Filed by Consolidated Papers, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to Rule 14-a-12
of the Securities Exchange Act of 1934
Subject Company: Consolidated Papers, Inc.
Commission File No.: 001-11359
[Press Release by Consolidated Papers on April 10, 2000]
These materials contain certain statements that are neither reported financial
results nor other historical information. These statements are forward-looking
statements within the meaning of the safe-harbor provisions of the U.S. federal
securities laws. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in the forward-looking statements. Many of these risks and
uncertainties relate to factors that are beyond the companies ability to control
or estimate precisely, such as future market conditions, currency fluctuations,
the behavior of other market participants and the actions of governmental
regulators. These and other risk factors are detailed in Consolidated Papers'
SEC reports. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of these materials.
Consolidated Papers does not undertake any obligations to publicly release any
revisions to these forward-looking statements to reflect events or circumstances
after the date of these materials.
Investors and security holders are advised to read the proxy
statement/prospectus regarding the business combination transaction between
Stora Enso and Consolidated Papers, when it becomes available, because it will
contain important information. The proxy statement/prospectus will be filed with
the Securities and Exchange Commission by Stora Enso and Consolidated Papers.
Investors and security holders may obtain a free copy of the proxy
statement/prospectus (when available) and other related documents filed by Stora
Enso and Consolidated Papers at the Commission's website at www.sec.gov. When
available, the proxy statement/prospectus and the other documents may also be
obtained from Consolidated Papers by contacting Consolidated Papers, Attn: Tim
Laatsch, Corporate Communications, 231 First Avenue North, Wisconsin Rapids,
Wisconsin, 52295-8050 and/or Stora Enso, Attn: Maija Harso, Investor Relations,
Kahavaranta 1, P.O. Box 309, FIN-00101 Helsinki, Finland.
<PAGE>
Consolidated Papers, its directors, executive officers and certain other members
of Consolidated Papers management and employees may be soliciting proxies from
Consolidated Papers shareholders in favor of the merger. Information concerning
the participants will be set forth in the proxy statement/prospectus when it is
filed with the Securities and Exchange Commission.
For Additional Information:
Jukka Harmala, CEO of Stora Enso, tel. +358 2046 21404
Esko Makelainen, SEVP, Accounting and Legal Affairs, tel. +358 2046 21450
Ingvar Peterson, SEVP, Chief Financial Officer, tel. +46 8 613 6600
Scott Deitz, Director of Public Affairs, tel. +715 422 1521
www.storaenso.com
www.storaenso.com/investors
www.consolidatedpapers.com
<PAGE>
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Consolidated Papers, Inc.
P.O. Box 8050
Wisconsin Rapids, WI 54495-8050
http://www.consolidatedpapers.com
CONSOLIDATED NEWS RELEASE
- --------------------------------------------------------------------------------
Public Affairs Department
Tim Laatsch
Phone: (715) 422-4023 or
Scott Deitz
Phone: (715) 422-1521
FOR IMMEDIATE RELEASE April 10, 2000
CONSOLIDATED PAPERS, INC. ANNOUNCES IMPROVED EARNINGS DURING FIRST QUARTER 2000;
- --------------------------------------------------------------------------------
RESULTS MARK THE THIRD CONSECUTIVE QUARTER OF INCREASED EARNINGS
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WISCONSIN RAPIDS, Wis. - Consolidated Papers, Inc. (NYSE: CDP) today
reported first quarter 2000 earnings of $25,271,000, or 28 cents per share. This
compares with first quarter 1999 earnings of $13,970,000, or 15 cents per share,
and fourth quarter 1999 earnings of $22,584,000, or 25 cents per share.
Gorton M. Evans, president and chief executive officer, and George W.
Mead, chairman of the board, said improvements in both demand and selling prices
for the company's coated and supercalendered printing papers and a corporate
wide cost reduction initiative contributed to the earnings increase. The
company's operating rates showed improvement during the quarter, although
overall productivity and profitability were less than planned, particularly
during the first two months of the period. First quarter earnings were also
negatively affected by increased pulp prices.
Both the improvement in earnings and a reduction in capital
expenditures allowed the company to reduce debt by almost $30 million during the
quarter.
(MORE)
<PAGE>
Consolidated's first quarter 2000 sales totaled $483,459,000, compared
with $459,233,000 in first quarter 1999 and $473,012,000 in fourth quarter 1999.
The company's total shipments for the quarter just ended were 552,904 tons,
compared with 524,216 tons during the same period last year and 541,771 tons in
the fourth quarter last year.
Consolidated's primary product is coated and supercalendered printing
papers for magazines, brochures, corporate annual reports, advertising inserts
and catalogs. Total shipments of these papers were up 7% compared with first
quarter 1999 and up 1% compared with fourth quarter 1999.
Shipments of heavier-weight groundwood-free coated printing paper were
up 3% compared with the first quarter of 1999 and down 2% compared with the last
quarter of 1999. Groundwood-free operations ran at 93% of available capacity
during the quarter, compared with 89% during the first quarter of 1999 and 91%
during the fourth quarter last year.
Shipments of lighter-weight groundwood coated printing paper grades
were up 8% compared with first quarter 1999 and up 4% compared with the final
quarter last year. The combined operating rate of the mills that produce
lightweight coated groundwood printing papers was 98% during first quarter 2000,
compared with 95% during the same quarter in 1999 and 94% during fourth quarter
1999.
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<PAGE>
Shipments of supercalendered printing papers were up 15% during first
quarter 2000 compared with the first quarter of last year but down 4% compared
with the fourth quarter last year. The operating rate at this mill was 100% of
available capacity, as it was for both the first and fourth quarters of 1999.
Due to improvements in orders, Consolidated's specialty paper shipments
were up 14% during the first quarter of 2000 compared with the first quarter of
1999 and up 15% compared with the fourth quarter of last year. The operating
rate of the mill that makes these papers for product packaging, bar code labels
and pressure sensitive papers was 85%, compared with 79% during first quarter
1999 and 76% during fourth quarter 1999.
Shipments of paperboard products were stable, and shipments of recycled
fiber made from office scrap paper increased during the period.
On February 22, 2000, Consolidated Papers announced its agreement to be
acquired by Stora Enso Oyj, Helsinki, Finland. Stora Enso is one of the world's
leading forest industry companies. The transaction has been unanimously approved
by the boards of directors of both companies. The completion of the sale, which
is subject to regulatory approval and the approval of shareholders of both
companies, is expected to occur in August or September 2000.
Consolidated Papers will hold its regular annual meeting of
shareholders on Wednesday, June 14, at 2 p.m., at the Hotel Mead in Wisconsin
Rapids, Wisconsin. This
(MORE)
<PAGE>
meeting will not consider approval of the merger. A separate proxy
statement/prospectus with respect to the merger will be mailed to shareholders
most likely in June or July of this year which will provide detailed information
concerning the merger.
CONSOLIDATED PAPERS, INC. PROFILE
Consolidated Papers, Inc. is North America's largest producer of coated
and supercalendered printing papers for the printing and publishing industries.
In addition, the company is the leading producer of coated specialty papers and
manufactures paperboard and paperboard products. Consolidated also produces
elemental chlorine-free kraft pulp from virgin wood fiber for its own use and
recycled pulp from printed, preconsumer and postconsumer scrap paper.
Consolidated employs approximately 6,800 people. The company is
headquartered in Wisconsin Rapids, Wisconsin, and operates manufacturing
facilities in Biron, Kimberly, Niagara, Stevens Point, Whiting and Wisconsin
Rapids, Wisconsin, as well as in Duluth, Minnesota.
Consolidated owns and manages nearly 700,000 acres of forestland in
Wisconsin, Michigan, Minnesota, and Ontario, Canada. The company obtains the
fiber required for its papermaking operations from these renewable forests; from
private, national, state and county forests; and from sawmill byproducts and
recycled scrap paper.
To learn more about Consolidated, visit the company's Web site at
http://www.consolidatedpapers.com.
Tabular summaries follow.
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<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS Consolidated Papers, Inc. and Subsidiaries
<CAPTION>
As of
---------------------------------------------
March 31 March 31 December 31
2000 1999 1999
(Dollars in thousands) (Unaudited) (Unaudited)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 9,475 $ 7,012 $ 6,201
Receivables (net of reserves of $5,852 as of March 31, 2000,
$6,626 as of March 31, 1999 and $6,002 as of December 31, 1999) 137,217 162,071 127,801
Inventories
Finished stock 80,816 81,996 68,972
Unfinished stock 5,858 7,649 8,301
Raw materials and supplies 96,728 103,597 91,348
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Total inventories 183,402 193,242 168,621
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Prepaid expenses 33,545 41,262 32,905
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Total current assets 363,639 403,587 335,528
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Investments and other assets 61,890 60,068 61,879
Restricted cash related to leases 438,877 429,609 443,844
Goodwill 128,313 137,953 130,593
PLANT AND EQUIPMENT
Buildings, machinery and equipment 3,657,522 3,544,095 3,632,547
Less: Accumulated depreciation 1,230,408 1,094,092 1,185,061
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2,427,114 2,450,003 2,447,486
Land and timberlands 42,100 41,063 42,129
Capital additions in process 67,020 118,735 64,714
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Total plant and equipment 2,536,234 2,609,801 2,554,329
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$ 3,528,953 $ 3,641,018 $ 3,526,173
===================================================================================================================
CURRENT LIABILITIES
Current portion of long-term debt $ 85,000 $ -- $ 85,284
Accounts payable
115,825 90,476 103,564
Other 131,036 147,195 122,412
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Total current liabilities 331,861 237,671 311,260
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Long-term debt 772,721 1,052,193 802,000
Capital lease obligations 461,511 455,210 467,804
Deferred income taxes 397,029 355,235 390,991
Postretirement benefits 170,285 152,910 167,118
Other noncurrent liabilities 30,537 32,657 32,870
SHAREHOLDERS' INVESTMENT
Preferred stock, authorized and unissued 15,000,000 shares -- -- --
Common stock, shares issued 91,263,171 as of March 31, 2000,
90,896,802 as of March 31, 1999 and 91,140,982 as of
December 31, 1999 91,263 90,897 91,141
Capital in excess of par value 74,582 64,907 71,390
Accumulated other comprehensive income (2,754) (2,658) (2,745)
Treasury stock, at cost, 213,977 shares as of March 31, 2000,
307,025 shares as of March 31, 1999 and 304,025 shares as of
December 31, 1999 (4,800) (7,168) (7,093)
Reinvested earnings 1,206,718 1,209,164 1,201,437
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Total shareholders' investment 1,365,009 1,355,142 1,354,130
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$ 3,528,953 $ 3,641,018 $ 3,526,173
===================================================================================================================
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME Consolidated Papers, Inc. and Subsidiaries
Three months ended
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March 31 December 31
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(Dollars in thousands, except per share data - unaudited) 2000 1999 1999
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 483,459 $ 459,233 $ 473,012
Cost of goods sold 403,600 398,056 395,487
Gross profit 79,859 61,177 77,525
Selling, general and administrative expenses 26,241 25,155 26,063
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Income from operations 53,618 36,022 51,462
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Interest expense (20,501) (21,051) (21,252)
Interest income 7,024 6,045 6,343
Miscellaneous, net 1,287 2,268 1,088
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Total other income (expense), net (12,190) (12,738) (13,821)
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Income before provision for income taxes 41,428 23,284 37,641
Provision for income taxes 16,157 9,314 15,057
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Net income $ 25,271 $ 13,970 $ 22,584
===================================================================================================================
Net income per share - basic $ 0.28 $ 0.15 $ 0.25
===================================================================================================================
Net income per share - diluted $ 0.28 $ 0.15 $ 0.25
===================================================================================================================
Average number of common shares outstanding 90,909,365 90,422,797 90,801,101
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</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF REINVESTED EARNINGS
<CAPTION>
Three months ended
---------------------------------------------
March 31 December 31
---------------------------------------------
(Dollars in thousands - unaudited) 2000 1999 1999
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance beginning of period $ 1,201,437 $ 1,215,091 $ 1,198,823
Add: Net income 25,271 13,970 22,584
Deduct: Cash dividends (19,990) (19,897) (19,970)
- -------------------------------------------------------------------------------------------------------------------
Balance end of period $ 1,206,718 $ 1,209,164 $ 1,201,437
===================================================================================================================
SHIPMENTS IN TONS
Three months ended
--------------------------------------------
March 31 December 31
2000 1999 1999
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Printing papers 498,170 465,918 493,517
Specialty papers 38,295 33,547 33,403
Paperboard 758 931 1,135
Paperboard products 7,066 7,057 6,970
Corrugated products -- 9,092 --
Recycled pulp 8,615 7,671 6,746
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Total 552,904 524,216 541,771
====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS Consolidated Papers, Inc. and Subsidiaries
<CAPTION>
Three months ended March 31
---------------------------
(Dollars in thousands - unaudited) 2000 1999
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 25,271 $ 13,970
Depreciation and depletion 47,956 47,628
Amortization of goodwill and intangibles 2,388 2,366
Debt premium amortization -- (898)
Deferred income taxes 6,104 5,662
Earnings of affiliates (686) (952)
(Increase) decrease in current assets, other than cash and cash (24,837) (11,598)
equivalents
Increase (decrease) in current liabilities, other than current
portion of long-term debt 20,819 14,710
Increase (decrease) in postretirement benefits 3,167 4,402
Increase (decrease) in other noncurrent liabilities (2,333) 1,241
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Net cash provided by operating activities 77,849 76,531
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CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures (29,861) (56,109)
Other (768) (1,441)
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Net cash (used in) investing activities (30,629) (57,550)
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CASH FLOWS FROM FINANCING ACTIVITIES
Cash dividends (19,990) (19,897)
Repayment of long-term debt -- (19,473)
Net borrowings under lines of credit, revolvers and commercial paper (29,563) 18,000
Other 5,607 6,171
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Net cash (used in) financing activities (43,946) (15,199)
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Net increase (decrease) in cash and cash equivalents 3,274 3,782
Cash and cash equivalents - beginning of period 6,201 3,230
- ------------------------------------------------------------------------------------------------
Cash and cash equivalents - end of period $ 9,475 $ 7,012
================================================================================================
Cash paid during the period for:
Interest $ 12,840 $ 13,197
Income taxes 340 4,561
================================================================================================
</TABLE>
NOTES TO FINANCIAL STATEMENTS
1. Reference is made to the Notes to Financial Statements that appear in the
1999 Annual Report.
The basic principles of those notes are pertinent to these statements.
###
