Cascades reports second quarter results

KINGSEY FALLS, QC, Aug. 11 /CNW Telbec/ - Cascades Inc. (CAS on the Toronto stock exchange), a leader in recovery and the manufacturing of green packaging and tissue paper products, announces its financial results for the three months ended June 30, 2010.

(All amounts in this press release are in Canadian dollars unless otherwise indicated.)

    
    Second quarter highlights
    -------------------------

    - Net earnings per share of $0.22 compared to net earnings per share of
      $0.00 in the previous quarter and $0.28 in the same period of last
      year (excluding specific items).

    - Operating income before depreciation and amortization (EBITDA)
      excluding specific items of $107 million, up 37% in comparison to
      Q1 2010. EBITDA excluding specific items amounted to $121 million in
      the second quarter of 2009.

    - Cash flow from operations (adjusted) of $71 million compared to
      $38 million in the first quarter of 2010 and $81 million in the same
      period last year.

    - Improved business conditions and increased demand and selling prices in
      both North America and Europe.

    - Total shipments up 3% compared to the first three months of the year
      and up 9% compared to the second quarter of 2009 (excluding the impact
      of acquisitions).

    - Buy-back of 325,463 shares at an average price of $6.66 for a total
      amount of approximately $2.2 million.

    - Launch of a new antibacterial tissue hand towel, a world first in terms
      of hand hygiene.

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Financial Summary
    -----------------

    Selected consolidated information
    (in millions of Canadian dollars,             ---------------------------
     except amounts per share)                     Q2/2010  Q2/2009  Q1/2010
    -------------------------------------------------------------------------

    Sales                                              998      981      942
    Excluding specific items(1)
      Operating income before depreciation and
       amortization (OIBD or EBITDA)                   107      121       78
      Operating income                                  56       66       23
      Net earnings attributable to shareholders
       for the period                                   21       28        -
        per common share                             $0.22    $0.28      $ -
      Cash flow from operations (adjusted)              71       85       41
    As reported
    Operating income before depreciation and
     amortization (OIBD or EBITDA)(1)                  101      130       82
    Operating income                                    50       75       27
    Net earnings attributable to shareholders
     for the period                                     21       30        -
      per common share                               $0.22    $0.30      $ -
    Cash flow from operations (adjusted)(1)             71       81       38
    -------------------------------------------------------------------------
    Note 1 - see the supplemental information on non-GAAP measures note.
    

Commenting on the second quarter results, Mr. Alain Lemaire, President and Chief Executive Officer stated: "As anticipated, we experienced a significant rebound in profitability compared to the previous quarter mostly as a result of the momentum in pricing and volumes in our different business units. All our segments delivered improved results as they benefited from selling price increases implemented during or prior to the second quarter. In addition, stronger demand combined with seasonal pick-up impacted positively our operational efficiency and financial results. In fact, during the quarter our overall operating rate reached 96%, the highest it's been in three years.

It is also important to note that these results were achieved despite the slow economic recovery as well as higher recycled fibre costs and Canadian dollar, up approximately 90% and 14% respectively compared to the same period last year."

    
    Results analysis for the three-month period ended June 30, 2010 (compared
    -------------------------------------------------------------------------
    to the previous year)
    ---------------------
    

In comparison with the same period last year, sales rose by 2% to $998 million resulting from higher selling prices and a 9% increase in shipments (excluding the impact of the acquisition of the tissue assets of Atlantic Packaging), offset by the appreciation of the Canadian dollar.

Net earnings excluding specific items amounted to $21 million ($0.22 per share) in the second quarter of 2010 compared to $28 million ($0.28 per share) for the same period of last year. Including specific items, net earnings amounted to $21 million ($0.22 per share) compared to $30 million ($0.30 per share) for the same quarter in 2009.

The operating income excluding specific items amounted to $56 million compared to $66 million in Q2 2009. Improved volumes and selling prices as well as the optimization of our cost structure and higher operating rates were more than offset by the rise of raw material costs. When including specific items, operating income amounted to $50 million in comparison to $75 million in the same period of last year.

In the second quarter of 2010, these specific items impacted our operating income and/or net earnings (before tax):

    
    - $6 million unrealized loss on financial instruments (impact on
      operating income and net earnings);
    - $6 million foreign exchange gain on long-term debt and financial
      instruments (impact on net earnings).
    

For further details, see the two following tables on GAAP and non-GAAP measures reconciliation.

    
    Third quarter outlook
    ---------------------
    

Mr. Alain Lemaire, President and Chief Executive Officer added: "Looking forward to the next quarter, we expect that the sequential improvement in profitability will carry on as a result of the continuous implementation of selling price increases in many of our operations. Also, the favourable seasonality associated with the third quarter leads us to anticipate a stronger demand for most of our products. In fact, despite some scheduled downtime for maintenance, we anticipate our operating rates to remain at high levels. In terms of input costs, we should start to benefit from the drop in pricing of old corrugated containers (OCC), the main grade of recycled fibres consumed by Cascades, which peaked in March. All in all, we remain confident for the coming months, particularly for our containerboard operations."

    
    Dividend on common shares and normal course issuer bid
    ------------------------------------------------------
    

The Board of Directors of Cascades declared a quarterly dividend of $0.04 per share to be paid September 17, 2010 to shareholders of record at the close of business on September 3, 2010. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada). In addition, in the second quarter of 2010, in accordance with its normal course issuer bid program, Cascades purchased for cancellation 325,463 shares at an average price of $6.66 representing an aggregate amount of approximately $2.2 million. In the first half of the year, Cascades purchased for cancellation 563,181 shares at an average price of $7.29 representing an aggregate amount of approximately $4.1 million

    
    Supplemental information on non-GAAP measures
    ---------------------------------------------
    

Operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations are not measures of performance under Canadian GAAP. The Company includes operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations because they are measures used by management to assess the operating and financial performance of the Company's operating segments. Additionally, the Company believes that these items provide additional measures often used by investors to assess a company's operating performance and its ability to meet debt service requirements. However, operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations do not represent, and should not be used as a substitute for net earnings or cash flows from operating activities as determined in accordance with Canadian GAAP, and they are not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income and cash flow from operations may differ from those of other companies. Cash flow from operations is defined as cash flow from operating activities as determined in accordance with Canadian GAAP excluding the change in working capital components.

Operating income before depreciation and amortization excluding specific items, earnings before interests, taxes, depreciation and amortization excluding specific items, operating income excluding specific items, net earnings excluding specific items, net earnings per common share excluding specific items and cash flow from operations excluding specific items are non-GAAP measures. The Company believes that it is useful for investors to be aware of specific items that have adversely or positively affected its GAAP measures, and that the above mentioned non-GAAP measures provide investors with a measure of performance with which to compare its results between periods without regard to these specific items. The Company's measures excluding specific items have no standardized meaning prescribed by GAAP and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.

Specific items are defined to include charges for impairment of assets, charges for facility or machine closures, debt restructuring charges, gains or losses on sale of business unit, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature.

Net earnings attributable, which is a performance measure defined by Canadian GAAP is reconciled below to operating income, operating income excluding specific items and operating income before depreciation excluding specific items or earnings before interests, taxes, depreciation and amortization excluding specific items:

    
                                                  ---------------------------
    (in millions of Canadian dollars)              Q2/2010  Q2/2009  Q1/2010
    -------------------------------------------------------------------------

    Net earnings attributable to shareholders for
     the period                                         21       30        -
    Non-controlling interest                             1        -        -
    Share of results of significantly influenced
     companies                                           -       (2)      (2)
    Provision for (recovery of) income taxes             7       17       (3)
    Foreign exchange loss (gain) on long-term
     debt and financial instruments                     (6)       5        1
    Loss on long-term debt refinancing                   -        -        3
    Financing expense                                   27       25       28
                                                  ---------------------------

    Operating income                                    50       75       27
    Specific items :
    Loss on disposal and others                          -        1        -
    Closure and restructuring costs                      -        3        -
    Unrealized loss (gain) on financial
     instruments                                         6      (13)      (4)
                                                  ---------------------------
                                                         6       (9)      (4)
                                                  ---------------------------

    Operating income - excluding specific items         56       66       23

    Depreciation and amortization                       51       55       55
                                                  ---------------------------

    Operating income before depreciation and
     amortization (OIBD or EBITDA) - excluding
     specific items                                    107      121       78
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

The following table reconciles net earnings attributable to shareholders for the period and net earnings per share attributable to shareholders for the period to net earnings attributable to shareholders for the period excluding specific items and net earnings per share attributable to shareholders for the period excluding specific items:

    
                       --------------------------- --------------------------
    (in millions of        Net earnings (loss)         Net earnings (loss)
     Canadian dollars,       attributable to         per share attributable
     except amounts           shareholders               to shareholders
     per share)              for the period             for the period(1)
    ---------------------------------------------- --------------------------
                        Q2/2010  Q2/2009  Q1/2010  Q2/2010  Q2/2009  Q1/2010
                       --------------------------- --------------------------

    As per GAAP              21       30        -    $0.22    $0.30      $ -
    Specific items :
    Loss on disposal
     and others               -        1        -      $ -      $ -      $ -
    Closure and
     restructuring
     costs                    -        3        -      $ -    $0.02      $ -
    Unrealized loss
     (gain) financial
     instruments              6      (13)      (4)   $0.05   $(0.09)  $(0.03)
    Loss on long-term
     debt refinancing         -        -        3      $ -      $ -    $0.02
    Foreign exchange
     loss (gain) on
     long-term debt
     and financial
     instruments             (6)       5        1   $(0.05)   $0.05    $0.01
    Tax effect on
     specific items           -        2        -
                       --------------------------- --------------------------
                              -       (2)       -      $ -   $(0.02)     $ -
                       --------------------------- --------------------------

    Excluding
     specific items          21       28        -    $0.22   $0.28       $ -
    ---------------------------------------------- --------------------------
    ---------------------------------------------- --------------------------
    Note 1 - specific amounts per share are calculated on an after-tax basis.
    

The following table reconciles cash flow provided by operating activities to cash flow (adjusted) from operations excluding specific items:

    
                                                  ---------------------------
                                                   Cash flow from operations
    (in millions of Canadian dollars,             ---------------------------
     except amounts per share)                     Q2/2010  Q2/2009  Q1/2010
    -------------------------------------------------------------------------

    Cash flow provided by operating activities          17       82       33
    Changes in non-cash working capital components      54       (1)       5
                                                  ---------------------------
    Cash flow (adjusted) from operations                71       81       38
    Specific items :
    Loss on disposal and others                          -        1        -
    Loss on long-term debt refinancing                   -        -        3
    Closure and restructuring costs, net of
     current income tax                                  -        3        -
                                                  ---------------------------

    Excluding specific items                            71       85       41
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Company employs close to 12,500 employees, who work in more than 100 units located in North America and Europe. Its management philosophy, its more than 45 years of experience in recycling and its continued efforts in research and development are strengths that enable Cascades to create new products for its customers. Cascades' shares trade on the Toronto Stock Exchange, under the ticker symbol CAS.

Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Company's products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Company's Securities and Exchange Commission filings.

    
    Consolidated Balance Sheets
    (in millions of Canadian dollars)

                                                         As at         As at
                                                       June 30,  December 31,
                                                          2010          2009
                                                -----------------------------
    Assets                                          (unaudited)

    Current assets
    Cash and cash equivalents                               22            19
    Accounts receivable                                    606           543
    Inventories                                            527           520
    -------------------------------------------------------------------------
                                                         1,155         1,082
    Property, plant and equipment                        1,848         1,912
    Intangible assets                                      158           165
    Other assets                                           318           317
    Goodwill                                               317           316
    -------------------------------------------------------------------------
                                                         3,796         3,792
                                                -----------------------------
                                                -----------------------------

    Liabilities and Equity

    Current liabilities
    Bank loans and advances                                 79            83
    Accounts payable and accrued liabilities               532           505
    Current portion of long-term debt                       10            10
    -------------------------------------------------------------------------
                                                           621           598
    Long-term debt                                       1,486         1,459
    Other liabilities                                      387           410
    -------------------------------------------------------------------------
                                                         2,494         2,467
                                                -----------------------------

    Equity attributable to the Shareholders
    Capital stock                                          496           499
    Contributed surplus                                     13            14
    Retained earnings                                      713           700
    Accumulated other comprehensive income                  58            91
    -------------------------------------------------------------------------
                                                         1,280         1,304
    Non-controlling interest                                22            21
    -------------------------------------------------------------------------
    Total equity                                         1,302         1,325
    -------------------------------------------------------------------------

                                                         3,796         3,792
                                                -----------------------------
                                                -----------------------------


    Consolidated Statements of Earnings
    (in millions of Canadian dollars, except per share amounts)
    (unaudited)

                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
                              2010          2009          2010          2009
                       ------------------------------------------------------

    Sales                      998           981         1,940         1,951
    Cost of sales and
     expenses
    Cost of sales
     (excluding
     depreciation and
     amortization)             791           750         1,557         1,502
    Depreciation and
     amortization               51            55           106           109
    Selling and
     administrative
     expenses                  101           108           199           216
    Losses on
     disposal and
     others                      -             1             -             1
    Impairment and
     other
     restructuring
     costs                       -             3             -             8
    Loss (gain) on
     financial
     instruments                 5           (11)            1            (9)
    -------------------------------------------------------------------------
                               948           906         1,863         1,827
    -------------------------------------------------------------------------
    Operating income            50            75            77           124

    Financing expense           27            25            55            52
    Loss on refinancing
     of long-term debt           -             -             3             -
    Gain on purchases
     of senior notes             -             -             -           (14)
    Foreign exchange
     loss (gain) on
     long-term debt
     and financial
     instruments                (6)            5            (5)            5
    -------------------------------------------------------------------------
                                29            45            24            81
    Provision for
     income taxes                7            17             4            22
    Share of results
     of significantly
     influenced
     companies                   -            (2)           (2)           (7)
    -------------------------------------------------------------------------
    Net earnings
     including
     non-controlling
     interest for the
     period                     22            30            22            66
    Non-controlling
     interest                    1             -             1            (1)
    -------------------------------------------------------------------------
    Net earnings
     attributable to
     Shareholders for
     the period                 21            30            21            67
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     net earnings per
     common share            $0.22         $0.30         $0.22         $0.68
                       ------------------------------------------------------
                       ------------------------------------------------------

    Weighted average
     number of common
     shares
     outstanding        96,895,355    97,467,651    96,990,471    97,960,461
                       ------------------------------------------------------
                       ------------------------------------------------------


    Consolidated Statements of Equity
    (in millions of Canadian dollars)
    (unaudited)

                                        For the 6-month period ended June 30,
                                                                        2010
               --------------------------------------------------------------
                                                     Total
                                             Accu-  equity
                                          mulated  attribu-     Non-
                                      Re-   other    table  control-
                         Contri-  tained-  compre-  to the     ling
               Capital    buted      ear- hensive    Share-    inte-   Total
                 stock  surplus    nings   income  holders     rest   equity
               --------------------------------------------------------------
    Balance -
     Beginning
     of period     499       14      700       91    1,304       21    1,325
    Comprehen-
     sive
     income
     (loss):
      Net
       earnings
       for the
       period        -        -       21        -       21        1       22
      Change in
       other
       compre-
       hensive
       income
       (loss)        -        -        -      (33)     (33)       -      (33)
                                                   --------------------------
    Comprehen-
     sive
     income
     (loss) for
     the period                                        (12)       1      (11)
                                                   --------------------------

    Dividends        -        -       (8)       -       (8)       -       (8)
    Redemption
     of common
     shares         (3)      (1)       -        -       (4)       -       (4)
               --------------------------------------------------------------
    Balance -
     End of
     period        496       13      713       58    1,280       22    1,302
               --------------------------------------------------------------
               --------------------------------------------------------------


                                        For the 6-month period ended June 30,
                                                                        2009
               --------------------------------------------------------------
                                                     Total
                                             Accu-  equity
                                          mulated  attribu-     Non-
                                      Re-   other    table  control-
                         Contri-  tained-  compre-  to the     ling
               Capital    buted      ear- hensive    Share-    inte-   Total
                 stock  surplus    nings   income  holders     rest   equity
               --------------------------------------------------------------
    Balance -
     Beginning
     of period     506        9      656       85    1,256       22    1,278
    Comprehen-
     sive
     income:
      Net
       earnings
       (loss)
       for the
       period        -        -       67        -       67       (1)      66
      Change in
       other
       comprehen-
       sive
       income
       (loss)        -        -        -       (3)      (3)       -       (3)
                                                   --------------------------
    Comprehen-
     sive
     income
     (loss) for
     the period                                         64       (1)      63
                                                   --------------------------

    Dividends        -        -       (8)       -       (8)       -       (8)
    Redemption
     of common
     shares         (5)       3        -        -       (2)       -       (2)
               --------------------------------------------------------------
    Balance -
     End of
     period        501       12      715       82    1,310       21    1,331
               --------------------------------------------------------------
               --------------------------------------------------------------


    Consolidated Statements of Comprehensive Income (Loss)
    (in millions of Canadian dollars)
    (unaudited)

                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
                              2010          2009          2010          2009
                       ------------------------------------------------------

    Net earnings
     including non-
     controlling
     interest for the
     period                     22            30            22            66
                       ------------------------------------------------------

    Other comprehensive
     income (loss)
      Translation
       adjustments
      Change in foreign
       currency
       translation of
       self-sustaining
       foreign
       subsidiaries             20           (61)          (15)          (44)
      Change in foreign
       currency
       translation
       related to
       hedging
       activities              (24)           39            (8)           25
      Income taxes               3            (5)            1            (3)
      Cash flow hedges
      Change in fair
       value of foreign
       exchange forward
       contracts                (6)           28            (2)           29
      Change in fair
       value of
       interest rate
       swap agreements          (1)            -            (3)            -
      Change in fair
       value of
       commodity
       derivative
       financial
       instruments               1             3           (11)            -
      Income taxes               1           (10)            5           (10)
                       ------------------------------------------------------
                                (6)           (6)          (33)           (3)
                       ------------------------------------------------------
    Comprehensive
     income (loss)
     including non-
     controlling
     interest for the
     period                     16            24           (11)           63
                       ------------------------------------------------------

    Less: Comprehensive
     income (loss)
     attributable to
     non-controlling
     interest                    1             -             1            (1)
                       ------------------------------------------------------
    Comprehensive
     income (loss)
     attributable to
     Shareholders               15            24           (12)           64
                       ------------------------------------------------------
                       ------------------------------------------------------


    Consolidated Statements of Cash Flows
    (in millions of Canadian dollars)
    (unaudited)

                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
                              2010          2009          2010          2009
                       ------------------------------------------------------
    OPERATING
     ACTIVITIES FROM
     CONTINUING
     OPERATIONS
    Net earnings
     attributable to
     Shareholders for
     the period                 21            30            21            67
    Adjustments for
      Depreciation and
       amortization             51            55           106           109
      Losses on
       disposal and
       others                    -             1             -             1
      Impairment and
       other
       restructuring
       costs                     -             -             -             3
      Unrealized loss
       (gain) on
       financial
       instruments               6           (13)            2           (14)
      Gain on
       purchases of
       senior notes              -             -             -           (14)
      Foreign exchange
       loss (gain) on
       long-term debt
       and financial
       instruments              (6)            5            (5)            5
      Future income
       taxes                    (2)            2           (12)           (1)
      Share of results
       of significantly
       influenced
       companies                 -            (2)           (2)           (7)
      Non-controlling
       interest                  1             -             1            (1)
      Others                     -             3            (2)            1
    -------------------------------------------------------------------------
                                71            81           109           149
    Change in non-cash
     working capital
     components                (54)            1           (59)            -
    -------------------------------------------------------------------------
                                17            82            50           149
    -------------------------------------------------------------------------
    INVESTING
     ACTIVITIES FROM
     CONTINUING
     OPERATIONS
    Purchases of
     property, plant
     and equipment             (22)          (30)          (56)          (70)
    Increase in other
     assets                     (3)           (8)           (5)          (11)
    Business
     acquisitions                -             -            (3)            -
    -------------------------------------------------------------------------
                               (25)          (38)          (64)          (81)
    -------------------------------------------------------------------------
    FINANCING
     ACTIVITIES FROM
     CONTINUING
     OPERATIONS
    Bank loans and
     advances                    2            13             -           (19)
    Change in revolving
     credit facilities          16           (57)          201           (45)
    Purchases of senior
     notes                      (4)           (4)         (165)          (18)
    Variance of other
     long-term debt             (1)            3             -            25
    Payments of other
     long-term debt              -            (4)           (5)           (5)
    Early settlement of
     foreign exchange
     contracts                   -             8             -             8
    Redemption of
     common shares              (2)            -            (4)           (2)
    Dividends                   (4)           (4)           (8)           (8)
    -------------------------------------------------------------------------
                                 7           (45)           19           (64)
    -------------------------------------------------------------------------
    Change in cash and
     cash equivalents
     during the period
     from continuing
     operations                 (1)           (1)            5             4
    Change in cash and
     cash equivalents
     from discontinued
     operations                  -             -            (2)           (3)
    -------------------------------------------------------------------------
    Net change in cash
     and cash
     equivalents
     during the period          (1)           (1)            3             1
    Translation
     adjustments on
     cash and cash
     equivalents                 -             -             -             -
    Cash and cash
     equivalents -
     Beginning of
     period                     23            13            19            11
    -------------------------------------------------------------------------

    Cash and cash
     equivalents -
     End of period              22            12            22            12
                       ------------------------------------------------------
                       ------------------------------------------------------


    Selected Segmented Information
    (in millions of Canadian dollars)
    (unaudited)

                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
    -------------------------------------------------------------------------
                              2010          2009          2010          2009
    -------------------------------------------------------------------------

    Sales
    Packaging products
      Boxboard
        Manufacturing          180           178           357           358
        Converting             162           181           315           362
        Intersegment
         sales                 (23)          (23)          (43)          (48)
                         ----------------------------------------------------
                               319           336           629           672
      Containerboard
        Manufacturing          148           130           282           261
        Converting             217           221           411           430
        Intersegment
         sales                 (94)          (76)         (167)         (153)
                         ----------------------------------------------------
                               271           275           526           538
      Specialty products
        Industrial
         packaging              49            45            95            92
        Consumer
         packaging              20            21            38            41
        Specialty papers        78            78           156           161
        Recovery and
         recycling              76            46           151            84
        Intersegment
         sales                  (3)           (2)           (5)           (4)
                         ----------------------------------------------------
                               220           188           435           374

        Intersegment
         sales                 (28)          (15)          (57)          (28)
                         ----------------------------------------------------
                               782           784         1,533         1,556
    Tissue papers
      Manufacturing and
       converting              220           207           418           418

    Intersegment sales
     and other                  (4)          (10)          (11)          (23)
    -------------------------------------------------------------------------
    Total                      998           981         1,940         1,951
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
    -------------------------------------------------------------------------
                              2010          2009          2010          2009
    -------------------------------------------------------------------------
    Operating income
     (loss) before
     depreciation and
     amortization

    Packaging products
      Boxboard
        Manufacturing           13            13            22            25
        Converting              17            16            32            28
        Others                  (1)            -            (2)           (2)
                         ----------------------------------------------------
                                29            29            52            51
      Containerboard
        Manufacturing           15            26            25            61
        Converting              26            11            47            18
        Others                  (3)            2            (3)           (5)
                         ----------------------------------------------------
                                38            39            69            74

      Specialty
       products
        Industrial
         packaging               6             5            13            10
        Consumer
         packaging               2             3             3             6
        Specialty
         papers                  5            10            10            20
        Recovery and
         recycling               7             3            12             -
        Others                   -             1             -            (1)
                         ----------------------------------------------------
                                20            22            38            35

                         ----------------------------------------------------
                                87            90           159           160
    Tissue papers
      Manufacturing
       and converting           23            42            42            81

    Corporate                   (9)           (2)          (18)           (8)
    -------------------------------------------------------------------------

    Operating income
     before depreciation
     and amortization          101           130           183           233
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Depreciation and
     amortization
      Boxboard                 (15)          (19)          (29)          (38)
      Containerboard           (17)          (16)          (36)          (32)
      Specialty
       products                 (9)           (9)          (18)          (17)
      Tissue papers             (9)           (9)          (20)          (18)
      Corporate and
       eliminations             (1)           (2)           (3)           (4)
                         ----------------------------------------------------
                               (51)          (55)         (106)         (109)
                         ----------------------------------------------------
    Operating income            50            75            77           124
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                          For the 3-month periods     For the 6-month periods
                                ended June 30,              ended June 30,
                              2010          2009          2010          2009
                         ----------------------------------------------------

    Purchases of property,
     plant and equipment
    Packaging products
      Boxboard
        Manufacturing            3             7             7            13
        Converting               3             6             6            13
                         ----------------------------------------------------
                                 6            13            13            26
      Containerboard
        Manufacturing            5             4             9             7
        Converting               3             2             8             4
                         ----------------------------------------------------
                                 8             6            17            11
      Specialty
       products
        Industrial
         packaging               1             -             1             1
        Consumer
         packaging               1             1             2             1
        Specialty
         papers                  2             1             3             3
        Recovery and
         recycling               1             5             2            12
                         ----------------------------------------------------
                                 5             7             8            17

                         ----------------------------------------------------
                                19            26            38            54
    Tissue papers
      Manufacturing and
       converting                3             8            11            15

    Corporate                    2             1             5             2
    -------------------------------------------------------------------------
    Total purchases             24            35            54            71

    Disposal of property,
     plant and equipment        (1)           (2)           (3)           (3)
    -------------------------------------------------------------------------
                                23            33            51            68

    Purchases of property,
     plant and equipment
     included in accounts
     payable
      Beginning of period        7             9            13            14
      End of period             (8)          (12)           (8)          (12)
    -------------------------------------------------------------------------
    Total investing
     activities                 22            30            56            70
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

SOURCE Cascades Inc.

For further information: For further information: Media: Hubert Bolduc, Vice-President, Communications and Public Affairs, 514 912-3790; Investors: Didier Filion, Director, Investor relations, 514 282-2697; Source: Allan Hogg, Vice-President and Chief Financial Officer


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