Filed Pursuant to Rule
424(b)(3) of the Rules and
Regulations Under the
Securities Act of 1933
Registration Statement Nos.
33-23826, 33-43448 and
33-51876
PROSPECTUS SUPPLEMENT
(To Prospectus dated November 24, 1993)
FORT HOWARD CORPORATION
12-5/8% Subordinated Debentures Due 2000
14-1/8% Junior Subordinated Discount Debentures Due 2004
9-1/4% Senior Notes Due 2001
10% Subordinated Notes Due 2003
1991 Pass Through Trust, Pass Through Certificates, Series 1991
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RECENT DEVELOPMENTS
Attached hereto and incorporated by reference herein is the news release
announcing Fort Howard Corporation's financial results for its first quarter
ended March 31, 1994.
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This Prospectus Supplement, together with the Prospectus, is to be used
by Morgan Stanley & Co. in connection with offers and sales of the
above-referenced securities in market-making transactions at negotiated prices
related to prevailing market prices at the time of sale. Morgan Stanley & Co.
Incorporated may act as principal or agent in such transactions.
April 28, 1994
For the first quarter, Fort Howard's net sales decreased 3.3% to
$275,330,000 compared to first quarter 1993 net sales of $284,814,000.
Operating income increased 7.5% for the first quarter of 1994 to
$60,133,000 compared to $55,959,000 for the first quarter of 1993. Operating
income for the first quarter of 1994 benefited from the elimination of
amortization of goodwill of $14 million for the quarter as a result of the
Company's goodwill write-off in the third quarter of 1993. Excluding the
amortization of goodwill from 1993 results, operating income for the first
quarter of 1994 decreased 14.3% compared to the first quarter of 1993.
Earnings before depreciation, interest, amortization and taxes decreased 9.2%
to $82,231,000 in the first quarter of 1994 from $90,543,000 in the first
quarter of 1993.
Business conditions remain extremely competitive. During the first
quarter of 1994, a period of seasonally lower volume, the Company maintained
its domestic price increases achieved through year-end 1993, adversely
affecting domestic sales volume for the first quarter. Severe weather
conditions also adversely affected domestic sales volume during the first
quarter of 1994. In addition, pricing at the Company's international
operations declined further in the first quarter of 1994.
As previously announced, on February 2, 1994, the Company sold $100
million principal amount of 8 1/4% Senior Notes due 2002 and $650 million
principal amount of 9% Senior Subordinated Notes due 2006 in a registered
public offering. The proceeds from the sale of the 8 1/4% Senior Notes and
the 9% Senior Subordinated Notes have been principally used to prepay $100
million of the Company's term loan indebtedness under its Bank Credit
Agreement on February 10, 1994, and to repurchase all the Company's remaining
12 3/8% Senior Subordinated Notes and $238 million of its 12 5/8% Subordinated
Debentures on March 11, 1994.
Extraordinary losses related to debt repurchases in 1994 and 1993 (See
Note to Financial Information) impacted the Company's financial performance in
the first quarters of 1994 and 1993.
The net loss for the first quarter of 1994 increased to $43,342,000 from
$35,975,000 for the same period in 1993.
(Financial information and note follow on separate pages. The note is an
integral part of this statement.)
# # # # #
FORT HOWARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended March 31,
----------------------------
1994 1993
---- ----
(In thousands)
Net Sales $275,330 $284,814
Operating Income 60,133 55,959
Interest Expense 84,318 86,610
Other (Income) Expense, Net 588 (253)
-------- --------
Loss Before Taxes (24,773) (30,398)
Income Taxes (Credit) (9,601) (4,183)
-------- --------
Loss Before Extraordinary Item (15,172) (26,215)
Extraordinary Item - Loss on
Debt Repurchases, Net (28,170) (9,760)
-------- --------
Net Loss $ (43,342) $ (35,975)
========= =========
*****
FORT HOWARD CORPORATION
NOTE TO FINANCIAL INFORMATION
1. In the first quarter of 1994, the Company reported an extraordinary
loss of $28 million (net of income tax credits of $15 million) representing
the redemption premiums and write-offs of deferred loan costs associated with
the repayment of $100 million of term loan indebtedness under the Company's
Bank Credit Agreement on February 10, 1994 and the repurchases of all the
Company's remaining 12 3/8% Senior Subordinated Notes and $238 million of the
Company's 12 5/8% Subordinated Debentures on March 11, 1994. In the first
quarter of 1993, the Company reported an extraordinary loss of $10 million
(net of income taxes of $6 million) representing the write-off of deferred
loan costs associated with the repayment of $250 million of term loan
indebtedness under the Company's Bank Credit Agreement on March 23, 1993 and
the repurchases of all the Company's Junior Subordinated Debentures on
April 21, 1993.
