FiberMark 8K Q1 05 Results
 
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 23, 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 23, 2005, FiberMark announced its first-quarter 2005 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 23, 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 24, 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 23, 2005


                                   FOR IMMEDIATE RELEASE    Contact:  Janice C. Warren
                                            Director of Investor Relations and Corporate Communications
                                            802 257 5981


FiberMark Reports First-quarter 2005 Results

 
BRATTLEBORO, VERMONT, May 23, 2005—FiberMark, Inc., (OTCBB: FMKIQ) today issued its financial results for the first quarter ended March 31, 2005. The company reported a net loss of $2.3 million, or $0.33 per share, versus a loss of $16.9 million, or $2.38 per share, in 2004. The smaller net loss primarily reflects lower reorganization expense of $6.5 million and lower interest expense of $8.3 million both related to the company’s chapter 11 filing. Foreign exchange benefits contributed to $2.9 million of the improvement. Offsetting those improvements were lower volume from North American operations, higher raw material costs, particularly in pulp and latex, and energy, which were only partially offset by price increases, improvements in product mix and lower fixed costs.
 
Net sales in the first quarter of 2005 were $114.8 million compared with $112.4 million in the prior-year quarter, an increase of $2.4 million or 2.1%. Sales from German operations were $61.2 million compared with $55.6 million in 2004, an increase of $5.6 million or 10.1%. Excluding the effects of a stronger euro, which accounted for $2.8 million of the increase, sales from German operations increased by $2.8 million or 5.0%. The company continued to generate sales gains in most of its German operations due to a combination of market share gains and geographic growth, particularly in the Pacific Rim. However, weak economic conditions in Europe, particularly in Germany, have affected industry demand in the nonwoven wallcovering market. German sales levels also reflect some offsetting pockets of pricing pressure and weaker product mix. Sales from North American operations were $53.6 million in the 2005 quarter versus $56.9 million in 2004, a decline of $3.3 million or 5.8%. North American operations sales reflect modest declines in most product families, particularly in technical specialties due to a combination of market erosion and lackluster economic conditions. Lower volume was partially offset by price increases and improvements in product mix.

As of March 31, 2005, FiberMark’s pro forma unused borrowing capacity under its existing credit facilities was $36.3 million.

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)


FIBERMARK, INC.
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 2005 and 2004
 
(In thousands, except per share amounts)
 
Unaudited
  
   
     
2005
    
2004
  
               
Net sales
  
$
114,797
  
$
112,428
  
               
Cost of sales
    
94,989
    
91,184
  
               
Gross profit
    
19,808
    
21,244
  
               
Selling, general and administrative expenses
    
11,321
    
12,088
  
               
Income from operations
    
8,487
    
9,156
  
               
Foreign exchange transaction (gain) loss
    
262
    
(227
)
Other expense, net
    
320
    
736
  
Interest expense, net (excluding post-petition contractual interest of $8,525 and
$92 in 2005 and 2004, respectively)
    
585
    
8,948
  
Reorganization expense
    
5,502
    
11,985
  
               
Income (loss) before income taxes
    
1,818
    
(12,286
)
               
Income tax expense
    
4,144
    
4,564
  
               
Net loss
  
$
(2,326
)
$
(16,850
)
               
Basic loss per share
  
$
(0.33
)
$
(2.38
)
               
Diluted loss per share
  
$
(0.33
)
$
(2.38
)
               
Weighted average basic shares outstanding
    
7,066
    
7,066
  
Weighted average diluted shares outstanding
    
7,066
    
7,066
  


FIBERMARK, INC.
Condensed Consolidated Balance Sheets
 
(In thousands, except share and per share amounts)
 
Unaudited
 
   
March 31,
2005 
    
December 31,
2004
  
ASSETS
              
Current assets:
              
Cash
  
$
2,938
  
$
1,194
  
Accounts receivable, net of allowances
    
66,885
    
61,116
  
Inventories
    
74,961
    
73,650
  
Prepaid expenses
    
4,502
    
4,339
  
               
Total current assets 
    
149,286
    
140,299
  
               
Property, plant and equipment, net
    
241,461
    
248,853
  
Goodwill
    
8,845
    
9,167
  
Other intangible assets, net
    
2,139
    
2,629
  
Other long-term assets
    
4,778
    
4,858
  
               
Total assets
  
$
406,509
  
$
405,806
  
               
LIABILITIES AND STOCKHOLDERS’ DEFICIT
              
Current liabilities:
              
Revolving credit line
  
$
12,588
  
$
2,628
  
Accounts payable
    
18,865
    
24,063
  
Accrued liabilities
    
24,175
    
21,269
  
Accrued income taxes payable
    
17,399
    
15,458
  
Deferred income taxes
    
266
    
279
  
               
Total current liabilities not subject to compromise
    
73,293
    
63,697
  
               
Long-term liabilities:
              
Deferred income taxes
    
24,384
    
28,497
  
Other long-term liabilities
    
48,327
    
48,788
  
               
Total long-term liabilities not subject to compromise
    
72,711
    
77,285
  
               
Liabilities subject to compromise
    
365,909
    
366,700
  
               
Total liabilities
    
511,913
    
507,682
  
               
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 2005 and 2004
    
7
    
7
  
Additional paid-in capital
    
65,496
    
65,496
  
Accumulated deficit
    
(177,034
)
  
(174,708
)
Accumulated other comprehensive income
    
6,162
    
7,364
  
Less treasury stock, 3,800 shares at cost in 2005 and 2004
    
(35
)
  
(35
)
               
Total stockholders’ deficit
    
(105,404
)
  
(101,876
)
               
Total liabilities and stockholders’ deficit
  
$
406,509
  
$
405,806
  
 

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 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 March 31, 
Variance
     
2005
    
2004
      $  
 
%
 
                           
Net loss
  
$
(2,326
)
$
(16,850
)
$
14,524
    
86
%
                           
Adjustments to reconcile to EBITDAR:
                          
Net interest
    
585
    
8,948
    
8,363
        
Income tax
   
4,144
    
4,564
    
420
        
Depreciation and amortization
    
4,679
    
4,663
    
(16
)
      
Chapter 11 reorganization expense
    
5,502
    
11,985
    
6,483
        
     
14,910
    
30,160
    
15,250
    
51
%
                           
EBITDAR1
    
12,584
    
13,310
    
(726
)
  
-5
%
                           
1Includes foreign exchange (gain)/loss
    
262
    
(227
)
  
(489
)