Click here to close now.

Welcome!

News Feed Item

Fortress Paper Announces First Quarter 2014 Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/12/14 -- Fortress Paper Ltd. (TSX:FTP) ("Fortress Paper" or the "Company") reported 2014 first quarter EBITDA loss of $13.6 million. The Dissolving Pulp Segment generated EBITDA loss of $15.2 million and the Security Paper Products Segment generated EBITDA of $3.2 million. Corporate costs contributed $1.6 million to EBITDA loss.

After planned market downtime through to early March 2014, the Fortress Specialty Cellulose mill restarted production and continued to realize its swing mill capabilities producing 14,130 air dried metric tonnes ("ADMT") of northern bleached hardwood kraft ("NBHK") pulp. The Fortress Specialty Cellulose mill sold 8,849 ADMT of dissolving pulp and 11,410 ADMT of NBHK pulp in the first quarter of 2014. Subsequent to March 31, 2014 to-date, the Fortress Specialty Cellulose mill has sold approximately 6,000 ADMT of dissolving pulp and 8,700 ADMT of NBHK pulp.

Results from the Dissolving Pulp Segment reflect approximately nine weeks of market downtime in the quarter combined with challenges during the subsequent ramp-up of both the Fortress Specialty Cellulose mill and cogeneration plant. In addition, continued delays in negotiations with our customers due to the impact of the interim duty imposed by China's Ministry of Commerce ("MOFCOM"), the final determination of which was announced in April of this year, has resulted in higher logistics costs, such as demurrage, customs and storage.

In early March, production began with NBHK pulp and transitioned to dissolving pulp mid-April. The Company is encouraged by recent mill results as production efficiencies and cash costs improve.

The Security Paper Products Segment experienced a fifth consecutive quarter with sales, volumes and revenues significantly higher relative to any comparative period in 2012. The Landqart mill continues to implement new initiatives to improve efficiencies and profitability. EBITDA for the Security Paper Products Segment for the quarter ended March 31, 2014 was $0.5 million higher when compared to the fourth quarter of 2013, and $5.3 million higher compared to the first quarter of 2013. However, less than favourable conditions, including the strength of the Swiss franc against the Euro, continue to adversely impact the results of the Security Paper Products Segment. The Landqart mill achieved over 2,500 tonnes of security paper sales in the first quarter of 2014, compared to 2,097 tonnes of security paper sales in the fourth quarter of 2013.

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 consolidated financial statements as at and for the three month period ended March 31, 2014 and the related notes thereto and Management's Discussion and Analysis, which are available on SEDAR.


                                                                            
(thousands of dollars, except                                               
 shipments, unaudited)                   Q1 2014       Q4 2013      Q1 2013 
----------------------------------------------------------------------------
                                                                            
Sales from continuing operations          53,856        37,183       57,559 
EBITDA from continuing operations(1)     (13,626)       (9,367)     (13,162)
EBITDA(2)                                (13,626)       (9,367)      (2,627)
Net loss from continuing operations      (23,421)      (54,731)     (18,814)
Adjusted net loss from continuing                                           
 operations (3)                          (25,858)      (21,247)     (20,618)
Paper shipments (tonnes) (4)               2,583         2,097        2,179 
Pulp shipments (ADMT)                     20,259         6,758       39,147 
(1)  See Net Loss to EBITDA Reconciliation for Continuing Operations.      
(2)  Including discontinued operations.                                    
(3)  See Net Loss to Adjusted Net Loss Reconciliation for Continuing       
     Operations.                                                           
(4)  From continuing operations.                                           

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. Reference is also made to adjusted net loss (calculated as net loss less specific items affecting comparability with prior periods) and adjusted net loss per share (calculated as adjusted net loss divided by the weighted average number of shares outstanding in the period). EBITDA, adjusted net loss and adjusted net loss per share are not generally accepted earnings measures and should not be considered as an alternative to net loss or cash flows as determined in accordance with IFRS. As there is no standardized method of calculating these measures, the Company's EBITDA, adjusted net loss and adjusted net loss per share may not be directly comparable with similarly titled measures used by other companies. Reconciliations of EBITDA and adjusted net loss to net loss reported in accordance with IFRS are included below.

Net Loss to Adjusted Net Loss Reconciliation for Continuing Operations:


                                                                            
(thousands of dollars, except per                                           
 share amounts, unaudited)               Q1 2014       Q4 2013      Q1 2013 
----------------------------------------------------------------------------
                                                                            
Net loss                                 (23,421)      (54,731)     (18,814)
Foreign exchange (gain) loss              (1,562)         (123)          56 
Gain on sale of property, plant and                                         
 equipment                                  (875)            -       (1,860)
Impairment of property, plant and                                           
 equipment                                     -        32,907            - 
Legal provision                                -           700            - 
----------------------------------------------------------------------------
Adjusted net loss                        (25,858)      (21,247)     (20,618)
                                                                            
Basic and diluted net loss per share       (1.61)        (3.76)       (1.30)
Adjusted net loss per share, basic                                          
 and diluted                               (1.77)        (1.46)       (1.42)

Net Loss to EBITDA Reconciliation for Continuing Operations:


                                                                            
(thousands of dollars, unaudited)        Q1 2014       Q4 2013      Q1 2013 
----------------------------------------------------------------------------
                                                                            
Net loss                                 (23,421)      (54,731)     (18,814)
Income tax (recovery) expense                (14)          620       (1,815)
Foreign exchange (gain) loss              (1,562)         (123)          56 
Net finance expense                        5,683         4,698        4,009 
Amortization                               6,325         6,821        4,334 
Gain on sale of property, plant and                                         
 equipment                                  (875)            -       (1,860)
Impairment of property, plant and                                           
 equipment                                     -        32,907            - 
Legal provision                                -           700            - 
Stock based compensation                     238          (259)         928 
----------------------------------------------------------------------------
EBITDA                                   (13,626)       (9,367)     (13,162)

The Company

Fortress Paper operates internationally in two distinct business segments: dissolving pulp and security paper products. 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 first quarter 2014 will be held on May 13, 2014 at 8:00 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: 1154572#                                       

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 1154572# 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 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 Company's most recent Annual Information Form 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.

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
Discussions about cloud computing are evolving into discussions about enterprise IT in general. As enterprises increasingly migrate toward their own unique clouds, new issues such as the use of containers and microservices emerge to keep things interesting. In this Power Panel at 16th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the state of cloud computing today, and what enterprise IT professionals need to know about how the latest topics and trends affect t...
"We provide a web application framework for building really sophisticated web applications that run on a browser without any installation need so we get used for biotech, defense, and banking applications," noted Charles Kendrick, CTO and Chief Architect at Isomorphic Software, in this SYS-CON.tv interview at @DevOpsSummit (http://DevOpsSummit.SYS-CON.com), held June 9-11, 2015, at the Javits Center in New York
SYS-CON Events announced today that Secure Infrastructure & Services will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Secure Infrastructure & Services (SIAS) is a managed services provider of cloud computing solutions for the IBM Power Systems market. The company helps mid-market firms built on IBM hardware platforms to deploy new levels of reliable and cost-effective computing and hig...
It is one thing to build single industrial IoT applications, but what will it take to build the Smart Cities and truly society-changing applications of the future? The technology won’t be the problem, it will be the number of parties that need to work together and be aligned in their motivation to succeed. In his session at @ThingsExpo, Jason Mondanaro, Director, Product Management at Metanga, discussed how you can plan to cooperate, partner, and form lasting all-star teams to change the world...
In the midst of the widespread popularity and adoption of cloud computing, it seems like everything is being offered “as a Service” these days: Infrastructure? Check. Platform? You bet. Software? Absolutely. Toaster? It’s only a matter of time. With service providers positioning vastly differing offerings under a generic “cloud” umbrella, it’s all too easy to get confused about what’s actually being offered. In his session at 16th Cloud Expo, Kevin Hazard, Director of Digital Content for SoftL...
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, will explore the IoT cloud-based platform technologies drivi...
"What Dyn is able to do with our Internet performance and our Internet intelligence is give companies visibility into what is actually going on in that cloud," noted Corey Hamilton, Product Marketing Manager at Dyn, in this SYS-CON.tv interview at 16th Cloud Expo, held June 9-11, 2015, at the Javits Center in New York City.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at @ThingsExpo, James Kirkland, Red Hat's Chief Arch...
Agile, which started in the development organization, has gradually expanded into other areas downstream - namely IT and Operations. Teams – then teams of teams – have streamlined processes, improved feedback loops and driven a much faster pace into IT departments which have had profound effects on the entire organization. In his session at DevOps Summit, Anders Wallgren, Chief Technology Officer of Electric Cloud, will discuss how DevOps and Continuous Delivery have emerged to help connect dev...
IT data is typically silo'd by the various tools in place. Unifying all the log, metric and event data in one analytics platform stops finger pointing and provides the end-to-end correlation. Logs, metrics and custom event data can be joined to tell the holistic story of your software and operations. For example, users can correlate code deploys to system performance to application error codes. In his session at DevOps Summit, Michael Demmer, VP of Engineering at Jut, will discuss how this can...
The last decade was about virtual machines, but the next one is about containers. Containers enable a service to run on any host at any time. Traditional tools are starting to show cracks because they were not designed for this level of application portability. Now is the time to look at new ways to deploy and manage applications at scale. In his session at @DevOpsSummit, Brian “Redbeard” Harrington, a principal architect at CoreOS, will examine how CoreOS helps teams run in production. Attende...
Containers are revolutionizing the way we deploy and maintain our infrastructures, but monitoring and troubleshooting in a containerized environment can still be painful and impractical. Understanding even basic resource usage is difficult – let alone tracking network connections or malicious activity. In his session at DevOps Summit, Gianluca Borello, Sr. Software Engineer at Sysdig, will cover the current state of the art for container monitoring and visibility, including pros / cons and liv...
Live Webinar with 451 Research Analyst Peter Christy. Join us on Wednesday July 22, 2015, at 10 am PT / 1 pm ET In a world where users are on the Internet and the applications are in the cloud, how do you maintain your historic SLA with your users? Peter Christy, Research Director, Networks at 451 Research, will discuss this new network paradigm, one in which there is no LAN and no WAN, and discuss what users and network administrators gain and give up when migrating to the agile world of clo...
WebRTC converts the entire network into a ubiquitous communications cloud thereby connecting anytime, anywhere through any point. In his session at WebRTC Summit,, Mark Castleman, EIR at Bell Labs and Head of Future X Labs, will discuss how the transformational nature of communications is achieved through the democratizing force of WebRTC. WebRTC is doing for voice what HTML did for web content.