FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 2002
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from____________ to _________________
Commission file number: 1-13923
WAUSAU-MOSINEE PAPER CORPORATION
(Exact name of registrant as specified in charter)
WISCONSIN 39-0690900
(State of incorporation) (I.R.S Employer Identification Number)
1244 KRONENWETTER DRIVE
MOSINEE, WISCONSIN 54455-9099
(Address of principal executive office)
Registrant's telephone number, including area code: 715-693-4470
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such report), and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
The number of common shares outstanding at July 31, 2002 was 51,536,891.
WAUSAU-MOSINEE PAPER CORPORATION
AND SUBSIDIARIES
INDEX
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of
Operations, Three Months and Six Months Ended
June 30, 2002 (unaudited) and
June 30, 2001 (unaudited) 1
Condensed Consolidated Balance
Sheets, June 30, 2002 (unaudited)
and December 31, 2001 (derived from
audited financial statements) 2
Condensed Consolidated Statements
of Cash Flows, Six Months
Ended June 30, 2002 (unaudited)
and June 30, 2001 (unaudited) 3
Notes to Condensed Consolidated
Financial Statements 3-7
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations 8-11
Item 3. Quantitative and Qualitative Disclosures about Market Risk 12
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
(i)
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Wausau-Mosinee Paper Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(AS RESTATED, SEE NOTE 2)
Three Months Ended Six Months Ended
June 30, June 30,
(Dollars in thousands, except per share data) 2002 2001 2002 2001
NET SALES $ 237,820 $ 240,637 $ 463,748 $ 474,782
Cost of products sold 209,349 216,781 409,949 434,984
GROSS PROFIT 28,471 23,856 53,799 39,798
Selling and administrative expenses 16,703 19,178 33,775 36,850
OPERATING PROFIT 11,768 4,678 20,024 2,948
Interest expense (2,773) (3,629) (5,536) (7,965)
Other income (expense), net 41 27 (14) 125
Earnings (loss) before income taxes 9,036 1,076 14,474 (4,892)
Provision (credit) for income taxes 3,340 394 5,350 (1,806)
Net earnings (loss) $ 5,696 $ 682 $ 9,124 $ (3,086)
NET EARNINGS (LOSS) PER SHARE-BASIC $ 0.11 $ 0.01 $ 0.18 $ (0.06)
NET EARNINGS (LOSS) PER SHARE-DILUTED $ 0.11 $ 0.01 $ 0.18 $ (0.06)
Weighted average shares outstanding-basic 51,536,891 51,484,218 51,526,038 51,428,760
Weighted average shares outstanding-diluted 51,727,711 51,521,815 51,684,330 51,428,760
See Notes to Condensed Consolidated Financial Statements.
-1-
Wausau-Mosinee Paper Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands) JUNE 30, December 31,
2002 2001
(UNAUDITED)
Assets
Current assets:
Cash and cash equivalents $ 14,085 $ 12,010
Receivables, net 78,320 69,425
Refundable income taxes 0 1,241
Inventories 130,226 124,338
Deferred income taxes 14,111 14,111
Other current assets 2,391 1,910
Total current assets 239,133 223,035
Property, plant and equipment, net 617,619 634,928
Other assets 34,533 34,045
TOTAL ASSETS $891,285 $892,008
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 67,795 $ 64,060
Accrued and other liabilities 61,809 57,251
Total current liabilities 129,604 121,311
Long-term debt 185,791 192,264
Deferred income taxes 105,638 105,638
Postretirement benefits 55,011 54,253
Pension 32,625 37,223
Other liabilities 17,006 16,464
Total liabilities 525,675 527,153
Stockholders' equity 365,610 364,855
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $891,285 $892,008
See Notes to Condensed Consolidated Financial Statements.
-2-
Wausau-Mosinee Paper Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended
June 30,
(Dollars in thousands) 2002 2001
Net cash provided by operating activities $26,883 $32,996
Cash used in investing activities:
Capital expenditures (10,429) (14,251)
Proceeds or sale of property, plant and equipment 165 209
(10,264) (14,042)
Cash used in financing activities:
Net payments under credit agreements ( 6,110) (11,879)
Proceeds on termination of swap agreement 0 2,250
Dividends paid ( 8,759) (8,743)
Stock options exercised 325 2,296
Other financing activities 0 (119)
(14,544) (16,195)
Net increase in cash and cash equivalents $2,075 $2,759
Cash and cash equivalents, beginning of period 12,010 10,579
Cash and cash equivalents, end of period $14,085 $13,338
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Note 1. The condensed consolidated financial statements include the
results of Wausau-Mosinee Paper Corporation and our consolidated
subsidiaries. All significant intercompany transactions have been
eliminated. The accompanying condensed financial statements, in the
opinion of management, reflect all adjustments which are normal and
recurring in nature and which are necessary for a fair statement of
the results for the periods presented. Results for the interim period
are not necessarily indicative of future results. In all regards, the
financial statements have been presented in accordance with accounting
principles generally accepted in the United States of America. Refer
to notes to the financial statements which appear in the Annual Report
on Form 10-K/A for the year ended December 31, 2001, for the Company's
accounting policies which are pertinent to these statements.
-3-
Note 2. As a result of a comprehensive review performed in the second
quarter of 2002, the Company determined that certain reclassifications
and adjustments were required to previously filed financial
statements. As discussed in Note 1 of the Form 10-K/A for the year
ended December 31, 2001 and in Note 2 of the Form 10-Q/A for the three
months ended March 31, 2002, the Company has reclassified gains and
losses on asset dispositions from other income and expense to either
cost of sales or selling and administrative expenses and has restated
amounts previously recognized as compensation expense for stock
options prior to plan approval by shareholders to the period
corresponding with shareholder approval of the plan. Unaudited
quarterly financial data for the years 2001 and 2002 has also been
restated from amounts previously reported as follows:
(i) For the three months ended June 30, 2001, net losses from asset
dispositions in the amount of $276,000 was reclassified from
other income and expense to cost of sales. For the six months
ended June 30, 2001, net losses of $523,000 were reclassified
from other income and expense to cost of sales. These
reclassifications do not change the Company's previously
reported net earnings (loss).
(ii) For the three months ended June 30, 2001, previously recognized
compensation expense in the amount of $408,000 was restated to
recognize amounts previously recognized in the three months
ended December 31, 2000 and March 31, 2001 of $1,183,000 and
$1,581,000, respectively, to correspond with the quarter in
which shareholder approval was obtained.
Except as otherwise stated herein, all information presented in the
Condensed Consolidated Financial Statements and related Notes to
Condensed Consolidated Financial Statements includes all such
reclassifications and restatements.
Note 3. Net earnings include provisions, or credits, for stock incentive
plans calculated by using the average price of the Company's stock
at the close of each calendar quarter as if all such plans had been
exercised on that day. For the three months ended June 30, 2002, the
credit for stock incentive plans was $317,000 compared to a provision
of $3,172,000 for the three months ended June 30, 2001. For the
six months ended June 30, 2002 and 2001, provisions of $216,000 and
$4,368,000, respectively, were recognized as stock incentive plan
expense.
-4-
Note 4. Basic and diluted earnings per share are reconciled as follows:
(Dollars in thousands, except per share data)
Three Months Six Months
Ended June 30, Ended June 30,
2002 2001 2002 2001
Net earnings (loss) $ 5,696 $ 682 $ 9,124 $ (3,086)
Basic weighted average common
shares outstanding 51,536,891 51,484,218 51,526,038 51,428,760
Dilutive securities:
Stock options 190,820 153,178 158,292 0
Dilutive weighted average common
shares outstanding 51,727,711 51,637,396 51,684,330 51,428,760
Net earnings (loss) per share-basic $ 0.11 $ 0.01 $ 0.18 $ (0.06)
Net earnings (loss) per share-diluted $ 0.11 $ 0.01 $ 0.18 $ (0.06)
For the three months ended June 30, 2002, 491,251 options for shares were
excluded from the diluted EPS calculation because the options were
antidilutive. For the three months ended June 30, 2001, 640,627 options were
antidilutive.
Note 5. Accounts receivable consisted of the following:
(Dollars in thousands) JUNE 30, December 31,
2002 2001
Trade $ 82,179 $ 73,349
Other 976 727
83,155 74,076
Less: Allowances 4,835 4,651
$ 78,320 $ 69,425
Note 6. The various components of inventories were as follows:
(Dollars in thousands) JUNE 30, December 31,
2002 2001
Raw Materials $ 35,876 $ 34,349
Work in Process and Finished Goods 85,720 80,343
Supplies 28,790 29,181
Subtotal 150,386 143,873
Less: LIFO Reserve 20,160 19,535
Net inventories $130,226 $124,338
-5-
Note 7. The accumulated depreciation on fixed assets was $587,745,000 as
of June 30, 2002 and $564,108,000 as of December 31, 2001. The
provision for depreciation, amortization and depletion for the six
months ended June 30, 2002 and June 30, 2001 was $30,345,000 and
$30,379,000, respectively.
Note 8. Interim Segment Information
FACTORS USED TO IDENTIFY REPORTABLE SEGMENTS
The Company's operations are classified into three principal
reportable segments, the Printing & Writing Group, the Specialty Paper
Group, and the Towel & Tissue Group, each providing different
products. Separate management of each segment is required because
each business unit is subject to different marketing, production and
technology strategies.
PRODUCTS FROM WHICH REVENUE IS DERIVED
The Printing & Writing Group produces a broad line of premium printing
and writing grades at manufacturing facilities in Brokaw, Wisconsin
and Groveton, New Hampshire. The Printing & Writing Group also
includes converting facilities which produce wax-laminated roll wrap
and related specialty finishing and packaging products, and a
converting facility which converts printing and writing grades. The
Specialty Paper Group produces specialty papers at its manufacturing
facilities in Rhinelander, Wisconsin; Mosinee, Wisconsin; and Jay,
Maine. The Towel & Tissue Group markets a complete line of towel,
tissue, soap and dispensing systems for the "away-from-home" market.
The Towel & Tissue Group operates a paper mill in Middletown, Ohio and
a converting facility in Harrodsburg, Kentucky.
MEASUREMENT OF SEGMENT PROFIT AND ASSETS
The Company evaluates performance and allocates resources based on
operating profit or loss. The accounting policies of the reportable
segments are the same as those described in the summary of significant
accounting policies.
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RECONCILIATIONS
The following are reconciliations to corresponding totals in the
accompanying consolidated financial statements:
Three Months Six Months
Ended June 30, Ended June 30,
(Dollars in Thousands) 2002 2001 2002 2001
Net sales external customers
Printing & Writing $ 95,790 $ 102,062 $192,097 $199,890
Specialty Paper 88,756 87,773 171,676 178,965
Towel & Tissue 53,374 50,802 99,975 95,927
$ 237,820 $ 240,637 $463,748 $474,782
Net sales intersegment
Printing & Writing $ 1,761 $ 2,256 $ 3,605 $ 4,958
Specialty Paper 67 130 150 234
Towel & Tissue 0 0 0 0
$ 1,828 $ 2,386 $ 3,755 $ 5,192
Operating profit (loss)
Printing & Writing $ 10,524 $ 6,104 $ 17,328 $ 7,429
Specialty Paper (2,854) (2,782) (3,784) (6,800)
Towel & Tissue 6,260 7,072 11,818 11,401
Total reportable segment
operating profit 13,930 10,394 25,362 12,030
Corporate & eliminations (2,162) (5,716) (5,338) (9,082)
Interest expense (2,773) (3,629) (5,536) (7,965)
Other income/expense 41 27 ( 14) 125
Earnings (loss) before
income taxes $ 9,036 $ 1,076 $ 14,474 $ (4,892)
(Dollars in Thousands) JUNE 30, December 31,
2002 2001
Segment Assets
Printing & Writing $295,660 $294,241
Specialty Paper 365,021 368,595
Towel & Tissue 178,441 177,708
Corporate & Unallocated* 52,163 51,464
$891,285 $892,008
* Segment assets do not include intersegment accounts receivable, cash,
deferred tax assets and certain other assets which are not identifiable with
segments.
-7-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
NET SALES
For the three months ended June 30, 2002, consolidated net sales for the
Company were $237.8 million, a decrease of 1.2% from the prior year's
second quarter net sales of $240.6 million. The decrease is attributable
to a 5.1% reduction in average selling price for comparable quarters with
an offsetting 4.5% improvement in total company-wide shipments. Shipments
in the second quarter of 2002 were 210,000 tons compared to 201,000 tons
for the same period in 2001. Year-to-date, net sales were $463.7 million
in 2002 compared to $474.8 million in 2001, a decrease of 2.3%. Similar to
the quarterly comparison, year-to-date average selling price decreased
5.8% year-over-year while shipments increased 3.9% to 409,000 tons in the
first six months of 2002 from the 393,500 tons shipped during the first
six months of 2001. Net sales to xpedx, International Paper's
distribution division and the Company's major customer that accounted for
10.6% of consolidated net sales for the year ending December 31, 2001,
were 8.5% and 10.2% for the second quarters of 2002 and 2001,
respectively, and 9.0% and 10.0% for the first six months of 2002 and
2001, respectively.
Second quarter net sales for the Printing & Writing Group were $95.8
million and $102.1 million in 2002 and 2001, respectively, representing a
decline of 6.2%. Mix enhancement on products sold partially offset product
price declines of approximately 3% resulting in an overall average
selling price decrease of 1.4% quarter-over-quarter. In
addition, shipments decreased 3.7% to 86,400 tons in the second quarter of
2002 compared to 89,700 tons in the second quarter of 2001. Reduced
commodity-offset volumes account for the decline in overall shipments.
Printing & Writing Group net sales for the first half of 2002 decreased
3.9% over the first half of 2001 at $192.1 million and $199.9 million,
respectively. Shipments of 173,500 tons were less than 1% below prior
year levels. As in the quarter-over-quarter comparison, product mix
changes partially offset volume declines and reduced product selling
prices resulting in the decline in net sales for the first six months of
2002 as compared to the similar period in 2001. Underlying market
conditions remained weak as demand for uncoated free sheet papers declined
approximately 4% in the first six months of 2002 as compared to the same
period last year.
Net sales for the Specialty Paper Group were $88.8 million compared to
$87.8 million for the second quarters of 2002 and 2001, respectively.
Total tons shipped were 85,700, an increase of 12.8% from the second
quarter of 2001 shipments of 76,000 tons; however, average selling prices
fell 10.3% in comparing the same periods. For the first six
months of 2002, Specialty Paper Group sales were $171.7 million
compared to $179.0 million for the same six month period in 2001, a
decrease of 4.1%. Shipment volume was 164,400 tons in the first six
months of 2002, an increase of 8.5% from the comparable period in 2001.
For both the quarter-over-quarter and year-to-date comparisons, the
Specialty Paper Group has been impacted by weak market conditions and
competitive pressures, resulting in mix deterioration and pricing
declines. The shipment gains realized have been driven by higher volumes
of fill-type grades as demand for the Specialty Paper Group's core
products remained weak.
-8-
The Towel & Tissue Group's second quarter 2002 sales were $53.3 million or
4.9% higher than second quarter sales in 2001 of $50.8 million. Although
the average selling price for the second quarter of 2002 was down 2.4%
compared to the second quarter of 2001, volume increased to 37,800 tons or
7.1% higher than the same period last year. Year-to-date sales for the
Towel & Tissue Group increased 4.3% to $100.0 million in 2002 compared to
$95.9 million in 2001. Year-to-date shipments improved 6.4% to 71,100 tons
in 2002 from 66,800 tons in 2001. The increase in volume was offset by a
year-to-date average selling price decline of 2.3%. The "away-from-home"
segment of the towel and tissue market expanded by nearly 3% in the first
half of 2002 as compared to 2001. This expansion, coupled with additional
volumes shipped from the Towel and Tissue Group's west coast distribution
center, account for a large portion of the shipment increase for both the
quarter and year-to-date. A selling price increase of 8% to 10% was
announced during the second quarter on select products. Competitive
pressures have limited realized price gains to approximately half of the
announced levels with most of the increases implemented late second quarter
to early third quarter.
Consolidated order backlogs increased to 37,262 tons at June 30, 2002
compared to 26,545 tons at June 30, 2001. Backlog tons at June 30, 2002
represent $39.8 million in sales compared to $29.9 million at June 30,
2001. Year-over-year improvement was realized at all locations of the
Company. The change in customer order backlogs does not necessarily
indicate the strengthening of business conditions since a substantial
portion of orders are shipped directly from inventory upon receipt and,
therefore, do not impact backlog tons or dollars.
GROSS PROFIT
Gross profit for the three months ended June 30, 2002 was $28.5 million or
12.0% of net sales, compared to gross profit for the same period of 2001
of $23.9 million or 9.9% of net sales. The improvement in the gross
profit margin from 2001 is due primarily to lower market pulp and natural
gas costs, improved productivity and cost reduction efforts. Partially
offsetting these cost improvements was the decline in average selling price
mentioned previously. In total, market pulp pricing was approximately $45
per air-dried metric ton less in the second quarter of 2002 than in the same
period of 2001 and contributed approximately $5.5 million
quarter-over-quarter. Natural gas prices per decatherm were approximately 34%
lower in the second quarter of 2002 than the second quarter of 2001 and
improved gross margin by $3.0 million. Year-to-date margins for 2002 improved
to $53.8 million, or 11.6% of net sales compared to $39.8 million, or 8.4% of
net sales in 2001. As in the quarterly comparison, favorable market pulp and
natural gas costs as well as improved operations contributed to the improved
margins. Although lower in the year-over-year comparison, market pulp prices
trended higher over the quarter with prices at the beginning of the third
quarter approximately $45 per air-dried metric ton higher than those
experienced at the beginning of the second quarter.
The Printing & Writing Group's gross profit margin for the second quarter
of 2002 was 17.0% compared to 10.9% for the prior year. For the first six
months of 2002 gross profit margin was 14.9% compared to 9.0% for 2001.
As indicated in the consolidated gross margin comparisons, the Printing &
Writing Group benefited from lower market pulp and natural gas costs, as
well as improved operating efficiencies on a quarter-over-quarter and
year-to-date basis.
The Specialty Paper Group's gross profit margin increased from 1.8% of net
sales in the second quarter of 2001 to 2.0% this year. For the first six
months of 2002 gross profit margins were
-9-
3.1% for the Specialty Paper Group, compared to 1.4% in the prior year's
first six months. As indicated in the consolidated gross margin comparisons,
the Specialty Paper Group benefited from lower market pulp and natural gas
costs as well as improved operational efficiencies on a quarter-over-quarter
and year-to-date basis. However, these favorable impacts were partially
offset by reduced product selling prices and mix deterioration for both the
quarterly and year-to-date periods. In addition, the Specialty Paper Group
recognized $1.3 million in consulting expense in the second quarter of 2002
for cost reduction and improvement work performed to assist the Group in
reducing operating costs.
The gross profit margin for the Towel & Tissue Group was 19.4% for the
second quarter of 2002, a decline of 2.3 percentage points from the prior
year's gross margin of 21.7%. For the first six months of 2002 the
group's gross profit margin declined to 19.8% compared to 20.2% in 2001.
Increased wastepaper costs and reduced average selling prices in the
quarter-over-quarter and year-to-date comparisons contributed to the
reduction in gross margin.
SELLING AND ADMINISTRATIVE EXPENSES
Selling and administrative expenses for the three months ended June 30,
2002 were $16.7 million compared to $19.2 million in the same period in
2001. Incentive compensation programs based on the market price of the
Company's stock resulted in a credit to selling and administrative
expenses of $0.3 million for the current quarter compared to expense
recognition of $3.2 million in the second quarter of 2001. In addition,
salary and benefit costs increased $0.8 million in the second quarter of
2002 compared to 2001.
For the six months ended June 30, 2002, selling and administrative
expenses were $33.8 million compared to $36.9 million in the first half of
2001. Expense for stock incentive programs was $.2 million in 2002
compared to expense of $4.4 million in 2001. As in the quarter-over-
quarter comparison, salary and benefit increases accounted for most of the
remaining difference for the first six months of 2002 as compared to the first
six months of 2001.
INCOME TAXES
The effective tax rate for the quarter ended June 30, 2002 and 2001 was
37% and 36.6%, respectively. For the six months ended June 30, 2002 and
2001, the effective tax rate was 37% and 36.9%, respectively. The
effective tax rate is expected to be 37% for 2002.
CAPITAL RESOURCES AND LIQUIDITY
CASH PROVIDED BY OPERATIONS
For the six months ended June 30, 2002, cash provided by operations was
$26.9 million, compared to $33.0 million for the same period of 2001. The
decrease in operating cash flows was due principally to one-time inventory
reductions during 2001 which occurred as a result of a concentrated effort to
reduce working capital. Inventories increased at seasonably normal levels
over the first half of 2002.
-10-
CAPITAL EXPENDITURES
Capital expenditures totaled $10.4 million for the six months ended June
30, 2002, compared to $14.3 million for the same period last year.
For the six months ended June 30, 2002, capital expenditures for projects
with total spending expected to exceed $1.0 million were $0.8 million for
a pulp mill digester replacement and $0.7 million on process control
equipment at the Brokaw and Groveton mills, respectively. At the Towel &
Tissue Group, $2.5 million was spent on various converting equipment.
Consolidated capital spending on maintenance related projects was $1.3
million for 2002. The balance of capital spending in 2002 was for projects
individually under $1.0 million.
During the first six months of 2001, the Specialty Paper Group incurred
$3.2 million in carry-over spending for the High Performance Liner (HPL)
project at the Rhinelander mill. The Printing & Writing Group spent $0.9
million on Cluster Rule Compliance at the Brokaw mill. Year-to-date, the
Towel & Tissue Group has spent $2.7 million on various converting lines at
the Harrodsburg, Kentucky facility.
FINANCING
Total current and long-term debt decreased $6.5 million for the six months
ended June 30, 2002 to $185.8 million. The decrease in total debt from
December 2001 is due, in part, to reduced capital spending.
Interest expense was $2.8 million in the second quarter of 2002 compared
to $3.6 million in the same period of 2001. The decrease in interest
expense is primarily attributable to lower debt levels in 2002 compared to
2001.
Cash provided by operations and the Company's borrowing capacity are
expected to meet capital needs and dividends. The Company had
approximately $115.2 million in borrowings available from existing bank
facilities as of June 30, 2002.
DIVIDENDS
A dividend declared in December, 2001, of $.085 per share was paid
February 15, 2002. At the April 18, 2002 meeting, the Board of Directors
declared a quarterly cash dividend of $.085 per share that was paid on May
15, 2002. On June 13, 2002, the Board of Directors declared a quarterly
cash dividend of $.085 payable August 15, 2002 to shareholders of record
on August 1, 2002.
OUTLOOK
While towel and tissue markets continue to expand, meaningful gains have
yet to occur in those markets serviced by the Company's specialty paper and
printing and writing businesses. With market pulp and wastepaper prices
trending higher, the Company will continue to focus on cost reduction and
efficiency improvement opportunities. These efforts are expected to result in
third quarter earnings comparable to 2001.
-11-
INFORMATION CONCERNING FORWARD LOOKING STATEMENTS
This report contains certain of management's expectations and other
forward-looking information regarding the Company pursuant to the safe-
harbor provisions of the Private Securities Litigation Reform Act of 1995.
While the Company believes that these forward-looking statements are based
on reasonable assumptions, such statements are not guarantees of future
performance and all such statements involve risk and uncertainties that
could cause actual results to differ materially from those contemplated in
this report. The assumptions, risks and uncertainties relating to the
forward-looking statements in this report include general economic and
business conditions, changes in the prices of raw materials or energy,
competitive pricing in the markets served by the Company as a result of
economic conditions, overcapacity in the industry and the demand for paper
products, manufacturing problems at Company facilities and various other
risks and assumptions. These and other assumptions, risks and
uncertainties are described under the caption "Cautionary Statement
Regarding Forward-Looking Information" in Item 1 of the Company's Annual
Report on Form 10-K/A for the year ended December 31, 2001, and, from time
to time, in the Company's other filings with the Securities and Exchange
Commission. The Company assumes no obligations to update or supplement
forward-looking statements that become untrue because of subsequent events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There has been no material change in the information provided in response
to Item 7A of the Company's Form 10-K/A for the year ended December 31,
2001.
-12-
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The annual meeting of shareholders of the Company was held on April 18,
2002.
The matters voted upon, including the number of votes cast for, against or
withheld, as well as the number of abstentions and broker non-votes, as to
each such matter were as follows:
MATTER SHARES VOTED
Broker
FOR WITHHELD NON-VOTE
1. Election of Class III
Directors
(a) Gary W. Freels 47,267,071 416,545 0
(b) Thomas J. Howatt 47,097,107 586,509 0
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required by Item 601 of Regulation S-K
99.1 Certification under Section 906 of Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K:
(1) FORM 8-K DATED APRIL 22, 2002. The Company filed a current report on
Form 8-K on April 22, 2002, reporting earnings and net sales information
for the quarter ended March 31, 2002 under Item 5 and additional related
information under Item 9, Regulation FD Disclosure.
(2) FORM 8-K DATED JUNE 18, 2002. The Company filed a current report on
Form 8-K on June 18, 2002, to report that effective on that date, Arthur
Anderson, LLP had been dismissed, and Deloitte & Touche LLP had been
engaged, as the Company's independent public accountants.
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SIGNATURES
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 thereunto duly authorized.
WAUSAU-MOSINEE PAPER CORPORATION
August 14, 2002 SCOTT P. DOESCHER
Scott P. Doescher
Senior Vice President-Finance,
Secretary and Treasurer
(On behalf of the Registrant and as
Principal Financial Officer)
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EXHIBIT INDEX
TO
FORM 10-Q
OF
WAUSAU-MOSINEE PAPER CORPORATION
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2002
Pursuant to Section 102(d) of Regulation S-T
(17 C.F.R. Section 232.102(d))
The following exhibits are filed as part of this report:
99.1 Certification under Section 906 of Sarbanes-Oxley Act of 2002
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