ALPHARETTA, Ga., Jan. 31 /PRNewswire-FirstCall/ -- Summary of Results (Amounts in Millions, Except Per Share Amounts) 2007 2006 Fourth Full Fourth Full Quarter Year Quarter Year Net Sales $188.5 $714.8 $166.2 $655.2 Restructuring (Income) Expenses (0.3) 24.0 4.8 21.1 Operating Profit (Loss) 5.8 17.9 (5.1) 5.3 Net Income (Loss) 2.5 3.4 (4.4) (0.8) Earnings (Loss) Per Share - Diluted $0.16 $0.22 $(0.28) $(0.05) Plus: Restructuring Expenses Per Share - Diluted - 0.98 0.20 0.88 Earnings (Loss) Per Share Without Restructuring Expenses - Diluted* $0.16 $1.20 $(0.08) $0.83 Average Shares - Diluted 15.8 15.7 15.4 15.4 * Earnings (Loss) Per Share Without Restructuring Expenses - Diluted is a non-GAAP financial measure that is calculated by adding the Earnings (Loss) Per Share reduction caused by Restructuring Expenses to Earnings (Loss) Per Share - Diluted.
Schweitzer-Mauduit International, Inc. (NYSE: SWM - News) today reported fourth quarter 2007 net income of $2.5 million compared with a net loss of $4.4 million during the fourth quarter of 2006. The diluted earnings per share were $0.16 compared with a diluted loss per share of $0.28 in the prior-year quarter. Restructuring expenses decreased earnings per share during the fourth quarter of 2006 by $0.20. Excluding restructuring expenses, earnings per share of $0.16 for the fourth quarter of 2007 improved relative to the diluted loss per share of $0.08 for the fourth quarter of 2006.
Wayne H. Deitrich, Chairman of the Board and Chief Executive Officer, commented that, "Overall, we are pleased with our financial and operational performance in 2007 as well as the significant progress made during the year in reshaping Schweitzer-Mauduit through the restructuring activities underway and growth realized in reconstituted tobacco products as well as cigarette paper for lower ignition propensity cigarettes. Despite continued volatility in our quarterly earnings in 2007, we delivered a 45 percent increase in earnings per share excluding restructuring expenses and a 38 percent increase in cash provided by operations, which enabled undertaking significant reinvestment in our business without substantially increasing debt. Further, on December 21, 2007, Schweitzer-Mauduit entered into an agreement to purchase the 28 percent of LTR Industries S.A., or LTR, owned by a subsidiary of Altadis, SA. We are pleased to announce that this acquisition was completed today. We expect this acquisition to be accretive to earnings in the range of $0.28 to $0.34 per share, subject in part to final purchase accounting.
"Schweitzer-Mauduit''s results for the fourth quarter of 2007 were in-line with our expectations for a weaker performance than previous quarters in 2007 and primarily reflected planned paper machine downtime in France, the United States and Brazil. Excluding restructuring expenses from both 2007 and 2006, earnings improved during the fourth quarter compared to an even weaker prior- year period. This stemmed primarily from increased demand and higher production capacity utilization for reconstituted tobacco leaf products. Also, sales volume growth and improved manufacturing costs were achieved for lower ignition propensity cigarette papers. We continued to realize significant savings during the fourth quarter from cost reduction activities across our businesses despite the planned machine downtime. These improvements were partially offset by the impacts of cost inflation and a further strengthening of the Brazilian real. We also improved cash generation, in part from a further decrease in working capital, during the fourth quarter of 2007."
Schweitzer-Mauduit initiated restructuring activities during 2006 and 2007 in France and the United States and in 2007 in Brazil. In accordance with applicable U.S. generally accepted accounting principles, restructuring expenses associated with these actions were recognized during the fourth quarters of both 2007 and 2006, resulting in a net credit of $0.3 million and a charge of $4.8 million, respectively.
In October 2007, Schweitzer-Mauduit announced a three-part restructuring plan to reduce production capacity for tobacco-related papers in both France and the United States as well as to reduce employment levels in Brazil. The three-part plan includes the expected idling of a base tipping paper machine at Papeteries de Malaucene, or PdMal, in Malaucene, France by the end of 2008 and the shutdown of our entire operation located at Lee, Massachusetts beginning in May 2008. The Company plans to transfer production from PdMal and the Lee Mills to its other facilities, primarily to Santanesia, Brazil, and discontinue the sale of the majority of commercial and industrial papers currently produced at the Lee Mills. On January 17, 2008, agreement was reached with the unions and Work''s Council at the PdMal facility regarding terms of the restructuring plan. The final negotiated terms, including severance payments, were consistent with the projections for total restructuring expenses included in the October 1, 2007 announcement of this plan.