MISSISSAUGA, ONTARIO – Papiers Tissu KP inc. (TSX: KPT) (“PTKP”) reports its financial and operating results and those of Kruger Products LP (“PK SEC”) for the first quarter of fiscal 2017. PK SEC is Canada’s leading manufacturer of (Cashmere, Purex, SpongeTowels, Scotties and White Swan) and the off-the-shelf market. It continues to grow in the United States through the brand White Cloud � and other private labels of superior quality. PTKP currently holds a 16.1% interest in PK SEC
PK SEC Highlights for the First Quarter of 2017
Revenues increased by 3.4% in Q1 2017 compared to Q1 2016, to $ 289.3 million.
Adjusted EBITDA was $ 33.8 million in Q1 2017 compared to $ 28.1 million in Q1 2016, an increase of 20.3%.
Adjusted EBITDA from TAD was $ 15.7 million.
Increased distribution of White Cloud � to selected retailers in the United States.
The Company declared a quarterly dividend of $ 0.18 per share payable on July 17, 2017.
“We are satisfied with the adjusted EBITDA of $ 33.8 million in the first quarter of 2017, which is mainly due to the higher contribution of TAD products despite higher fiber prices,” said Mario Gosselin, Chief Executive Officer of PTKP and PK SEC
“We are entering the fifth year of marketing our TAD products, and we are extremely satisfied with their results overall. Adjusted EBITDA for TAD was $ 15.7 million in the first quarter, an annualized amount greater than the $ 60 million previously projected for the TAD project. We have now fully integrated TAD products into our business and are proud of the results we have achieved.
“While we expect the negative effects of higher pulp prices to hurt short-term results, we expect Q2 2017 adjusted EBITDA slightly higher than the same period in 2016 . by the end of 2017, we expect enthusiastically commissioning of our new paper machine in Crabtree, the improved results of the segment away from home products and increased distribution of the brand White Cloud MD at some retailers Americans, “concluded Mr. Gosselin.
PK SEC Financial Results for the First Quarter of 2017
In Q1 2017, revenue was $ 289.3 million compared to $ 279.7 million in Q1 2016, an increase of $ 9.6 million or 3.4%. This increase was mainly due to higher sales volumes and a favorable increase in Canadian selling prices, partially offset by the negative impact of exchange rates on sales in US dollars.
Cost of sales in Q1 2017 was $ 244.3 million compared to $ 240.6 million in Q1 2016, primarily due to higher sales volumes and higher Partially offset by the favorable impact of exchange rates and the impact of our cost reduction initiatives and capital projects. As a percentage of revenue, cost of sales increased from 86.0% in Q1 2016 to 84.4% in Q1 2017.
General, administrative and sales expenses were $ 23.2 million in Q1 2017 compared to $ 21.7 million in Q1 2016, mainly due to a modest increase in advertising and promotion costs and A slight increase in sales costs due to the growth in sales volume, offset in part by the favorable effect of exchange rates. As a percentage of revenues, general, administrative and sales expenses represented 8.0% in Q1 2017, compared with 7.8% in Q1 2016.
Adjusted EBITDA was $ 33.8 million in Q1 2017 compared to $ 28.1 million in Q1 2016, primarily driven by higher sales volume, improved selling prices In Canada, the net positive impact of exchange rates and the impact of our cost reduction initiatives and our capital projects, partially offset by higher raw material costs and overhead, administrative and sales costs . The contribution to adjusted EBITDA from the sale of TAD products was $ 15.7 million in Q1 2017, compared with $ 10.5 million in Q1 2016.
Net income was $ 6.9 million in Q1 2017 compared to $ 6.4 million in Q1 2016. This is mainly due to higher adjusted EBITDA of $ 5.7 million and a Interest expense of $ 0.9 million, partially offset by higher tax expense and amortization of $ 2.1 million and $ 1.6 million, respectively, an increase in the variance The amortized value of the limited partnership unit liability of $ 1.3 million and a $ 1.1 million foreign exchange gain adjustment.
The cash position, which represents cash and cash equivalents and line credit under the restrictive covenants, was $ 88.6 million as at March 26, 2017 compared to $ 103.0 million, $ 5 million as at December 31, 2016.
PTKP Financial Results for the First Quarter of 2017
PTKP recorded a net loss of $ 0.6 million in Q1 2017, after inclusion of $ 1.1 million representing its interest in PK SEC results. The result was weakened by amortization of 1.5 Million related to adjustments to book values at the time of acquisition and a tax expense of $ 0.2 million.
Dividends on common shares
The Board of Directors of PTKP declared a quarterly dividend of $ 0.18 per share payable on July 17, 2017 to shareholders of record at the close of business on June 30, 2017.
Source: Tissue Papers KP inc.