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KP Tissue Full Year 2023 results: revenue up 11.4 percent from year ago to C$1.9 billion
KP Tissue Inc. reports the Q4 2023 and full year 2023 financial and operational results of KPT and Kruger Products Inc. Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere, Purex, SpongeTowels, Scotties, White Swan and BonterraTM) and the Away-From-Home (AFH) market and continues to grow in the U.S. Consumer tissue business with the White Cloud brand and premium private label products. KPT currently holds a 12.9 percent interest in Kruger Products. Kruger Products Q4 2023 Business and Financial Highlights
Kruger Products Full Year 2023 Financial Highlights
“We are pleased with our financial results in fiscal 2023, highlighted by record sales of $1.9 billion and record Adjusted EBITDA of $238.6 million driven by many positive factors,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “Overall, our business benefited from robust volume, positive margin management with continued volatile costs, and strong operational efficiency across our network.” “In our Consumer segment, we gained market share within the facial tissue and paper towel categories, while improving our share trend on bathroom tissue. We also stepped up to support and supply our Scotties facial tissue to customers and consumers given the exit of Kleenex from the Canadian grocery market. Our Away-From-Home business continued to deliver sustainable results with another strong Adjusted EBITDA quarter and year.” “In the fourth quarter, our underlying results remained solid with Adjusted EBITDA growing 37.9 percent year-over-year to $61.2 million, despite strategically increasing investments in marketing and maintenance to enable us to enter 2024 in a stronger competitive position. Looking ahead, we plan to manage our margins amid rising costs, continue to invest in our brands, grow our facial tissue position, and implement a successful start-up of our Sherbrooke Expansion,” Mr. Bianco concluded. Outlook for Q1 2024 For the first quarter of 2024, we expect margins to remain consistent and Adjusted EBITDA1 to be in a similar range to Q4 2023. Kruger Products Q4 2023 Financial Results Revenue was $482.3 million in Q4 2023 compared to $458.1 million in Q4 2022, an increase of $24.2 million or 5.3 percent. The increase in revenue was primarily due to higher sales volume, partially offset by increased promotional spending compared to the prior year quarter. Cost of sales was $400.5 million in Q4 2023 compared to $416.4 million in Q4 2022, a decrease of $15.9 million or 3.8 percent. Manufacturing costs decreased due primarily to lower pulp and other input costs resulting from moderating inflation and productivity improvements in plant operations, which were only partially offset by higher volume. Freight costs were lower compared to Q4 2022 as supply constraints and inflation moderated, while warehousing costs increased as a result of additional logistics network costs. As a percentage of revenue, cost of sales was 83.0 percent in Q4 2023 compared to 90.9 percent in Q4 2022. Selling, general and administrative (SG&A) expenses were $50.3 million in Q4 2023 compared to $30.6 million in Q4 2022, an increase of $19.7 million or 64.4 percent. The increase was primarily due to significantly higher advertising and IT spend in the quarter, higher personnel and selling expenses to support additional sales volume, and a loss on disposal of fixed assets. As a percentage of revenue, SG&A expenses were 10.4 percent in Q4 2023 compared to 6.7 percent in Q4 2022. Adjusted EBITDA1 was $61.2 million in Q4 2023 compared to $44.4 million in Q4 2022, an increase of $16.8 million or 37.9 percent. The significant increase was primarily due to higher sales volume, lower pulp and other input costs, productivity improvements in plant operations and lower freight costs, partially offset by slightly lower selling prices, higher warehousing and SG&A expenses. Net income was $16.5 million in Q4 2023 compared to $16.0 million in Q4 2022, an increase of $0.5 million. The increase was primarily due to higher Adjusted EBITDA1, lower depreciation expense and restructuring costs related primarily to the shutdown of certain Memphis plant production assets in Q4 2022, higher foreign exchange gains and lower interest expense, partially offset by the change in the amortized cost of Partnership Units Liability in Q4 2022, a loss on sale of fixed assets, higher income tax expense and a loss from non-controlling interest. Kruger Products 2023 Financial Results Revenue was $1,873.0 million in Fiscal 2023 compared to $1,681.4 million in Fiscal 2022, an increase of $191.6 million or 11.4 percent. The increase in revenue was primarily due to higher sales volume along with the favourable impact of selling price increases implemented across all segments and regions during Fiscal 2022. Revenue was also favourably impacted by foreign exchange fluctuations on U.S. dollar sales. Adjusted EBITDA1 was $238.6 million in Fiscal 2023 compared to $116.0 million in Fiscal 2022, an increase of $122.6 million or 105.7 percent. The significant increase was primarily due to the favourable impact of selling price increases implemented in Fiscal 2022 along with higher sales volume, lower pulp prices, improvements in Memphis operations and lower freight costs, partially offset by other input cost inflation compared to Fiscal 2022, higher manufacturing overhead spending, and higher warehousing and SG&A expenses along with the unfavourable impact of foreign exchange fluctuations. Net loss was $5.3 million in Fiscal 2023 compared to $56.9 million in Fiscal 2022, a decrease in the loss of $51.6 million. The decrease in the loss was primarily due to higher Adjusted EBITDA1, a lower foreign exchange loss, lower interest and depreciation expenses and lower consulting and restructuring costs, partially offset by higher income tax expense, the change in the amortized cost of Partnership Units Liability in Fiscal 2022, a loss on sale of fixed assets and a loss from non-controlling interest. Kruger Products Q4 2023 Liquidity Total liquidity, representing cash and availability under the revolving credit agreements, was $326.7 million as of December 31, 2023. In addition, $14.9 million of cash was held for the Sherbrooke Expansion Project. KPT Q4 2023 Financial Results KPT had net income of $2.0 million in Q4 2023. Included in net income was $2.2 million representing KPT’s share of Kruger Products’ net income, a dilution gain of $0.3 million, depreciation expense of $0.3 million related to adjustments to carrying amounts on acquisition and an income tax expense of $0.2 million. KPT 2023 Financial Results KPT had a net loss of $4.9 million in Fiscal 2023. Included in the net loss was $0.7 million representing KPT’s share of Kruger Products’ net loss, a dilution gain of $1.1 million, depreciation expense of $1.2 million related to adjustments to carrying amounts on acquisition and an income tax expense of $4.1 million. Dividends on Common Shares The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on April 15, 2024 to shareholders of record at the close of business on April 1, 2024. |
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