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
In his general session at 21st Cloud Expo, Greg Dumas, Calligo’s Vice President and G.M. of US operations, discussed the new Global Data Protection Regulation and how Calligo can help business stay compliant in digitally globalized world. Greg Dumas is Calligo's Vice President and G.M. of US operations. Calligo is an established service provider that provides an innovative platform for trusted cloud solutions. Calligo’s customers are typically most concerned about GDPR compliance, application p...
"I focus on what we are calling CAST Highlight, which is our SaaS application portfolio analysis tool. It is an extremely lightweight tool that can integrate with pretty much any build process right now," explained Andrew Siegmund, Application Migration Specialist for CAST, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
As many know, the first generation of Cloud Management Platform (CMP) solutions were designed for managing virtual infrastructure (IaaS) and traditional applications. But that's no longer enough to satisfy evolving and complex business requirements. In his session at 21st Cloud Expo, Scott Davis, Embotics CTO, explored how next-generation CMPs ensure organizations can manage cloud-native and microservice-based application architectures, while also facilitating agile DevOps methodology. He expla...
SYS-CON Events announced today that Evatronix will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Evatronix SA offers comprehensive solutions in the design and implementation of electronic systems, in CAD / CAM deployment, and also is a designer and manufacturer of advanced 3D scanners for professional applications.
SYS-CON Events announced today that Synametrics Technologies will exhibit at SYS-CON's 22nd International Cloud Expo®, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Synametrics Technologies is a privately held company based in Plainsboro, New Jersey that has been providing solutions for the developer community since 1997. Based on the success of its initial product offerings such as WinSQL, Xeams, SynaMan and Syncrify, Synametrics continues to create and hone inn...
Cloud Expo | DXWorld Expo have announced the conference tracks for Cloud Expo 2018. Cloud Expo will be held June 5-7, 2018, at the Javits Center in New York City, and November 6-8, 2018, at the Santa Clara Convention Center, Santa Clara, CA. Digital Transformation (DX) is a major focus with the introduction of DX Expo within the program. Successful transformation requires a laser focus on being data-driven and on using all the tools available that enable transformation if they plan to survive ov...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Continuous Delivery makes it possible to exploit findings of cognitive psychology and neuroscience to increase the productivity and happiness of our teams. In his session at 22nd Cloud Expo | DXWorld Expo, Daniel Jones, CTO of EngineerBetter, will answer: How can we improve willpower and decrease technical debt? Is the present bias real? How can we turn it to our advantage? Can you increase a team’s effective IQ? How do DevOps & Product Teams increase empathy, and what impact does empath...
DevOps promotes continuous improvement through a culture of collaboration. But in real terms, how do you: Integrate activities across diverse teams and services? Make objective decisions with system-wide visibility? Use feedback loops to enable learning and improvement? With technology insights and real-world examples, in his general session at @DevOpsSummit, at 21st Cloud Expo, Andi Mann, Chief Technology Advocate at Splunk, explored how leading organizations use data-driven DevOps to close th...
Smart cities have the potential to change our lives at so many levels for citizens: less pollution, reduced parking obstacles, better health, education and more energy savings. Real-time data streaming and the Internet of Things (IoT) possess the power to turn this vision into a reality. However, most organizations today are building their data infrastructure to focus solely on addressing immediate business needs vs. a platform capable of quickly adapting emerging technologies to address future ...
Most technology leaders, contemporary and from the hardware era, are reshaping their businesses to do software. They hope to capture value from emerging technologies such as IoT, SDN, and AI. Ultimately, irrespective of the vertical, it is about deriving value from independent software applications participating in an ecosystem as one comprehensive solution. In his session at @ThingsExpo, Kausik Sridhar, founder and CTO of Pulzze Systems, discussed how given the magnitude of today's application ...
With tough new regulations coming to Europe on data privacy in May 2018, Calligo will explain why in reality the effect is global and transforms how you consider critical data. EU GDPR fundamentally rewrites the rules for cloud, Big Data and IoT. In his session at 21st Cloud Expo, Adam Ryan, Vice President and General Manager EMEA at Calligo, examined the regulations and provided insight on how it affects technology, challenges the established rules and will usher in new levels of diligence arou...
There is a huge demand for responsive, real-time mobile and web experiences, but current architectural patterns do not easily accommodate applications that respond to events in real time. Common solutions using message queues or HTTP long-polling quickly lead to resiliency, scalability and development velocity challenges. In his session at 21st Cloud Expo, Ryland Degnan, a Senior Software Engineer on the Netflix Edge Platform team, will discuss how by leveraging a reactive stream-based protocol,...
Mobile device usage has increased exponentially during the past several years, as consumers rely on handhelds for everything from news and weather to banking and purchases. What can we expect in the next few years? The way in which we interact with our devices will fundamentally change, as businesses leverage Artificial Intelligence. We already see this taking shape as businesses leverage AI for cost savings and customer responsiveness. This trend will continue, as AI is used for more sophistica...