Welcome!

News Feed Item

Stronger pulp pricing and weaker Canadian dollar result in higher Q4 EBITDA

RICHMOND, BC, March 4, 2014 /PRNewswire/ - Catalyst Paper (TSX:CYT) recorded adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $19.1 million in Q4 versus $16.4 million in Q3, despite higher production costs related to an annual maintenance shut at the Crofton pulp mill. As well paper productivity improved by 3,600 tonnes over the previous quarter. In Q4, free cash flow of $5.9 million was positive for the second consecutive quarter.

Catalyst recorded a net loss of $95 million in Q4 compared to net earnings of $5.2 million in Q3. The net loss was mainly driven by an adjustment to the carrying value of goodwill and fixed assets to reflect a non-cash impairment charge of $86.9 million required under U.S. GAAP. Excluding specific items net earnings were $1.7 million versus a net loss of $3.5 million the previous quarter. Sales were higher at $272.1 million compared to $268.8 million in the previous quarter, driven by higher pulp and paper prices and a weakening Canadian dollar.

Market conditions were mixed during the fourth quarter, with North American paper demand down from the third quarter for directory and coated, and up for newsprint and uncoated. Benchmark prices remained flat for directory, showed a decline for coated and uncoated grades, and a moderate up-tick for newsprint. Pulp prices during the quarter steadily increased and softwood inventories ended the year well below the historical average.

"While the North American paper market remains challenging, our focus is continuing to grow lightweight, environmentally friendly, niche grades such as Marathon Lite, Ascent and Sage," said Catalyst President and CEO Joe Nemeth. "In addition, the pulp team continues to implement productivity improvements to capitalize on strong pulp markets."

Results for the Year

Adjusted EBITDA for the year was $46.1 million in 2013 compared to $55.4 million in 2012, primarily due to higher power rates plus the reintroduction of the Provincial Sales Tax on purchased electricity. Total sales were $1,051.4 million, marginally below $1,058.2 million in 2012.  Net earnings before specific items improved relative to the previous year by $6.3 million mostly due to a significant reduction in interest expense resulting from the reorganization of our debt in 2012.

Net earnings moved from $583.2 million in 2012 to a loss of $127.6 million in 2013.  Net earnings in the prior year reflect one-time reorganization and fresh start accounting adjustments made upon exiting creditor protection (CCAA) of $667.5 million, while the 2013 loss reflects the inclusion of a non-cash impairment charge required under U.S. GAAP of $86.9 million.

Liquidity

Total liquidity increased to $122.6 million at the end of 2013, compared to $97.9 million in 2012 mostly due to non-core asset sales, lower reorganization costs and improved vendor payment terms. Free cash flow improved over 2012 by $25.8 million, due mostly to significantly lower reorganization costs in 2013.

Selected Highlights

(In millions of dollars, except where otherwise stated) 2013   2012   2011
Sales 2 $ 1,051.4   $ 1,058.2   $ 1,079.7
Operating earnings (loss) 2   (87.8)     19.1     (704.5)
Depreciation and amortization 2   47.0     36.3     105.5
Adjusted EBITDA 1,2   46.1     55.4     62.8
- before restructuring costs 1,2   47.3     60.7     68.7
Net earnings (loss) attributable to the company   (127.6)     583.2     (974.0)
- before specific items 1   (31.5)     (37.8)     (126.3)
Total assets   700.1     978.8     737.6
Total long-term liabilities   565.5     720.6     713.6
Adjusted EBITDA margin 1,2   4.4%     5.2%     5.8%
- before restructuring costs 1,2   4.5%     5.7%     6.4%
Net earnings (loss) per share attributable to the company's common shareholders (in dollars)                
- basic and diluted from continuing operations 3 $ (9.01)   $ 41.65   $ (2.04)
- basic and diluted from discontinued operations 3   0.21     (1.15)     (0.51)
- before specific items  3   (2.17)     (2.62)     (0.33)
                 
(In thousands of tonnes)                
Sales 2   1,373.3     1,401.4     1,351.2
Production 2   1,382.6     1,388.6     1,365.1
Common shares (millions)                
At period-end 3   14.5     14.5     381.9
Weighted average 3   14.5     14.4     381.9

1   Refer to section 12, Non-GAAP measures, of our Q4 2013 management's discussion and analysis.
2   Numbers exclude the Snowflake mill's results from operations which have been reclassified as discontinued operations; earnings from discontinued operations, net of tax, are shown separately from continuing operations in the consolidated statements of earnings (loss) in our annual consolidated financial statements for the year ended December 31, 2013.
  Earnings per share data for periods ended on and subsequent to September 30, 2012 were based on the weighted average common shares issued pursuant to our reorganization under CCAA. Earnings per share data for periods prior to September 30, 2012 were based on the weighted average common shares outstanding prior to emergence from creditor protection proceedings. These shares were cancelled on September 13, 2012.

Outlook

Printing paper markets are expected to remain challenging in North America with continued contraction in demand. We expect some weakening in coated and uncoated paper prices in the first half of the year that will rebound in the latter half. We will continue to focus our efforts on growing market share in Latin America and other freight-logical markets. By the end of 2013, pulp demand in Asia had improved and continues to show strength in Q1 of 2014. Current and future hardwood pulp capacity additions are creating uncertainty as to pulp market supply-to-demand balance in the second half of 2014.

Profitability of our export sales continues to be bolstered by a weakening Canadian dollar. The company commenced hedging a portion of its U.S. dollar-denominated sales in the first quarter of 2014 in accordance with its policy to manage currency risk when the Canadian dollar declined below US$0.90.

In November, BC Hydro announced a 15% rate increase on hydroelectricity over the next two years. The increases, the first of which is slated for April 1, are expected to add $10 million to 2014 electricity costs. We have entered into discussions with BC Hydro and the provincial government regarding new programs designed to mitigate a significant portion of the rate increases.

The company's planned maintenance scheduled for the first of 2014 will total 6,100 tonnes of lost production. Capital spending is expected to be similar to the previous year, in the range of $20 million.

Further Quarterly Results Materials

This release, along with the full annual Management Discussion &Analysis, Financial Statements and accompanying notes are available on our web site at www.catalystpaper.com/Investors. This material is also filed with SEDAR in Canada and EDGAR in the United States.

Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.

Forward-Looking Statement

Certain matters in this news release, including statements with respect to general economic and market conditions, demand for products, pricing expectations, anticipated cost savings and capital expenditures, are forward looking. These forward-looking statements reflect management's current views and are based on certain assumptions including assumptions as to future economic conditions, demand for products, levels of advertising, product pricing, ability to achieve operating and labour cost reductions, currency fluctuations, production flexibility and related courses of action, as well as other factors management believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including those risks and uncertainties identified under the heading "Risks and Uncertainties" in Catalyst's management's discussion and analysis contained in Catalyst's annual report for the year ended December 31, 2013 available on the company's website at www.catalystpaper.com/investors and at www.sedar.com. 

SOURCE Catalyst Paper Corporation

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
Get deep visibility into the performance of your databases and expert advice for performance optimization and tuning. You can't get application performance without database performance. Give everyone on the team a comprehensive view of how every aspect of the system affects performance across SQL database operations, host server and OS, virtualization resources and storage I/O. Quickly find bottlenecks and troubleshoot complex problems.
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
"We are a custom software development, engineering firm. We specialize in cloud applications from helping customers that have on-premise applications migrating to the cloud, to helping customers design brand new apps in the cloud. And we specialize in mobile apps," explained Peter Di Stefano, Vice President of Marketing at Impiger Technologies, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
Rapid innovation, changing business landscapes, and new IT demands force businesses to make changes quickly. In the eyes of many, containers are at the brink of becoming a pervasive technology in enterprise IT to accelerate application delivery. In this presentation, attendees learned about the: The transformation of IT to a DevOps, microservices, and container-based architecture What are containers and how DevOps practices can operate in a container-based environment A demonstration of how ...
President Obama recently announced the launch of a new national awareness campaign to "encourage more Americans to move beyond passwords – adding an extra layer of security like a fingerprint or codes sent to your cellphone." The shift from single passwords to multi-factor authentication couldn’t be timelier or more strategic. This session will focus on why passwords alone are no longer effective, and why the time to act is now. In his session at 19th Cloud Expo, Chris Webber, security strateg...
"At ROHA we develop an app called Catcha. It was developed after we spent a year meeting with, talking to, interacting with senior citizens watching them use their smartphones and talking to them about how they use their smartphones so we could get to know their smartphone behavior," explained Dave Woods, Chief Innovation Officer at ROHA, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events has announced today that Roger Strukhoff has been named conference chair of Cloud Expo and @ThingsExpo 2017 New York. The 20th Cloud Expo and 7th @ThingsExpo will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "The Internet of Things brings trillions of dollars of opportunity to developers and enterprise IT, no matter how you measure it," stated Roger Strukhoff. "More importantly, it leverages the power of devices and the Internet to enable us all to im...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
Cloud Expo, Inc. has announced today that Andi Mann returns to 'DevOps at Cloud Expo 2017' as Conference Chair The @DevOpsSummit at Cloud Expo will take place on June 6-8, 2017, at the Javits Center in New York City, NY. "DevOps is set to be one of the most profound disruptions to hit IT in decades," said Andi Mann. "It is a natural extension of cloud computing, and I have seen both firsthand and in independent research the fantastic results DevOps delivers. So I am excited to help the great t...
We are always online. We access our data, our finances, work, and various services on the Internet. But we live in a congested world of information in which the roads were built two decades ago. The quest for better, faster Internet routing has been around for a decade, but nobody solved this problem. We’ve seen band-aid approaches like CDNs that attack a niche's slice of static content part of the Internet, but that’s it. It does not address the dynamic services-based Internet of today. It does...
The many IoT deployments around the world are busy integrating smart devices and sensors into their enterprise IT infrastructures. Yet all of this technology – and there are an amazing number of choices – is of no use without the software to gather, communicate, and analyze the new data flows. Without software, there is no IT. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, Dave McCarthy, Director of Products at Bsquare Corporation; Alan Williamson, Principal...
"Venafi has a platform that allows you to manage, centralize and automate the complete life cycle of keys and certificates within the organization," explained Gina Osmond, Sr. Field Marketing Manager at Venafi, in this SYS-CON.tv interview at DevOps at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"We analyze the video streaming experience. We are gathering the user behavior in real time from the user devices and we analyze how users experience the video streaming," explained Eric Kim, Founder and CEO at Streamlyzer, in this SYS-CON.tv interview at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
"ReadyTalk is an audio and web video conferencing provider. We've really come to embrace WebRTC as the platform for our future of technology," explained Dan Cunningham, CTO of ReadyTalk, in this SYS-CON.tv interview at WebRTC Summit at 19th Cloud Expo, held November 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.