FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
October 21, 1999
ST. LAURENT PAPERBOARD INC.
(Translation of registrant's name into English)
630 Rene-Levesque Boulevard, West, Suite 3000,
Montreal, Quebec H3B 5C7
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F ...... Form 40-F ..X...
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b)under the Securities Exchange Act of 1934.
Yes ..... No ...X..
INFORMATION FILED WITH THIS REPORT
The following document is filed as an Exhibit to this Report:
Exhibit I Press Release, dated October 21, 1999, of St. Laurent Paperboard Inc.
announcing its Financial Results for the Third Quarter of 1999.
<PAGE>
On October 21, 1999 St. Laurent Paperboard Inc. issued a press release
announcing its Financial Results for the Third Quarter of 1999.
Exhibit I Press Release, dated October 21, 1999, of St. Laurent Paperboard Inc.
announcing its Financial Results for the Third Quarter of 1999.
PRESENTATION OF OUR FINANCIAL INFORMATION
Beginning in 1997, we began reporting our financial results in U.S.
dollars. In this Report (and the Exhibit attached to this Report),
unless otherwise specified or the context otherwise requires, all
dollar amounts are expressed in U.S. dollars. Amounts reported by us
in years prior to 1997 have been converted into U.S. dollars using a
convenience exchange rate of US $0.73 to CAN $1, the closing rate as
at December 31, 1996. The average exchange rate of the U.S. dollar to
the Canadian dollar for 1994, 1995 and 1996 was $0.7300, $0.7286 and
$0.7332, respectively. Beginning in 1997, we also started to report
production and sales figures in short tons instead of metric tons, the
reporting standard of the containerboard industry.
Unless otherwise indicated, our financial information in this Report (and
the Exhibit attached to this Report) has been prepared in accordance with
generally accepted accounting principles in Canada. As described in Note 20 to
our Consolidated Financial Statements for the year-ended December 31, 1998, as
contained in our 1998 Annual Report, those principles differ in certain material
respects from those that we would have followed had our Consolidated Financial
Statements been prepared in accordance with generally accepted accounting
principles in the United States. We filed our Consolidated Financial Statements
for the year-ended December 31, 1998, as contained in our 1998 Annual Report,
with the Commission as Exhibit 43 to our Form 40-F/A filed with the Commission
on June 8, 1999.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements made in this Report (and the Exhibit attached to this
Report) are not historical facts and are "forward-looking" (as defined in the
Private Securities Litigation Reform Act of 1995). Words such as "believes,"
"expects," "estimates," "may," "intends," "will," "should" or "anticipates" and
similar expressions or their negatives identify forward-looking statements.
Forward-looking statements contained in this Report (and the Exhibit attached
to this Report) regarding matters that are not historical facts reflect our
current views about future events and are subject to risks, uncertainties and
assumptions. Such risks, uncertainties and assumptions include the following:
o continued demand for our products,
o industry cyclicality,
o fluctuation in foreign currency exchange rates,
o changes in environmental and other laws or regulations affecting our
operations,
o factors influencing competition in our industry and pricing, and
o industry-wide market factors and other general economic and business
conditions.
Our actual results could differ materially from those indicated, expressed
or implied in such forward-looking statements as a result of these and other
factors, many of which are beyond our control.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 21, 1999 ST. LAURENT PAPERBOARD INC.
(Registrant)
By: /s/ Richard Garneau
-------------------------------
Name: Richard Garneau
Title: Senior Vice President and
Chief Financial Officer
St. Laurent Paperboard Inc.
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<PAGE>
Exhibit 1
Note: All amounts are expressed in US dollars.
[GRAPHIC OMITTED]
P r e s s R e l e a s e
For immediate release
A considerable improvement over 1998
st. Laurent Paperboard INC. REPORTS $20.3 MILLION
NET EARNINGS for THE third quarter OF 1999
Montreal, October 21, 1999 - For the third quarter of 1999, St. Laurent
Paperboard Inc. generated net earnings of $20.3 million, or $0.42 per
share, on net sales of $246.2 million, compared to a net loss of $12.8
million, or $0.26 per share, on net sales of $197.7 million for the same
quarter in 1998. The third quarter net earnings include an unusual gain of
$5.8 million after tax, or $0.12 per share, resulting from the
renegotiation of fibre supply agreements with Chesapeake Corp. The 1998
third quarter net earnings included a special charge of $8.3 million after
tax or $0.17 per share related to the major restructuring project
implemented at the West Point, Virginia mill. Before these special items,
1999's third quarter earnings increased by $19.0 million, or $0.39 per
share, over the same period of 1998.
For the nine months ended September 30, 1999, net earnings totaled $29.4
million, or $0.60 per share, on net sales of $663.3 million, compared to a
net loss of $12.7 million on net sales of $607.6 million for the same
period in 1998.
BUSINESS REVIEW
Higher shipments for paperboard and corrugated products
4,000 tons production reduction at the La Tuque mill for major maintenance
Significant price realization increases for paperboard and corrugated
products
New sawmills, acquired on July 30, contributed $0.7 million to operating
earnings
Unusual gain of $5.8 million after tax on the renegotiation of fibre supply
agreements
Hurricane Floyd caused production disturbances and reduced West Point mill
shipments
Significant purchase price increase for Old Corrugated Container (OCC)
NET SALES
Net sales in the third quarter of 1999 increased to $246.2 million compared
to $197.7 million for the same period in 1998. This improvement in net
sales is attributable to higher net price realization and increased
shipments. Shipments were up 21.5% for corrugated products and 4.6% for
paperboard products. Net price realizations in the third quarter of 1999
increased by 10.8% for corrugated products and 16.0% for paperboard
products. Shipments and net price realizations for liquid and food
packaging products decreased slightly during the third quarter of 1999
compared to the same period of 1998. The new sawmills acquired in July 1999
also contributed to the sales increase, adding $4.6 million to net sales.
Shipments were higher for all paperboard products in the third quarter of
this year. White top linerboard shipments increased by 19,600 tons,
corrugating medium and kraft linerboard shipments increased by 5,000 and
5,400 tons respectively, compared to the corresponding period in 1998. No
shipments of market pulp were made in the third quarter, compared to 19,700
tons in 1998. Moreover, overseas shipments decreased by 46,000 tons
compared to the same period of 1998, contributing to the improvement in net
price realization for the quarter.
-1-
<PAGE>
<TABLE>
<CAPTION>
Table 1 - Key Financial Results
(In millions of US dollars, except percentage and per share amounts)
<S> <C> <C> <C>
------------------------------------------------------------------------------------------
1999 1998 1999
Third Quarter Third Quarter Second Quarter
--------------------------------------------- ----------- ------------ -----------------
Net sales 246.2 197.7 218.6
--------------------------------------------- ----------- ------------ -----------------
EBITDA - before restructuring costs 46.9 18.1 33.9
--------------------------------------------- ----------- ------------ -----------------
EBITDA margin - % 19.0% 9.2% 15.5%
--------------------------------------------- ----------- ------------ -----------------
Operating earnings -
before restructuring costs 29.9 1.5 17.3
--------------------------------------------- ----------- ------------ -----------------
Unusual items and (restructuring costs)
after taxes 5.8 (8.3) ---
--------------------------------------------- ----------- ------------ -----------------
Net earnings (losses) 20.3 (12.8) 6.8
--------------------------------------------- ----------- ------------ -----------------
Per share 0.42 (0.26) 0.13
--------------------------------------------- ----------- ------------ -----------------
</TABLE>
Note: EBITDA is Earnings Before Interest, Taxes, Depreciation and
Amortization. EBITDA margin is the ratio of EBITDA divided by net sales.
OPERATING EARNINGS
1999 3rd quarter vs 1998 3rd quarter
For the third quarter of 1999, operating earnings were $29.9 million
compared to $1.5 million before West Point mill restructuring charges, an
increase of $28.4 million compared to the corresponding quarter in 1998.
The operating earnings improvement is mainly attributable to higher net
price realization for paperboard and corrugated products, which were
respectively 16.0% and 10.8% higher than the corresponding period in 1998.
Paperboard cash manufacturing costs were negatively impacted by higher OCC
prices, which increased the average cash manufacturing cost by
approximately $4.0 million or $10/ton. Higher productivity and the various
cost reduction programs underway offset the impact of higher OCC costs.
Operating earnings from converting activities improved by $3.8 million as a
result of the implementation of price increases, the inclusion of Castle
Rock Container's results for the whole quarter and higher volume shipped.
The Company actively manages its Canadian dollar currency and its commodity
prices exposure. The Company bought Canadian dollar forward contracts to
protect its third quarter exposure at US$0.71, while the actual rate was
US$0.67, resulting in an opportunity loss of $2.4 million (including
Canadian dollar denominated inventory translation and the opportunity loss
on its commodity forward contracts). For the corresponding quarter in 1998,
the opportunity loss was $6.5 million. During the third quarter, the
Canadian dollar appreciated by about 2% when compared to 1998 and
increased the Company's Canadian manufacturing costs by $1.1 million.
This currency related costincrease translates into a $3 per ton increase on
the overall primary mills production.
<TABLE>
<CAPTION>
Table 2 - Operating earnings variances
1999 3rd quarter vs 1998 3rd quarter
(In millions of US dollars)
<S> <C> <C> <C> <C>
---------------------------------------------------------------------------------------------
VARIANCE Positive (Negative)
---------------------------------------------------------------------------------------------
Mill Converting Other Total
--------------------------------------- ------------ -------------- ------------ ------------
Net price realization on all products 20.9 7.1 0.0 28.0
--------------------------------------- ------------ -------------- ------------ ------------
Cost reduction (increase) 0.5 (4.7) (0.5) (4.7)
--------------------------------------- ------------ -------------- ------------ ------------
Volume increase 1.1 2.6 0.9 4.6
--------------------------------------- ------------ -------------- ------------ ------------
Commodity and currency 4.1 -- -- 4.1
--------------------------------------- ------------ -------------- ------------ ------------
Selling and administration (2.3) (0.9) 0.0 (3.2)
--------------------------------------- ------------ -------------- ------------ ------------
Depreciation 0.1 (0.3) (0.2) (0.4)
--------------------------------------- ------------ -------------- ------------ ------------
Total 24.4 3.8 0.2 28.4
--------------------------------------- ------------ -------------- ------------ ------------
</TABLE>
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<PAGE>
1999 3rd quarter vs 1999 2nd quarter
In the third quarter of 1999, operating earnings increased to $29.9 million
compared to $17.3 million in the second quarter, an increase of $12.6
million, mainly resulting from higher net price realization for paperboard
and converting products totalling $15.5 million and $5.1 million
respectively. The favourable impact of the price increases was partially
offset by higher OCC costs, which increased costs by $4.6 million, higher
losses on commodity contracts and higher selling and administrative
expenses. Converting profitability also increased compared to the second
quarter as a result of the price increase implementation and higher volume
shipped.
<TABLE>
<CAPTION>
Table 3 - Operating earnings variances
1999 3rd quarter vs 1999 2nd quarter
(In millions of US dollars)
<S> <C> <C> <C> <C>
-------------------------------------------- ------------- -------------- --------- -----------
VARIANCE Positive (Negative)
-------------------------------------------- ------------- -------------- --------- -----------
Mill Converting Other Total
-------------------------------------------- ------------- -------------- --------- -----------
Net price realization on all products 15.5 5.1 0.0 20.6
-------------------------------------------- ------------- -------------- --------- -----------
Cost reduction (increase) (3.1) (2.9) 0.0 (6.0)
-------------------------------------------- ------------- -------------- --------- -----------
Volume increase (reduction) (0.1) 1.4 0.8 2.1
-------------------------------------------- ------------- -------------- --------- -----------
Commodity and currency (1.9) -- -- (1.9)
-------------------------------------------- ------------- -------------- --------- -----------
Selling and administration (1.1) (0.7) 0.0 (1.8)
-------------------------------------------- ------------- -------------- --------- -----------
Depreciation 0.1 (0.3) (0.2) (0.4)
-------------------------------------------- ------------- -------------- --------- -----------
Total 9.4 2.6 0.6 12.6
-------------------------------------------- ------------- -------------- --------- -----------
</TABLE>
LIQUIDITY AND CAPITAL EXPENDITURES
During the third quarter, cash provided by operating activities was $42.0
million compared to $7.6 million for the corresponding quarter in 1998. The
$34.4 million increase is attributable to profitability improvement.
Capital expenditures were $12.6 million compared to $10.5 million for the
third quarter of 1998. The increase in capital expenditures in the third
quarter is attributable to two projects currently underway at the La Tuque
mill. When completed, the first project will allow for the production of
about 50,000 tons per year of coated white top linerboard. The second
project involves the modernization of the fibre receiving and handling
area. On July 30, 1999, the Company also acquired, for an aggregate
purchase price of $13.9 million, two sawmills with a combined capacity of
60 million board feet, a lumber re-manufacturing facility as well as a chip
mill from Chesapeake Corp. This transaction was mainly financed by the
proceeds resulting from the renegotiation of fibre supply agreements with
the seller.
COST REDUCTION INITIATIVES
The West Point restructuring initiative contributed to the reduction of
manufacturing costs by $4.2 million during the third quarter compared to
the corresponding quarter in 1998. The savings realized are essentially on
target with the restructuring program.
PRODUCTIVITY ENHANCEMENT
Compared to the corresponding quarter in 1998, productivity increased by
10.5% on the #3 paper machine at the La Tuque mill, by 7.1% at the Matane
mill and by 6.7% at the Thunder Bay mill.
YEAR-2000 COMPLIANCE
Approach
The Company initiated its Year 2000 compliance program ("Y2K") under
the supervision of a centralized Y2K Project Management Organization
(PMO) in February 1998 with a focus of achieving Y2K readiness for all
Information Technology (IT) and computer controlled process
technologies used in the Company's business. The PMO reports to the
Chief Information Officer with regular reporting to the Audit
Committee of the Board of Directors. The Company's Y2K compliance
program also includes the assessment of the Y2K readiness of its major
suppliers and customers by contacting them to evaluate their
strategies and action plans for the Y2K transition. To minimize the
Y2K risk, contingency plans and year-end rollover strategies are being
deployed within the Company as part of the program.
-3-
<PAGE>
Readiness
As of the end of the third quarter of 1999, the Company has
successfully completed its remedial program in all material respects
and considers itself compliant with regards to items under its
control.
Among others, process control, shop floor technology, infrastructure
and business systems including finance, accounting, payroll, order
fulfilment, order tracking and invoicing software programs, were
successfully replaced or upgraded as required at all facilities. To
maintain the Company's readiness level, further testing will continue
beyond Year 2000.
As part of the Y2K due diligence process, the Company is taking steps
to insure that new acquisitions meet compliance standards.
Risk to the Company
The Company's primary business consists of manufacturing and selling
paperboard products, and most of our systems are not date sensitive.
For systems where dates are critical, the Company could face localized
interruptions if Y2K issues are not properly resolved. Our main risk,
therefore, would arise if we were temporarily unable to produce and
deliver our products to our customers due to interruption of a
production unit, the malfunction of a production management system, or
an interruption in delivery of raw material or services from a
critical supplier.
To minimize any potential disruption, the Company's Y2K compliance
program will continue with further system testing. In addition,
the risks to the Company posed by possible non-compliance of critical
suppliers of raw materials, utilities, financial services and
government agencies are currently being re-assessed. Contingency plans
are being prepared, where required, to minimize such risk. It is not
possible however, to be certain that all aspects of the Y2K issue
affecting the Company, including those related to the efforts of
customers, suppliers, or other third parties, will be fully resolved.
Contingency planning
The contingency planning is focusing on two levels of potential
critical business disruption: marketplace risks and opportunities,
production unit and supply chain risks. The plans include alternate
solutions to ensure delivery of our products and services to our
customers, procedures to minimize disruption of critical supplies as
well as procedures to deal with possible disruption of production.
Contingency plans are carefully reviewed and rehearsed by facility
personnel. The conditions which may trigger these plans will be tested
against expected results during the rollover period.
The Company believes that its pro-active approach will secure business
continuity by ensuring readiness before, at and after the Year 2000.
Cost
The Company's cost to achieve Y2K compliance is estimated at $5.6
million. At the end of September, about $2.3 million has been
capitalized and $2.7 million has been expensed.
-4-
<PAGE>
OUTLOOK
Demand for containerboard is expected to remain consistent as the
North American economies continue to remain stable. Price increases
have also been implemented in Europe and Asia as demand in those
regions is stronger.
**************************************
St. Laurent Paperboard is a major North American producer, supplier
and converter of high-quality, value-added paperboard and packaging
products, with more than 3,700 employees serving a diverse customer
base in North America and selected international markets.
St. Laurent Paperboard owns four primary mills, located in La Tuque
and Matane, Quebec; in Thunder Bay, Ontario; as well as in West Point,
Virginia, with an aggregate annual paperboard production capacity of
approximately 1.5 million short tons. It also owns twelve packaging
facilities located in Canada and the United States as well as 920,000
acres of forest land, the largest freehold in Quebec.
The Company's common shares are listed on the Toronto and Montreal
stock exchanges under the trading symbol "SPI" as well as on the New
York Stock Exchange (NYSE) under "SLW".
FOR FURTHER INFORMATION:
Mr. Richard Garneau
Senior Vice President and Chief Financial Officer
ST. LAURENT PAPERBOARD INC.
Tel: (514) 864-5102
Website: www.stlaurent.com
-5-
<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS
(unaudited)
(in thousands of US dollars, except per share amounts)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Third quarter ended Second quarter ended 9 months ended
September 30 June 30 September 30
1999 1998 1999 1999 1998
- ------------------------------------------------------------------------- ---------------- ------------------------------
Sales $ 263,965 214,159 $ 236,184 $ 716,624 $ 659,004
Cost of delivery 17,739 16,467 17,565 53,355 51,398
------------------------------ ---------------- ------------------------------
Net sales 246,226 197,692 218,619 663,269 607,606
------------------------------ ---------------- ------------------------------
Cost of sales 183,480 166,883 170,584 518,656 501,687
Selling and administrative expenses 15,861 12,687 14,092 42,640 38,247
Restructuring charge - 12,878 - - 12,878
Amortization 17,024 16,648 16,598 50,057 48,693
------------------------------ ---------------- ------------------------------
216,365 209,096 201,274 611,353 601,505
------------------------------ ---------------- ------------------------------
Operating earnings 29,861 (11,404) 17,345 51,916 6,101
Interest expense, net 7,103 7,247 6,517 20,677 22,184
Other expense (income) (10,020) (634) 630 (14,206) (644)
------------------------------ ---------------- ------------------------------
Earnings before income taxes 32,778 (18,017) 10,198 45,445 (15,439)
Provision for income taxes 12,670 (5,235) 3,550 16,699 (2,729)
------------------------------ ---------------- ------------------------------
20,108 (12,782) 6,648 28,746 (12,710)
Earnings from equity investment 208 - 186 679 -
------------------------------ ---------------- ------------------------------
Net earnings (loss) 20,316 (12,782) 6,834 29,425 (12,710)
------------------------------ ---------------- ------------------------------
Net earnings (loss) per common share
Basic 0.42 (0.26) 0.13 0.60 (0.26)
------------------------------ ---------------- ------------------------------
Fully diluted $ 0.41 (FN1 ) $ 0.13 $ 0.59 $ (FN1)
------------------------------ ---------------- ------------------------------
Retained earnings at beginning of period $ 10,878 25,104 $ 4,044 1,769 $ 25,032
Net earnings (loss) 20,316 (12,782) 6,834 29,425 (12,710)
------------------------------ ---------------- ------------------------------
Retained earnings at end of period $ 31,194 12,322 $ 10,878 31,194 $ 12,322
------------------------------ ---------------- ------------------------------
Weighted average number of outstanding
common shares (in thousands) 49,356 49,161 49,310 49,310 49,092
------------------------------ ---------------- ------------------------------
FN1 Anti-dilutive
</TABLE>
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<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED STATEMENT OF CHANGES IN CASH POSITION
(unaudited)
(in thousands of US dollars)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Third quarter ended Second quarter ended 9 months ended
September 30 June 30 September 30
1999 1998 1999 1999 1998
- ------------------------------------------------------------------------- ---------------------------------------------
Cash provided by (used in)
Operating activities
Net earnings (loss) $ 20,316 (12,782) $ 6,834 $ 29,425 $ (12,710)
Items not involving cash
Amortization of property, plant and
equipment, deferred costs and goodwill 17,024 16,648 16,598 50,057 48,693
Amortization of debt issue costs 469 386 311 1,179 991
Future income taxes 12,200 (5,305) 3,011 15,396 (3,626)
Gain on sale of property, plant and
equipmen (547) - - (5,100) (235)
Other (268) (194) (64) (554) (843)
Start-up and other deferred costs incurred (2,072) (1,225) (587) (3,350) (384)
Post retirement expense, net of funding (616) 11,056 665 1,090 12,251
Earnings from equity investment (208) - (186) (679) -
------------------------------ ------------ ------------------------------
46,298 8,584 26,582 87,464 44,137
Change in non-cash working capital
relating to operations
Accounts receivable (7,793) 1,320 (495) (17,963) 7,555
Inventory 244 (4,729) 2,419 11,009 (7,849)
Prepaid expenses (4,373) (1,764) (2,914) (5,822) (6,255)
Accounts payable and accruals 7,395 4,333 5,605 24,091 4,500
Income and other taxes payable 263 (175) (306) (85) 440
------------------------------ ------------ ------------------------------
(4,264) (1,015) 4,309 11,230 (1,609)
------------------------------ ------------ ------------------------------
Cash provided by operating activities 42,034 7,569 30,891 98,694 42,528
------------------------------ ------------ ------------------------------
Investing activities
Equity investment - - - (9,607) -
Business acquisitions (13,922) - (25,483) (39,405) -
Additions to property, plant and
equipment (12,572) (10,516) (11,930) (30,706) (38,468)
Proceeds from disposals of property,
plant and equipment 1,150 - - 6,805 235
------------------------------ ------------ ------------------------------
(25,344) (10,516) (37,413) (72,913) (38,233)
------------------------------ ------------ ------------------------------
Financing activities
Issuance of common shares, net of expenses 526 623 390 1,249 1,892
Redemption of common shares - - - - (242)
Issuance of long-term debt 112 59 66 248 230,195
Repayment of long-term debt (69) (33) (22) (115) (241,519)
Debt issue costs (710) (379) (583) (1,420) (4,960)
Cash held in escrow - - - 11,000
------------------------------ ------------ ------------------------------
(141) 270 (149) (38) (3,634)
------------------------------ ------------ ------------------------------
Increase (decrease) in cash 16,549 (2,677) (6,671) 25,743 661
Cash and cash equivalents at beginning of period 5,675 16,778 12,346 (3,519) 13,440
------------------------------ -------------- ------------------------------
Cash and cash equivalents at end of period $ 22,224 14,101 $ 5,675 $ 22,224 $ 14,101
------------------------------ -------------- ------------------------------
Cash and cash equivalents
Cash on hand (indebtedness) 10,013 4,969 (475) 10,013 4,969
Temporary investments 12,211 9,132 6,150 12,211 9,132
------------------------------ -------------- ------------------------------
$ 22,224 14,101 $ 5,675 $ 22,224 $ 14,101
------------------------------ -------------- ------------------------------
</TABLE>
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<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands of US dollars)
September 30
1999 1998
- -----------------------------------------------------------------------------
ASSETS
Current assets
Cash and temporary investments $ 22,224 $ 14,101
Accounts receivable 119,065 100,253
Income and other taxes receivable 4,956 4,553
Inventories 97,118 104,449
Prepaid expenses 19,679 11,934
-----------------------------
263,042 235,290
Property, plant and equipment 784,570 779,206
Future income taxes - 6,887
Deferred charges and other assets 45,009 22,658
Goodwill 19,100 20,206
-----------------------------
$ 1,111,721 $ 1,064,247
-----------------------------
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 97,427 85,437
Current portion of long-term debt 23,152 259
-----------------------------
120,579 85,696
Long-term debt 339,515 362,248
Future income taxes 13,322 9,350
Other liabilities 31,519 20,413
SHAREHOLDERS' EQUITY
Common shares 573,184 571,810
Contributed surplus 2,408 2,408
Retained earnings 31,194 12,322
-----------------------------
606,786 586,540
-----------------------------
$ 1,111,721 $ 1,064,247
-----------------------------
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ST. LAURENT PAPERBOARD INC.
SEGMENTED INFORMATION
(unaudited)
(in thousands of US dollars) Third quarter ended 9 months ended
September 30 September 30
1999 1998 1999 1998
------------------------- -------------------------
Net sales to third parties
From Canada
Within Canada $ 42,004 $ 30,056 $ 103,473 $ 96,082
To the United States 53,464 38,656 151,807 114,108
Other 5,409 12,099 22,453 33,814
------------------------- -------------------------
$ 100,877 $ 80,811 $ 277,733 $ 244,004
From the United States 145,349 116,881 385,536 363,602
------------------------- -------------------------
$ 246,226 $ 197,692 $ 663,269 $ 607,606
------------------------- -------------------------
Intercompany sales between geographic areas
From Canada $ 5,217 $ 2,364 $ 13,014 $ 6,839
From the United States 322 772 813 1,727
------------------------- -------------------------
$ 5,539 $ 3,136 $ 13,827 $ 8,566
------------------------- -------------------------
Operating earnings (loss)
Canada $ 13,920 $ (1,557) $ 26,413 $ 3,580
United States 15,941 (9,847) 25,503 2,521
------------------------- -------------------------
$ 29,861 $ (11,404) $ 51,916 $ 6,101
------------------------- -------------------------
Identifiable assets
Canada $ 464,668 $ 456,204
United States 647,053 608,043
-------------------------
$1,111,721 $ 1,064,247
-------------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
ST. LAURENT PAPERBOARD INC.
SUMMARY OF OPERATIONS
(unaudited)
(in thousands of US dollars, except for units)
Woodlands,
Solid Wood and
Primary Unallocated
Third Quarter ended September 30, 1999 mills Converting amounts Total
- -----------------------------------------------------------------------------------------------------------
Net sales to third parties $ 139,202 $ 97,532 $ 9,492 $ 246,226
Inter-segment sales 25,390 - - 25,390
----------------------------------------------------
Total $ 164,592 $ 97,532 $ 9,492 $ 271,616
EBITDA 38,465 7,858 562 46,885
Amortization 13,982 2,453 589 17,024
Operating earnings (loss) 24,483 5,405 (27) 29,861
Identifiable assets 760,022 243,045 108,654 1,111,721
Additions to property, plant and equipment 8,476 3,783 313 12,572
Sales to third parties (short tons) 332,798 - -
Sales to third parties - corrugated containers (MMSF) - 1,505 -
Sales to third parties - liquid and food (short tons) - 17,374 -
Inter-segment sales (short tons) 58,414 - -
Woodlands,
Solid Wood and
Primary Unallocated
Third Quarter ended September 30, 1998 mills Converting amounts Total
- -----------------------------------------------------------------------------------------------------------
Net sales to third parties $ 116,707 $ 76,649 $ 4,336 $ 197,692
Inter-segment sales 18,896 - - 18,896
----------------------------------------------------
Total $ 135,603 $ 76,649 $ 4,336 $ 216,588
EBITDA - Before restructuring charge 14,162 3,799 161 18,122
Amortization 14,053 2,199 396 16,648
Operating earnings (loss) - Before restructuring charge 109 1,600 (235) 1,474
Identifiable assets 814,529 189,671 60,047 1,064,247
Additions to property, plant and equipment 7,299 2,998 219 10,516
Sales to third parties (short tons) 321,295 - -
Sales to third parties - corrugated containers (MMSF) - 1,239 -
Sales to third parties - liquid and food (short tons) - 18,241 -
Inter-segment sales (short tons) 52,707 - -
</TABLE>
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<S> <C> <C> <C> <C>
ST. LAURENT PAPERBOARD INC.
SUMMARY OF OPERATIONS - YEAR TO DATE
(unaudited)
(in thousands of US dollars, except for units)
Woodlands,
Solid Wood and
Primary Unallocated
Nine months ended September 30, 1999 mills Converting amounts Total
- -----------------------------------------------------------------------------------------------------------
Net sales to third parties $ 386,726 $ 258,744 $ 17,799 $ 663,269
Inter-segment sales 63,169 - - 63,169
----------------------------------------------------
Total $ 449,895 $ 258,744 $ 17,799 $ 726,438
EBITDA 83,697 18,495 (219) 101,973
Amortization 42,011 6,649 1,397 50,057
Operating earnings (loss) 41,686 11,846 (1,616) 51,916
Identifiable assets 760,022 243,045 108,654 1,111,721
Additions to property, plant and equipment 19,537 10,673 496 30,706
Sales to third parties (short tons) 1,019,524 - -
Sales to third parties - corrugated containers (MMSF) - 4,075 -
Sales to third parties - liquid and food (short tons) - 50,741 -
Inter-segment sales (short tons) 159,590 - -
Woodlands,
Solid Wood
Primary and unallocated
Nine months ended September 30, 1998 mills Converting amounts Total
- -----------------------------------------------------------------------------------------------------------
Net sales to third parties $ 369,191 $ 224,374 $ 14,041 $ 607,606
Inter-segment sales 61,451 - - 61,451
----------------------------------------------------
Total $ 430,642 $ 224,374 $ 14,041 $ 669,057
EBITDA - Before restructuring charge 56,862 12,735 (1,925) 67,672
Amortization 41,314 6,104 1,275 48,693
Operating earnings (loss) - Before restructuring charge 15,548 6,631 (3,200) 18,979
Identifiable assets 814,529 189,671 60,047 1,064,247
Additions to property, plant and equipment 26,470 10,846 1,152 38,468
Sales to third parties (short tons) 965,693 - -
Sales to third parties - corrugated containers (MMSF) - 3,515 -
Sales to third parties - liquid and food (short tons) - 45,616 -
Inter-segment sales (short tons) 163,325 - -
</TABLE>
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