Bowater, Fort Howard See Rebound in 2000

Bowater Inc. reported financial results for the fourth quarter and the full year of 1999. Net income for the fourth quarter was $20.4 million on net sales of $525.0 million. Included in these results are gains related to the sale of assets totaling $11.1 million after-tax. This compares with net income of $25.9 million on sales of $639.2 million in the fourth quarter of 1998.

For the full year of 1999, the company had net income of $78.7 million, which includes gains on the sale of assets, net of impairment charges, of $72.8 million after-tax, or $1.32 per diluted share. This compares with a net loss of $18.5 million, or $.44 per diluted share in 1998, which includes a charge for the impairment of assets of $73.0 million after-tax, or $1.53 per diluted share, in 1998. Net sales in 1999 totaled $2.1 billion, compared with $2.0 billion in 1998.

During 1999, Bowater took market downtime in newsprint of more than 200,000 metric tons, 24,000 tons of which were taken in the fourth quarter. The company will take approximately 40,000 metric tons of newsprint downtime in the first quarter of 2000.

The company successfully implemented price increases for newsprint, coated paper, and market pulp during the fourth quarter. Bowater announced plans for additional price increases for market pulp and newsprint this month and April 2000, respectively.

Fort James Corp.

Fort James Corp. announced fourth quarter 1999 earnings of $105.3. This compares to earnings of $134.4 million in the prior year. These results exclude unusual and non-recurring items. Net sales for the quarter increased to $1.700.6 billion versus $1.689.0 billion in 1998. Sales volume increases of approximately 4% were largely offset by pricing declines and the impact of foreign currency translation.

For the year, the company reported earnings of $468.3 versus $536.7 million in 1998, each excluding unusual and non-recurring items. Sales increased modestly to $6,827.4 million from $6,802.6 million, as volume increases were largely offset by weaker pricing and foreign currency translation changes.

``Nineteen ninety-nine was a difficult year for Fort James,'' said Miles L. Marsh, Chairman and Chief Executive Officer. ``Our results were affected by elevated competitive spending in the tissue category, increased distribution and warehousing costs, and significant escalation in raw material costs in the latter part of the year. However, our sales and market shares remained strong in 1999, and we executed a number of initiatives that both improved our business mix and strengthened our balance sheet.''

``We were clearly disappointed with our 1999 results,'' said Marsh. ``However, while still cautious in our near-term outlook, we believe many of the negative factors that affected 1999 will gradually dissipate in 2000. We understand the cost issues that affected 1999 and are aggressively engaged in remedial activities. Fiber costs are continuing to escalate, but we have announced price increases in many of our businesses that should alleviate the situation, once they are fully effective. And as such, we believe we're entering a period where our greater backward integration will be an advantage. These factors, combined with our strong new product pipeline, give us confidence in our outlook for 2000.''

United States Gypsum Corp.

USG Corp. reported record sales and net earnings for both the fourth quarter and full year. Fourth quarter 1999 net sales totaled $930 million and net earnings were $115 million, increases of 15 percent and 25 percent, respectively, from the year before.

"1999 was a terrific year for USG," said William C. Foote, USG chairman, CEO and president. "Record product shipments and earnings underscored our confidence in our strategies to accelerate USG's growth while reducing our cost structure. We believe the fundamentals in our key markets will remain favorable and in combination with our strategies will produce another record year of earnings in 2000."

Full year 1999 net sales were $3.60 billion, up 15 percent from net sales of $3.13 billion for 1998. Full year 1999 net earnings were $421 million, an increase of 27 percent from $332 million last year.

USG's North American gypsum business recorded net sales of $801 million and operating profit of $200 million, increases of 19 percent and 27 percent, respectively, over the fourth quarter of 1998. Strong business conditions in all markets led to record fourth quarter volumes for Sheetrock brand gypsum wallboard and joint compounds, Durock(R) brand cement board, and building products distribution business results.

United States Gypsum Company recorded fourth quarter 1999 net sales of $534 million and operating profit of $169 million, increases of 20 percent and 25 percent, respectively, versus the same period in 1998. Improved profitability primarily reflected higher prices and volumes for its Sheetrock brand gypsum wallboard, partially offset by higher production, overhead and asbestos-related costs.