Cascades posts a sixth consecutive quarter of improved results

KINGSEY FALLS, QC, Nov. 5 /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 September 30, 2009.

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

    
    - Net earnings of $0.35 per share ($34 million) compared to a net loss of
      $0.07 per share ($7 million) in the third quarter of 2008. Excluding
      specific items, net earnings of $0.36 per share ($35 million) compared
      to net earnings of $0.06 per share ($6 million) in the same period of
      last year;

    - For the first nine months of 2009, net earnings of $1.03 per share
      ($101 million), $0.86 per share ($84 million) when excluding specific
      items;

    - Highest operating income before depreciation and amortization (EBITDA)
      excluding specific items in the Company's history, $127 million, up 5%
      compared to the previous quarter and 44% compared to the same period of
      last year;

    - Cash flow from operations excluding specific items more than doubled
      compared to Q3 2008 to $95 million ($0.97 per share);

    - Net debt down by approximately $90 million in comparison to the
      previous quarter, notwithstanding acquisitions in the tissue paper and
      recovery sectors. Compared to the same period of last year, Cascades'
      net debt decreased by $216 million;

    - Two strategic acquisitions in the paper recovery sector increasing
      Cascades' collection capacity by 20%, thus reaffirming the Company's
      position as the largest paper collector in Canada and amongst the
      leaders in North America.

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

    Financial Highlights
    --------------------

    Selected consolidated information
    (in millions of Canadian dollars, except    -----------------------------
     amounts per share)                          Q3/2009   Q3/2008   Q2/2009
    ------------------------------------------  -----------------------------
                                                            Note 2    Note 2

    Sales                                            974     1,039       981
    Excluding specific items(1)
      Operating income before depreciation and
       amortization (OIBD or EBITDA)                 127        88       121
      Operating income from continuing
       operations                                     74        34        66
      Net earnings                                    35         6        28
       per common share                            $0.36     $0.06     $0.28
      Cash flow from operations (adjusted)
       from continuing operations                     95        47        85
        per common share                           $0.97     $0.47     $0.87
    As reported
    Operating income before depreciation and
     amortization (OIBD or EBITDA)(1)                129        71       130
    Operating income from continuing
     operations                                       76        17        75
    Net earnings (loss)                               34        (7)       30
      per common share                             $0.35    $(0.07)    $0.30
    Cash flow from operations (adjusted) from
     continuing operations(1)                         94        43        81
      per common share(1)                          $0.96     $0.43     $0.83
    -------------------------------------------------------------------------
    Note 1 - see the supplemental information on non-GAAP measures note.
    Note 2 - the 2008 results were restated following the retrospective
             application of CICA handbook Section 3064
    

Operating income before depreciation (OIBD or EBITDA) and net earnings excluding specific items increased significantly to respectively $127 million and $35 million ($0.36 per share) in the third quarter of 2009 compared to $88 million and $6 million ($0.06 per share) in the same period in 2008.

Excluding specific items, EBITDA also improved by $6 million in comparison to the previous quarter while net earnings increased by $7 million.

Including specific items, the operating income before depreciation and net earnings also grew substantially to reach respectively $129 million and $34 million ($0.35 per share) in the third quarter of 2009 compared to $71 million and a net loss of $7 million ($0.07 per share) for the same quarter in 2008.

Commenting on the quarterly results, Mr. Alain Lemaire, President and Chief Executive Officer stated: "We delivered very strong third quarter results in a challenging environment. Compared to the previous quarter, we experienced some selling price erosion and we faced the rapid rise of our recycled fibre costs and the Canadian dollar. However, our shipments increased by 5% and we were able to control our fixed and other variable costs to deliver the highest EBITDA in the Company's history. Moreover, we continue to generate strong free cash flow and pay down debt."

    
    Results analysis for the three-month period ended September 30, 2009
    --------------------------------------------------------------------
    

In comparison with the same period last year, sales decreased by 6% to $974 million reflecting a drop in all our selling prices, an 8% fall in shipments, partly offset by the depreciation of the Canadian dollar.

Operating results however improved despite lower sales volumes and selling prices. In fact, the operating income from continuing operations more than quadrupled to $76 million compared to $17 million last year due mainly to lower raw material and energy costs as well as the depreciation of the Canadian dollar. When excluding specific items, operating income from continuing operations increased by $40 million to $74 million. The third quarter operating results include a $4 million profit resulting from the settlement of a construction mandate conducted by our engineering and project division in Western Canada.

The specific items that impacted the operating income in the third quarter of 2009 include $5 million in closure and restructuring costs, a $1 million impairment charge, as well as a $8 million unrealized gain on commodity financial instruments. In addition to these specific items, the $34 million in net earnings also reflects a $3 million foreign exchange loss on long-term debt.

Net debt decreased by $88 million compared to June 30th 2009 and the ratio of net debt to EBITDA excluding specific items in the last twelve months decreased from 4.0x in the second quarter of 2009 to 3.5x in the third quarter of 2009.

Finally, through the Pulp & Paper Green Transformation Program of the Canadian Government, Cascades expects to receive $6.1 million in investment credits to apply against energy and environmental efficiency projects through March 31, 2012.

    
    Near term outlook
    -----------------
    

Mr. Alain Lemaire, President and Chief Executive Officer added: "Looking ahead to the fourth quarter, while we are encouraged by the recent improvement in demand and the relative stability of most of our selling prices, we expect lower volumes due to normal seasonality and planned maintenance downtimes. In addition, we anticipate slightly higher fibre and energy costs. We also remain cautious in regards to short term business conditions given the uncertain economic climate in North America."

    
    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 December 18, 2009 to shareholders of record at the close of business on December 4, 2009. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada). In addition, in the third quarter of 2009, in accordance with its normal course issuer bid program, Cascades purchased 120,818 shares at an average price of $5.71. Since the beginning of the year, Cascades has purchased for cancellation 1,202,018 common shares at an average price of $2.48 per share representing an aggregate amount of approximately $3 million.

Supplemental information on non-GAAP measures

Operating income before depreciation and amortization, earnings before interests, taxes, depreciation and amortization, operating income, cash flow from operations and cash flow from operations per share 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, cash flow from operations and cash flow from operations per share 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, cash flow from operations and cash flow from operations per share does 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, cash flow from operations and cash flow from operations per share 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 and cash flow from operations per share is determined by dividing cash flow from operations by the weighted average number of common shares of the period.

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, cash flow from operations excluding specific items and cash flow from operations per share 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 (loss), which is a performance measure defined by Canadian GAAP is reconciled below to operating income (loss), 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)            Q3/2009   Q3/2008   Q2/2009
    -------------------------------------------------------------------------
                                                            Note 2    Note 2

    Net earnings (loss)                               34        (7)       30
    Non-controlling interest                           -         1         -
    Share of results of significantly
     influenced companies                             (3)       (2)       (2)
    Provision for (recovery of) income taxes          17        (2)       17
    Loss on derivative financial instruments on
     long-term debt                                    -         -         2
    Foreign exchange loss on long-term debt            3         -         3
    Interest expense                                  25        27        25
                                                -----------------------------

    Operating income                                  76        17        75
    Specific items :
    Loss on disposal and others                        -         -         1
    Impairment loss                                    1         -         -
    Closure and restructuring costs                    5         4         3
    Unrealized loss (gain) on financial
     instruments                                      (8)       13       (13)
                                                -----------------------------
                                                      (2)       17        (9)
                                                -----------------------------

    Operating income - excluding specific items       74        34        66

    Depreciation and amortization                     53        54        55
                                                -----------------------------

    Operating income before depreciation and
     amortization (OIBD) - excluding specific
     items(1)                                        127        88       121
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Note 1 - also refers to earnings before interests, taxes, depreciation
             and amortization (EBITDA).
    Note 2 - the 2008 results were restated following the retrospective
             application of CICA handbook Section 3064


    The following table reconciles net earnings and net earnings per share to
net earnings excluding specific items and net earnings per share excluding
specific items:

                      --------------------------- ---------------------------
    (in millions of
     Canadian dollars,
     except amounts                                   Net earnings (loss)
     per share)           Net earnings (loss)             per share(1)
    --------------------------------------------- ---------------------------
                       Q3/2009  Q3/2008  Q2/2009   Q3/2009  Q3/2008  Q2/2009
                      --------------------------- ---------------------------
                                 Note 2   Note 2             Note 2   Note 2

    As per GAAP             34       (7)      30     $0.35   $(0.07)   $0.30
    Specific items :
    Loss on disposal
     and others              -        -        1       $ -      $ -      $ -
    Impairment loss          1        -        -     $0.01      $ -      $ -
    Closure and
     restructuring
     costs                   5        4        3     $0.03    $0.03    $0.02
    Unrealized loss
     (gain) financial
     instruments            (8)      13      (13)   $(0.06)   $0.10   $(0.09)
    Loss on derivative
     financial
     instruments on
     long-term debt          -        -        2       $ -      $ -    $0.02
    Foreign exchange
     loss on long-term
     debt                    3        -        3     $0.03      $ -    $0.03
    Tax effect on
     specific items          -       (4)       2
                      --------------------------- ---------------------------
                             1       13       (2)    $0.01    $0.13   $(0.02)
                      --------------------------- ---------------------------

    Excluding specific
     items                  35        6       28     $0.36    $0.06    $0.28
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    Note 1 - specific amounts per share are calculated on an after-tax basis.
    Note 2 - the 2008 results were restated following the retrospective
             application of CICA handbook Section 3064


    The following table reconciles cash flow from operations and cash flow
from operations per share to cash flow from operations excluding specific
items and cash flow from operations per share excluding specific items:

                      --------------------------- ---------------------------
                                                   Cash flow from operations
                       Cash flow from operations            per share
                      --------------------------- ---------------------------
    (in millions of
     Canadian dollars,
     except amounts
     per share)        Q3/2009  Q3/2008  Q2/2009   Q3/2009  Q3/2008  Q2/2009
    --------------------------------------------- ---------------------------

    Cash flow provided
     by operating
     activities            117       22       82
    Changes in
     non-cash working
     capital
     components            (23)      21       (1)
                      --------------------------- ---------------------------
    Cash flow
     (adjusted) from
     operations             94       43       81     $0.96    $0.43    $0.83
    Specific items :
    Gains or losses
     on disposals and
     others                  -        -        1         -        -        -
    Closure and
     restructuring
     costs, net of
     current income
     tax                     1        4        3     $0.01    $0.04    $0.04
                      --------------------------- ---------------------------

    Excluding specific
     items                  95       47       85     $0.97    $0.47    $0.87
    --------------------------------------------- ---------------------------
    --------------------------------------------- ---------------------------
    

Founded in 1964, Cascades produces, converts and markets packaging and tissue products composed mainly of recycled fibres. Cascades employs close to 13,000 employees who work in more than 100 modern and flexible production units located in North America and Europe. Cascades' management philosophy, its 45 years of experience in recycling, its continued efforts in research and development are strengths which enable the company to create new products for its customers. The 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
                                                  September 30,  December 31,
                                                          2009          2008
                                                 ----------------------------
    Assets                                          (unaudited)    (restated)

    Current assets
    Cash and cash equivalents                               20            11
    Accounts receivable                                    622           657
    Inventories                                            525           580
    -------------------------------------------------------------------------
                                                         1,167         1,248
    Property, plant and equipment                        1,955         2,030
    Intangible assets                                      159           149
    Other assets                                           272           283
    Goodwill                                               324           321
    -------------------------------------------------------------------------
                                                         3,877         4,031
                                                 ----------------------------
                                                 ----------------------------

    Liabilities and Shareholders' Equity

    Current liabilities
    Bank loans and advances                                 79           104
    Accounts payable and accrued liabilities               534           586
    Current portion of long-term debt                       10            36
    -------------------------------------------------------------------------
                                                           623           726
    Long-term debt                                       1,501         1,672
    Other liabilities                                      418           377
                                                 ----------------------------
                                                         2,542         2,775
    -------------------------------------------------------------------------

    Commitments and Contingencies
    Shareholders' Equity
    Capital stock                                          500           506
    Retained earnings                                      745           656
    Contributed surplus                                     13             9
    Accumulated other comprehensive income                  77            85
                                                 ----------------------------
                                                         1,335         1,256
    -------------------------------------------------------------------------
                                                         3,877         4,031
                                                 ----------------------------
                                                 ----------------------------


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

                                    For the 3-month         For the 9-month
                                     periods ended           periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------
                                           (restated)              (restated)

    Sales                            974       1,039       2,925       2,997
    Cost of sales and
     expenses
    Cost of sales (excluding
     depreciation and
     amortization)                   752         854       2,254       2,502
    Depreciation and
     amortization                     53          54         162         158
    Selling and
     administrative expenses          93          96         309         287
    Losses on disposal and
     others                            -           -           1           5
    Impairment and other
     restructuring costs               6           4          14          20
    Loss (gain) on
     financial instruments            (6)         14         (15)          6
    -------------------------------------------------------------------------
                                     898       1,022       2,725       2,978
    -------------------------------------------------------------------------
    Operating income from
     continuing operations            76          17         200          19

    Interest expense                  25          27          77          77
    Gain on purchases of
     senior notes                      -           -         (14)          -
    Foreign exchange loss on
     long-term debt                    3           -           8          20
    -------------------------------------------------------------------------
                                      48         (10)        129         (78)
    Provision for (recovery
     of) income taxes                 17          (2)         39         (20)
    Share of results of
     significantly influenced
     companies                        (3)         (2)        (10)         (6)
    Non-controlling interest           -           1          (1)          2
    -------------------------------------------------------------------------
    Net earnings (loss) from
     continuing operations            34          (7)        101         (54)
    Net earnings from
     discontinued operations           -           -           -          18
    -------------------------------------------------------------------------
    Net earnings (loss) for
     the period                       34          (7)        101         (36)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (loss) from
     continuing operations
     per common share
    Basic                          $0.35      ($0.07)      $1.03      ($0.54)
                             ------------------------------------------------
                             ------------------------------------------------
    Diluted                        $0.34      ($0.07)      $1.02      ($0.54)
                             ------------------------------------------------
                             ------------------------------------------------
    Net earnings (loss) per
     common share
    Basic                          $0.35      ($0.07)      $1.03      ($0.36)
                             ------------------------------------------------
                             ------------------------------------------------
    Diluted                        $0.34      ($0.07)      $1.02      ($0.36)
                             ------------------------------------------------
                             ------------------------------------------------
    Weighted average basic
     number of common
     shares outstanding       97,430,683  98,727,291  97,781,928  98,873,025
                             ------------------------------------------------
                             ------------------------------------------------


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

                                   For the 9-month period ended September 30,
                                                                        2009
                            -------------------------------------------------

                                                            Accumu-
                                                             lated
                                                             other
                                                  Contri-   compre-    Share-
                             Capital  Retained     buted   hensive   holders'
                               stock  earnings   surplus    income    Equity
                            -------------------------------------------------

    Balance - Beginning of
     period                      506       656         9        85     1,256
    Comprehensive income:
      Net earnings for the
       period                      -       101         -         -       101
      Change in other
       comprehensive income
       (loss)                      -         -         -        (8)       (8)
                                                                    ---------
    Comprehensive income for
     the period                                                           93
                                                                    ---------
    Dividends                      -       (12)        -         -       (12)
    Adjustment related to
     stock options                 -         -         1         -         1
    Redemption of common
     shares                       (6)        -         3         -        (3)
                            -------------------------------------------------
    Balance - End of period      500       745        13        77     1,335
                            -------------------------------------------------
                            -------------------------------------------------


                                   For the 9-month period ended September 30,
                                                                        2008
                            -------------------------------------------------
                                                                   (restated)

                                                            Accumu-
                                                             lated
                                                             other
                                                            compre-
                                                  Contri-  hensive     Share-
                             Capital  Retained     buted    income   holders'
                               stock  earnings   surplus     (loss)   Equity
                            -------------------------------------------------

    Balance - Beginning of
     period                      509       724         8       (43)    1,198
    Cumulative impact of
     accounting changes            -         3         -         -         3
                            -------------------------------------------------
    Restated balance -
     Beginning of period         509       727         8       (43)    1,201
    Comprehensive income:
      Net loss for the
       period                      -       (36)        -         -       (36)
      Change in other
       comprehensive income        -         -         -        50        50
                                                                    ---------
    Comprehensive income for
     the period                                                           14
                                                                    ---------

    Dividends                      -       (12)        -         -       (12)
    Redemption of common
     shares                       (2)       (1)        -         -        (3)
                            -------------------------------------------------
    Balance - End of period      507       678         8         7     1,200
                            -------------------------------------------------
                            -------------------------------------------------


    Consolidated Statements of Comprehensive Income (Loss)
    (in millions of Canadian dollars)
    (unaudited)
                                    For the 3-month         For the 9-month
                                     periods ended           periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------

    Net earnings (loss) for
     the period                       34          (7)        101         (36)
                             ------------------------------------------------

    Other comprehensive
     income (loss)

      TRANSLATION ADJUSTMENTS
      Change in foreign
       currency translation
       of self-sustaining
       foreign subsidiaries          (61)          9        (105)         52
      Change in foreign
       currency translation
       related to hedging
       activities                     48           -          73           -
      Income taxes                    (7)          -         (10)          -
      CASH FLOW HEDGES
      Change in fair value of
       foreign exchange
       forward contracts
       designated as cash
       flow hedges                    23          (7)         52         (10)
      Change in fair value of
       commodity derivative
       financial instruments
       designated as cash
       flow hedges                    (1)          -          (2)         11
      Income taxes                    (7)          -         (16)         (3)
                             ------------------------------------------------
                                      (5)          2          (8)         50
                             ------------------------------------------------
    Comprehensive income
     (loss) for the period            29          (5)         93          14
                             ------------------------------------------------
                             ------------------------------------------------


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

                                    For the 3-month         For the 9-month
                                     periods ended           periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------
                                           (restated)              (restated)
    OPERATING ACTIVITIES FROM
     CONTINUING OPERATIONS
    Net earnings (loss) for
     the period                       34          (7)        101         (36)
    Net earnings from
     discontinued operations           -           -           -         (18)
    -------------------------------------------------------------------------
    Net earnings (loss) from
     continuing operations            34          (7)        101         (54)
    Adjustments for
      Depreciation and
       amortization                   53          54         162         158
      Losses on disposal and
       others                          -           -           1           5
      Impairment and other
       restructuring costs             5           -           8           3
      Unrealized loss (gain)
       on financial
       instruments                    (8)         13         (22)          6
      Foreign exchange loss
       on long-term debt               3           -           8          20
      Gain on purchases of
       senior notes                    -           -         (14)          -
      Future income taxes             12          (9)         11         (42)
      Share of results of
       significantly
       influenced companies           (3)         (2)        (10)         (6)
      Non-controlling
       interest                        -           1          (1)          2
      Others                          (2)         (5)         (1)         (9)
      Early settlement of
       natural gaz contracts           -          (2)          -          13
    -------------------------------------------------------------------------
                                      94          43         243          96
    Change in non-cash
     working capital
     components                       23         (21)         23         (57)
    -------------------------------------------------------------------------
                                     117          22         266          39
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES FROM
     CONTINUING OPERATIONS
    Purchases of property,
     plant and equipment             (52)        (45)       (124)       (128)
    Proceeds from disposal of
     property, plant and
     equipment                         -           -           2           5
    Decrease (increase) in
     other assets                     (1)          -          (9)          2
    Cash of a joint venture
     and business
     acquisitions                    (61)         (1)        (64)          5
    -------------------------------------------------------------------------
                                    (114)        (46)       (195)       (116)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES FROM
     CONTINUING OPERATIONS
    Bank loans and advances           (3)         18         (22)         13
    Change in revolving
     credit facilities                14           -         (31)         22
    Purchases of senior notes          -           -         (18)          -
    Increase in other
     long-term debt                    2           1          27           1
    Payments of other
     long-term debt                   (3)         (1)         (8)         (7)
    Early settlement of
     foreign exchange
     contracts                         -           -           8           -
    Redemption of common
     shares                           (1)         (1)         (3)         (3)
    Dividends                         (4)         (4)        (12)        (12)
    -------------------------------------------------------------------------
                                       5          13         (59)         14
    -------------------------------------------------------------------------
    Change in cash and cash
     equivalents during the
     period from continuing
     operations                        8         (11)         12         (63)

    Change in cash and cash
     equivalents from
     discontinued operations,
     including proceeds on
     disposal                          -           6          (3)         49
    -------------------------------------------------------------------------

    Net change in cash and
     cash equivalents during
     the period                        8          (5)          9         (14)
    Translation adjustments
     on cash and cash
     equivalents                       -          (7)          -          (2)
    Cash and cash
     equivalents - Beginning
     of period                        12          21          11          25
    -------------------------------------------------------------------------

    Cash and cash
     equivalents - End of
     period                           20           9          20           9
                             ------------------------------------------------
                             ------------------------------------------------


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

                                    For the 3-month         For the 9-month
                                     periods ended           periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------

    Sales
    Packaging products
      Boxboard
        Manufacturing                170         189         528         568
        Converting                   170         167         532         498
        Intersegment sales           (19)        (24)        (67)        (74)
                             ------------------------------------------------
                                     321         332         993         992
      Containerboard
        Manufacturing                132         157         393         461
        Converting                   230         257         677         730
        Intersegment sales           (90)        (96)       (260)       (281)
                             ------------------------------------------------
                                     272         318         810         910
      Specialty products
        Manufacturing                 83          80         254         232
        Converting                    60          67         182         197
        Recovery and deinked
         pulp                         70         102         193         295
        Intersegment sales           (18)        (25)        (60)        (73)
                             ------------------------------------------------
                                     195         224         569         651

        Intersegment sales           (17)        (28)        (45)        (81)
                             ------------------------------------------------
                                     771         846       2,327       2,472
    Tissue papers
      Manufacturing and
       converting                    210         205         628         559

    Intersegment sales                (7)        (12)        (30)        (34)
    -------------------------------------------------------------------------
    Total                            974       1,039       2,925       2,997
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                   For the 3-month          For the 9-month
                                    periods ended            periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------
    Operating income (loss)
     before depreciation and
     amortization from
     continuing operations
    Packaging products
      Boxboard
        Manufacturing                  8          (8)         34         (24)
        Converting                    14          15          42          39
        Others                         -          (1)         (3)        (11)
                             ------------------------------------------------
                                      22           6          73           4
      Containerboard
        Manufacturing                 20          13          81          40
        Converting                    22          15          40          46
        Others                         -          (5)         (5)         (2)
                             ------------------------------------------------
                                      42          23         116          84

      Specialty products
        Manufacturing                  8           5          28           4
        Converting                     7           8          18          21
        Recovery and deinked
         pulp                          6           7          12          18
        Others                         -           1          (2)          1
                             ------------------------------------------------
                                      21          21          56          44

                             ------------------------------------------------
                                      85          50         245         132
    Tissue papers
      Manufacturing and
       converting                     38          22         119          48

    Corporate                          6          (1)         (2)         (3)
    -------------------------------------------------------------------------
    Operating income before
     depreciation and
     amortization from
     continuing operations           129          71         362         177
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Depreciation and
     amortization                          (restated)              (restated)
      Boxboard                       (19)        (18)        (57)        (52)
      Containerboard                 (16)        (16)        (48)        (47)
      Specialty products              (8)         (9)        (25)        (25)
      Tissue papers                   (9)         (9)        (27)        (26)
      Corporate and
       eliminations                   (1)         (2)         (5)         (8)
                             ------------------------------------------------
                                     (53)        (54)       (162)       (158)
                             ------------------------------------------------
    Operating income from
     continuing operations            76          17         200          19
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


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

                                    For the 3-month         For the 9-month
                                     periods ended           periods ended
                                     September 30,           September 30,
                                    2009        2008        2009        2008
                             ------------------------------------------------

    Purchases of property,
     plant and equipment
    Packaging products
      Boxboard
        Manufacturing                  7           7          20          14
        Converting                     9           7          21          23
                             ------------------------------------------------
                                      16          14          41          37
      Containerboard
        Manufacturing                  3           6          10          10
        Converting                     3           4           7          15
                             ------------------------------------------------
                                       6          10          17          25
      Specialty products
        Manufacturing                  2           2           5           5
        Converting                     2           -           4           3
        Recovery and deinked
         pulp                          2           9          14          19
                             ------------------------------------------------
                                       6          11          23          27

                             ------------------------------------------------
                                      28          35          81          89
    Tissue papers
      Manufacturing and
       converting                     11           7          26          25

    Corporate                         12           1          14           5
    -------------------------------------------------------------------------
    Total                             51          43         121         119
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Purchases of property,
     plant and equipment
     included in accounts
     payable
      Beginning of period             12          10          14          17
      End of period                  (11)         (8)        (11)         (8)
    -------------------------------------------------------------------------
    Total investing
     activities                       52          45         124         128
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

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: Christian Dubé, Vice-President and Chief Financial Officer


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