EXHIBIT 99.3
FOR IMMEDIATE RELEASE
August 13, 2003
| CONTACT: | Ronald J. Domanico | |||
| V.P. and Chief Financial Officer | ||||
| (770) 948-3101 |
CARAUSTAR REVISES
SECOND QUARTER 2003 RESULTS
ATLANTA, Georgia—Caraustar Industries, Inc. (NASDAQ-NMS Symbol: CSAR) today announced a revision to the company’s second quarter results as previously reported on July 29, 2003. The company’s reporting and controls process related to filing its June 30, 2003 10-Q identified additional non-cash charges at a restructured operation. The charges, associated with the rationalization of Carolina Converting, Inc. (CCI), include an inventory adjustment of $1.6 million and a reserve for uncollectable receivables of $0.5 million.
The revised operating loss, net loss and loss per share for the quarter ended June 30, 2003 is $4.3 million, $9.8 million and $0.35, respectively, compared to the previously announced operating loss, net loss and net loss per share for the quarter of $2.2 million, $8.5 million and $0.31.
The revised operating loss, net loss and loss per share for the six-month period ended June 30, 2003 is $5.7 million, $17.0 million and $0.61 respectively, compared to the previously announced operating loss, net loss and net loss per share for the six-month period of $3.6 million, $15.6 million and $0.56.
The revised unaudited condensed consolidated financial statements are included below.
Caraustar, a recycled packaging company, is one of the largest and most cost-effective manufacturers and converters of recycled paperboard and recycled packaging products in the United States. The company has developed its leadership position in the industry through diversification and integration from raw materials to finished products. Caraustar serves the four principal recycled paperboard product markets: tubes, cores and cans; folding cartons and custom packaging; gypsum wallboard facing paper; and miscellaneous “other specialty” and converted products.
This press release may contain certain “forward-looking statements,” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, that represent the company’s expectations, anticipations or beliefs about future events, operating results or financial condition. For this purpose, any statements that are not statements of historical fact may be deemed to be forward-looking statements. These statements involve risks and uncertainties that could cause actual results to differ materially depending on a variety of important factors, including, but not limited to, fluctuations in raw material prices and energy costs, increases in pension and insurance costs, downturns in industrial production, housing and construction and the consumption of
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PHONE 770 . 948 . 3101 Ÿ P. O. BOX 115 Ÿ AUSTELL, GA 30168-0115
3100 JOE JERKINS BOULEVARD Ÿ AUSTELL, GA 30106-3227
Caraustar Industries, Inc.
August 13, 2003
Page 2
durable and nondurable goods, the degree and nature of competition, demand for the company’s products, the degree of success achieved by the company’s new product initiatives, changes in government regulations, the company’s ability to complete acquisitions and successfully integrate the operations of acquired businesses (including specifically the recently acquired Smurfit-Stone industrial packaging operations) and the company’s ability to service its substantial indebtedness. Additional relevant risk factors that could cause actual results to differ materially are discussed in the company’s registration statements and reports filed with the Securities and Exchange Commission, which are available from the company. These documents also may be examined at public reference facilities maintained by the Securities and Exchange Commission or, to the extent filed via EDGAR, accessed through the Web Site of the Securities and Exchange Commission (http://www.sec.gov). The company does not undertake any obligation to update any forward-looking statements and is not responsible for any changes made to this press release by wire or Internet services.
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CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
| For The Three Months Ended June 30, |
For The Six Months Ended June 30, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| SALES |
$ 246,843 | $ | 229,122 | $ | 499,745 | $ | 448,024 | |||||||||
| COST OF SALES |
204,072 | 184,886 | 410,418 | 360,379 | ||||||||||||
| Gross profit |
42,771 | 44,236 | 89,327 | 87,645 | ||||||||||||
| SELLING, GENERAL AND ADMINISTRATIVE EXPENSES |
45,237 | 36,396 | 88,831 | 70,391 | ||||||||||||
| Operating (loss) income before restructuring costs |
(2,466 | ) | 7,840 | 496 | 17,254 | |||||||||||
| RESTRUCTURING AND IMPAIRMENT COSTS |
1,835 | 985 | 6,167 | 985 | ||||||||||||
| Operating (loss) income |
(4,301 | ) | 6,855 | (5,671 | ) | 16,269 | ||||||||||
| OTHER (EXPENSE) INCOME: |
||||||||||||||||
| Interest expense |
(11,244 | ) | (9,377 | ) | (21,581 | ) | (18,679 | ) | ||||||||
| Interest income |
235 | 492 | 436 | 868 | ||||||||||||
| Write-off of deferred debt costs |
(1,812 | ) | 0 | (1,812 | ) | 0 | ||||||||||
| Gain on extinguishment of debt |
0 | 0 | 0 | 87 | ||||||||||||
| Equity in income of unconsolidated affiliates |
1,444 | 1,032 | 1,464 | 1,035 | ||||||||||||
| Other, net |
253 | (6 | ) | 351 | 128 | |||||||||||
| 11,124 | ) | (7,859 | ) | (21,142 | ) | (16,561 | ) | |||||||||
| LOSS BEFORE MINORITY INTEREST AND INCOME TAXES |
(15,425 | ) | (1,004 | ) | (26,813 | ) | (292 | ) | ||||||||
| MINORITY INTEREST IN (INCOME) LOSSES |
(58 | ) | 55 | (63 | ) | 78 | ||||||||||
| BENEFIT FOR INCOME TAXES |
(5,648 | ) | (368 | ) | (9,913 | ) | (132 | ) | ||||||||
| NET LOSS |
$ | (9,835 | ) | $ | (581 | ) | $ | (16,963 | ) | $ | (82 | ) | ||||
| BASIC |
||||||||||||||||
| NET LOSS PER COMMON SHARE |
$ | (0.35 | ) | $ | (0.02 | ) | $ | (0.61 | ) | $ | (0.00 | ) | ||||
| Weighted average number of shares outstanding |
27,911 | 27,857 | 27,911 | 27,857 | ||||||||||||
| DILUTED |
||||||||||||||||
| NET LOSS PER COMMON SHARE |
$ | (0.35 | ) | $ | (0.02 | ) | $ | (0.61 | ) | $ | (0.00 | ) | ||||
| Diluted weighted average number of shares outstanding |
27,911 | 27,857 | 27,911 | 27,857 | ||||||||||||
| Note: | Certain prior year income statement items have been reclassified to conform with the current year presentation. |
CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Share Data)
| June 30, 2003 |
December 31, 2002 |
|||||||
| ASSETS | ||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 53,815 | $ | 34,314 | ||||
| Receivables, net of allowances |
104,005 | 106,149 | ||||||
| Inventories |
104,311 | 107,644 | ||||||
| Refundable income taxes |
596 | 14,926 | ||||||
| Other current assets |
9,049 | 8,498 | ||||||
| Total current assets |
271,776 | 271,531 | ||||||
| PROPERTY, PLANT AND EQUIPMENT: |
||||||||
| Land |
14,487 | 14,337 | ||||||
| Buildings and improvements |
149,438 | 150,565 | ||||||
| Machinery and equipment |
634,301 | 643,863 | ||||||
| Furniture and fixtures |
15,240 | 14,894 | ||||||
| 813,466 | 823,659 | |||||||
| Less accumulated depreciation |
(379,539 | ) | (380,264 | ) | ||||
| Property, plant and equipment, net |
433,927 | 443,395 | ||||||
| GOODWILL, net |
181,429 | 180,545 | ||||||
| INVESTMENT IN UNCONSOLIDATED AFFILIATES |
51,733 | 52,830 | ||||||
| OTHER ASSETS |
24,439 | 36,913 | ||||||
| $ | 963,304 | $ | 985,214 | |||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: |
||||||||
| Current maturities of debt |
$ | 101 | $ | 70 | ||||
| Accounts payable |
64,117 | 60,027 | ||||||
| Accrued interest |
8,723 | 8,687 | ||||||
| Accrued compensation |
10,235 | 12,828 | ||||||
| Accrued pension |
11,700 | 11,279 | ||||||
| Other accrued liabilities |
30,928 | 36,941 | ||||||
| Total current liabilities |
125,804 | 129,832 | ||||||
| SENIOR CREDIT FACILITY |
0 | 0 | ||||||
| OTHER LONG-TERM DEBT, less current maturities |
533,172 | 532,715 | ||||||
| DEFERRED INCOME TAXES |
53,309 | 60,630 | ||||||
| PENSION LIABILITY |
18,605 | 13,572 | ||||||
| DEFERRED COMPENSATION |
1,409 | 1,500 | ||||||
| OTHER LIABILITIES |
4,719 | 4,584 | ||||||
| MINORITY INTEREST |
763 | 700 | ||||||
| SHAREHOLDERS’ EQUITY: |
||||||||
| Preferred stock, $.10 par value; 5,000,000 shares authorized; none issued |
0 | 0 | ||||||
| Common stock, $.10 par value; 60,000,000 shares authorized, 27,910,819 and 27,906,674 shares issued and outstanding at June 30, 2003 and and December 31, 2002, respectively |
2,791 | 2,791 | ||||||
| Additional paid-in capital |
182,306 | 182,224 | ||||||
| Retained earnings |
62,603 | 79,566 | ||||||
| Accumulated other comprehensive loss |
(22,177 | ) | (22,900 | ) | ||||
| 225,523 | 241,681 | |||||||
| $ | 963,304 | $ | 985,214 | |||||
CARAUSTAR INDUSTRIES, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
| For the Six Months Ended June 30, |
||||||||
| 2003 |
2002 |
|||||||
| Cash provided by (used in) |
||||||||
| Operating activities: |
||||||||
| Net loss |
$ | (16,963 | ) | $ | (82 | ) | ||
| Gain on extinguishment of debt |
0 | (87 | ) | |||||
| Depreciation and amortization |
14,924 | 30,896 | ||||||
| Write-off of deferred debt costs |
1,812 | 0 | ||||||
| Disposal of property, plant and equipment, net |
687 | 326 | ||||||
| Restructuring costs |
5,670 | 985 | ||||||
| Other noncash adjustments |
(7,226 | ) | (347 | ) | ||||
| Equity in income of unconsolidated affiliates, net of distributions |
686 | 1,920 | ||||||
| Changes in operating assets and liabilities |
17,343 | 7,056 | ||||||
| Net cash provided by operating activities |
16,933 | 40,667 | ||||||
| Investing activities: |
||||||||
| Purchases of property, plant and equipment |
(10,839 | ) | (10,701 | ) | ||||
| Acquisitions of businesses, net of cash acquired |
(707 | ) | (115 | ) | ||||
| Proceeds from disposal of fixed assets |
175 | 50 | ||||||
| Other, net |
0 | 499 | ||||||
| Net cash used in investing activities |
(11,371 | ) | (10,267 | ) | ||||
| Financing activities: |
||||||||
| Repayment of short and long-term debt |
(8 | ) | (6,581 | ) | ||||
| Proceeds from swap agreement unwind |
15,950 | 0 | ||||||
| Dividends paid |
0 | (833 | ) | |||||
| Deferred debt costs |
(2,003 | ) | (728 | ) | ||||
| Net cash provided by (used in) financing activities |
13,939 | (8,142 | ) | |||||
| Net change in cash and cash equivalents |
19,501 | 22,258 | ||||||
| Cash and cash equivalents at beginning of period |
34,314 | 64,244 | ||||||
| Cash and cash equivalents at end of period |
$ | 53,815 | $ | 86,502 | ||||
| Supplemental Disclosures: |
||||||||
| Cash payments for interest |
$ | 19,978 | $ | 18,244 | ||||
| Income tax refunds net of payments |
$ | 17,373 | $ | 15,697 | ||||