KPLP 4Q 2016 Results: Revenue Up 13% from Year Ago

KP Tissue Inc. (KPT) has reported the Q4 and full year 2016 financial and operational results of KPT and Kruger Products L.P. (KPLP). Kruger Products is Canada's leading manufacturer of quality tissue products for the consumer market (Cashmere, Purex, SpongeTowels, Scotties, and White Swan) and the away-from-home market, and continues to grow in the US consumer tissue business with the White Cloud brand and premium private label products. KPT currently holds a 16.1% interest in KPLP.

KPLP Q4 2016 business and financial highlights:

 

•Revenue increased by 13.0% to $339.6 million in Q4 2016 compared to Q4 2015

•Adjusted EBITDA was $42.9 million in Q4 2016 compared to $30.3 million in Q4 2015, up 41.6%

KPLP full year 2016 business and financial highlights:

 

•Revenue increased by 7.8% to $1,227.9 million in 2016 compared to $1,138.9 million in 2015

•Adjusted EBITDA was $152.5 million in 2016, up from $126.4 million in 2015, a 20.6% increase

"We are extremely pleased with our results for Fiscal 2016. The record Revenue and Adjusted EBITDA performance was primarily due to higher sales volume, improved pricing and strong contribution from TAD products" said Mario Gosselin, CEO of KP Tissue and KPLP.

"We continue to be No. 1 in overall tissue market share in Canada, with share gains in our market leading position in the bathroom tissue category, while remaining the uncontested market leader in the facial tissue category and holding a strong No. 2 position in the paper towels category. In the U.S., we continue to leverage our TAD product manufacturing capacity to take advantage of growth opportunities in the US premium private label market.

"In the past two years, our capital program has increased significantly, focused on projects related to capacity growth and cost reduction with quick paybacks, highlighted by our $55 million paper machine investment in Crabtree to reduce our overall paper costs. We are starting to see the benefits of these investments in our results, and expect a positive impact from capital projects on our costs going forward," concluded Gosselin.

For the first quarter of 2017, Adjusted EBITDA is expected to increase over Q1 2016, while being seasonally lower than the fourth quarter of 2016 due primarily to 12 fewer sales days and higher advertising expenses.

KPT Q4 2016 financial results:

KPT incurred a net loss of $0.4 million in Q4 2016. Included in the net loss was $0.7 million representing KPT's share of KPLP's loss. The loss was increased by the net of depreciation expense of $1.5 million related to adjustments to carrying amounts on acquisition, partially offset by an income tax recovery of $1.8 million.

KPT 2016 financial results:

KPT incurred a net loss of $1.7 million in 2016. Included in the net loss was $5.8 million representing KPT's share of KPLP's income. The income was reduced by depreciation expense of $5.9 million related to adjustments to carrying amounts on acquisition and income tax expense of $1.8 million

KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 16.1% interest in KPLP.

KPLP is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. The Away-From-Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. KPLP has approximately 2,500 employees and operates eight production facilities in North America, including five FSC(R) CoC-certified plants (FSC(R) C104904), four of which are located in Canada and one in the US.