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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 27, 1999
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CROWN PAPER CO.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Virginia 33-93494 54-1752385
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
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<S> <C>
300 Lakeside Drive, Oakland CA 94612-3592
(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (510) 874-3400
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
See exhibit 99.1 for copy of news release.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
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Exhibit No. Description
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99.1 Weak fourth quarter 1998 pulp and paper
pricing, fourth quarter 1998 charges and
Nasdaq hearing.
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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 hereunto duly authorized.
CROWN PAPER CO.
February 3, 1999 /s/ Michael J. Hunter
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Michael J. Hunter
Vice President, Chief Accounting Officer
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Exhibit 99.1
Crown Vantage Says Fourth Quarter Results
Will Reflect Weaker Pulp and Paper Pricing
OAKLAND, Calif., Jan. 27, 1999 Crown Vantage Inc. (Nasdaq:CVAN) said today
that it expects to report a net operating loss for the fourth quarter 1998
relative to operating profits in the prior quarter and the 1997 fourth quarter,
principally caused by the continuing unfavorable pricing environment for many
of the company's pulp and paper products. Company sales volumes and costs
continued their improvement trend in the quarter, however. A full release of
financial results for the quarter and 1998 will be made Feb. 3.
Crown Vantage expects to include in the fourth quarter results a pre-tax
charge of about $164 million. Included are a $147 million pre-tax write-down
consisting primarily of fixed assets at the Berlin and Gorham, N.H., pulp and
paper mills. Also included is a $17 million pre-tax charge that represents net
future lease payments for a co-generation facility at the St. Francisville,
La., mill that was originally leased in 1985. Even factoring in the lease
expense, the mill has been able to source energy more economically through the
local energy provider; therefore, the equipment under lease no longer provides
substantive use or benefit to the mill. The company said the reduction in non-
cash expense represented by these two charges should improve pre-tax operating
results going forward. The improvement is expected to be about $20 million in
1999.
The impact of these anticipated charges on financial performance has been
reviewed with and consented to by the company's lending banks. The company
remains in compliance with its revised bank covenants for 1998.
As previously reported, fourth quarter 1998 results will also include a
non-operating extraordinary gain resulting from the return of $33 million in
pay-in-kind notes formerly held by Fort James Corporation.
- more -
In a separate development, the company said its common stock price has
remained below the $5 minimum maintenance standard for continued listing on the
Nasdaq National Market. It has requested and been granted a hearing with
Nasdaq on Feb. 5 to discuss the continued listing. Following the hearing, an
extension could be granted or the shares could be de-listed from the Nasdaq
National Market.
"Our stock price has reflected investor attitude toward small-cap stocks
and the paper industry as a group," said President and Chief Executive Officer
Robert A. Olah. "While there's
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little we can do about the pulp and paper market disruption that began with the
Asian economic situation, we're pleased with the continuing improvements in our
per-ton costs and sales volume those major factors over which we have the most
control. With price increases announced recently in some paper grades, we're
moderately optimistic that we'll see additional improvement in markets as the
year progresses."
Crown Vantage, headquartered in Oakland, Calif., owns ten pulp and paper
mills in the United States and Scotland. It markets a broad range of
specialized papers for printing, publishing and packaging applications.
This news release contains certain forward-looking statements concerning
the company's potential operating results improvement based on fourth quarter
charges, continued listing of the company's common stock on the Nasdaq National
Market, and industry market conditions, including announced price increases.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those stated or inferred by
these statements. These could include, but are not limited to, failure to
achieve operating results improvements based on fourth quarter charges, a
decision by Nasdaq to de-list Crown Vantage stock, and failure of pulp and
paper markets to improve.
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