Date: Thu, 20 Nov 1997 23:58:04 GMT Server: Apache/1.2.4 Last-Modified: Fri, 10 Oct 1997 18:21:18 GMT ETag: "103b0-11f8-343e721e" Content-Length: 4600 Accept-Ranges: bytes Connection: close Content-Type: text/html News Release, 10/10/97


Republic Group Incorporated


News Release, October 10, 1997

Republic Group Incorporated Reports 10% Increase in 1st Quarter Net Sales

Contact: Janey Rife - (316) 727-2711 or Doyle Ramsey - (316) 727-2709

FOR IMMEDIATE RELEASE

Hutchinson, Kan., Oct 10--Republic Group Incorporated (NYSE:RGC) today announced consolidated net sales increased 10% to $31,889,000 for the first quarter ended September 30, 1997 compared to $29,004,000 for the same quarter of 1996. Consolidated net income was $4,326,000 or $.37 per share in the 1997 quarter and $5,019,000 or $.43 per share in the 1996 quarter.

The 10% increase in consolidated net sales is primarily attributable to an 11% increase in gypsum wallboard net selling prices. Additionally, consolidated net sales were influenced by a 2% increase in net sales recorded by the Company's recycled paperboard segment which includes the Company's recycled paperboard mills and recovered paper fiber operations. Although both segments operated at higher operating rates than during the same quarter of 1996, this was not sufficient to offset a 46% increase in unit raw material costs, principally reclaimed paper fiber, experienced by the recycled paperboard operations during the 1997 quarter when compared to 1996. Reclaimed paper fiber is a strict commodity whereby cost corrections are almost immediately affected by changes in supply and demand. The Company began implementing selling price increases for its recycled paperboard products during September 1997. However, because of the lag between raw material cost increases and subsequent selling price increases and difficulties passing through all of the cost increases to customers, recycled paperboard margins were severely restricted during the quarter. There are positive signs that the costs of reclaimed paper fiber have now stabilized and margins may return closer to historical levels.

Phil Simpson, Chairman and President, stated: "Although during the first quarter the Company's recycled paperboard segment experienced a sharp increase in the cost of reclaimed paper fiber and a corresponding decrease in margins, results should improve now that it appears those cost pressures are beginning to abate. The Company's gypsum wallboard segment continues to operate at near capacity. The capital expansion plan to double the productive capacity of the Company's gypsum wallboard operations is on schedule and should be completed by July 1998."

Republic Group Incorporated and its wholly-owned operating subsidiaries-Republic Paperboard Company, Halltown Paperboard Company, Republic Recycling Company, and Republic Gypsum Company-are manufacturers of 100% recycled paperboard, recovered paper fiber and gypsum wallboard, servicing markets nationwide. Republic's common stock is traded on the New York Stock Exchange under the symbol "RGC".

Consolidated Statements of Income

Quarters Ended September 30, 1997 and 1996 (Unaudited)


                                       1997              1996

Gross Sales                    $ 37,002,000       $33,880,000

Less Freight and discounts        5,113,000         4,876,000

Net sales                        31,889,000        29,004,000

Costs and expenses:

   Cost of sales	         21,383,000        17,611,000

   Selling and admin. Expenses    3,620,000         3,149,000

                                 25,003,000        20,760,000

Operating profit                  6,886,000         8,224,000

Other income (expense), net          91,000          (329,000)

Income before income taxes        6,977,000         7,915,000

Provision for income taxes        2,651,000         2,896,000

Net income                      $ 4,326,000       $ 5,019,000

Income per common equiv. share  $      0.37       $      0.43

Weighted avg. shares outstanding 11,832,000        11,768,000
Notes: Income per common and common equivalent share on a fully diluted basis is substantially the same as primary income per share as presented.


Last Updated: 10/10/97
KellyB@southwind.net