John Dillon Continue Quotations

Although the economic problems in Southeast Asia continue to affect some of our major businesses, we've made significant progress in completing our restructuring program that was announced last July.

Not only are our markets getting better and our internal cost-cutting programs succeeding, we are also seeing the benefits of our merger with Union Camp reflected in our earnings. Going forward, we will continue to manage production in line with our customer orders and not build inventory.

We completed the first quarter with strong momentum, and we continue to improve our underlying cost structure in a difficult macro environment,

Due to wet weather conditions, our wood costs were much higher than expected. However, these costs were partially offset by lower purchase prices for other raw materials and the continued success of our cost-reduction program.

These second-quarter results continue the favorable trend in industry conditions that we began to see earlier this year, ... We will be divesting or closing operations that no longer meet the company's financial or strategic objectives.

The external environment continues to be very difficult, ... We have continued to reduce our capacity to match demand from our customers, improved our operations and began to realign staff resources to better our financial results.