KP Tissue reports the Q1 2016 financial and operational results of KPT and Kruger Products L.P. (KPLP). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere(R), Purex(R), SpongeTowels(R), Scotties(R), and White Swan(R)) and the Away-From-Home market, and continues to grow in the U.S. Consumer tissue business with the White Cloud(R) brand and premium private label products. KPT currently holds a 16.2% interest in KPLP.
KPLP Q1 2016 Business and Financial Highlights include:
-- Revenue increased by 5.4% to $279.7 million in Q1 2016 compared to Q1
2015
-- Adjusted EBITDA was $28.1 million in Q1 2016 compared to $31.1 million
in Q1 2015
-- Continued negative impact of foreign exchange estimated at approximately
$2 million on Adjusted EBITDA over the previous year
-- Market share leader in Canada with overall Q1 growth
-- Declared a quarterly dividend of $0.18 per share to be paid on July 15, 2016
"Despite revenue growth supported by the Consumer segment, the weak Canadian dollar continued to have a measurable impact on our Adjusted EBITDA for the seasonally lower first quarter," said Mario Gosselin, CEO of KPT and KPLP.
"TAD Product Adjusted EBITDA for the quarter increased to $10.5 million from $9.7 million last year. We continue to expect progress over the next few quarters allowing us to achieve our $60 million TAD Product Adjusted EBITDA goal for Fiscal 2017.
"Starting last year, we expanded our CAPEX program to dedicate more funds to high-return projects. In 2016, CAPEX is expected to reach $65 to $85 million. The benefits of these projects on manufacturing cost reductions and capacity improvements will begin in Fiscal 2017. In the first quarter, two new modern converting lines began production in our Away-From-Home (AFH) business and we incurred higher operating costs due to the start-up and the continued implementation of our AFH growth plan.
"As indicated before, to offset part of the rise of raw material costs, price increases to our Canadian retailers will take effect in the second quarter and will have a full impact in the third quarter. We expect second quarter 2016 Adjusted EBITDA to be slightly higher than the same quarter last year, mainly driven by higher promotional activity in our U.S. market. However, we will continue to be impacted by the unfavourable exchange rate," concluded Mr. Gosselin.
