<b>Mead Corp. Sees Loss</b>

The Mead Corp. reported a first quarter loss of $36.6 million, compared to net income of $23.2 million the same time last year. Net sales for the first quarter of 2001 were $944.5 million compared to $953.6 million in 2000.

"Our first quarter is seasonally weak, but even so it was disappointing. Sales and earnings were affected by continued weak market conditions, which led to a decline in prices for coated paper and corrugating medium from the prior year quarter," said Jerry Tatar, Mead chairman, president and CEO. "Other external factors affecting us included higher energy-related costs and the impact of foreign currency exchange rates. In addition, we experienced significant productivity issues at our Ohio mill."

Tatar added, "We are meeting these challenges head-on by intensifying our efforts to improve productivity and customer satisfaction, and we are taking prudent measures in capital spending, working capital management, purchasing and cost controls."

The Paper segment had an operating loss of $6.3 million in the first quarter of 2001 compared to earnings of $48.5 million in the first quarter of 2000. Sales were $476.3 million versus $468.6 million in the same period a year ago. The segment's loss was primarily due to lower prices for coated paper, which resulted from pricing pressure brought on by rising imports.

Paper segment results in the first quarter of 2001 included a negative impact of $15 million pretax due to operating issues at Mead's Ohio mill. The mill experienced lower productivity related to the conversion to alkaline papermaking chemistry on two of the mill's paper machines.

The Packaging & Paperboard segment's first quarter of 2001 earnings were $11.9 million compared to $42.2 million in the same period a year ago. Sales for the segment were also lower at $363.2 million in the first quarter of 2001 versus $388.8 million in the prior year first quarter.

The segment's results were affected by lower prices for and reduced shipments of corrugating medium compared to the first quarter of 2000 and costs associated with previously announced market-related downtime. Mead's Stevenson, Alabama, mill took 33,000 tons of downtime in the first quarter of 2001. The effect of production downtime was approximately $5 million pretax.

Mead's Coated Board System business, which includes the Packaging and Coated Board divisions, had lower operating earnings in the first quarter of 2001 versus a year ago. The decline was due to higher costs for energy and raw materials, the impact of foreign currency exchange rates on European operations, and lower price and volume on wood products.

The Consumer & Office Products segment had improved operating results and higher sales in the first quarter of 2001 compared to the same period in 2000. Due to the highly seasonal nature of this business, the segment had an operating loss of $8.5 million in the first quarter of 2001 compared to an operating loss of $11.9 million in the same period a year ago. Sales were $105.0 million in the first quarter of 2001 and $96.2 million in the first quarter of 2000. Higher sales and operating results were achieved based on improved performance across many product lines.

Mead's more cyclical businesses -- containerboard and coated paper -- are expected to have lower prices and sales volume versus a year ago as a result of a weaker economy. In the second quarter of 2001, Mead expects to take production downtime of approximately 25,000 tons for corrugating medium and approximately 5,000 tons for coated paper.