/R E P E A T/ - SFK Pulp Fund - Reports results for fourth quarter and year ended December 31, 2006



    
    HIGHLIGHTS

    - Fourth quarter:
      - Acquisition of the Fairmont and Menominee RBK Pulp Mills on
        October 31, 2006.
      - Sales totalling $110.5 million with sales volume of 151,313 tonnes.
      - EBITDA(1) of $14.4 million compared to $0.4 million in the fourth
        quarter of 2005

    - Year 2006:
      - Sales totalling $312.4 million, up from $236.2 million in 2005.
      - EBITDA(1) reached $43.0 million, up $13.7 million from 2005.
      - Net earnings of $1.3 million compared to a net loss of $5.2 million
        in 2005.

    TSX:SFK.UN

    SAINT-FELICIEN, QC, March 15 /CNW Telbec/ - For the fourth quarter ended
December 31, 2006, SFK Pulp recorded sales of $110.5 million. Earnings before
interest, taxes, depreciation and amortization (EBITDA)(1) stood at
$14.4 million and net loss was $0.1 million. This compares with sales of
$56.5 million, EBITDA of $0.4 million and a net loss of $8.4 million for the
same period last year.
    For the year ended December 31, 2006, SFK Pulp recorded sales of
$312.4 million, EBITDA of $43.0 million and net earnings of $1.3 million. For
the year ended December 31, 2005, SFK Pulp recorded sales of $236.2 million,
EBITDA of $29.3 million and a net loss of $5.2 million.
    "We are pleased with our results of the last quarter of 2006 which include
two months of our recently acquired Fairmont and Menominee RBK pulp mills.
During the quarter we benefited from strong market conditions in both RBK and
NBSK segments, resulting in a sales volume in excess of 151,000 tonnes and an
EBITDA margin of 13.0%. The three mills also performed as planned during the
quarter, with a total production of more than 150,000 tonnes. I would also
like to take the opportunity to thank our customers, suppliers and employees
for their support in the continuing integration of the Fairmont and Menominee
divisions", said André Bernier, President and Chief Executive Officer of SFK
Pulp.

    FOURTH QUARTER 2006
    -------------------

    Sales in the fourth quarter of 2006 totalled $110.5 million, compared with
sales of $56.5 million for the same period last year, representing an increase
of $54.0 million. Sales of RBK pulp from the acquisition of the Fairmont and
Menominee Mills contributed for $38.7 million of the increase while the
improvement in the sales price and sales volume of NBSK pulp accounted for the
other $15.3 million.
    Total sales volume reached 151,313 tonnes; RBK pulp accounting for
59,255 tonnes and NBSK pulp for 92,058 tonnes. During the fourth quarter of
2005, the sales volume totalled 84,754 tonnes (of NBSK pulp only).
    Production at the mills during the quarter ended December 31, 2006
totalled 150,729 tonnes, compared with 86,754 tonnes for the fourth quarter of
2005. The 63,685 tonnes of RBK pulp produced by the newly acquired mills
accounted for the increase while the NBSK pulp production at the
Saint-Félicien Mill remained substantially at the same level as last year with
a total of 87,044 tonnes.
    Cost of sales for the Saint-Félicien Mill of CAN$631 per tonne in the
fourth quarter 2006 decreased by CAN$13 per tonne when compared with the
corresponding period of 2005. The reduction is attributable to lower wood
fibre costs (lower delivery costs) and lower wood pulp transportation costs
(improvement in sales mix). Cost of sales for the Fairmont and Menominee Mills
was CAN$559 per tonne and totalled CAN$33.1 million for the two-month period.

    Distributable cash(2)

    During the fourth quarter of 2006, SFK Pulp generated distributable cash
of $6.9 million. Including the $23.1 million cash reserve at the end of the
third quarter 2006, total distributable cash available amounted to
$30.0 million. Of the distributable cash available, SFK Pulp declared
distributions of $5.8 million ($0.0800 per unit) and retained $24.2 million,
of which $1.2 million is reserved for the Saint-Félicien Mill's semi-annual
outage in mid-April 2007, leaving a cash reserve of $23.0 million.
    For the corresponding quarter of 2005, SFK Pulp generated negative
distributable cash of $1.9 million. Including the cash reserve at the end of
the third quarter of 2005, total distributable cash at the end of 2005
amounted to $8.9 million. Of the total distributable cash generated, SFK Pulp
declared distributions of $1.3 million ($0.0225 per unit) and $7.6 million was
set aside as a reserve.

    Distributions to unitholders

    During the quarter ended December 31, 2006, SFK Pulp declared total
distributions of $5.8 million ($0.0800 per unit), compared with $1.3 million
($0.0225 per unit) for the corresponding period in 2005.

    YEAR 2006
    ---------

    In 2006, total sales reached $312.4 million, representing an increase of
$76.2 million when compared with total sales of $236.2 million in 2005. Sales
of RBK pulp from the acquisition of the Fairmont and Menominee Mills
contributed for $38.7 million of the increase while improved NBSK pulp market
conditions accounted for the other $37.5 million.
    Sales volume of NBSK pulp in 2006 reached a record level of
377,393 tonnes, an increase of approximately 39,000 tonnes when compared to a
sales volume of 338,196 tonnes in 2005. For the two-month period ended
December 31, 2006, sales of RBK pulp reached 59,255 tonnes.
    Productivity at the Saint-Félicien Mill remained at the same level in
2006, with an average daily production of 1,036 tonnes per day, despite the
loss of four days of production early in 2006 as a result of a problem with
the recovery boiler. Productivity at the Fairmont and Menominee Mills averaged
1,074 tonnes per day over the two-month period ended December 31, 2006, for a
total production of 63,685 tonnes.
    Cost of sales for the Saint-Félicien Mill increased to $CAN599 per tonne
in the year ended December 31, 2006, from CAN$590 per tonne in 2005. The
increase is attributable to the aforementioned production losses, the
additional costs incurred following the failure, in the first quarter of 2006,
of the main turbo generator and the increase in fuel prices affecting both the
mill operating cost and freight costs. Cost of sales for the Fairmont and
Menominee Mills was CAN$559 per tonne and totalled CAN$33.1 million for the
two-month period.

    Distributable cash(2)

    For the year ended December 31, 2006, SFK Pulp generated distributable
cash of $26.8 million. Including the cash reserve at the end of 2005, total
distributable cash available amounted to $34.4 million for the year 2006. SFK
Pulp declared distributions of $10.2 million ($0.1500 per unit) and retained
$24.2 million as a cash reserve. Of that $24.2 million reserve, $1.2 million
will be used for the Saint-Félicien Mill's semi-annual outage in mid-April
2007, leaving $23.0 million as a cash reserve.

    Distributions to unitholders

    For the year ended December 31, 2006, SFK Pulp declared total
distributions of $10.2 million ($0.1500 per unit), compared with $20.4 million
($0.3450 per unit) in 2005.

    OUTLOOK
    -------

    "Markets for NBSK and RBK pulp continue to be strong with low producer and
consumer inventories and sustained demand. This allowed pulp producers to
implement prices increases at the beginning of 2007. Our sales team continues
to build on these positive market conditions and to consolidate our customer
base and optimize our sales' portfolio.
    As for operations, we will accelerate our investment program in
Saint-Félicien over the next two years, with projects of approximately $10
million per year. These projects are expected to improve the environmental
performance of the Saint-Felicien NBSK pulp mill, increase our production
capacity and reduce our chemical and energy costs. We also intend to invest a
total of approximately $5 million in 2007 in our two RBK pulp mills.
    Finally, the recent closing of our public offering in January allowed us
to reposition our capital structure by reducing our debt; thus providing us
with the financial flexibility to pursue our growth strategy", said
André Bernier, President and Chief Executive Officer of SFK Pulp.

    ABOUT SFK PULP
    --------------

    With the Acquisition, SFK Pulp now operates, through its subsidiaries, the
Saint-Félicien Mill, the Fairmont Mill and the Menominee Mill and employs
approximately 550 people. The Saint-Félicien Mill (located in Saint-Félicien,
Québec, approximately 450 kilometres north of Montréal) has an annual
production capacity of 375,000 metric tonnes of NBSK pulp and supplies NBSK
pulp to various sectors of the paper industry in Canada, the United States and
in Europe for use in speciality products. The Fairmont Mill (located in
Fairmont, West Virginia) and the Menominee Mill (located in Menominee,
Michigan), with a combined annual production capacity of 360,000 metric
tonnes, both manufacture air-dried market recycled bleached kraft (RBK) pulp
and primarily supply RBK pulp to manufacturers of uncoated freesheet,
commercial and away-from-home tissue and coated paper in the United States.

    FORWARD-LOOKING STATEMENTS
    --------------------------

    Certain statements made in this press release including, but not limited
to, announced pulp prices which have not yet been implemented, expected
capital expenditures, financial benefits expected to arise from capital
investments and other statements that are not historical facts, are
"forward-looking statements" which reflect the intentions, plans, expectations
and beliefs of SFK Pulp's management ("Management") regarding SFK Pulp's
future growth, results of operations, performance and business prospects and
opportunities. In certain instances, these statements require Management to
make assumptions and there is significant risk that these assumptions may not
be correct. The words "may", "would", "could", "will", "intend", "plan",
"anticipate", "believe", "estimate", "expect", and similar expressions, as
they relate to SFK Pulp or Management, are intended to identify
forward-looking statements. Such forward-looking statements reflect
Management's current beliefs and are based on information currently available
to Management. Forward-looking statements involve known and unknown risks,
uncertainties and other factors outside Management's control. A number of
factors could cause actual results of SFK Pulp to differ materially from the
results discussed in the forward-looking statements, including, but not
limited to: risks associated with the lack of accuracy and completeness of
market and industry data, adverse operating conditions, unforeseen capital
expenditures, changes in prices of raw materials and operating costs, changes
in wood fibre and waste paper costs and availability, dependence on
cross-border trade, vulnerability to economic conditions, changes in selling
prices and volume sold, competition, regulatory change, foreign exchange,
interest rates, reliance on key personnel, uninsured and underinsured losses,
the integration of the Fairmont and Menominee Mills, potential undisclosed
liabilities associated with the acquisition of the Fairmont and Menominee
Mills, changes in the business strengths of the Fairmont and Menominee Mills,
restrictions on potential growth, refinancing, credit and collection and other
factors referenced in SFK Pulp's management's discussion and analysis for the
year ended December 31, 2006 and in SFK Pulp's continuous disclosure filings,
which may be found through the internet on the Canadian System for Electronic
Document Analysis and Retrieval (SEDAR) at www.sedar.com. Although the
forward-looking statements contained herein are based upon what Management
believes to be reasonable assumptions, Management cannot assure investors that
actual results will be consistent with these forward-looking statements. These
forward-looking statements are made as of the date of this press release, and,
except as required by applicable laws, Management assumes no obligation to
update or revise them to reflect new events or circumstances. These statements
do not reflect the potential impact of any special items or of any business
combination or other transaction that may be announced or that may occur after
the date hereof. Readers are cautioned not to place undue reliance on these
forward-looking statements.

    SFK Pulp will hold a conference call Friday, March 16, 2007 at 2:00 p.m.
(Eastern Time), to discuss its results. President and Chief Executive Officer
André Bernier, and Paul Bourque, Chief Financial Officer, will host the
conference call and a question-and-answer session to discuss earnings. The
first 30 minutes will be devoted to questions from investment professionals
while media representatives will be in listening mode only. This will be
followed by a question period for business media. To participate in the
conference call, investment professionals and business media may dial
1-514-868-1042 or 1-866-898-9626. Participants not able to listen to the live
call can access a replay of the archived call by calling 1-800-408-3053,
Access code 3216636#. The replay will be available until April 6, 2007.

    Attached: Summary of Results


    SFK Pulp - Financial Highlights - Fourth Quarter and Year ended
    December 31, 2006

        (in thousands of Canadian dollars except per unit amounts and
                             percentage figures)
    -------------------------------------------------------------------------
                                  Three months ended              Year ended
                                         December 31             December 31
                                          (unaudited)             (unaudited)
    -------------------------------------------------------------------------
    FINANCIAL RESULTS               2006        2005        2006        2005
    -------------------------------------------------------------------------
                                       $           $           $           $
    -------------------------------------------------------------------------
    Sales                        110,486      56,479     312,367     236,179
    -------------------------------------------------------------------------
    Cost of sales                 91,246      54,612     259,150     199,679
    -------------------------------------------------------------------------
    Selling and administrative
     expenses                      3,602       1,331       8,436       6,611
    Loss on derivative             1,017           -       1,017           -
    -------------------------------------------------------------------------
    Loss on foreign currency
     translation                     265         104         777         619
    -------------------------------------------------------------------------
    EBITDA(1)                     14,356         432      42,987      29,270
    -------------------------------------------------------------------------
    EBITDA Margin (%)               13.0%        0.8%       13.8%       12.4%
    -------------------------------------------------------------------------
    Amortization                   9,178       7,552      31,546      29,590
    -------------------------------------------------------------------------
    Financial charges              5,633       1,361      10,298       4,889
    -------------------------------------------------------------------------
    Recovery of income taxes        (313)        (60)       (142)          -
    -------------------------------------------------------------------------
    Net (loss) earnings             (142)     (8,421)      1,285      (5,209)
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    DISTRIBUTABLE CASH(2)         Three months ended              Year ended
                                         December 31             December 31
                                          (unaudited)             (unaudited)
                              -----------------------------------------------
                                    2006        2005        2006        2005
    -------------------------------------------------------------------------
                                       $           $           $           $
    -------------------------------------------------------------------------
    Cash flows (used in)
     from operations             (18,381)     (9,707)      7,413       9,358
    -------------------------------------------------------------------------
    Changes in non-cash
     operations working items     31,072       8,911      29,643      15,830
    -------------------------------------------------------------------------
    Cash flows from
     operations before changes
     in operating non-cash
     working capital items        12,691        (796)     37,056      25,188
    -------------------------------------------------------------------------
    Less:
      Capital expenditures         5,365         936       9,208       9,253
      Employee future benefits       162          77         544         614
      Amortization of deferred
       financing fees                283          65         478         262
    -------------------------------------------------------------------------
    Distributable cash             6,881      (1,874)     26,826      15,059

    Distributions to unitholders
     declared (including
     distribution equivalent
     paid to holders of
     subscription receipts)        5,799       1,335      10,170      20,441
    -------------------------------------------------------------------------
    Increase (decrease) in
     distributable cash            1,082      (3,209)     16,656      (5,382)
    -------------------------------------------------------------------------
    Reserve for distributions
     at the beginning
     of the period                23,155      10,790       7,581      12,963
    -------------------------------------------------------------------------
    Reserve for
     distributions at
     the end of the period        24,237       7,581      24,237       7,581
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
    Distributions to unitholders              Three months ended December 31
                                                                  (unaudited)
    -------------------------------------------------------------------------
    (in thousands
     of Canadian dollars
     except per unit amounts)                   2006                    2005
    -------------------------------------------------------------------------
                                       $    Per unit           $    Per unit
    -------------------------------------------------------------------------
    Total distributions
     declared                     $5,799(*)  $0.0800(*)   $1,335     $0.0225
    -------------------------------------------------------------------------
    (*) Including a distribution equivalent of $0.3 million ($0.0200 per
        subscription receipt) on the subscription receipts issued on
        September 7, 2006.


    -------------------------------------------------------------------------
    Distributions to unitholders                      Year ended December 31
                                                                  (unaudited)
    -------------------------------------------------------------------------
    (in thousands of
     Canadian dollars
     except per unit amounts)                   2006                    2005
                                       $    Per unit           $    Per unit
    -------------------------------------------------------------------------
    Total distributions
     declared                    $10,170(*)  $0.1500(*) $20, 441     $0.3450
    -------------------------------------------------------------------------
    (*) Including a distribution equivalent of $0.3 million ($0.0200 per
        subscription receipt) on the subscription receipts issued on
        September 7, 2006.


    (1) Earnings before amortization, financial charges and income taxes
        ("EBITDA") is not a recognized measure under Canadian GAAP and is
        unaudited. Management believes that this measure is useful
        supplemental information as it provides investors with an indication
        of cash available for distribution prior to debt service, capital
        expenditures and income taxes. Investors should be cautioned however
        that this information should not be confused with or used as an
        alternative for net earnings determined in accordance with GAAP as an
        indicator of SFK Pulp's performance or cash flows from operating,
        investing and financing activities as a measure of liquidity and cash
        flows. SFK Pulp's method for calculating this information may differ
        from that used by other issuers and, accordingly, this information
        may not be comparable to measures used by other issuers. EBITDA shown
        herein represents earnings before amortization, financial charges and
        income taxes in the Financial Statements.

    (2) Distributable cash of SFK Pulp is a non-GAAP measure generally used
        by Canadian open-ended trusts as an indicator of financial
        performance and it should not be seen as a measure of liquidity or a
        substitute for comparable metrics prepared in accordance with GAAP.
        SFK Pulp's distributable cash may differ from similar calculations as
        reported by other similar entities and accordingly may not be
        comparable to distributable cash as reported by such entities.
        Management believes that SFK Pulp's distributable cash calculated
        from net earnings is the most appropriate measure to help readers
        evaluate the performance of the fund as it is the most comparable
        measure from period to period. In addition, this measure is currently
        used by investors, management and other interested parties to
        evaluate the ongoing performance of SFK Pulp.
    




For further information:

For further information: please contact: Investors & Analysts: Paul
Bourque, Chief Financial Officer,(418) 679-8585 ext. 4600; Media & Other:
Louise D'Anjou, Optimum Public Relations, (514) 282-4733

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SFK PULP FUND

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