Appleton to Sell Performance Packaging Operations

Appleton to Sell Performance Packaging Operations

Appleton, Wisconsin, USA, 08 July 2010 -- /PRNewswire/ -- Appleton announced today that it has entered into an agreement to sell its Performance Packaging operations to a newly formed company named NEX Performance Films Inc. which is owned by Mason Wells, a Milwaukee-based private equity firm. The sale of the Performance Packaging operations is a strategic move to consolidateAppleton's offerings and to allow Appleton to focus on its core business. The purchase price to be paid in the transaction is approximately USD 58 million. Subject to the satisfaction of customary closing conditions, the companies expect the transaction to be completed in July.Appleton intends to use proceeds from the sale to reduce debt and for general corporate purposes. Appleton's Performance Packaging operations produce high-quality single and multilayer polyethylene films and are comprised of two wholly-owned subsidiaries: American Plastics Company, Inc., located in Rhinelander, Wisconsin; and New England Extrusion Inc., which has facilities in Turners Falls, Massachusetts, and Milton, Wisconsin. Appleton's chief executive officer, Mark Richards, said the Performance Packaging operations no longer complement the company's long-term strategic direction, which is to focus on its specialty paper and microencapsulation businesses. "Our core strengths in specialty paper production and microencapsulation have been the foundation of our company's success for more than a century, and they will be the focus of our growth strategy in the future," said Richards. He added that Appleton will leverage the operational strengths of the company and its recent capital investments in its thermal and encapsulation businesses to expand Appleton's market leadership positions in specialty paper and encapsulation. Appleton simultaneously acquired American Plastics Company and C&H Packaging Company, Inc. in April 2003. C&H Packaging, located in Merrill, Wisconsin, prints and converts flexible plastic packaging materials for companies in the food processing, household, and industrial products industries. Appleton sold C&H Packaging to The Interflex Group, Inc. in December 2009. Appleton acquired New England Extrusion in January 2005. Appleton creates product solutions through its development and use of coating formulations, coating applications, and encapsulation technology. The company produces carbonless papers, thermal papers, encapsulation products, and performance packaging products.Appleton, headquartered in Appleton, Wisconsin, has manufacturing operations in Wisconsin,Ohio, Pennsylvania, and Massachusetts; employs approximately 2100 people; and is 100% employee-owned. For more information, visit www.appletonideas.com.

Appleton Thermal Papers converts

APPLETON — A decision to halt use of a chemical in its thermal paper has given company Appleton an edge up with buyers increasingly attuned to "green" office supplies. Or so thinks a Fox Cities firm that converts large parent rolls from Appleton to thinner rolls, which it then sells for cash register receipts.

."We've been hearing more and more about customers requesting BPA-free paper, and Appleton being the only one (with) that product today," said Dave Blum, vice president of paper for Heartland Label Printers Inc., Little Chute. "We've designed a particular stock number just so we know we'll be using Appleton paper (and) guarantee customers that it's BPA-free paper."

Bill Van Den Brandt, company spokesman, said the firm did away with chemical bisphenol-A, or BPA, in its thermal receipt paper in 2006. He said the firm concluded its elimination was "the right thing to do" as the controversy about the weak organic acid's effect on human health began heating up.

Most fears at that point focused on BPA's use in clear plastic products like baby bottles and sipping cups because it potentially can leach into beverages. Gov. Jim Doyle this month signed into law the BPA-Free Kids Act to help protect children from exposure to its potentially harmful effects.

Van Den Brandt said the company doesn't use BPA in any of its other lines and never used it in its carbonless paper.

The BPA-free paper has clearly sparked interest from users.

"We have had people call and inquire about it," he said. "I think there is a greater attention to the whole subject of BPA. For some people, it does matter and it is a good thing. We haven't promoted it specifically as that."

In addition, thermal paper produced at Appleton's West Carrollton, Ohio, facility contains up to 50 percent recycled fiber. "So there are elements beyond the BPA element that we're proud of and we think distinguish us from competitors."

It's a classic win-win situation, Blum said. Appleton and Heartland are Fox Valley partners and the latter has been involved in green initiatives for some time. All of Heartland's waste — 1,400 tons per year — goes to another Wisconsin firm and not the landfill. That firm breaks it all down and makes fuel pellets out of it, Blum said.

Appleton is looking at eliminating its employee stock ownership plan

APPLETON — Papermaker Appleton is looking at eliminating its employee stock ownership plan (ESOP), but the process is neither simple nor certain, an executive told analysts during a Web conference call Tuesday.

"We have frequent conversations about mitigation of the ESOP," said Thomas Ferree, chief financial officer.

The stock was priced at $10 a share when the plan was launched in November 2001. In 2007, it had risen to about $33.60 per share, he said. As of this week, the stock hovered around $13 per share. Analysts tossed some pointed questions about the ESOP at Ferree during the call to review 2009 final-quarter and full-year earnings. Ferree said there are two ways to terminate an ESOP: Pay off shareholders in cash or provide some form of tradable public securities. "There's really no set value for that," he said.

With 10 million shares outstanding, the full value is about $130 million. While Appleton is privately held — 100 percent owned by employees or former employees —it has some publicly traded debt and thus must publicly report financial results. Bill Van Den Brandt, manager for corporate communications, said it's largely the public bondholders who have pushed for the company to consider eliminating the ESOP, structured so the company must buy back the stock in a process called a repurchase obligation.

  

Comments posted at Post Crescent:

oldster2 wrote:

Where are the answers to key questions:
Does the company have the financial capacity to repurchase ESOP shares? (Presumably not, which suggests that a buyer is needed.)
Are any viable buyers engaged in discussion with the company?
Are there alternative lenders other than public bondholders available to the company?
If this information is provided, we could conclude what is likely to occur.

smack2649 wrote:

There are probably 2 main reasons. The company is not doing very good - not meeting annual objectives. Secondly, executives will receive platinum parachutes. When there is a change of control to the company the CEO gets 3 times salary & bonus and the other execs get 2 times - sounds like a great plan to me.

Bluedevil84 wrote:

Appears that the public bondholders are nervous about the poor performance of the company. Look for a merger or company sale to take place and we can all watch as the CEO and his team float away on their golden parachutes!

sludgemonkey wrote:

The real issue appears to be marginal performance.

Appleton has hired Jim Tyrone as senior vice president- Thermal Paper

APPLETON — Appleton has hired Jim Tyrone as senior vice president. He will be responsible for Appleton's thermal paper business unit and have oversight of paper manufacturing operations. Tyrone has 28 years of management experience. He most recently served as senior vice president of sales and marketing for NewPage Corp. Tyrone served in the same capacity with MeadWestvaco Corp. before its spinoff of NewPage. Tyrone earned a master's degree in business administration from Harvard University and a bachelor's degree in chemical engineering from the University of Virginia.

Lloyd Swaim

Lloyd Swaim, 96, Neenah, died with his loving wife by his side, Wednesday, February 17, 2010, at Vallhaven Care Center, Neenah. He was born November 15, 1913, in Tangier, Indiana, son of Jacob and Anna (English) Swaim. Lloyd married Evelyn A. Govert June 14, 1941, at St. Mary Catholic Church, Griffith, Indiana. Mr. Swaim was a member of St. Margaret Mary Catholic Church, Neenah. He was an instructor and taught at Indiana University and Purdue University at Indianapolis. Lloyd was employed as senior vice president at Appleton Papers and also served on their board of directors until his retirement. After retirement, Lloyd owned Management Consultants for 16 years, finally retiring at the age of 82. Lloyd was involved and a former member of the following: Society for Advancement of Management, serving as chapter president; Work Factor Association, Midwest Director; American Institute of Industrial Engineers, serving as former director; Appleton Chamber of Commerce Project Division Vice Chair; TAPPI Association, serving as former chapter president; Technical Association of Pulp and Paper Industry; Institute of Paper Chemistry; Appleton Chamber of Commerce recipient as one of the 50 top industrialists of the Fox Valley. Lloyd was also a former member of Buttes Des Morts Country Club and Ridgeway Country Club.
Lloyd is survived by his wife, Evelyn; his children: Lloyd (Hermine) Swaim, Davie, FL; Robert (Karen) Swaim, Neenah; MaryAnn (Dr. G. Paul) DeRosa, Durham, N.C.; Thomas (Linda) Swaim, Neenah; 9 grandchildren: Bryan Swaim, Los Angeles, CA; Cpt. Brett (Kimberly) Swaim, Camp Lejeune, N.C.; Bart (Angela) Swaim, Neenah; Peggy (Stephen) Stair, Mason, OH; Kathleen (Paul) Lytle, Ft. Wayne, IN; Julie (Scott) Wasoski, Miamisburg, OH; Karen (Jason) Johnson, Toledo, OH; James (Molli) DeRosa, Lexington, S.C.; Crystal (John) Vodopija, Neenah; 18 great-grandchildren; a brother-in-law, Lester (Mercedes) Govert, Apple River, IL; 3 sisters-in-law: Lorraine Herod, Griffith, IN; Patricia (Paul) Searle, Lowell, IN; Gloria Govert, Griffith, IN; nieces, nephews and other relatives and friends.
He was preceded in death by his parents; a sister, Lorene (Frank) Gray; brothers- and sisters-in-law. Funeral services will be held at 11 a.m. Saturday, February 20, 2010, at St. Margaret Mary Catholic Church, 620 Division St., Neenah, with Fr. Mike Ingold officiating. Interment will be in St. Margaret Cemetery, Neenah. Visitation will be from 9 a.m. Saturday at the church until the time of the mass. In lieu of flowers a memorial has been established in Lloyd's name for the St. Margaret Mary Memorial Scholarship Fund.

Lloyd Swaim, 96, Neenah, died Wednesday

Lloyd Swaim, 96, Neenah, died Wednesday. Funeral arrangements are pending.

Kessler Funeral Home

& Cremation Services

Neenah 920-722-6464

www.kesslerfh.com

Amendments allow ESOP to own less than 50% of Paperweight Development Corp

Appleton, Wisconsin, USA, 28 January 2010 -- Appleton Papers Inc. announced today that it has received the requisite consents from the beneficial owners of its 11.25% second lien notes due 2015 to certain amendments to the indenture governing the second lien notes (the indenture). Adoption of the amendments requires the consents of the holders of a majority in aggregate principal amount of the second lien notes.

The amendments will permit the Appleton Papers Retirement Savings and Employee Stock Ownership Plan (the ESOP) to own less than 50% of Paperweight Development Corp. (Appleton’s parent company) without triggering a requirement on the part of Appleton to make an offer to repurchase the second lien notes pursuant to the Indenture. They also will permit a capital contribution or operating lease of the black liquor assets located at Appleton’s facilities at Roaring Spring, Pennsylvania, to a newly-formed joint venture with a third party in exchange for a minority equity interest in such joint venture. 

Appleton expects to immediately enter into a supplemental indenture giving effect to such amendments upon satisfaction of certain customary conditions contained in the Indenture.

APPLETON NAMES NEW THERMAL AND CARBONLESS VP'S

APPLETON — Papermaker Appleton has tapped a paper industry veteran from outside to head the firm's thermal paper business unit. At the same time it handed a vice president who joined the firm in 2005 the role of heading the carbonless unit. The company named Jim Tyrone, who has 28 years of management experience, most recently with NewPage Corp., to be responsible for the thermal paper unit and have oversight of the firm's paper manufacturing operations.

Tyrone most recently served as senior vice president of sales and marketing for NewPage Corp., the Miamisburg, Ohio-based firm that shuttered a paper mill in Kimberly 18 months ago but still owns it and still runs mills in four central Wisconsin cities. He had served in the same capacity with MeadWestvaco Corp. before its spinoff of NewPage, Appleton said.

Tyrone began his career in the paper industry with the former Mead Corp.

Sarah Macdonald, currently vice president of global sales and general manager of international business, was named vice president of the carbonless business unit with responsibility for the firm's carbonless and security business.

Appleton announced last week it would outsource parts of its information technology and finance functions, phasing out 28 local jobs the next six months.

The company employs about 1,200 people in the Fox Cities

Appleton to outsource IT, finance work

APPLETON — Papermaker Appleton today announced plans to outsource the management of portions of its information technology and finance processes, eliminating 28 jobs at its headquarters here.

The processes will be outsourced to Cognizant Technology Solutions, Teaneck, N.J., which operates more than 50 global delivery centers in five countries around the world.

The transition will take six months to accomplish, said Bill Van Den Brandt, manager, corporate communications.

Appleton will continue to staff a core IT team to direct and actively manage the core architecture, business process ownership, and project development to address evolving business needs, he said.

Cognizant will provide services through an onsite/offshore delivery model based in India.

Appleton, a producer of carbonless, thermal, security paper and perfomance packaging, employs about 1,200 people in the Fox Cities.

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State Street Global Advisors (SSGA) has completed its valuation of Paperweight Development Corp. stock for the second half of 2009. SSGA has determined the new per share value to be $13.26.

The value of PDC stock on June 30, 2009, was $18.87 per share. That means the share value decreased 29.7% for the period July 1, 2009, through December 31, 2009.

Analysis
A combination of difficult economic conditions worldwide and weak demand for our carbonless, thermal and packaging products resulted in the company missing its 2009 business forecast. Missing the forecast included a drop in earnings that caused a subsequent decrease in share value. Specifically, the performance of our core paper business resulted in a $3.16 drop in share value. That decrease in value includes the positive contribution of the increase in value of our Encapsys business. The performance and decrease in value of our packaging division resulted in a $3.98 decrease in share value.

Additional offsets to the decreases were a $.95 increase in share value for debt reduction and a $.58 increase for a reduction in the number of outstanding shares and related valuation matters. The December sale of C&H Packaging had no net impact on share value.

2009 performance
For full-year 2009, the value of PDC stock dropped from $21.43 to $13.26, a decline of 38.1%. By comparison, the Dow Jones Industrial Average rose 18.8% during 2009. The NASDAQ was up 43.9%, and S&P 500 rose 23.5%. The Dow Jones Index for the paper industry was up 124.5% in the U.S. and 38.2% worldwide.

The value of PDC stock has increased approximately 33% since the November 2001 employee buyout of the company. During that period the Dow Jones rose 8.5%, the NASDAQ is up 24.1% and the S&P 500 rose 1.2% while the Dow Jones Index for the paper industry declined 39.3%.

John D. Sobiesczyk

John D. Sobiesczyk John D. Sobiesczyk, 71, town of Pine River, Lincoln County, died Sunday, Jan. 10, 2010, at Aspirus Wausau Hospital. John worked in the paper industry in the Fox River Valley and then Wausau Papers-Brokaw mill. After his retirement, John became a real estate broker and was employed with Coldwell/Banker in Wausau. He was a veteran of the U.S. Army. Survivors include his wife, Kris (Pope) Sobiesczyk, Merrill; one daughter, Nicole (Kendall) Hull, Appleton; three sons, Michael (fiancee, Mary Schnell) Sobiesczyk, Neenah, Stan (Sarah) Sobiesczyk, Wausau, and Andy (April) Sobiesczyk, Merrill; two grandchildren; and one sister, Barb (Fred) Daniel, Menasha. Memorial service will be at noon Saturday at the Taylor-Stine Funeral Home, Merrill. Burial will be in spring in St. John's Cemetery I, Menasha. Visitation will be from 10 a.m. until service time Saturday at the funeral home.

Sad news regarding Candy Adams

Just learned yesterday that Candy Adams lost her battle with cancer early last week. Ken Nissen called me from Arizona asking if what he had heard was true. I talked to Doug yesterday afternoon and learned that the family will have a small, private service for Candy early this week in Philadelphia and Doug said friends are organizing an open house in Neenah this Saturday. We found the obituary in the Post Crescent this morning on-line, there wasn't anything in the Philadelphia papers that we could find. Such sad news, please pass this on, I don't have everyone's e-mail address in my contact list. Stan

obit from PC:

Candy Adams, 59, Neenah, peacefully departed life on Jan. 6, 2010, in the loving arms of her husband, Doug. She was born March 13, 1950, to Richard and Ruth Shepherd in Philadelphia, Pennsylvania. Candy graduated from Harriton High School, Rosemont, Pennsylvania and went on to college at Penn State University where she graduated in 1972 with a degree in Education. Candy was a member of Kappa Alpha Theta Sorority. It was at Penn State that Candy met her soul mate, Doug Adams, and they married in 1973. Candy and Doug raised two wonderful sons, Hunter and Drew. Candy worked as a librarian at St. Johns Elementary School in Menasha, Wisconsin. She was very fond of books and providing reading opportunities for children. Candy also served on the Neenah School Board from 1995 to 2006 serving on the Curriculum and Program Development Committee and as the Board Clerk from 2000-2005.

Candy enjoyed life, especially getting involved in the activities of her children. She had a penchant for bringing out the best in people. Always an upbeat attitude, warm smile and pleasant personality that put everyone at ease, Candy made it her mission to find the best in everyone. Whether it be gathering a group of people for a fun cup of tea, glass of wine or a full PARTY, Candy was the classic organizer. She shared many memories with friends on their walks around "The Point" in Neenah.

Candy is survived by her husband, Doug; two sons, Hunter, Los Angeles, California and Drew, San Diego, California; her mother Ruth Hinkle Shepherd, Philadelphia, Penn.; and a brother, Rick Shepherd, Philadelphia, Penn.

She was preceded in death by her father, Richard Shepherd.

It was Candy's wish to have an open house to celebrate her life. It will be held on Saturday, January 16, 2010, from Noon-3:00 p.m., at their home at 415 East Wisconsin Avenue, Neenah, Wisconsin.

A memorial has been established in Candy's name through the Education Foundation of Neenah, (Candy's Books For Kids), P.O. Box 244, Neenah, WI 54957-0244