Wausau Paper (WPP) Cuts Q4 Outlook; Approves $6.6M Capital Project

December 17, 2008 5:27 PM EST

Wausau Paper (NYSE: WPP) today announced revised Q4 EPS guidance, reflecting weakening economic conditions and reduced customer order activity at both its Specialty Products and Printing & Writing business units.

The Company anticipates taking Q4 market-related downtime of approximately 11,000 tons within Specialty Products and 7,000 tons within Printing & Writing. As a result, Wausau now sees Q4 EPS about breakeven, compared to prior guidance for earnings of $0.03-$0.05. The Street is expecting Q4 EPS of $0.05.

The Company also announced that its Board of Directors has approved a $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 as well as the relocation of Appleton and Brokaw distribution activities to a centralized location that will be determined in Q109.

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 prior to December 31, 2009. The closure will impact approximately 90 permanent jobs. In addition to capital investment, the Company expects one-time pre-tax expenses of $3.8 million related primarily to the close of the Appleton facility, removal of equipment and relocation of paper inventories. Less than $0.1 million of these expenses are expected in Q4 with the remainder occurring in 2009.

Wausau Paper Corp. manufactures, converts, and sells paper and paper products primarily in the United States and Canada.

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