/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
VANCOUVER, Nov. 12 /CNW/ - Fortress Paper Ltd. (the "Company") (TSX:FTP)
today announced its unaudited financial results for its third fiscal quarter
ended September 30, 2007. Net income of $0.2 million was reported for the
three months ended September 30, 2007 on sales of $34.1 million. For the nine
months ended September 30, 2007, Fortress Paper recorded net income of
$3.0 million on sales of $107.8 million.
EBITDA was $2.2 million or 6.5% of sales for the three months ended
September 30, 2007. For the nine months ended September 30, 2007 EBIDTA was
$9.4 million or 8.7% of sales. For a reconciliation of net income to EBITDA
please see the Management Discussion and Analysis available on SEDAR at
EBITDA is defined as operating earnings plus amortization 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 directly comparable with similarly titled measures used by other
On July 19, 2007, the Underwriters for our IPO exercised their option to
purchase an additional 750,000 Common shares of the Company at a price of
$8.00 per share, bringing total gross proceeds from the IPO to $46.0 million.
Net of issuance costs, the Company received $40.6 million. Approximately
$5.6 million from the proceeds of the IPO were used to repay the Stendal Note
which was held at our Landqart operations.
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 three months ended
September 30, 2007 and related notes and Management Discussion and Analysis
filed on SEDAR.
Q3 Q2 Q1 YTD
(unaudited, in thousands except
earnings per share ("EPS"))
Sales 34,065 35,441 38,251 107,757
Operating income 1,406 3,364 2,448 7,218
EBITDA 2,196 4,319 2,841 9,356
Net income 211 1,700 1,094 3,005
Basic EPS $0.02 $0.40 $0.35 $0.52
Diluted EPS $0.02 $0.38 $0.20 $0.52
Weighted average shares outstanding
Basic 10,049 4,275 3,102 5,834
Weighted average shares outstanding
Diluted 10,986 5,212 6,227 6,771
Average Swiss/Canadian exchange
rate(1) 0.8720 0.8982 0.9501 0.9072
Average Euro/Canadian exchange
rate(1) 1.4370 1.4801 1.5355 1.4847
(1) Source - Bank of Canada (average noon rate for the period)
Prior year comparative financial information has not been presented
because the Company acquired its assets from Mercer International Inc.
effective August 1, 2006.
During the third quarter the Company completed its scheduled shutdown in
order to implement capital expenditure upgrades at both mills to increase
higher margin production capacity. While the operating results of the planned
ugrades to the mills are positive, the financial results in the third quarter
were negatively impacted. The Company's results reflect a higher portion of
our Landqart mill sales attributed to specialty papers rather than security
papers which traditionally offer higher sales per tonne prices and higher
EBITDA margins. The Dresden mill continues to focus on shifting production to
more non-woven wallpaper base which offers higher sales per tonne and higher
Sales for the three months ended September 30, 2007 totaled
$34.1 million, compared to $35.4 million in the prior quarter. The Landqart
Mill contributed $13.3 million and the Dresden Mill contributed $20.8 million
of sales revenue. In the three months ended June 30, 2007 the Landqart Mill
and Dresden Mill contributed $15.7 million and $19.7 million, respectively.
Total shipments during the three months ended September 30, 2007 were
12,798 tonnes, comprised of 3,864 tonnes of security and specialty papers from
the Landqart Mill and 8,934 tonnes of wallpaper base from the Dresden Mill.
Total shipments during the second quarter 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.
The average sales revenue per tonne at the Landqart Mill was $3,439 per
tonne and at the Dresden Mill $2,325 per tonne, during the third quarter. The
average sales revenue per tonne at the Landqart Mill was $4,096 per tonne and
at the Dresden Mill $2,256 per tonne, during the previous quarter.
For the nine months ended September 30, 2007 sales totaled
$107.8 million. The Landqart Mill contributed $46.2 million and the Dresden
Mill contributed $61.5 million of sales revenue. Shipments for the same period
have been 38,846 tonnes comprised of 12,130 tonnes of security and specialty
papers from the Landqart Mill and 26,716 tonnes of wallpaper base from the
Dresden Mill. The average sales revenue per tonne at the Landqart Mill and
Dresden Mill was $3,809 per tonne and $2,304 per tonne, respectively, during
The Company's results were adversely affected by the appreciating
Canadian dollar relative to the Euro and Swiss Franc. Relative to the Canadian
dollar, the average Euro and Swiss Franc rates have weakened from the second
quarter averages by approximately $0.043 and $0.026 respectively. Based on pro
forma production and sales for the year ended December 31, 2006, every $0.01
increase in the Canadian dollar relative to the Euro and Swiss Franc impacts
EBITDA negatively by approximately $100,000 on an annualized basis.
The Company 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
A conference call to discuss the third quarter 2007 financial and
operating results will be held on Tuesday, November 13, 2007 at 9:30 PDT. To
attend the conference call, please use the following dial-in numbers:
604-899-1159 from Vancouver; 403-232-6311 from Calgary or international;
780-424-5694 from Edmonton; 416-883-0139 from Toronto; 613-212-4230 from
Ottawa; 514-395-2055 from Montreal
Toll-free dial-in number: 1-888-458-1598 from elsewhere in Canada and the
Participant pass code: 77788 followed by the number sign
A replay of the conference call will be available for seven days. To
access the replay in Canada (other than Calgary) or the United States,
listeners may dial 1-877-653-0545. The Calgary and international dial-in
number for the replay is 403-232-0933. The pass code to access the replay is
516599 followed by the number sign.
Some information in this news release contains certain 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 obligations to release publicly any
revisions for updating any voluntary forward-looking statements.
Neither the Toronto Stock Exchange nor any other regulatory body has
reviewed and therefore does not accept responsibility for the adequacy or
accuracy of this release.
For further information:
For further information: Mr. Chadwick Wasilenkoff, CEO, Fortress Paper
Ltd., (604) 904-2328, firstname.lastname@example.org