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ALPHARETTA, Ga., July 16, 2001 (press release) -- Schweitzer-Mauduit International, Inc. (NYSE: SWM - news) today announced a plan to restructure its Brazilian operations and exit the printing and writing uncoated papers business in Brazil in response to current business conditions. A pre-tax charge of approximately $4.5 to $5.0 million will be taken in the second quarter of 2001 to implement this restructuring. Excluding this unusual item, the Company anticipates diluted earnings per share for the second quarter of 2001 to be in the range of $.52 to $.54 per share. Second quarter diluted earnings per share in 2000 were $.41. 
Brazilian Restructuring 
Wayne H. Deitrich, Chairman of the Board and Chief Executive Officer, commented that, ``Recent changes in Brazilian business conditions made it necessary for Schweitzer-Mauduit to reassess its ability to continue to compete effectively in the printing and writing uncoated papers market. Sales volumes during the past six months have been unfavorably impacted by a slowdown in the Brazilian printing and writing papers market as well as by a decision by the Company to reduce its sales of certain grades of these papers that have been negatively impacted by ICMS, a form of value-added business tax. In addition, the recently enacted electricity rationing program in Brazil has necessitated production curtailments in our Brazilian operations. The printing and writing uncoated papers business is our least profitable product line in Brazil while being our largest electricity user.'' 
The decision to exit the printing and writing uncoated papers business in Brazil will result in a pre-tax charge in the second quarter of 2001 of approximately $4.5 to $5.0 million, or $.20 to $.22 per share, for a non-cash write-off of assets. In addition, a further pre-tax charge of approximately $0.5 to $0.7 million, or $.02 to $.03 per share, will be taken in the third quarter, primarily related to employee termination and severance costs. Schweitzer-Mauduit do Brasil's net sales of printing and writing uncoated papers totaled approximately $25 million in 2000. Because of cost reduction steps to be implemented as part of the restructuring, exiting the printing and writing uncoated papers business is not expected to have a material impact on ongoing operating results after the restructuring is fully implemented, which should occur by year-end 2001. 
Brazilian Energy Situation 
In late May, the Brazilian government announced the details of its electricity rationing program which has an overall objective of a 20 percent reduction in electricity consumption and mandates a 25 percent reduction in electricity consumption by the paper industry in the most populated and industrialized regions of Brazil. The reduction is calculated from prior-year average electricity consumption. The reduction must be measured and achieved for consecutive thirty-day periods commencing May 31, 2001. Failure to achieve the mandated reductions would result in higher electricity rates and cuts in electrical power service. The duration of the government's energy reduction directive is uncertain although it is expected to last at least six months, through the traditional ``dry period'' in Brazil. The government's forced consumption reduction program is in response to unusually low water levels in the lakes and reservoirs supplying Brazil's hydroelectric facilities that provide 90 percent of that country's electricity. 
In response to the Brazilian government's energy reduction directive, Schweitzer-Mauduit do Brasil implemented a four-part electricity reduction program. All nonessential nonmanufacturing uses of electricity are being eliminated including cuts in air conditioning, reduced lighting and changes in the operation of the water and effluent treatment plants. Manufacturing process modifications are being implemented to achieve more energy-efficient usage of equipment where product quality will not be compromised. A comprehensive energy conservation training program is being conducted for Brazilian employees and contracted service providers of the Company to increase awareness and solicit ideas for additional electricity reduction. To achieve the 25 percent electrical consumption reduction target, it has also been necessary to implement production curtailments. Machine downtime has been taken to reduce the production of the Company's least profitable products. 
Mr. Deitrich added that, ``Schweitzer-Mauduit does not expect the government's electricity reduction program to significantly affect the demand for or its ability to produce tobacco-related papers. Likewise, the availability of the Company's major raw materials such as wood pulp, chemicals and chalk and the ability to receive raw materials and ship finished product are not expected to be materially impacted. Exiting the printing and writing uncoated papers business will permit Schweitzer-Mauduit do Brasil to better focus on and service its other product lines.'' 
Anticipated Second Quarter Results 
Excluding the unusual charge associated with restructuring the Brazilian operations, the Company anticipates diluted earnings per share for the second quarter of 2001 to be in the range of $.52 to $.54 per share. Operating profit improvement is anticipated in both the French and U.S. business units compared with the prior-year quarter. Results for the quarter are expected to benefit from increased tobacco-related papers sales volumes, lower wood pulp costs and improvement in average selling prices. The average per ton list price of northern bleached softwood kraft pulp in the United States was $570 per metric ton in the second quarter of 2001 compared with $680 per metric ton in the second quarter of 2000. These positive factors will be partially offset by higher purchased energy costs and expenses related to the banded cigarette paper project and resultant higher cost of operations at the Spotswood, New Jersey mill. 
Schweitzer-Mauduit will issue its second quarter 2001 earnings press release on Thursday, July 26, 2001. The Company will hold a conference call to review second quarter results with investors and analysts at 10:30 a.m. eastern time on that day. The conference call will be simultaneously broadcast over the World Wide Web at http://www.schweitzer-mauduit.com . To listen to the call, please go to the Web site at least fifteen minutes prior to the call to register and download and install any necessary audio software. For those unable to listen to the live broadcast, a replay will be available on the Web site shortly after the call. 
Schweitzer-Mauduit International, Inc. is a diversified producer of premium specialty papers and the world's largest supplier of fine papers to the tobacco industry. It also manufactures specialty papers for use in alkaline batteries, vacuum cleaner bags, overlay products, business forms and printing and packaging applications. Schweitzer-Mauduit and its subsidiaries conduct business in over 90 countries and employ 3,500 people worldwide, with operations in the United States, France, Brazil and Canada. For further information, please visit the Company's Web site at www.schweitzer-mauduit.com . 
Certain comments contained in this news release concerning the business outlook and anticipated financial and operating results of the Company constitute ``forward-looking statements,'' generally identified by phrases such as the Company ``expects'' or ``anticipates'' or words of similar effect, within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to the safe harbor created by that Act. The forward-looking statements are based on information currently available to the Company and are based upon management's expectations and beliefs concerning future events and factors impacting the Company, including energy usage and costs, production downtime, restructuring costs, per ton wood pulp costs, banded cigarette paper implementation costs, local Brazilian business taxes, mill operations, raw materials availability, transportation availability, sales volumes and average selling prices. There can be no assurances that such factors or future events will occur as anticipated or that the Company's results will be as estimated. Many factors outside the control of the Company also could impact the realization of such estimates. Such factors are discussed in more detail in the Company's latest filings with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2000. Except as required by federal securities law, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reasons, after the date of this news release.