Apr 26, 2007. /Lesprom Network/. Schweitzer-Mauduit International, Inc. reported a first quarter 2007 net income of $4.2 million compared with net income of $4.6 million during the first quarter of 2006. The first quarter of 2007 and 2006 included pre-tax restructuring expenses of $2.7 million and $0.5 million, respectively. The diluted earnings per share were $0.27 compared with diluted earnings per share of $0.30 in the prior-year quarter, a decrease of 10%. The restructuring expenses reduced first quarter 2007 and 2006 earnings per share by $0.11 and $0.02, respectively. The diluted earnings per share excluding restructuring expenses would have been $0.38 for the first quarter of 2007 and $0.32 for the first quarter of 2006, an increase of 19%. Wayne H. Deitrich, chairman of the board and chief executive officer, commented that, "Schweitzer-Mauduit experienced improvement during the first quarter of 2007 in several areas of our business. Less production downtime occurred in our French reconstituted tobacco leaf business, we realized improved results from the production and sale of cigarette paper used in lower ignition propensity cigarettes, average selling prices increased somewhat and progress was made with the restructuring activities initiated in 2006”. Consolidated net sales were $170.3 million for the quarter compared with $165.4 million in the same period a year ago, an increase of 3%. The increase in net sales was the result of $6.7 million attributable to currency exchange rates and $5.4 million from somewhat higher average selling prices, mainly related to the mix of products sold, partially offset by lower sales volumes primarily in the United States. Currency changes primarily reflected the impact of a stronger euro compared with the U.S. dollar. Operating profit was $9.1 million for the quarter, essentially unchanged from $9.0 million during the first quarter of 2006. Excluding restructuring expenses, operating profit was $11.8 million for the first quarter of 2007, an increase of $2.3 million, or 24%, from the prior-year period operating profit of $9.5 million. Outlook Mr. Deitrich added, "Total PdM restructuring expenses are now projected to be $8 million for 2007, including cash severance costs of $7 million. The amount of severance expenses is now expected to be approximately $2 million less than previously projected due to a greater number of employees choosing to leave voluntarily. The PdM workforce reductions are expected to generate annual pre-tax labor savings of approximately $14 million, or $0.58 per share, due to both restructuring activities and planned capital investments. Realization of the majority of labor savings is now expected to occur by the end of 2007. We expect to realize annual pre-tax benefits greater than $14 million upon full implementation of all elements of the PdM strategy, including the planned capital investments. 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.