Jul 26, 2007. /Lesprom Network/. Schweitzer-Mauduit International, Inc. reported on July 26, 2007 second quarter 2007 net income of $1.0 million, which included $3.4 million in pre-tax restructuring expenses, compared with net income of $0.7 million during the second quarter of 2006. Diluted earnings per share were $0.06 compared with diluted earnings per share of $0.04 in the prior-year quarter. Restructuring expenses reduced earnings per share by $0.14 in both the second quarter of 2007 and 2006. Excluding restructuring expenses, earnings per share for the second quarter of 2007 and 2006 would have been $0.20 and $0.18, respectively. Wayne H. Deitrich, chairman of the board and chief executive officer, commented that, "Schweitzer-Mauduit's net income for the second quarter of 2007 improved over the prior year due to increased earnings in reconstituted tobacco products and cigarette paper used in lower ignition propensity cigarettes. Increased demand and higher production capacity utilization were experienced in reconstituted tobacco leaf products while sales volume growth and improved manufacturing costs were achieved for lower ignition propensity- related cigarette papers. Despite these achievements, we did not sustain the rate of year-over-year earnings improvement seen in the first quarter of 2007 because our traditional tobacco-related papers business experienced greater earnings weakness during the second quarter. This was caused by continuing cost inflation, the unfavorable impact on earnings from reduced volumes, and further strengthening of the Brazilian real. We again realized significant savings during the second quarter from cost reduction activities across our business, but not at the same level as during the first quarter of the year." Consolidated net sales were $171.8 million for the quarter compared with $162.1 million in the same period a year ago, an increase of 6%. The increase in net sales resulted from $9.5 million in higher average selling prices, primarily due to an improved mix of products sold, as well as $6.8 million from favorable foreign currency exchange rate impacts on revenue, partially offset by lower sales volumes. The increase in average selling prices reflected an improved mix of products sold within the French paper and reconstituted tobacco leaf businesses as well as in the United States, related primarily to increased sales of cigarette paper for lower ignition propensity cigarettes. Currency changes primarily reflected the impact of a stronger euro compared with the U.S. dollar. Decreased sales volumes reduced net sales by $6.6 million compared with the prior-year quarter. Operating profit was $6.0 million for the quarter, an increase of $1.8 million from the $4.2 million operating profit during the second quarter of 2006. Excluding the restructuring expenses of $3.4 million realized in both the second quarters of 2007 and 2006, operating profit was $9.4 million for the quarter, an increase of 24 percent from the prior-year quarter. Outlook "We now project that full-year 2007 earnings per share, excluding restructuring expenses, will be in the range of $1.00 to $1.15, which would be an improvement over the 2006 level of $0.83 per share but below the 2005 level of $1.26 per share. Earnings per share in 2008, excluding restructuring expenses, are expected to increase above the 2007 level as a result of growth in reconstituted tobacco products and cigarette paper for lower ignition propensity cigarettes as well as from the benefits of current and possible additional restructuring activities that may be announced later this year.” 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, saturating base papers, 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, the Philippines, Indonesia and Canada.