Mosinee, Wisconsin, USA, 17 December 2008 -- (BUSINESS WIRE) -- Wausau Paper (NYSE:WPP) today announced revised fourth-quarter earnings guidance, reflecting weakening economic conditions and reduced customer order activity at its Specialty Products and Printing & Writing business units. The company anticipates taking fourth-quarter market-related downtime of approximately 11,000 tons within Specialty Products and 7000 tons within Printing & Writing. As a result, fourth-quarter results are expected to approximate breakeven levels, excluding timberland sales gains and charges related to facility closures and a permanent machine shutdown at the company's mill in Jay, Maine. The company had earlier anticipated earnings in the range of USD 0.03-0.05 per share.
The company also announced that its board of directors has approved a USD 6.6 million capital project that will consolidate converting capacity and streamline distribution within its Printing & Writing business. The project includes the relocation of converting equipment from its Appleton, Wisconsin, facility to its Brokaw, Wisconsin, and Brainerd, Minnesota, mills and the relocation of Appleton and Brokaw distribution activities to a centralized location that will be determined in the first quarter of 2009.
As a result of the consolidation initiative, operations at the Appleton facility will be reduced in a phased manner beginning in mid-2009 and will be permanently closed before 31 December 2009. The closure will affect approximately 90 permanent jobs. In addition to capital investment, the company expects one-time pre-tax expenses of USD 3.8 million related primarily to the close of the Appleton facility, removal of equipment, and relocation of paper inventories. Less than USD 100,000 of these expenses are expected in the fourth quarter, with the remainder occurring in 2009.
"Our lower earnings expectations are entirely driven by weaker-than-anticipated fourth-quarter market conditions," stated Thomas J. Howatt, president and CEO. "We are committed to balancing production with demand and have scheduled market-related downtime to maintain that balance. At the same time, we continue to pursue opportunities that improve the cost structure and competitiveness of our businesses as evidenced by board approval of Printing & Writing's converting and distribution project. As part of our broader profit recovery initiative, this project will help achieve the second of our recovery plan targets -- to reestablish cost-of-capital returns in the business unit."
Wausau Paper, with record revenues of USD 1.2 billion in fiscal 2007, produces and markets fine printing and writing papers, technical specialty papers, and away-from-home towel and tissue products. To learn more about Wausau Paper visit: http://www.wausaupaper.com.