Welcome!

News Feed Item

Fortress Paper Announces Fourth Quarter 2013 Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/10/14 -- Fortress Paper Ltd. ("Fortress Paper" or the "Company") (TSX: FTP) reported 2013 fourth quarter EBITDA loss of $9.4 million. The Dissolving Pulp Segment generated EBITDA loss of $10.8 million and the Security Paper Products Segment generated EBITDA of $2.7 million. Corporate costs contributed $1.3 million to EBITDA loss.

Chadwick Wasilenkoff, Chief Executive Officer of Fortress Paper, commented: "The 2013 year proved to be very challenging for Fortress Paper. Positive developments throughout the year were overshadowed by the disappointing financial results from the Dissolving Pulp Segment. As we enter 2014, we believe that we are making progress on numerous initiatives and are confident that we are on the right track to overcome remaining obstacles. I would like to thank the entire team at Fortress Paper for their perseverance and commitment throughout a difficult year."

Early in the fourth quarter of 2013, the Fortress Specialty Cellulose mill reached a significant milestone for the reduction of the overall cost structure at the mill when the cogeneration facility project was successfully completed and delivering power to the Hydro Quebec grid at the contracted commercial rate. Also, the Fortress Specialty Cellulose mill realized its swing mill capabilities producing 12,889 air dried metric tonnes (ADMT) of northern bleached hardwood kraft (NBHK) pulp early in the quarter. The mill sold 6,758 ADMT of NBHK pulp inventory in the fourth quarter of 2013 and 6,950 ADMT of NBHK pulp inventory subsequent to December 31, 2013. Despite these developments, the results for the Dissolving Pulp Segment reflect a combination of the following:

--  A seven day planned maintenance shut-down in October.
--  A 13% interim duty imposed by China's Ministry of Commerce ("MOFCOM") on
    the import of dissolving pulp into China from the Fortress Specialty
    Cellulose mill (Thurso) and possibly a 50.9% interim duty on the import
    of dissolving pulp into China from future output from the Fortress
    Global Cellulose mill (Lebel-sur-Quevillon) if it were to be converted
    to be able to produce dissolving pulp.
--  As a result of the 50.9% MOFCOM interim duty imposed on the import of
    future dissolving pulp into China, a $32.9 million impairment was taken
    against the Fortress Global Cellulose mill assets.
--  The duty imposed also resulted in a build-up of dissolving pulp
    inventories and consequent $3.7 million write-down to fair market value.
--  A decision to take market downtime in mid-December for approximately 10
    weeks as a result of market pricing for NBHK being insufficient for
    sustained production.
--  A five day shut-down in early December as a result of a digester issue,
    which has since been resolved.

The Security Paper Products Segment experienced a second consecutive EBITDA positive quarter. Sales, volumes and revenues were significantly higher relative to any quarter in 2012 and 2011. The Landqart mill continues to implement new initiatives to improve efficiencies and profitability.

Selected Financial Information

The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with, the Company's audited consolidated financial statements as at and for the three and twelve month periods ended December 31, 2013 and the related notes thereto and Management's Discussion and Analysis (the "MD&A"), which are available on SEDAR.

Reference is made in this news release to EBITDA (defined as net income before interest, income taxes, depreciation, amortization, non-operating income and expenses and stock-based compensation), which the Company considers to be an indicative measure of operating performance and a metric to evaluate profitability. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to net income (loss) or cash flows as determined in accordance with IFRS. As there is no standardized method of calculating this measure, the Company's EBITDA may not be directly comparable with similarly titled measures used by other companies. Reconciliations of EBITDA to net loss reported in accordance with IFRS are included below.

                                             Three Months Ended

(thousands of dollars, except    December 31,  September 30,   December 31,
 shipments, unaudited)                   2013           2013           2012
----------------------------------------------------------------------------

Sales from continuing
 operations                            37,183         53,160         58,747
EBITDA from continuing
 operations(1)                         (9,367)        (7,290)        (9,109)
EBITDA(2)(3)                           (9,367)        (7,290)           241
Net loss from continuing
 operations                           (54,731)       (13,427)        (9,914)
Net loss (3)                          (54,731)       (12,436)        (4,226)
Paper shipments (tonnes) (4)            2,097          1,856          1,688
Pulp shipments (ADMT)                   6,758         31,258         46,909

(1)  See Net Loss to EBITDA Reconciliation for Continuing Operations.
(2)  See Net Loss to EBITDA Reconciliation including Discontinued
     Operations.
(3)  Including discontinued operations.
(4)  From continuing operations.

Net Loss to EBITDA Reconciliation for Continuing Operations:

                                            Three Months Ended

(thousands of dollars,           December 31,  September 30,   December 31,
 unaudited)                              2013           2013           2012
----------------------------------------------------------------------------

Net loss                              (54,731)       (13,427)        (9,914)
Income tax expense (recovery)             620           (611)        (5,780)
Foreign exchange (gain) loss             (123)           739         (1,310)
Net finance expense                     4,698          4,021          3,049
Amortization                            6,821          4,296          4,216
Gain on sale of property, plant
 and equipment                              -         (4,135)             -
Impairment of property, plant
 and equipment                         32,907              -              -
Legal provision                           700          1,250              -
Stock based compensation                 (259)           577            630
----------------------------------------------------------------------------
EBITDA                                 (9,367)        (7,290)        (9,109)

Net Loss to EBITDA Reconciliation Including Discontinued Operations:

                                            Three Months Ended

(thousands of dollars,           December 31,  September 30,   December 31,
 unaudited)                              2013           2013           2012
----------------------------------------------------------------------------

Net loss                              (54,731)       (12,436)        (4,226)
Income tax expense (recovery)             620           (611)        (3,376)
Foreign exchange (gain) loss             (123)           739         (1,294)
Net finance expense                     4,698          4,021          3,391
Amortization                            6,821          4,296          5,116
Gain on disposal of business                -           (991)             -
Gain on sale of property, plant
 and equipment                              -         (4,135)             -
Impairment of property, plant
 and equipment                         32,907              -              -
Legal provision                           700          1,250              -
Stock based compensation                 (259)           577            630
----------------------------------------------------------------------------
EBITDA                                 (9,367)        (7,290)           241

The Company

During the year ended December 31, 2013, the Company operated internationally in three distinct business segments: the Dissolving Pulp Segment, the Security Paper Products Segment, and the Specialty Papers Segment. The Specialty Papers Segment was sold on April 30, 2013 leaving two remaining business segments. Accordingly, references in this news release to "discontinued operations" refer to the Specialty Papers Segment.

The Company operates its dissolving pulp business through the Fortress Specialty Cellulose mill located in Thurso, Quebec, Canada, which has expanded into the renewable energy generation sector with the construction of a cogeneration facility and the production of NBHK pulp. The Company is also evaluating expanding its dissolving pulp capacity by converting the Fortress Global Cellulose mill located at Lebel-sur-Quevillon, Quebec into a dissolving pulp mill and re-starting the cogeneration facility. The Company operates its security paper products business at the Landqart mill located in Switzerland, where it produces banknote, passport, visa and other brand protection and security papers, and at its high security production and research facility located in Canada, where it manufactures optically variable thin film material. The segmentation of the Company's manufacturing operations is based on a number of factors, including production, production processes, and economic characteristics. Fortress Paper's business segments were re-classified in 2012 given changes in the nature of products being produced.

Conference Call

A conference call to discuss the financial results for the fourth quarter 2013 will be held on March 11, 2014 at 9:00 a.m. (PDT). To participate in the conference call, please dial one of the following numbers:

North America: 1-855-353-9183
Vancouver: 604-681-8564
Calgary and international: 403-532-5601
Edmonton: 780-429-5820
Toronto: 416-623-0333
Ottawa: 613-212-0171
Montreal: 514-687-4017
Participant pass code: 15086#
Conference Reference Number: 1150521#

A replay of the conference call will be available for 30 days. To access the replay, listeners may dial 1-855-201-2300 from North America or 403-255-0697 International. The conference reference number is 1150521# and the participant pass code to access the replay is 15086 #.

Forward-Looking Statements

This news release contains certain forward-looking statements that reflect the current views and/or expectations of the Company with respect to its expectations, beliefs, assumptions, estimates and forecasts about its business and the industry and markets in which it operates. The reader is cautioned that forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties, assumptions and other factors which are difficult to predict and that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Examples of such forward-looking statements contained in this news release include statements relating to the growth and future prospects of the Company's business. Assumptions underlying the Company's expectations regarding forward-looking statements or information contained in this news release include, among others: that the Company will be able to effectively market its products; the ability of the Company to realize significant cost-savings from production improvements, cost reduction initiatives and the cogeneration facility at the Fortress Specialty Cellulose mill; that current depressed dissolving pulp prices are indicative of unusual market conditions and are not sustainable in the long term; that the supply of dissolving pulp will decrease significantly and lead to a price increase in the short to medium term; that the swing mill strategy at the Fortress Specialty Cellulose mill will maximize margins in response to changing market conditions; that the duty imposed by MOFCOM, if unchanged, may result in the supply of dissolving pulp decreasing significantly with a corresponding price increase in the short to medium term; that the adverse impact of any dumping tariff will be limited to the short-term; that the Landqart mill will continue operating on a consistent and regular basis in order to produce and deliver on its banknote orders; that the Landqart mill will secure new orders; the general stability of the economic, political and regulatory environments within the countries where the Company conducts operations; and that equipment will operate at expected levels. Persons reading this news release are cautioned that forward-looking statements or information are only predictions, and that the Company's actual future results or performance are subject to certain risks and uncertainties including, without limitation those risk factors detailed in the MD&A and other filings with Canadian securities regulatory authorities. These risks, as well as others, could cause actual results and events to vary significantly. The Company does not undertake any obligation to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

Contacts:
Fortress Paper Ltd.
Mr. Chadwick Wasilenkoff
Chief Executive Officer
604-904-2328
[email protected]

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
SYS-CON Events announced today that SkyScale 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. SkyScale is a world-class provider of cloud-based, ultra-fast multi-GPU hardware platforms for lease to customers desiring the fastest performance available as a service anywhere in the world. SkyScale builds, configures, and manages dedicated systems strategically located in maximum-security...
As you move to the cloud, your network should be efficient, secure, and easy to manage. An enterprise adopting a hybrid or public cloud needs systems and tools that provide: Agility: ability to deliver applications and services faster, even in complex hybrid environments Easier manageability: enable reliable connectivity with complete oversight as the data center network evolves Greater efficiency: eliminate wasted effort while reducing errors and optimize asset utilization Security: imple...
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, will discuss how by using...
In this strange new world where more and more power is drawn from business technology, companies are effectively straddling two paths on the road to innovation and transformation into digital enterprises. The first path is the heritage trail – with “legacy” technology forming the background. Here, extant technologies are transformed by core IT teams to provide more API-driven approaches. Legacy systems can restrict companies that are transitioning into digital enterprises. To truly become a lead...
DevOps at Cloud Expo, taking place October 31 - November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 21st Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to w...
SYS-CON Events announced today that Daiya Industry will exhibit at the Japanese Pavilion 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. Ruby Development Inc. builds new services in short period of time and provides a continuous support of those services based on Ruby on Rails. For more information, please visit https://github.com/RubyDevInc.
When it comes to cloud computing, the ability to turn massive amounts of compute cores on and off on demand sounds attractive to IT staff, who need to manage peaks and valleys in user activity. With cloud bursting, the majority of the data can stay on premises while tapping into compute from public cloud providers, reducing risk and minimizing need to move large files. In his session at 18th Cloud Expo, Scott Jeschonek, Director of Product Management at Avere Systems, discussed the IT and busine...
As businesses evolve, they need technology that is simple to help them succeed today and flexible enough to help them build for tomorrow. Chrome is fit for the workplace of the future — providing a secure, consistent user experience across a range of devices that can be used anywhere. In her session at 21st Cloud Expo, Vidya Nagarajan, a Senior Product Manager at Google, will take a look at various options as to how ChromeOS can be leveraged to interact with people on the devices, and formats th...
Is advanced scheduling in Kubernetes achievable? Yes, however, how do you properly accommodate every real-life scenario that a Kubernetes user might encounter? How do you leverage advanced scheduling techniques to shape and describe each scenario in easy-to-use rules and configurations? In his session at @DevOpsSummit at 21st Cloud Expo, Oleg Chunikhin, CTO at Kublr, will answer these questions and demonstrate techniques for implementing advanced scheduling. For example, using spot instances ...
First generation hyperconverged solutions have taken the data center by storm, rapidly proliferating in pockets everywhere to provide further consolidation of floor space and workloads. These first generation solutions are not without challenges, however. In his session at 21st Cloud Expo, Wes Talbert, a Principal Architect and results-driven enterprise sales leader at NetApp, will discuss how the HCI solution of tomorrow will integrate with the public cloud to deliver a quality hybrid cloud e...
The next XaaS is CICDaaS. Why? Because CICD saves developers a huge amount of time. CD is an especially great option for projects that require multiple and frequent contributions to be integrated. But… securing CICD best practices is an emerging, essential, yet little understood practice for DevOps teams and their Cloud Service Providers. The only way to get CICD to work in a highly secure environment takes collaboration, patience and persistence. Building CICD in the cloud requires rigorous ar...
SYS-CON Events announced today that Yuasa System will exhibit at the Japan External Trade Organization (JETRO) Pavilion 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. Yuasa System is introducing a multi-purpose endurance testing system for flexible displays, OLED devices, flexible substrates, flat cables, and films in smartphones, wearables, automobiles, and healthcare.
The session is centered around the tracing of systems on cloud using technologies like ebpf. The goal is to talk about what this technology is all about and what purpose it serves. In his session at 21st Cloud Expo, Shashank Jain, Development Architect at SAP, will touch upon concepts of observability in the cloud and also some of the challenges we have. Generally most cloud-based monitoring tools capture details at a very granular level. To troubleshoot problems this might not be good enough.
Companies are harnessing data in ways we once associated with science fiction. Analysts have access to a plethora of visualization and reporting tools, but considering the vast amount of data businesses collect and limitations of CPUs, end users are forced to design their structures and systems with limitations. Until now. As the cloud toolkit to analyze data has evolved, GPUs have stepped in to massively parallel SQL, visualization and machine learning.
Organizations do not need a Big Data strategy; they need a business strategy that incorporates Big Data. Most organizations lack a road map for using Big Data to optimize key business processes, deliver a differentiated customer experience, or uncover new business opportunities. They do not understand what’s possible with respect to integrating Big Data into the business model.