Fortress Paper announces second quarter 2008 results



    /NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
    DISSEMINATION IN THE UNITED STATES/

    TSX: FTP

    VANCOUVER, Aug. 11 /CNW/ - Fortress Paper Ltd. ("Fortress Paper" or the
"Company") reported net income of $3.4 million for the second quarter of 2008
on sales of $49.1 million or basic and diluted earnings per share of $0.33. In
the first quarter of 2008 the Company reported net income of $4.2 million on
sales of $49.8 million or basic and diluted earnings per share of $0.41 and
$0.38, respectively. For the second quarter of 2007 the Company reported net
income of $1.7 million on sales of $35.4 million or basic and diluted earnings
per share of $0.40 and $0.38, respectively. The number of shares outstanding
was significantly higher in the first and second quarters of 2008 when
compared to the second quarter of 2007.

    Highlights

    EBITDA was $6.2 million or 12.6% of sales for the three months ended June
30, 2008. For the three months ended June 30, 2007 EBITDA was $4.3 million or
12.1% of sales. For a reconciliation of net income to EBITDA please see the
Management's Discussion and Analysis available on SEDAR at www.sedar.com. The
increase in EBITDA relative to the prior year comparative period was primarily
due to the continued focus at the Dresden mill, towards more non-woven
wallpaper base which typically offers higher sales per tonne and higher EBITDA
margins.
    EBITDA is 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 a key performance indicator.
EBITDA is not a generally accepted earnings measure and should not be
considered as an alternative to earnings or cash flows as determined in
accordance with Canadian generally accepted accounting principles. As there is
no standardized method of calculating EBITDA, the Company's use for the term
may not be comparable with similarly titled measures used by other companies.

    Selected Financial Information

    The selected financial information presented herein is qualified in its
entirety by, and should be read in conjunction with, our unaudited
consolidated financial statements as at and for the six and three month
periods ended June 30, 2008 and the related notes thereon and our Management's
Discussion and Analysis filed on SEDAR.

    
    Selected Financial Information and Statistics

    (thousands of dollars, except shares,        Q2 2008    Q1 2008  Q2 2007
    per unit amounts and shipments, unaudited)
    -------------------------------------------------------------------------

    Sales                                         49,138     49,789   35,441
    EBITDA                                         6,184      6,643    4,319
    Operating income                               5,075      5,527    3,364
    Net income                                     3,401      4,189    1,700
    Shipments (tonnes)                            14,125     15,004   12,578
    Basic EPS                                      $0.33      $0.41    $0.40
    Weighted average shares outstanding
     basic (thousands)                            10,248     10,203    4,275
    Diluted EPS                                    $0.33      $0.38    $0.38
    Weighted average shares outstanding
     diluted (thousands)                          10,423     11,141    5,212

    Operational Results

    Sales for the three months ended June 30, 2008 totaled $49.1 million. The
Landqart Mill contributed $20.0 million and the Dresden Mill contributed
$29.1 million of sales revenue. In the three months ended June 30, 2007 sales
totaled $35.4 million. The Landqart Mill and Dresden Mill contributed
$15.7 million and $19.7 million, respectively. Sales for the three months
ended June 30, 2008 were significantly higher relative to the prior year
comparative period primarily due to capacity increases at both mills and the
continued focus at the Dresden mill, towards more non-woven wallpaper base.
    Landqart produces various specialty and security papers. Security paper
production includes banknotes which result in varying degrees of EBITDA margin
depending on the complexity of the features included.
    Total shipments during the three months ended June 30, 2008 were 14,125
tonnes, comprised of 4,473 tonnes of security and specialty papers from the
Landqart Mill and 9,652 tonnes of wallpaper base from the Dresden Mill. Total
shipments during the three months ended June 30, 2007 were 12,578 tonnes,
comprised of 3,841 tonnes of security and specialty papers from the Landqart
Mill and 8,737 tonnes of wallpaper base from the Dresden Mill.

    Selected Financial Information and Statistics - Six Months Ended June 30

    (thousands of dollars, except per unit                 June 30,  June 30,
    amounts and shipments, unaudited)                         2008      2007
    -------------------------------------------------------------------------
    Sales                                                   98,927    73,692
    EBITDA                                                  12,827     7,160
    Operating income                                        10,602     5,812
    Net income                                               7,590     2,794
    Shipments (tonnes)                                      29,129    26,048
    

    Second Quarter 2008 Financial Statements and Management's Discussion
    & Analysis

    The Company's consolidated financial statements for the six and three
month periods ended June 30, 2008 and related Management's Discussion and
Analysis are available on SEDAR at www.sedar.com.

    The Company

    Fortress Paper is a leading international producer of security and other
specialty papers. The Company operates two paper mills, the Landqart Mill
located in Switzerland and the Dresden Mill located in Germany. The Company's
security papers include banknote, passport and visa papers and its specialty
papers include non-woven wallpaper base products, and graphic and technical
papers. As an extension of its security papers business, the Landqart Mill has
been actively developing and marketing innovative paper-based security
products.

    Conference Call

    A conference call to discuss the financial results for the first quarter
2008 will be held on Tuesday, August 12, 2008 at 9:30 a.m. (PST). To attend
the conference call, please dial one of the following toll free numbers:

    North America: 1-866-585-6398

    International: 416-849-9626

    A replay of the conference call will be available for 7 days. To access
the replay, listeners may dial 1-866-245-6755. The pass code to access the
replay is 270118.

    Forward-Looking Statements

    Some information in this news release contains forward-looking statements
that reflect the current views and/or expectations of the Company with respect
to its performance, business and future events. The reader is cautioned that
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking statements including, without
limitation, those relating to damage to our reputation, competition,
maintaining our market position, marketability and price of our products,
technology and protection of our intellectual property, dependence on our
major customers, fluctuations in the price and supply of raw materials,
fluctuations in foreign exchange and other risk factors detailed in our
filings with Canadian securities regulatory authorities. These risks, as well
as others, could cause actual results and events to vary significantly.
Fortress Paper Ltd. does not undertake any obligation to release publicly any
revisions for updating any voluntary forward-looking statements.





For further information:

For further information: Mr. Chadwick Wasilenkoff, Chief Executive
Officer, Fortress Paper Ltd., (604) 904-2328 (chadw@fortresspaper.com)

Organization Profile

FORTRESS PAPER LTD.

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