FORM 8-K

Date of Report: November 14, 2003

FiberMark, Inc.

(Exact name of registrant as specified in charter)

Delaware	001-12865	82-0429330
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

             

161 Wellington Road

P.O. Box 498

Brattleboro, Vermont 05302

(802) 257-0365

 

 

 

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Item 12. Results of Operations and Financial Condition.

 

    On November 12, 2003, FiberMark, Inc., announced its financial results for the quarter ended September 30, 2003.  The full text of the press release issued in connection with the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

    The information in this Form 8-K and the Exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 ofthe Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

 

 

    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 hereunto duly authorized.  

	FiberMark
Date: November 14, 2003	By:	/s/ Allan M. Kline
		Senior Vice President and Chief Financial Officer

 

Exhibit No.		Description
99.1		Press release dated November 12, 2003

The company also consummated a new $85 million credit facility November 12, 2003, which provides a significant increase in available cash for capital expenditures, working capital and general corporate purposes. The new credit facility, provided by GE Capital, is secured by substantially all of FiberMark’s U.S. accounts receivable, inventory and equipment, excluding certain equipment at our Quakertown, Penn., and Warren Glen, N.J. facilities that secure two separate term loans, and is also secured by specific foreign assets. The facility also provides borrowing capacity based on the level of profitability of FiberMark’s German businesses. As of September 30, FiberMark’s pro forma unused borrowing capacity under the new facility was $51.8 million compared with $28.8 million on the former credit facility and the capital expenditure sub-facility. A portion of the proceeds from the new facility will be used to pay off the former credit facility as well as related transaction costs. Berenson & Company acted as a financial advisor to FiberMark in connection with this financing. Further details on the credit facility will be provided in the company’s Form 10-Q filing November 14, 2003.

For the first nine months of 2003, the company reported a net loss of $116.9 million, or $16.54 per share, compared with net income of $4.1 million, or $.58 per share, for the prior-year period. The absence of tax benefits on U.S. net operating losses recorded in the first nine months of 2003 accounted for approximately $14.9 million, or $2.11 per share, of the period loss. In the first nine months of 2002, tax benefits were recognized on the company’s U.S. pre-tax loss. Sales for the nine-month 2003 period were $302.5 million compared with $299.9 million in 2002, a 1% increase. Sales for German operations were $138.3 million in the first nine months of 2003 compared with $112.3 million in the same period last year, an increase of 23%. Excluding the translation effects of a stronger euro, which accounted for $22.7 million in sales for first nine months of 2003 compared with the prior year period, sales from German operations increased 3%. North American operations sales in 2003 were $164.1 million compared with $187.5 million in 2002, a 13% decline.

"Third quarter sales were positively impacted by German operations, boosted by foreign exchange translation benefits, as well as market share gains in automotive filter media and tape base," said Alex Kwader, chairman and chief executive officer, adding that the company’s German operations had exceptionally strong results in the corresponding 2002 period. "Our German operations completed an equipment upgrade during the third quarter in its transportation filtration business, which entailed an extended production shutdown. Although the shutdown reduced third quarter sales by approximately $1.5 million, early in the fourth quarter we have already generated expected production rate increases for this filtration business," Kwader said. "The decline in North American operations was primarily due to continued economic weakness, lower cost substitutes and discontinued business related to product line divestitures and facility closures, particularly in technical specialties." The December 2002 sale of most of the company’s North American industrial filter media business accounted for $1.1 million of the decline.

This press release contains forward-looking statements. Actual results may differ depending on the economy and other risk factors discussed in the company’s Form 10K filed with the SEC March 31, 2003, and accessible on the company’s Web site : www.fibermark.com .

 

FIBERMARK, INC.
Condensed Consolidated Statements of Operations
Three Months Ended September 30, 2003 and 2002
(In thousands, except per share amounts)
Unaudited
			2003			2002
Net sales		$	93,651		$	97,594
Cost of sales			81,320			77,550
Gross profit			12,331			20,044
Selling, general and administrative expenses			9,805			8,745
Restructuring charge			1,682			-
Goodwill impairment			92,261			-
Income (loss) from operations			(91,417	)		11,299
Other expense, net			574			322
Interest expense, net			8,723			8,470
Income (loss) before income taxes			(100,714	)		2,507
Income tax expense			2,223			1,364
Net income (loss)		$	(102,937	)	$	1,143
Basic earnings (loss) per share		$	(14.57	)	$	0.16
Diluted earnings (loss) per share		$	(14.57	)	$	0.16
Average basic shares outstanding			7,066			7,066
Average diluted shares outstanding			7,066			7,093

 

 

FIBERMARK, INC.
Condensed Consolidated Statements of Operations
Nine Months Ended September 30, 2003 and 2002
(In thousands, except per share amounts)
Unaudited
			2003			2002
Net sales		$	302,493		$	299,876
Cost of sales			255,208			237,419
Gross profit			47,285			62,457
Selling, general and administrative expenses			32,871			27,540
Restructuring charge			1,682			-
Goodwill impairment			92,261			-
Income (loss) from operations			(79,529	)		34,917
Other expense, net			835			1,065
Interest expense, net			26,196			25,985
Income (loss) before income taxes			(106,560	)		7,867
Income tax expense			10,296			3,774
Net income (loss)		$	(116,856	)	$	4,093
Basic earnings (loss) per share		$	(16.54	)	$	0.58
Diluted earnings (loss) per share		$	(16.54	)	$	0.58
Average basic shares outstanding			7,066			7,008
Average diluted shares outstanding			7,066			7,046

 

 

FIBERMARK, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
			Unaudited
			September 30,			December 31,
ASSETS			2003			2002
Current assets:
Cash		$	20,787		$	35,567
Accounts receivable, net of allowances			52,709			50,386
Inventories			60,592			64,569
Prepaid expenses			1,791			1,591
Total current assets			135,879			152,113
Property, plant and equipment, net			238,138			225,506
Goodwill			7,713			98,460
Other intangible assets, net			10,381			11,478
Other long-term assets			1,434			1,347
Other pension assets			5,011			5,011
Total assets		$	398,556		$	493,915
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Current portion of long-term debt		$	4,481		$	3,188
Accounts payable			22,222			27,344
Accrued liabilities			36,524			22,461
Accrued income taxes payable			7,794			4,330
Deferred income taxes			573			538
Total current liabilities			71,594			57,861
Long-term liabilities:
Revolving credit line			-			-
Long-term debt, less current portion			341,382			341,073
Deferred income taxes			16,026			14,952
Other long-term liabilities			44,586			43,800
Total long-term liabilities			401,994			399,825
Total liabilities			473,588			457,686
Stockholders' equity (deficit)
Preferred stock, par value $.001 per share;
2,000,000 shares authorized, and none issued			-			-
Series A Junior participatory preferred stock, par value $.001;
7,066 shares authorized, and none issued			-			-
Common stock, par value $.001 per share; 20,000,000 shares authorized
7,070,026 and 7,066,226 shares issued and outstanding in 2003 and 2002			7			7
Additional paid-in capital			65,496			65,496
Accumulated deficit			(146,797	)		(29,931	)
Accumulated other comprehensive income			6,297			692
Less treasury stock, 3,800 shares at cost in 2003 and 2002			(35	)		(35	)
Total stockholders' equity (deficit)			(75,032	)		36,229
Total liabilities and stockholders' equity (deficit)		$	398,556		$	493,915