FiberMark 8K 4 5 05





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: May 4, 2005

FiberMark, Inc. 
(Exact name of registrant as specified in charter) 

Delaware  
001-12865  
82-0429330 
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 


161 Wellington Road 
P.O. Box 498 
Brattleboro, Vermont 05302 
(802) 257-0365 
 
 
 




 


Item 2.02 Results of Operations and Financial Condition. 
 
On May 4, 2005, FiberMark announced its fourth-quarter and year-end 2004 results. The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The Exhibit associated with this item attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.


Item 9.01. Financial Statements and Exhibits

Exhibit 99.1  Press Release Dated May 4, 2005





 


 


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 hereunto duly authorized.  
 

     
 
FiberMark 
     
Date: May 4, 2005
By:  
/s/ John E. Hanley
 
 John E. Hanley
 
Vice President and Chief Financial Officer
 


 


EXHIBIT INDEX
 
Exhibit No.
 
 Description
 
 
  
Exhibit 99.1
 
 
 
 
Press release dated May 4, 2005


 

Exhibit 99.1

FOR IMMEDIATE RELEASE
Contact:
Janice C. Warren
   
Director of Investor Relations and Corporate Communications
   
802 257 5981 
 
FiberMark Reports 2004 Fourth-quarter and Year-end Results
BRATTLEBORO, VERMONT, May 4, 2005—FiberMark, Inc., (OTCBB: FMKIQ) today issued its financial results for the fourth quarter and year ended December 31, 2004. For full-year 2004, the company reported a net loss of $25.6 million, or $3.62 per share, versus a loss of $119.2 million, or $16.87 per share, in 2003. The smaller net loss reflects an improvement in operating income to $20.4 million from an operating loss of $76.8 million in 2003 attributable to improved sales; lower interest expense as $25.7 million of post-petition interest was stayed by the company’s chapter 11 filing; the lack of asset impairment charges in 2004 versus $93.6 million of such charges in 2003, including $92.3 million in goodwill impairment; and, partially offsetting these amounts, chapter 11-related reorganization expenses in 2004 of $25.1 million.

Sales in 2004 totaled $438.1 million versus $399.3 million in 2003, an increase of $38.8 million or 9.7%. Sales from the company’s German operations were $210.3 million in 2004 compared with $185.1 million in 2003, an increase of $25.2 million or 13.6%. Excluding the effects of a stronger euro, which accounted for $22.1 million of the increase, sales from German operations increased by $3.1 million or 1.7%. Sales from German operations grew despite continued weak economic conditions, reflecting gains in automotive filter media, nonwoven wallcovering and tape-base materials, which offset declines in other markets. North American operations sales were $227.8 million in 2004 compared with $214.2 million in 2003, an increase of $13.6 million or 6.3%. These sales gains reflected general economic improvement, as well as new product and business development that resulted in share gains in the company’s graphic design and packaging businesses.

For the 2004 fourth quarter, the company reported a net loss of $4.7 million, or $0.66 per share, versus a loss of $2.3 million, or $0.33 per share, in 2003. Reorganization expense, which was not present in 2003, accounted for $4.6 million of the net loss in the fourth quarter of 2004, while interest expense was $8.4 million lower for the reason indicated above. Fourth-quarter 2003 results included a $1.4 million non-cash asset impairment charge, as well as a one-time foreign exchange transaction gain of $4.0 million, which were not factors in the fourth quarter of 2004. Higher pulp, energy and other raw material costs were only partially offset by selling price increases, while higher volume largely filled this shortfall.
 
Sales in the fourth quarter of 2004 were $106.9 million versus $95.2 million in 2003, an increase of $11.7 million or 12.3%. Sales from German operations were $54.2 million in 2004 compared with $45.1 million in 2003, an increase of $9.1 million or 20.2%. Net of foreign currency translation effects of $7.4 million, German operations sales grew by 3.8%. Sales from North American operations were $52.7 million compared with $50.1 million, an increase of $2.6 million or 5.2%.

As of December 31, 2004, FiberMark’s pro forma unused borrowing capacity under its existing credit facilities was $45.2 million.

“Fourth-quarter sales were stronger than in 2003, aided by strengthening markets and market development successes through our North American operations, continued strength in key German operations markets and exchange rate benefits,” said Alex Kwader, chairman and chief executive officer. “Technical specialties and office products continue to contend with modest market erosion, while our publishing and packaging businesses generated gains. Publishing in particular rebounded due to industry improvement and favorable comparisons versus a weak 2004 quarter.”

FiberMark, headquartered in Brattleboro, Vt., is a leading producer of specialty fiber-based materials meeting industrial and consumer needs worldwide, operating 11 facilities in the eastern United States and Europe. Products include filter media for transportation and vacuum cleaner bags; base materials for specialty tapes, electrical and graphic arts applications; wallpaper, building materials and sandpaper; and cover/decorative materials for office and school supplies, publishing, printing and premium packaging.

This document contains forward-looking statements. Actual results may differ depending on the economy and other risk factors discussed in the company's Form 10-K/A as filed with the SEC on May 4, 2005, which is accessible on the company's Web site at www.fibermark.com.

(tables follow)

-more-
 
FiberMark, Inc.
  
Condensed Consolidated Statements of Operations
  
Three Months Ended December 31, 2004 and 2003
  
   
(In thousands, except per share amounts)
  
   
Unaudited
  
           
   
2004
  
2003
  
           
Net sales
 
$
106,883
  
$
95,243
  
               
Cost of sales
    
97,483
   
81,585
 
               
Gross profit
    
9,400
   
13,658
 
               
Selling, general and administrative expenses
    
9,511
   
11,076
 
               
Restructuring and facility closure expense (reversal)
   
(149
)
  
(800
)
Gain on disposal of assets
   
(207
)
  
-
 
Asset impairment charges
   
-
   
1,386
 
               
Income (loss) from operations
    
245
   
1,996
 
               
Foreign exchange transaction (gain) loss
    
196
   
(3,793
)
Other expense, net
   
315
   
1,274
 
Interest expense, net (excluding post-petition
contractual interest of $8,524 in 2004)
    
612
   
8,950
 
Reorganization expense
    
4,631
   
-
 
               
Loss before income taxes
    
(5,509
)
  
(4,435
)
               
Income tax benefit
    
(829
)
  
(2,111
)
               
Net loss
  
$
(4,680
)
$
(2,324
)
               
               
Basic loss per share
  
$
(0.66
)
$
(0.33
)
               
Diluted loss per share
  
$
(0.66
)
$
(0.33
)
               
Weighted average basic shares outstanding
    
7,066
    
7,066
  
Weighted average diluted shares outstanding
    
7,066
    
7,066
  
               
 
-more-
 
FiberMark, Inc.
  
Consolidated Statements of Operations
  
Years Ended December 31, 2004 and 2003
  
   
(In thousands, except per share amounts)
  
           
   
2004
  
2003
  
           
Net sales
 
$
438,070
  
$
399,309
  
               
Cost of sales
    
374,746
    
337,682
  
               
Gross profit
    
63,324
    
61,627
  
               
Selling, general and administrative expenses
    
43,977
    
43,947
  
               
Restructuring and facility closure expense (reversal)
   
(358
)
  
882
  
Gain on disposal of assets
   
(689
)
  
-
 
Asset impairment charges
   
-
   
93,647
  
               
Income (loss) from operations
    
20,394
    
(76,849
)
               
Foreign exchange transaction gain
    
(286
)
  
(3,109
)
Other expense, net
   
1,473
    
2,109
  
Interest expense, net (excluding post-petition
contractual interest of $25,666 in 2004)
    
10,771
    
35,146
  
Reorganization expense
    
25,050
    
-
 
               
Loss before income taxes
    
(16,614
)
  
(110,995
)
               
Income tax expense
    
8,983
    
8,185
  
               
Net loss
  
$
(25,597
)
$
(119,180
)
               
               
Basic loss per share
  
$
(3.62
)
$
(16.87
)
               
Diluted loss per share
  
$
(3.62
)
$
(16.87
)
               
Weighted average basic shares outstanding
    
7,066
    
7,066
  
Weighted average diluted shares outstanding
    
7,066
    
7,066
  
               
 
-more-
 
 

FiberMark, Inc.
Consolidated Balance Sheets
December 31, 2004 and 2003
 
(In thousands, except share and per share amounts)
 
  
   
2004
  
2003
  
ASSETS
          
Current assets:
              
Cash
  
$
1,194
  
$
6,111
  
Accounts receivable, net of allowances of $1,343 in 2004 and $2,952 in 2003
    
61,116
    
53,752
  
Inventories
   
73,650
    
63,443
  
Prepaid expenses
    
4,339
    
1,671
  
               
Total current assets 
    
140,299
    
124,977
  
               
Property, plant and equipment, net
   
248,853
    
248,194
  
Goodwill
    
9,167
    
8,602
  
Other intangible assets, net
    
2,629
    
12,745
  
Other long-term assets
    
4,858
    
5,189
  
               
Total assets
  
$
405,806
  
$
399,707
  
               
LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
Current liabilities:
              
Revolving credit line
  
$
2,628
  
$
5,906
  
Current portion of long-term debt
    
-
   
3,955
  
Accounts payable
    
24,063
    
23,168
  
Accrued liabilities
    
21,269
    
22,013
  
Accrued income taxes payable
    
15,458
    
9,930
  
Deferred income taxes
    
279
    
656
  
               
Total current liabilities not subject to compromise
    
63,697
    
65,628
  
               
Long-term liabilities:
              
Long-term debt
    
-
   
338,749
  
Deferred income taxes
    
28,497
    
15,528
  
Other long-term liabilities
    
48,788
    
48,654
  
               
Total long-term liabilities not subject to compromise
    
77,285
    
402,931
  
               
Liabilities subject to compromise
    
366,700
    
-
 
               
Total liabilities
    
507,682
    
468,559
  
               
Commitments and contingencies
             
               
Stockholders’ deficit:
              
Preferred stock, par value $.001 per share;
              
2,000,000 shares authorized, and none issued
    
-
   
-
 
Series A Junior participatory preferred stock, par value $.001;
              
7,066 shares authorized, and none issued
    
-
   
-
 
Common stock, par value $.001 per share; 20,000,000 shares authorized
              
7,070,026 shares issued and 7,066,226 shares outstanding in 2004 and 2003
    
7
    
7
  
Additional paid-in capital
    
65,496
    
65,496
  
Accumulated deficit
    
(174,708
)
  
(149,111
)
Accumulated other comprehensive income
    
7,364
    
14,791
  
Less treasury stock, 3,800 shares at cost in 2004 and 2003
    
(35
)
  
(35
)
               
Total stockholders’ deficit
    
(101,876
)
  
(68,852
)
               
Total liabilities and stockholders’ deficit
  
$
405,806
  
$
399,707
  

-more-
 
FiberMark, Inc.
  
   
Supplemental Financial Information
  
   
Reconciliation of Net Loss to EBITDAR
  
   
EBITDAR, a non-GAAP measure, is defined as earnings before, interest, taxes depreciation, amortization, asset impairment and reorganization expenses. This financial metric reflects liquidity and operating profitability commonly used by the investment community and internally for evaluation purposes. Such measures should be considered in addition to, but not in lieu of, financial measures reported under GAAP.
 
       
     Three Months Ended December 31,    Variance  
   
2004
  
2003
    $  
%
  
                   
Net loss
  
$
(4,680
)
$
(2,324
)
$
(2,356
)
  
-101%
 
                           
Adjustments to reconcile to EBITDAR:
                          
Income tax benefit
    
(829
)
  
(2,111
)
  
(1,282
)
      
Net interest
    
612
    
8,950
    
8,338
        
Chapter 11 reorganization expense
    
4,631
    
-
   
(4,631
)
      
Asset impairment charges
    
-
   
1,386
    
1,386
        
Depreciation and amortization
    
7,690
    
4,757
    
(2,933
)
      
     
12,104
    
12,982
    
(3,234
)
      
                           
EBITDAR1
    
7,424
    
10,658
    
(3,597
)
  
-30%
 
                           
1Includes foreign exchange gain/(loss)
    
(196
)
  
3,793
    
(3,597
)
      
                           

     Year Ended December 31,    Variance  
   
2004
  
2003
   $   
%
  
                   
Net loss
  
$
(25,597
)
$
(119,180
)
$
93,583
    
79%
 
                           
Adjustments to reconcile to EBITDAR:
                          
Income tax expense
    
8,983
    
8,185
    
(798
)
      
Net interest
   
10,771
    
35,146
    
24,375
        
Chapter 11 reorganization expense
    
25,050
    
-
   
(25,050
)
      
Asset impairment charges (goodwill)
    
-
   
93,647
    
93,647
        
Depreciation and amortization
    
20,924
    
17,003
    
(3,921
)
      
     
65,728
    
153,981
    
(88,253
)
      
                           
EBITDAR1
    
40,131
    
34,801
    
5,330
    
15%
 
                           
1Includes foreign exchange gain
    
286
    
3,109
    
(2,823
)