<PAGE> 1
==============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------ ------
Commission File No.: 000-09409
MERCER INTERNATIONAL INC.
(Exact name of Registrant as specified in its charter)
Washington 91-6087550
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Burglistrasse 6, Zurich, Switzerland CH 8002
(Address of principal executive offices) (Zip Code)
41(1) 201 7710
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. YES X NO
----- -----
The Registrant had 16,209,963 shares of beneficial interest outstanding as at
May 14, 1999.
==============================================================================
<PAGE> 2
PART I. FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
MERCER INTERNATIONAL INC.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED MARCH 31, 1999
(Unaudited)
FORM 10-Q
QUARTERLY REPORT - PAGE 2
<PAGE> 3
MERCER INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
As at March 31, 1999 and December 31, 1998
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1999 1998
------------ ------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $ 19,851 $ 53,250
Investments 11,259 12,891
Receivables 31,774 33,828
Inventories 16,982 19,540
Other 5,019 2,207
------------ ------------
Total current assets 84,885 121,716
Long-Term Assets
Cash restricted 13,821 15,000
Properties 217,643 161,012
Investments 13,236 13,626
Receivables 10,150 10,150
Deferred income tax 10,930 11,780
------------ ------------
265,780 211,568
------------ ------------
$ 350,665 $ 333,284
============ ============
LIABILITIES
Current Liabilities
Accounts payable and accrued expenses $ 43,825 $ 53,518
Notes payable 1,828 1,839
Debt 973 1,338
------------ ------------
Total current liabilities 46,626 56,695
Long-Term Liabilities
Debt 156,328 121,548
Other 1,863 2,022
------------ ------------
158,191 123,570
------------ ------------
Total liabilities 204,817 180,265
SHAREHOLDERS' EQUITY
Shares of beneficial interest 95,611 91,913
Cumulative translation adjustment (40,777) (28,663)
Net unrealized loss on investments valuation (7,285) (8,398)
Retained earnings 98,299 98,167
------------ ------------
145,848 153,019
------------ ------------
$ 350,665 $ 333,284
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FORM 10-Q
QUARTERLY REPORT - PAGE 3
<PAGE> 4
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
For Three Months Ended March 31, 1999 and 1998
(Unaudited)
(dollars in thousands, except for earnings per share)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Revenues
Sales $ 39,729 $ 49,093
Investments and other 1,350 3,416
------------ ------------
41,079 52,509
Expenses
Cost of sales 35,431 39,580
General and administrative 4,988 5,874
Interest expense 528 793
------------ ------------
40,947 46,247
------------ ------------
Income from operations before income taxes 132 6,262
Income taxes - -
------------ ------------
Net income 132 6,262
Retained earnings, beginning of period 98,167 89,765
------------ ------------
Retained earnings, end of period $ 98,299 $ 96,027
============ ============
Earnings per share
Basic $ 0.01 $ 0.41
============ ============
Diluted $ 0.01 $ 0.41
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FORM 10-Q
QUARTERLY REPORT - PAGE 4
<PAGE> 5
MERCER INTERNATIONAL INC.
STATEMENT OF COMPREHENSIVE INCOME
For Three Months Ended March 31, 1999 and 1998
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Net income $ 132 $ 6,262
Other comprehensive income (loss):
Foreign currency translation adjustments (12,114) (2,178)
Unrealised gain on securities 1,113 605
------------ ------------
Other comprehensive loss (11,001) (1,573)
------------ ------------
Total comprehensive income (loss) $ (10,869) $ 4,689
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FORM 10-Q
QUARTERLY REPORT - PAGE 5
<PAGE> 6
MERCER INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Three Months Ended March 31, 1999 and 1998
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net income from continuing operations $ 132 $ 6,263
Adjustments to reconcile net income from
continuing operations to cash
Depreciation and amortization 3,347 3,289
Non-cash asset acquisitions (145) (2,502)
------------ ------------
3,334 7,050
Changes in current assets and liabilities
Investments 1,401 785
Inventories 1,060 143
Receivables (766) (9,240)
Accounts payable and accrued expenses (6,326) 2,023
Other (2,899) (11)
------------ ------------
Net cash (used in) provided by
operating activities (4,196) 750
Cash Flows from Investing Activities:
Purchase of fixed assets (74,901) (3,923)
Other - 14
------------ ------------
Net cash used in investing activities (74,901) (3,909)
Cash Flows from Financing Activities:
Increase in bank indebtedness 48,861 831
Decrease in bank indebtedness (108) (1,080)
Net proceeds on issuance of shares
of beneficial interest - 1,196
------------ ------------
Net cash provided by financing activities 48,753 947
Effect of exchange rate changes on cash
and cash equivalents (3,055) (70)
------------ ------------
Net decrease in cash and cash equivalents (33,399) (2,282)
Cash and cash equivalents, beginning of period 53,250 4,414
------------ ------------
Cash and cash equivalents, end of period $ 19,851 $ 2,132
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
FORM 10-Q
QUARTERLY REPORT - PAGE 6
<PAGE> 7
MERCER INTERNATIONAL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THREE MONTHS ENDED MARCH 31, 1999
(Unaudited)
Note 1. Basis of Presentation
---------------------
The interim period consolidated financial statements contained herein include
the accounts of Mercer International Inc. and its subsidiaries (the
"Company").
The interim period consolidated financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission (the "SEC"). Certain information and footnote disclosure normally
included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
SEC rules and regulations. The interim period consolidated financial
statements should be read together with the audited consolidated financial
statements and accompanying notes included in the Company's latest annual
report on Form 10-K for the fiscal year ended December 31, 1998. In the
opinion of the Company, the unaudited consolidated financial statements
contained herein contain all adjustments necessary to present a fair statement
of the results of the interim periods presented.
Note 2. Earnings Per Share
------------------
Earnings per share is computed on the basis of the weighted average number of
shares outstanding during a period after considering convertible securities,
warrants and options. The weighted average number of shares outstanding for
the purposes of calculating diluted earnings per share was 15,893,867 and
15,243,379 for the three months ended March 31, 1999 and 1998, respectively.
FORM 10-Q
QUARTERLY REPORT - PAGE 7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Mercer International Inc. is a pulp and paper company and its operations are
primarily located in Germany. The following discussion and analysis of the
results of operations and financial condition of the Company for the three
months ended March 31, 1999 should be read in conjunction with the
consolidated financial statements and related notes included elsewhere herein.
In this document: (i) unless the context otherwise requires, the "Company"
refers to Mercer International Inc. and its subsidiaries; and (ii) a "tonne"
is one metric ton or 2,204.6 pounds.
RESULTS OF OPERATIONS - Three Months Ended March 31, 1999
- ---------------------------------------------------------
The following table sets forth selected sales data for the Company for the
periods indicated:
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 31, 1999 March 31, 1998
-------------- --------------
(in thousands)
<S> <C> <C>
Sales by Product Class
- ----------------------
Packaging papers(1) $ 4,621 $ 8,431
Specialty papers 8,107 8,628
Printing papers 10,016 10,672
Pulp 16,132 20,593
Other 853 769
-------------- --------------
Total(2) $ 39,729 $ 49,093
============== ==============
Sales by Geographic Area
- ------------------------
Germany $ 20,749 $ 27,319
European Union(3) 15,733 18,611
Other 3,247 3,163
-------------- --------------
Total $ 39,729 $ 49,093
============== ==============
Sales by Volume (tonnes)
- ---------------
Packaging papers(1) 17,398 31,893
Specialty papers 9,475 10,543
Printing papers 14,175 14,904
Pulp 38,033 42,289
-------------- --------------
Total 79,081 99,629
============== ==============
</TABLE>
- ---------------
(1) The Company sold its packaging paper mill in Greiz in the third quarter
of 1998. Paper sales from the Greiz paper mill are included in the
Company's results of operations for the three months ended March 31,
1998. The Greiz paper mill sold 12,261 tonnes of packaging paper for
$3.3 million in the three months ended March 31, 1998.
(2) Excluding intercompany sales.
(3) Not including Germany.
FORM 10-Q
QUARTERLY REPORT - PAGE 8
<PAGE> 9
In the three months ended March 31, 1999, revenues decreased to $41.1 million
from $52.5 million in the comparative period of 1998, primarily as a result of
lower sales volumes. In the first quarter of 1999, pulp and paper revenues
decreased by approximately 19.6% from the comparable period of 1998, on a
21.7% decrease in pulp sales and an 18.0% decrease in paper sales.
In the three months ended March 31,1999, pulp markets remained generally weak.
While prices improved marginally during the quarter, they were largely offset
by the devaluation of the deutschmark and euro against the U.S. dollar in the
same period. On average, pulp prices realized by the Company in the first
quarter of 1999 were approximately 12.9% lower than in the same period of 1998.
Overall, pulp sales decreased to $16.1 million in the three months ended March
31, 1999 from $20.6 million in the comparative period of 1998.
In the three months ended March 31, 1999, markets for specialty and printing
papers were generally stable while markets for packaging papers were weaker
than in the comparative period of 1998. On average, paper prices realized by
the Company increased by approximately 14.6% in the three months ended March
31, 1999, compared to the same period in 1998, primarily as a result of higher
prices for specialty papers. Overall, paper sales in the three months ended
March 31, 1999 decreased to $22.7 million from $27.7 million in the same
period of 1998, primarily as a result of a sales volume decrease of 28.4%.
Expenses decreased to $40.9 million in the three months ended March 31, 1999
from $46.2 million in the comparable period of 1998, primarily as a result of
lower sales volumes. On average, the Company's fibre costs for pulp production
in the three months ended March 31, 1999 decreased by approximately 2.0%,
compared to the same period in 1998. Prices for waste paper, which comprises
approximately 80% of the fibre for the Company's paper mills, increased by
approximately 16.0% in the three months ended March 31, 1999, compared to the
same period of 1998, due to the change in the product mix to produce more
higher-margin products. General and administrative expenses were $5.0 million
in the three months ended March 31, 1999, compared to $5.9 million in the
comparable period of 1998.
Interest expense in the three months ended March 31, 1999 decreased to $0.5
million from $0.8 million in the comparable period of 1998, as a result of
reduced indebtedness during the current period, other than with respect to the
financing for the project to convert the Company's pulp mill from the
production of sulphite pulp to kraft pulp (the "Conversion Project"). Interest
costs in respect of the Conversion Project are being capitalized.
In the three months ended March 31, 1999, the Company reported net income of
$0.1 million or $0.01 per share, compared to $6.3 million or $0.41 per share
in the comparable period of 1998.
FORM 10-Q
QUARTERLY REPORT - PAGE 9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The following table is a summary of selected financial information concerning
the Company for the periods indicated:
<TABLE>
<CAPTION>
As at As at
March 31, 1999 December 31, 1998
-------------- -----------------
(in thousands)
<S> <C> <C>
FINANCIAL POSITION
Working capital $ 38,259 $ 65,021
Total assets 350,665 333,284
Long-term government debt 6,452 7,003
Long-term debt - other 149,876 114,545
</TABLE>
At March 31, 1999, the Company's cash and cash equivalents totalled $19.9
million, a net decrease of $33.4 million from $53.3 million at December 31,
1998. At March 31, 1999, the Company had short-term trading securities
totalling $11.3 million, compared to $12.9 million at December 31, 1998.
Operating Activities
- --------------------
Operating activities used cash of $4.2 million in the first quarter of 1999,
compared to providing cash of $0.8 million in the same period in 1998. A
decrease in accounts payable and accrued expenses used cash of $6.3 million in
the three months ended March 31, 1999, compared to an increase in same
providing cash of $2.0 million in the three months ended March 31, 1998.
Lower inventories provided cash of $1.1 million in the three months ended
March 31, 1999, compared to $0.1 million in the three months ended March 31,
1998. An increase in receivables used cash of $0.8 million in the three
months ended March 31, 1999, compared to $9.2 million in the three months
ended March 31, 1998. The Company expects to generate sufficient cash flow
from operations to meet its working capital requirements.
Investing Activities
- --------------------
Investing activities in the three months ended March 31, 1999 used cash of
$74.9 million, consisting primarily of capital expenditures relating to the
Conversion Project, compared to $3.9 million in the three months ended March
31, 1998.
The Conversion Project was commenced in mid-1998 and is designed, among other
things, to convert the Company's pulp mill to produce kraft pulp, increase its
annual production capacity from 160,000 tonnes to 280,000 tonnes and reduce
its emissions of sulphur dioxides and effluent. The estimated cost for the
Conversion Project is approximately $400 million, which is being financed
through a combination of borrowings under a project loan (the "Project Loan"),
non-refundable governmental grants, governmental assistance and guarantees for
long-term project financing and an equity investment by the Company. Capital
expenditures in respect of the Conversion Project in 1999 are estimated to be
approximately $309.0 million and it is expected to be completed around the end
of 1999.
FORM 10-Q
QUARTERLY REPORT - PAGE 10
<PAGE> 11
During the first quarter of 1999, the Conversion Project was on schedule and
on budget. The Company has entered into contracts for the purchase of
equipment in excess of 90% of the capital budget for the Conversion Project and
the Company does not currently anticipate any significant delays with respect to
the Conversion Project. In addition, the Company has commenced site preparation
at its pulp mill for the installation of certain key items of equipment,
including a new recovery boiler. Increased construction activity on the mill
site during the current quarter had a limited negative impact on production.
As at March 31, 1999, the Company had expended approximately $162.1 million on
the Conversion Project.
Although the Conversion Project is on schedule, the Company believes that the
project may incur cost overruns as a result of higher than expected
infrastructure costs relating to site development and piping. Such additional
costs have been partially offset by lower than expected costs for new
equipment purchases. Pursuant to the terms of the Project Loan, such cost
overruns will be funded in equal proportions through borrowings under a cost
overrun tranche established under such loan facility and amounts deposited by
the Company into a restricted account with the lenders under the Project Loan.
Financing Activities
- --------------------
Financing activities provided cash of $48.8 million in the first quarter of
1999, primarily as a result of increased borrowing under the Project Loan in
respect of the Conversion Project. Financing activities provided cash of $0.9
million in the first quarter of 1998.
The depreciation of the deutschmark against the U.S. dollar in the first
quarter of 1999 resulted in an unrealized foreign exchange translation loss of
$3.1 million on cash and cash equivalents, which is included as shareholders'
equity in the Company's balance sheet and does not affect the Company's net
earnings. See "Foreign Currency".
Other than the Conversion Project, the Company had no material commitments to
acquire assets or operating businesses as at March 31, 1999. The Company
anticipates that there will be acquisitions of businesses or commitments to
projects in the future. To achieve its long-term goals of expanding its asset
and earnings base through mergers and acquisitions, the Company will require
substantial capital resources. The necessary resources will be generated from
cash flow from operations, cash on hand, borrowing against its assets and/or
the sale of assets.
Foreign Currency
- ----------------
Substantially all of the Company's operations are conducted in international
markets and its consolidated financial results are subject to foreign currency
exchange rate fluctuations, in particular, those in Germany. Approximately 99%
of the Company's revenues are denominated in deutschmarks and euros. The value
of the euro is fixed at 1.95583 deutschmarks.
FORM 10-Q
QUARTERLY REPORT - PAGE 11
<PAGE> 12
The Company translates foreign assets and liabilities into U.S. dollars at the
rate of exchange on the balance sheet date. Revenues and expenses are
translated at the average rate of exchange prevailing during the year.
Unrealized gains or losses from these translations are recorded as
shareholders' equity on the Company's balance sheet and do not affect the net
earnings of the Company.
Since substantially all of the Company's revenues are received in deutschmarks
and euros, the financial position of the Company for any given period, when
reported in U.S. dollars, can be significantly affected by the exchange rates
prevailing during that period. In the three months ended March 31, 1999, the
depreciation of the deutschmark against the U.S. dollar resulted in a net
$12.1 million foreign exchange translation loss and, as a result, the
cumulative foreign exchange translation loss increased from $28.7 million at
December 31, 1998 to $40.8 million at March 31, 1999.
As both the Company's principal sources of revenues and expenses are in
deutschmarks or euros, the Company does not currently enter into any currency
hedging arrangements for exchange rate fluctuations.
The average and period ending exchange rates for the deutschmark to the U.S.
dollar for the periods indicated are as follows:
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 31, 1999 March 31, 1998
-------------------------- --------------------------
Period End Period Average Period End Period Average
---------- -------------- ---------- --------------
<S> <C> <C> <C> <C>
RATE OF EXCHANGE
Deutschmark 1.8088 1.7429 1.8496 1.8189
</TABLE>
Based upon the period average exchange rate in the first quarter of 1999, the
U.S. dollar increased by approximately 4.6% in value against the deutschmark
since December 31, 1998.
European Economic and Monetary Union
- ------------------------------------
Effective January 1, 1999, the currencies of the majority of the member
countries of the European Economic and Monetary Union ("EMU") were replaced by
a new currency, the "euro". The Company commenced transacting business in the
euro beginning on January 1, 1999. The Company does not anticipate that the
conversion rate for the deutschmark into the euro, fixed on January 1, 1999,
will significantly impact on the Company's results of operations. However,
there can be no assurance that the potential increased competition on the
German market, which is the primary market for the Company's pulp and paper
products, resulting from the introduction of the euro will not have an adverse
effect on the Company's results of operations.
Year 2000
- ---------
Many of the world's computer systems currently record years in a two-digit
format. These computer systems will be unable to properly interpret dates
beyond the year 1999, which could lead to business disruptions and is commonly
referred to as the "Year 2000" issue. The Company is conducting a
comprehensive review of all significant applications that may require
modification to
FORM 10-Q
QUARTERLY REPORT - PAGE 12
<PAGE> 13
ensure Year 2000 compliance. The Company is utilizing both internal and
external resources to make any required modifications and to test for Year
2000 compliance. The modification and testing process of all significant
applications is expected to be completed in the third quarter of 1999. In
addition, the Company has initiated communications with its significant
suppliers and largest customers to ascertain their Year 2000 readiness and
develop contingency plans as required.
Based upon its current information, management of the Company has determined
that the Year 2000 issue will not pose significant operational problems for
its computers. The total cost to the Company of Year 2000 compliance
activities has not been and is not currently anticipated to be material to its
financial position or results of operations in any given year. The costs and
the dates on which the Company plans to complete Year 2000 modification and
testing are based on management's best estimates, which were derived utilizing
numerous assumptions of future events. However, there can be no assurance
that these estimates will be achieved and actual results could differ
materially from those anticipated.
Conversion Project Uncertainties
- --------------------------------
The Company is subject to various uncertainties in connection with the
Conversion Project, such as availability and cost of materials and labour,
construction delays, cost overruns, weather conditions, governmental
regulations, availability of adequate financing, increases in long-term
interest rates and increases in taxes and other governmental fees, which may
cause fluctuations in its operating results. The Conversion Project is also
subject to extensive and complex regulations and environmental compliance,
which may result in delays or the Company incurring substantial costs in
relation thereto. The Conversion Project has and will continue to adversely
affect and disrupt the production of sulphite pulp and the operation of the
Company's pulp mill in 1999, as a result of disruptions caused by
construction, site development work, installation and removal of equipment,
employee training and planned and unplanned downtime. In addition, after the
first quarter of 1999, the pulp mill will no longer produce dissolving
sulphite pulp, which is a premium priced grade of sulphite pulp.
Construction of the Conversion Project is expected to be completed around the
end of 1999 and the pulp mill will take approximately three months of downtime
to facilitate its completion. Upon completion of construction, the pulp mill
will go through a "start-up" or "ramp-up" period. The Company expects that
the pulp mill will operate at approximately 80% of capacity by mid-2000 and at
or near full capacity by the end of 2000.
While the Conversion Project is on schedule, there can be no assurance that
the project will not suffer delays during the construction phase as a result
of, among other things, delays in the shipment and installation of equipment,
materials or labour shortages, delays in the receipt of permits, weather
conditions, or governmental actions. In addition, there are a number of risks
and uncertainties inherent in the start-up of the pulp mill after the
completion of construction. There can be no assurance that the pulp mill will
not experience any operating difficulties or delays during the start-up
period, any of which could have a material adverse effect on the Company's
operations.
FORM 10-Q
QUARTERLY REPORT - PAGE 13
<PAGE> 14
Cyclical Nature of Business; Competitive Position
- -------------------------------------------------
The pulp and paper business is cyclical in nature and markets for the
Company's principal products are characterized by periods of supply and demand
imbalance, which in turn affects product prices. The markets for pulp and
paper are highly competitive and sensitive to cyclical changes in industry
capacity and in the economy, both of which can have a significant influence on
selling prices and the earnings of the Company. Demand for pulp and paper
products has historically been determined by the level of economic growth and
has been closely tied to overall business activity. The competitive position
of the Company is influenced by the availability and quality of raw materials
(fibre) and its experience in relation to other producers with respect to
inflation, energy, labour costs and productivity.
Forward-Looking Statements
- --------------------------
Statements in this report, to the extent they are not based on historical
events, constitute forward-looking statements. Forward-looking statements
include, without limitation, statements regarding the outlook for future
operations, forecasts of future costs and expenditures, the evaluation of
market conditions, the outcome of legal proceedings, the adequacy of reserves,
or other business plans. Investors are cautioned that forward-looking
statements are subject to an inherent risk that actual results may vary
materially from those described herein. Factors that may result in such
variance, in addition to those accompanying the forward-looking statements,
include changes in interest rates, commodity prices, and other economic
conditions; actions by competitors; changing weather conditions and other
natural phenomena; actions by government authorities; uncertainties associated
with legal proceedings; technological development; future decisions by
management in response to changing conditions; and misjudgments in the course
of preparing forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
FORM 10-Q
QUARTERLY REPORT - PAGE 14
<PAGE> 15
PART II. OTHER INFORMATION
-----------------
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to routine litigation incidental to its business. The
Company does not believe that the outcome of such litigation will have a
material adverse effect on its business or financial condition.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit
Number Description
------- -----------
27 Article 5 - Financial Data Schedule for the 1st Quarter
1999 - Form 10-Q.
(b) Reports on Form 8-K
None.
FORM 10-Q
QUARTERLY REPORT - PAGE 15
<PAGE> 16
SIGNATURES
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.
MERCER INTERNATIONAL INC.
/s/ Jimmy S.H. Lee
-------------------------------------
Jimmy S.H. Lee
President and Chief Executive Officer
Date: May 14, 1999
FORM 10-Q
QUARTERLY REPORT - PAGE 16
<PAGE> 17
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
27 Article 5 - Financial Data Schedule for the 1st Quarter
1999 - Form 10-Q.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS AND NOTES INCLUDED IN THIS FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 19,851
<SECURITIES> 11,259
<RECEIVABLES> 31,774
<ALLOWANCES> 0
<INVENTORY> 16,982
<CURRENT-ASSETS> 84,885
<PP&E> 217,643
<DEPRECIATION> 0
<TOTAL-ASSETS> 350,665
<CURRENT-LIABILITIES> 46,626
<BONDS> 156,328
0
0
<COMMON> 95,611
<OTHER-SE> 50,237
<TOTAL-LIABILITY-AND-EQUITY> 350,665
<SALES> 39,729
<TOTAL-REVENUES> 41,079
<CGS> 35,431
<TOTAL-COSTS> 40,947
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 528
<INCOME-PRETAX> 132
<INCOME-TAX> 0
<INCOME-CONTINUING> 132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
