KP Tissue Releases Second Quarter 2015 Financial Results
(firmenpresse) - MISSISSAUGA, ONTARIO -- (Marketwired) -- 08/12/15 -- KP Tissue Inc. ("KPT") (TSX: KPT) reports the Q2 2015 Financial and Operational Results of KPT and Kruger Products L.P. (KPLP):
"We are pleased with EBITDA of $30.2 million for the quarter, considering the persistent negative impact of foreign exchange, high commodity prices and the competitive environment in the North American tissue market. Despite these challenges, we remained the clear overall market leader in the Canadian Consumer tissue market. We achieved higher EBITDA contribution from our TAD products, and from the Away-From-Home segment with the integration of the Metro Paper acquisition. Further, our incremental cost reduction initiatives are partially offsetting the impact of the adverse market conditions," said Mario Gosselin, CEO of KP Tissue and KPLP.
"The EBITDA outlook for the third quarter is for a slight improvement over the second quarter of 2015. When compared with Q3 last year, we expect that Q3 2015 EBITDA will be lower primarily due to the negative impact of foreign exchange," concluded Mr. Gosselin.
KP Tissue Inc.
KPT currently holds a 16.4% interest in KPLP. The highlights, discussion and analysis in this earnings release, unless identified specifically as representing the financial results of only KPT, relates entirely to the financial results of KPLP.
KPLP Q2 2015 Financial Results
Revenue in Q2 2015 was $279.3 million, compared to $265.3 million in Q2 2014, an increase of $14.0 million or 5.3%. The increase in revenue was due to additional sales volume in the Consumer segment in Canada and Mexico, and a significant increase in AFH segment revenue resulting from the acquisition of Metro Paper. In the Consumer U.S. business, sales volume declined due to comparatively higher promotional activities in Q2 2014, which was partially offset by the favourable impact of foreign exchange on U.S. dollar sales.
Cost of sales in Q2 2015 was $240.4 million, compared to $226.3 million in Q2 2014 primarily due to the negative impact of foreign exchange fluctuations. Pulp market prices (NBSK) decreased while Eucalyptus (BEK) was up compared to the same period in 2014. Cost of sales was also negatively impacted in the quarter by a $3.4 million pension revaluation for past service costs. Cost reduction initiatives and lower natural gas prices and freight costs partially offset the above increases in cost of sales. As a percentage of revenue, cost of sales was 86.1% in Q2 2015 compared to 85.3% in Q2 2014.
Selling, general and administrative (SG&A) expenses in Q2 2015 were $21.3 million, compared to $19.9 million in Q2 2014 primarily due to higher selling expenses as a result of increased sales volume and the unfavourable impact of foreign exchange. As a percentage of revenue, SG&A expenses were 7.6% in Q2 2015 compared to 7.5% in Q2 2014.
EBITDA in Q2 2015 was $30.2 million compared to $29.0 million in Q2 2014 as the positive impact of increased sales was partially offset by higher SG&A and the net negative impact of foreign exchange in Q2 2015 compared to Q2 2014. TAD Product EBITDA increased to $11.2 million in Q2 2015 from $7.8 million in Q2 2014 due to improved sales mix, favourable foreign exchange on U.S. sales and the continued ramp-up in manufacturing operational efficiencies.
Net income in Q2 2015 was $3.2 million compared to $8.1 million in Q2 2014. The decrease was primarily due to a pension revaluation related to past service costs of $3.4 million, a change in the tax expense of $1.1 million, an increase in interest expense of $1.1 million and a decrease in the unrealized foreign exchange gain of $0.7 million, partially offset by higher EBITDA of $1.2 million.
The cash balance as of June 28, 2015 was $35.3 million compared to $32.0 million as of March 29, 2015. Cash generated from operating activities resulting from EBITDA in Q2 2015, was partially offset by higher working capital requirements, as well as capital spending and interest payments in the quarter.
KPT Q2 2015 Financial Results
KPT incurred a net loss of $0.9 million in Q2 2015. Included in the net loss was $0.5 million representing KPT''s share of KPLP''s income. The income was reduced by the net of depreciation expense of $1.4 million related to adjustments to carrying amounts on acquisition, and an income tax expense of $0.1 million.
KPLP Distribution
KPLP will pay a distribution of $0.18 per KPLP unit to its partners on or prior to October 15, 2015.
Dividends on Common Shares
The Board of Directors of KP Tissue Inc. declared a quarterly dividend of $0.18 per share to be paid on October 15, 2015 to shareholders of record at the close of business on September 30, 2015.
Additional Information
For additional information please refer to Management''s Discussion and Analysis ("MD&A") of KPT and KPLP for the second quarter ended June 28, 2015 available on SEDAR at or our website at .
Conference Call Information
KPT will hold its second quarter conference call on Wednesday, August 12, 2015 at 8:30 a.m. Eastern Time.
Details of Conference Call
Via telephone: 1-877-223-4471 or 647-788-4922
Via the internet at:
Presentation material referenced during the conference call will be available at .
Conference Call Rebroadcast
A rebroadcast of the conference call will be available until midnight, September 11, 2015 by dialing 800-585-8367 or 416-621-4642 and entering passcode 82096316.
The replay of the webcast will remain available on the web site until midnight, September 11, 2015.
About KP Tissue Inc. (KPT)
KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 16.4% interest in KPLP. For more information visit .
About Kruger Products L.P. (KPLP)
KPLP is Canada''s leading manufacturer of quality tissue products for household, industrial and commercial use. KPLP serves the Canadian consumer market with such well-known brands as Cashmere®, Purex®, SpongeTowels®, Scotties®'' and White Swan®. In the U.S., KPLP manufactures the White Cloud® brand, as well as many private label products. The Away-From-Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. KPLP has approximately 2,500 employees across North America and operates five FSC® CoC- certified mills (FSC® C104904), four of which are located in Canada and one in the US. For more information visit .
Non-IFRS Measures
This press release uses certain non-IFRS financial measures and ratios which KPLP believes provide useful information to both management of KPLP and the readers of the financial information in measuring the financial performance and financial condition of KPLP. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other companies. An example of such measures is EBITDA. EBITDA is not a measurement of operating performance computed in accordance with IFRS and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with IFRS. "EBITDA" is calculated by KPLP as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) impairment of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) unrealized foreign exchange loss (gain), (viii) one-time costs related to restructuring activities, (ix) change in the amortized cost of the Partnership unit liability, and (x) one-time costs due to pension revaluations related to past service. A reconciliation of EBITDA to the relevant reported results can be found in the Management''s Discussion and Analysis ("MD&A") of KPT and KPLP for the second quarter ended June 28, 2015 available on SEDAR at .
Forward-Looking Statements
Certain statements in this press release about KPT''s and KPLP''s current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. The forward-looking information is based on certain key expectations and assumptions made by KPT, including expectations and assumptions concerning the impact of the TAD Project on EBITDA. Although KPT believes that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking information since no assurance can be given that such expectations and assumptions will prove to be correct.
Many factors could cause KPLP''s actual results, level of activity, performance or achievements or future events or developments (which could in turn affect the economic benefits derived from the Corporation''s economic interest in KPLP) to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the "Risk Factors - Risks Related to KPLP''s Business" section of the KPT Annual Information Form dated March 12, 2015 available on SEDAR at : Kruger Inc.''s influence over KPLP; KPLP''s reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the TAD Project; operational risks; Gatineau Plant land lease; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; KPLP''s inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of KPLP or KPLP''s brands; KPLP''s sales being less than anticipated; KPLP''s failure to implement its business and operating strategies; KPLP''s obligation to make regular capital expenditures; KPLP''s entering into unsuccessful acquisitions; KPLP''s dependence on key personnel; KPLP''s inability to retain its existing customers or obtain new customers; KPLP''s loss of key suppliers; KPLP''s failure to adequately protect its intellectual property rights; KPLP''s reliance on third party intellectual property licenses; adverse litigation and other claims affecting KPLP; material expenditures due to comprehensive environmental regulation affecting KPLP''s cash flow; KPLP''s pension obligations are significant and can be materially higher than predicted if KPLP Management''s underlying assumptions are incorrect; labour disputes adversely affecting KPLP''s cost structure and KPLP''s ability to run its plants; exchange rate and U.S. competitors; KPLP''s inability to service all of its indebtedness; exposure to potential consumer product liability, restrictive covenants; interest rate and refinancing risk; information technology and innovation; insurance; and internal controls.
Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release and KPT undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.
Contacts:
Information:
Francois Paroyan
General Counsel and Corporate Secretary
KP Tissue Inc.
905.812.6936
Investors:
Mike Baldesarra
Director of Investor Relations
KP Tissue Inc.
905.812.6962
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Datum: 12.08.2015 - 05:00 Uhr
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