Wausau Paper Shutters Maine Mill

Report from Deutsche Bank - Equity Research
Wausau Paper announced a number of moves to conserve cash and improve financial performance. The two notable ones are the suspension of the dividend and the permanent closure of the remaining paper machine at the Jay, Maine mill. The dividend was previously $0.34 per year, which recently resulted in a 6.5% yield. The suspension will save the company almost $17MM/year.

The machine being closed at Jay, Maine had annual capacity to produce 28K tons of Specialty Products. The closure will result in $26MM in charges, $22MM of which will be non-cash. The closure, along with other cost improvements, is expected to save $20MM/year pre-tax. If successful, this would improve EPS by about $0.25/year, which is more than the company has earned in any year since 2004.