Catalyst announces Q1 results

Catalyst Paper  recently announced results for the first quarter ended March 31, 2016.

Adjusted earnings before tax, depreciation and amortization (EBITDA) was $17.1 million and adjusted EBITDA before specific items was $17.7 million in the first quarter, compared to adjusted EBITDA of $15.1 million and adjusted EBITDA before specific items of $19.8 million in the fourth quarter of 2015.

In the first quarter, the company reported $16.9 million in net earnings and a net loss before specific items of $5.1 million, compared to a net loss of $26.3 million and a net loss of $10.0 before specific items in the fourth quarter of 2015. First quarter earnings benefited from a $22.6 million foreign exchange gain on the translation of U.S. dollar denominated debt. Catalyst's free cash flow was negative $1.7 million, an improvement from negative $11.4 million in the previous quarter. The company ended the first quarter with liquidity of $84.0 million.

"In light of the continuing price erosion in some of our products, we are ramping up our programs to reduce costs, improve existing product mix and grow new specialty paper sales," said Joe Nemeth, President & Chief Executive Officer.

Operating results benefited from cost savings driven primarily by Revitalization Programs even though the company was challenged by maintenance-related issues in the quarter. Compnay’s Revitalization Programs were successfully implemented at three of its mill locations in 2015. The program has now been extended to the two remaining mills and in addition to the corporate group to ensure this program is an enterprise-wide initiative.

Production on Rumford's No. 12 Paper Machine resumed in the quarter after being indefinitely curtailed on September 1, 2015. This decision reflects proactive action by management to more fully leverage integrated capabilities at Rumford. The machine will be dedicated to the production of coated paper and Rumford Offset, a newly developed uncoated free sheet product.

Market demand for traditional printing and writing papers continues to decline. Reduced paper use, driven by the proliferation of digital options and resulting oversupply, has led to lower prices and declining demand across almost all grades, with coated groundwood and directory grades experiencing the severest declines.