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
May 8, 2000
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 -- First Quarter Report of St. Laurent Paperboard for the period
ending March 31, 2000.
<PAGE>
On May 8 , 2000 St. Laurent Paperboard Inc. first sent its First Quarter Report
for the period ending March 31, 2000 to its shareholders.
Exhibit I -- First Quarter Report of St. Laurent Paperboard for the period
ending March 31, 2000.
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: May 8, 2000
ST. LAURENT PAPERBOARD INC.
(Registrant)
By: /s/ Richard Garneau
-------------------------------
Name: Richard Garneau
Title: Senior Vice President and
Chief Financial Officer
St. Laurent Paperboard Inc.
<PAGE>
EXHIBIT I
FIRST QUARTER REPORT
for the period ending
March 31, 2000
To obtain an English version
of this report, please contact:
Communications Department
630 Rene-Levesque Blvd. West, Suite 3000
Montreal, Quebec H3B 5C7
Tel: (514) 861-4011, extension 234
Fax: (514) 861-7003
ST. LAURENT PAPERBOARD, INC.
<PAGE>
MESSAGE TO SHAREHOLDERS
St. Laurent Paperboard Inc. reports first quarter net earnings of $8.3 million,
or $0.17 per share, on net sales of $282.2 million, compared to net earnings of
$2.3 million, or $0.05 per share, on net sales of $198.4 million for the same
quarter in 1999.
The first quarter results were impacted by an unusual expense of $2.5 million
after tax or $0.05 per share related to expenses incurred in the course of the
pending acquisition of the Company by Smurfit-Stone Container Corporation.
Without this unusual expense, net earnings would have amounted to $10.8 million,
or $0.22 per share for the first quarter of 2000.
NET SALES
Net sales in the first quarter of 2000 increased to $282.2 million compared to
$198.4 million for the same period in 1999. This improvement is attributable to
the following:
o Net price realizations of paperboard products were 28% higher compared to
the corresponding quarter of 1999, which contributed to increase sales by
approximately $36 million.
o Shipments of corrugated containers increased by 478 million square feet, a
38% improvement, and net price realizations were up 20% contributing to net
sales increase of $43.1 million when compared to the same quarter in 1999.
The increased shipments were attributable to the strong performance of the
Milwaukee sheet feeder facility and the acquisition of Castle Rock
Container and Eastern Container.
o Sawmills' net sales increased by $7.3 million over the corresponding
quarter last year, the result of the acquisition of three sawmills and a
hardwood lumber re-manufacturing facility.
o Liquid and food packaging net sales increased by $4.2 million attributable
to higher shipments and net price realizations which were respectively 28%
and 5.6% better than the same quarter in 1999.
BUSINESS REVIEW
o Pre-merger agreement concluded on Feb. 23 with Smurfit-Stone Container
Corporation.
o Operating earnings increase of $21.5 million.
o Price increases of $50 per ton for linerboard and $60 per ton for
corrugating medium announced for Feb. 1st shipments.
o Corrugated box price increase of 12% effective with April 1st shipments.
o Successful conversion of the La Tuque, Quebec white top linerboard machine
to lightly clay-coated linerboard. Related downtime taken at the mill
lowered production by close to 11,000 tons.
o Machine conversion at the Matane, Quebec mill enabling production of
23lbs/msf corrugating medium.
o Start-up of two value-added converting facilities at Pickering, Ontario and
Columbus, Ohio.
o E-commerce initiative continues to develop efficiently and first consumer
contract has been signed.
o Productivity increase of 4% at the West Point mill, mainly due to a very
good performance of the white top machine.
o Started construction of two greenfield sheet feeders in Ontario and
California.
Note: All amounts are expressed in US dollars unless otherwise stated.
<PAGE>
<TABLE>
<CAPTION>
Table 1 - Key Financial Results
(In millions of US dollars, except percentage and per share amounts)
- --------------------------------------------------------------------------------
2000 1999 1999
First Quarter First Quarter Fourth Quarter
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales 282.2 198.4 252.5
- --------------------------------------------------------------------------------
EBITDA 44.9 21.1 40.1
- --------------------------------------------------------------------------------
EBITDA margin - % 15.9% 10.7% 15.9%
- --------------------------------------------------------------------------------
Operating earnings 26.2 4.7 23.2
- --------------------------------------------------------------------------------
Net earnings 8.3 2.3 8.9
- --------------------------------------------------------------------------------
Per share 0.17 0.05 0.18
- --------------------------------------------------------------------------------
Note: EBITDA is Earnings Before Interest, Taxes, Depreciation and Amortization.
EBITDA margin is the ratio of EBITDA divided by net sales.
</TABLE>
OPERATING EARNINGS
2000 1st quarter compared to 1999 1st quarter
For the first quarter of 2000, operating earnings amounted to $26.2 million
compared to operating earnings of $4.7 million for the corresponding quarter in
1999, an increase of $21.5 million. The operating earnings improvement is mainly
attributable to higher net price realizations for paperboard and corrugated
products, which were respectively 28% and 20% higher than the corresponding
period in 1999. Paperboard cash manufacturing costs were higher due to increases
of virgin fibre, Old Corrugated Container (OCC) and fuel costs, which totalled
$10.2 million. The La Tuque mill's manufacturing costs were also impacted by a
10-day shutdown to complete the machine modifications related to the lightly
clay-coated white top project. Selling and administrative expenses were $11
million higher, reflecting the expense of the acquired packaging facilities, the
new e-commerce business, the supply chain management program implementation and
extensive containerboard branding advertising campaign costs.
Corrugated container operating earnings, before the Columbus, Pickering and
e-commerce results, increased to $6.6 million from $3.6 million for the same
quarter in 1999. The improvement is attributable to the strong performance of
the Milwaukee and Castle Rock Container facilities. The operating losses of the
Columbus and Pickering facilities and the start-up costs of the e-commerce
initiative amounted to $3.7 million.
The Canadian dollar strengthened by 4.0% compared to the corresponding quarter
in 1999 thus increasing manufacturing costs denominated in Canadian dollars by
$2.2 million or $6 per ton. The Company's currency hedging and commodity price
programs resulted in an opportunity loss of $1.1 million, a reduction of $1.3
million compared to the corresponding quarter in 1999.
Note: All amounts are expressed in US dollars unless otherwise stated.
<PAGE>
<TABLE>
<CAPTION>
Table 2 - Operating earnings variances
2000 1st quarter compared to 1999 1st quarter
(In millions of US dollars)
- -----------------------------------------------------------------------------------------------------
VARIANCE Positive (Negative)
- -----------------------------------------------------------------------------------------------------
Mill Converting Other Total
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net price realization on all products 35.9 14.1 2.0 52.0
- -----------------------------------------------------------------------------------------------------
Cost reduction (increase) (11.0) (12.6) (1.5) (25.1)
- -----------------------------------------------------------------------------------------------------
Volume increase (decrease) (1.5) 8.1 0.4 7.0
- -----------------------------------------------------------------------------------------------------
Commodity and currency 0.8 0.8
- -----------------------------------------------------------------------------------------------------
Selling and administration (2.1) (8.9) ---- (11.0)
- -----------------------------------------------------------------------------------------------------
Depreciation (0.4) (1.4) (0.4) (2.2)
- -----------------------------------------------------------------------------------------------------
Total 21.7 (0.7) 0.5 21.5
- -----------------------------------------------------------------------------------------------------
</TABLE>
2000 1st quarter compared to 1999 4th quarter
For the first quarter of 2000, operating earnings totalled $26.2 million
compared to $23.2 million for the fourth quarter of 1999, an increase of $3.0
million. The primary mill operating earnings were $4.0 million higher than the
fourth quarter due to higher selling prices. This positive variance was
partially offset by higher manufacturing costs at the La Tuque mill related to
the 10-day shutdown to complete the clay-coated project. The Matane, Quebec mill
manufacturing costs were also higher due to a six-day downtime to make machine
modifications which provide the ability to produce lighter weight corrugating
medium (23 lbs/msf).
Packaging operating earnings were $1.7 million higher compared to the fourth
quarter of 1999. This increase is attributable to higher selling prices, lower
operating costs and to the inclusion, for the entire quarter, of the Eastern
Container results that were consolidated with the Company's results for one
month only in the fourth quarter of 1999. The higher selling and administrative
expenses are attributable to Eastern Container's results and to the costs
associated with setting up the new e-commerce packaging subsidiary.
<TABLE>
<CAPTION>
Table 3 - Operating earnings variances
2000 1st quarter compared to 1999 4th quarter
(In millions of US dollars)
- -----------------------------------------------------------------------------------------------------
VARIANCE Positive (Negative)
- -----------------------------------------------------------------------------------------------------
Mill Converting Other Total
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net price realization on all products 4.9 2.9 0.6 8.4
- -----------------------------------------------------------------------------------------------------
Cost reduction (increase) (2.0) 1.8 (3.4) (3.6)
- -----------------------------------------------------------------------------------------------------
Volume increase (decrease) (0.5) 3.2 0.0 2.7
- -----------------------------------------------------------------------------------------------------
Commodity and currency 0.9 0.9
- -----------------------------------------------------------------------------------------------------
Selling and administration 1.0 (4.7) 0.0 (3.7)
- -----------------------------------------------------------------------------------------------------
Depreciation (0.3) (1.5) 0.1 (1.7)
- -----------------------------------------------------------------------------------------------------
Total 4.0 1.7 (2.7) 3.0
- -----------------------------------------------------------------------------------------------------
</TABLE>
Note: All amounts are expressed in US dollars unless otherwise stated.
<PAGE>
LIQUIDITY AND CAPITAL EXPENDITURES
During the first quarter, cash provided by operating activities was $30.3
million, compared to $25.8 million for the corresponding quarter in 1999. The
$4.5 million increase is attributable to profitability improvement. Capital
expenditures were $23.2 million compared to $6.2 million for the first quarter
of 1999. The increase in capital expenditures in the first quarter is mostly
attributable to the La Tuque lightly clay-coated white top project as well as
the transfer of a state-of-the-art corrugator to the greenfield sheet feeder
plant currently under construction in the greater Toronto area.
EMPLOYEE FUTURE BENEFITS - NEW ACCOUNTING RULE
In March 1999, the Canadian Institute of Chartered Accountants (" CICA ")
released new accounting rules regarding employee future benefits under section
3461 of the CICA Handbook. The most significant change is the requirement to
discount pension obligations using a market rate of interest instead of using a
long-term expected rate of return on plan assets. The cumulative impact of the
change increased the pension plan liability by $28.9 million and decreased the
retained earnings and deferred income taxes by $19.6 million and $9.3 million
respectively.
OUTLOOK
Price increases of $50 per ton for kraft and white top linerboard and $60 per
ton for corrugating medium announced for February 1st shipments will be fully
realized during the second quarter. A box price increase of 12% announced for
April 1st shipments will be implemented during the second quarter. The outlook
for 2000 is positive as the growth of the North American economy is trending up.
MERGER WITH SMURFIT-STONE CONTAINER CORPORATION
The merger with Smurfit-Stone Container Corporation is expected to be completed
by early June.
On behalf of the Board of Directors,
/s/ Raymond R. Pinard /s/ Jay J. Gurandiano
- ----------------------------- ------------------------------
Raymond R. Pinard Jay J. Gurandiano
Chairman of the Board President and Chief
Executive Officer
Note: All amounts are expressed in US dollars unless otherwise stated.
<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED STATEMENT OF EARNINGS AND RETAINED EARNINGS
(unaudited)
(in thousands of US dollars, except per share amounts)
<TABLE>
<CAPTION>
First quarter ended Fourth quarter ended
March 31 December 31
2000 1999 1999
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales $ 300,110 $ 216,475 $ 270,195
Cost of delivery 17,921 18,051 17,667
------------ ------------ ------------
Net sales 282,189 198,424 252,528
------------ ------------ ------------
Cost of sales 213,621 164,592 192,374
Selling and administrative expenses 23,694 12,687 20,011
Amortization 18,631 16,435 16,966
------------ ------------ ------------
255,946 193,714 229,351
------------ ------------ ------------
Operating earnings 26,243 4,710 23,177
Interest expense, net 8,193 7,057 7,932
Other expense (income) 3,373 (4,816) 414
------------ ------------ ------------
Earnings before income taxes 14,677 2,469 14,831
Provision for income taxes 6,207 479 5,137
------------ ------------ ------------
8,470 1,990 9,694
Earnings from equity investment / Minority
interests (137) 285 (782)
------------ ------------ ------------
Net earnings 8,333 2,275 8,912
------------ ------------ ------------
Net earnings per common share
Basic 0.17 0.05 0.18
------------ ------------ ------------
Fully diluted $ 0.17 $ 0.05 $ 0.18
============ ============ ============
Retained earnings at beginning of period $ 40,106 $ 1,769 $ 31,194
Employee Future Benefits Transitional Amount (19,643) -- --
Net earnings 8,333 2,275 8,912
------------ ------------ ------------
Retained earnings at end of period $ 28,796 $ 4,044 $ 40,106
============ ============ ============
Weighted average number of outstanding
common shares (in thousands) 49,559 49,264 49,382
============ ============ ============
</TABLE>
<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED STATEMENT OF CHANGES IN CASH POSITION
(unaudited)
(in thousands of US dollars)
<TABLE>
<CAPTION>
First quarter ended Fourth quarter ended
March 31 December 31
2000 1999 1999
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Cash provided by (used in)
Operating activities
Net earnings $ 8,333 $ 2,275 $ 8,912
Items not involving cash
Amortization of property, plant and equipment,
start up, deferred costs and goodwill 18,631 16,435 16,966
Amortization of debt issue costs 510 399 259
Future income taxes 5,456 185 4,983
Loss (gain) on sale of property, plant
and equipment 185 (4,553) 6
Other 135 (222) (373)
Start-up and other deferred costs incurred (1,511) (691) 1,151
Post retirement expense, net of funding (378) 1,041 2,152
Earnings from equity investment / Minority
interests 137 (285) 782
------------ ------------ ------------
31,498 14,584 34,838
Change in non-cash working capital
relating to operations
Accounts receivable (6,120) (9,674) 7,375
Inventory (4,732) 8,345 (1,305)
Prepaid expenses 7,445 1,464 6,048
Accounts payable and accruals 2,597 11,092 (237)
Income and other taxes payable (425) (42) (453)
------------ ------------ ------------
(1,235) 11,185 11,428
------------ ------------ ------------
Cash provided by operating activities 30,263 25,769 46,266
------------ ------------ ------------
Investing activities
Equity investment -- (9,607) --
Business acquisitions -- -- (21,403)
Additions to property, plant and equipment (23,245) (6,204) (26,432)
Proceeds from disposals of property, plant
and equipment 142 5,655 2,254
------------ ------------ ------------
(23,103) (10,156) (45,581)
------------ ------------ ------------
Financing activities
Issuance of common shares, net of expenses 3,318 333 288
Minority interests 729 -- 700
Issuance of long-term debt 8,790 70 362
Repayment of long-term debt (9,561) (24) (9,434)
Debt issue costs 19 (127) 66
------------ ------------ ------------
3,295 252 (8,018)
------------ ------------ ------------
Increase (decrease) in cash 10,455 15,865 (7,333)
Cash and cash equivalents at beginning of period 14,891 (3,519) 22,224
------------ ------------ ------------
Cash and cash equivalents at end of period 25,346 $ 12,346 $ 14,891
============ ============ ============
Cash and cash equivalents
Cash on hand 22,225 6,713 9,125
Temporary investments 3,121 5,633 5,766
------------ ------------ ------------
$ 25,346 $ 12,346 $ 14,891
============ ============ ============
</TABLE>
<PAGE>
ST. LAURENT PAPERBOARD INC.
CONSOLIDATED BALANCE SHEET
(unaudited)
(in thousands of US dollars)
<TABLE>
<CAPTION>
March 31
2000 1999
- ------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets
Cash and temporary investments $ 25,346 $ 12,346
Accounts receivable 130,399 105,570
Income and other taxes receivable 5,217 4,912
Inventories 111,213 90,196
Prepaid expenses 6,539 12,367
------------ ------------
278,714 225,391
Property, plant and equipment 822,530 765,413
Future income taxes -- 9,136
Deferred charges and other assets 33,008 40,248
Goodwill 39,783 19,649
------------ ------------
$ 1,174,035 $ 1,059,837
============ ============
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 105,443 83,203
Current portion of long-term debt 48,167 5,953
------------ ------------
153,610 89,156
Long-term debt 336,735 356,558
Future income taxes 14,501 7,247
Other liabilities 61,196 28,157
SHAREHOLDERS' EQUITY
Common shares 576,789 572,267
Contributed surplus 2,408 2,408
Retained earnings 28,796 4,044
------------ ------------
607,993 578,719
------------ ------------
$ 1,174,035 $ 1,059,837
============ ============
</TABLE>
<PAGE>
ST. LAURENT PAPERBOARD INC.
SEGMENTED INFORMATION
(unaudited)
(in thousands of US dollars)
<TABLE>
<CAPTION>
First quarter ended
March 31
2000 1999
----------------------------
<S> <C> <C>
Net sales to third parties
From Canada
Within Canada $ 37,496 $ 27,238
To the United States 52,312 45,525
Other 5,257 10,586
------------ ------------
$ 95,065 $ 83,349
From the United States 187,124 115,075
------------ ------------
$ 282,189 $ 198,424
============ ============
Intercompany sales between geographic areas
From Canada $ 8,146 $ 3,018
From the United States 558 225
------------ ------------
$ 8,704 $ 3,243
============ ============
Operating earnings
Canada $ 10,443 $ 2,649
United States 15,800 2,061
------------ ------------
$ 26,243 $ 4,710
============ ============
Identifiable assets
Canada $ 444,127 $ 450,674
United States 729,908 609,163
------------ ------------
$ 1,174,035 $ 1,059,837
============ ============
</TABLE>
<PAGE>
ST. LAURENT PAPERBOARD INC.
SUMMARY OF OPERATIONS
(unaudited)
(in thousands of US dollars, except for units)
<TABLE>
<CAPTION>
Woodlands,
Solid Wood
Primary and unallocated
First Quarter ended March 31, 2000 mills Converting amounts Total
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales to third parties $ 134,819 $ 133,674 $ 13,696 $ 282,189
Inter-segment sales 31,744 -- -- 31,744
------------ ------------ ------------- ------------
Total $ 166,563 $ 133,674 $ 13,696 $ 313,933
EBITDA 38,193 6,410 271 44,874
Amortization 14,401 3,474 756 18,631
Operating earnings (loss) 23,792 2,936 (485) 26,243
Identifiable assets 764,941 345,428 63,666 1,174,035
Additions to property, plant and equipment 10,163 12,759 323 23,245
Sales to third parties (short tons) 305,392 -- --
Sales to third parties - corrugated containers (MMSF) -- 1,744 --
Sales to third parties - liquid and food (short tons) -- 20,729 --
Inter-segment sales (short tons) 72,868 -- --
</TABLE>
<TABLE>
<CAPTION>
Woodlands,
Solid Wood
Primary and unallocated
First Quarter ended March 31, 1999 mills Converting amounts Total
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales to third parties $ 119,521 $ 75,271 $ 3,632 $ 198,424
Inter-segment sales 18,338 -- -- 18,338
------------ ------------ ------------- ------------
Total $ 137,859 $ 75,271 $ 3,632 $ 216,762
EBITDA 16,052 5,629 (536) 21,145
Amortization 13,994 2,034 407 16,435
Operating earnings (loss) 2,058 3,595 (943) 4,710
Identifiable assets 785,028 188,866 85,943 1,059,837
Additions to property, plant and equipment 3,783 2,246 175 6,204
Sales to third parties (short tons) 349,497 -- --
Sales to third parties - corrugated containers (MMSF) -- 1,266 --
Sales to third parties - liquid and food (short tons) -- 16,184 --
Inter-segment sales (short tons) 51,354 -- --
</TABLE>
