KPLP Q2 2020 Business and Financial Highlights
- Revenue increased by
$21.1 million or 5.8% to$386.8 million in Q2 2020 compared to$365.7 million in Q2 2019. Excluding the divestedMexico business, Q2 2020 revenue increased by$46.5 million or 13.7%. - Adjusted EBITDA was
$64.4 million in Q2 2020 compared to$31.5 million in Q2 2019, an increase of 104.6%. - TAD
Sherbrooke site progressing on time and on budget despite the temporary shutdown in Q1 2020 due to the implementation of strict COVID-19 protocols. - Declared a quarterly dividend of
$0.18 per share to be paid onOctober 15, 2020 .
“Our robust second quarter results were driven by a consistent increased demand in our Consumer segment and strong operational performance. We continued to benefit from the trust in our brands, leading to market share gains that began at the end of last year. We also gained new listings and new customers, and saw good growth and increased distribution in our
“Adjusted EBITDA performance was exceptional with growth of over 100% to
“Despite a temporary halt to construction as we implemented COVID-19 procedures, we are pleased to report that TAD
“In addition to robust quarterly performance, we continue to reinvest in our brands and business in order to build an even stronger future. Lastly, I would like to thank the entire Kruger Products team for working safe while driving strong performance during COVID-19,” concluded
Outlook
Demand for our products is expected to remain strong but at a diminishing growth rate in the Consumer segment and weaker in the Away-From-Home segment, with input costs expected to remain unchanged. As COVID-19 continues to evolve, there are many opportunities and uncertainties in the market. Given this, we are providing a wide range for Q3 2020 Adjusted EBITDA that is above Q3 2019 and below Q2 2020.
KPLP Q2 2020 Financial Results
Revenue was
Cost of sales was
Selling, general and administrative (SG&A) expenses were
Adjusted EBITDA was
Net income was
KPLP Q2 2020 Financing Activity
Total liquidity, representing cash and availability under the Senior Credit Facility within covenant limitations, was
KPT Q2 2020 Financial Results
KPT had a net loss of
Dividends on Common Shares
The Board of Directors of KPT declared a quarterly dividend of
Additional Information
For additional information please refer to Management’s Discussion and Analysis (MD&A) of KPT and KPLP for the second quarter ended
Second Quarter Results Conference Call Information
KPT will hold its second quarter conference call on
Via telephone: 1-877-223-4471 or 647-788-4922
Via the internet at: www.kptissueinc.com
Presentation material referenced during the conference call will be available at www.kptissueinc.com.
A rebroadcast of the conference call will be available until midnight,
The replay of the webcast will remain available on the website until midnight,
About
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 14.8% interest in KPLP. For more information visit www.kptissueinc.com.
About
KPLP is
Non-IFRS Measures
This press release uses certain non-IFRS financial measures which KPLP believes provide useful information to management of KPLP and the readers of the financial information in measuring the financial performance and financial condition of KPLP. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other companies. An example of such a measure is Adjusted EBITDA. Beginning with Q4 2015 in accordance with Canadian Securities Administrators Staff Notice 52-306 (Revised), we have referenced Adjusted EBITDA as a non-IFRS financial measure. This term replaces the previously referenced non-IFRS financial measure EBITDA. Adjusted EBITDA is not a measurement of operating performance computed in accordance with IFRS and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with IFRS. “Adjusted EBITDA” is calculated by KPLP as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) impairment (gain on sale) of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) foreign exchange loss (gain), (viii) costs related to restructuring activities, (ix) changes in amortized cost of Partnership units liability, (x) change in fair value of derivatives, (xi) consulting costs related to operational transformation initiatives, (xii) corporate development related costs and (xiii) loss (gain) on sale of shares. A reconciliation of Adjusted EBITDA to the relevant reported results can be found in the MD&A of KPT and KPLP for the year ended
COVID-19
In
Forward-Looking Statements
Certain statements in this press release about KPT’s and KPLP's current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding the projected capacity of the
The outlook provided in respect of Adjusted EBITDA for Q3 2020 is forward-looking information and is subject to the risk and uncertainties referred to below. The purpose of the outlook is to provide the reader with an indication of management’s expectations, at the date of this press release, regarding KPLP’s future financial performance. Readers are cautioned that this information may not be appropriate for other purposes.
Many factors could cause KPLP’s actual results, level of activity, performance or achievements or future events or developments (which could in turn affect the economic benefits derived from KPT’s economic interest in KPLP), to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the “Risk Factors – Risks Related to KPLP’s Business” section of the KPT Annual Information Form dated
Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release and KPT undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.
INFORMATION:
General Counsel and Corporate Secretary
Tel.: 905.812.6936
francois.paroyan@krugerproducts.ca
INVESTORS:
Director of Investor Relations
Tel.: 905.812.6962
IR@KPTissueinc.com
Unaudited Condensed Consolidated Statement of Financial Position | ||||||
(thousands of Canadian dollars) | ||||||
$ | $ | |||||
Assets | ||||||
Current assets | ||||||
Cash and cash equivalents | 144,188 | 93,141 | ||||
Trade and other receivables | 89,431 | 89,236 | ||||
Receivables from related parties | 16 | 59 | ||||
Current portion of advances to partners | 2,323 | 80 | ||||
Inventories | 193,214 | 190,686 | ||||
Income tax recoverable | - | 466 | ||||
Prepaid expenses | 15,273 | 8,341 | ||||
444,445 | 382,009 | |||||
Non-current assets | ||||||
Property, plant and equipment | 1,063,825 | 935,010 | ||||
Right-of-use assets | 92,402 | 97,582 | ||||
Other long-term assets | 10 | 1,766 | ||||
160,939 | 160,939 | |||||
Intangible assets | 16,137 | 15,317 | ||||
Deferred income taxes | 24,750 | 30,988 | ||||
Total assets | 1,802,508 | 1,623,611 | ||||
Liabilities | ||||||
Current liabilities | ||||||
Trade and other payables | 254,773 | 242,357 | ||||
Payables to related parties | 10,178 | 6,809 | ||||
Income tax payable | 1,242 | 325 | ||||
Distributions payable | 11,760 | 11,393 | ||||
Current portion of provisions | 3,509 | 759 | ||||
Current portion of long-term debt | 4,937 | 11,937 | ||||
Current portion of lease liabilities | 19,796 | 18,080 | ||||
306,195 | 291,660 | |||||
Non-current liabilities | ||||||
Long-term debt | 700,388 | 579,125 | ||||
Lease liabilities | 93,987 | 100,682 | ||||
Provisions | 5,196 | 6,148 | ||||
Pensions | 179,153 | 140,674 | ||||
Post-retirement benefits | 61,021 | 57,005 | ||||
Liabilities to non-unitholders | 1,345,940 | 1,175,294 | ||||
Current portion of Partnership units liability | 12,599 | 5,103 | ||||
Long-term portion of Partnership units liability | 130,853 | 138,412 | ||||
143,452 | 143,515 | |||||
Total liabilities | 1,489,392 | 1,318,809 | ||||
Equity | ||||||
Partnership units | 428,936 | 408,978 | ||||
Deficit | (209,059 | ) | (183,188 | ) | ||
Accumulated other comprehensive income | 93,239 | 79,012 | ||||
Total equity | 313,116 | 304,802 | ||||
Total equity and liabilities | 1,802,508 | 1,623,611 | ||||
Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) | |||||||||||
(thousands of Canadian dollars) | |||||||||||
3-month period ended | 3-month period ended | 6-month period ended | 6-month period ended | ||||||||
$ | $ | $ | $ | ||||||||
Revenue | 386,763 | 365,674 | 761,909 | 716,651 | |||||||
Expenses | |||||||||||
Cost of sales | 310,009 | 325,723 | 624,522 | 645,831 | |||||||
Selling, general and administrative expenses | 30,492 | 25,370 | 60,126 | 47,426 | |||||||
Loss on sale of non-financial assets | - | 6 | 1 | 6 | |||||||
Restructuring costs, net | 483 | 232 | 1,221 | 297 | |||||||
Operating income | 45,779 | 14,343 | 76,039 | 23,091 | |||||||
Interest expense | 11,333 | 11,433 | 21,913 | 22,730 | |||||||
Other (income) expense | (3,269 | ) | 864 | 8,152 | 1,713 | ||||||
Income (loss) before income taxes | 37,715 | 2,046 | 45,974 | (1,352 | ) | ||||||
Income taxes | 8,811 | 1,114 | 8,682 | 928 | |||||||
Net income (loss) for the period | 28,904 | 932 | 37,292 | (2,280 | ) | ||||||
Other comprehensive income (loss) | |||||||||||
Items that will not be reclassified to net income (loss): | |||||||||||
Remeasurements of pensions | (103,032 | ) | (52,439 | ) | (36,655 | ) | (50,412 | ) | |||
Remeasurements of post-retirement benefits | (9,896 | ) | (4,201 | ) | (3,388 | ) | (6,331 | ) | |||
Items that may be subsequently reclassified to net income (loss): | |||||||||||
Cumulative translation adjustment | (12,480 | ) | (6,123 | ) | 14,227 | (12,513 | ) | ||||
Total other comprehensive loss for the period | (125,408 | ) | (62,763 | ) | (25,816 | ) | (69,256 | ) | |||
Comprehensive income (loss) for the period | (96,504 | ) | (61,831 | ) | 11,476 | (71,536 | ) | ||||
Unaudited Condensed Consolidated Statement of Cash Flows | |||||||||||
(thousands of Canadian dollars) | |||||||||||
3-month period ended | 3-month period ended | 6-month period ended | 6-month period ended | ||||||||
$ | $ | $ | $ | ||||||||
Cash flows from (used in) operating activities | |||||||||||
Net income (loss) for the period | 28,904 | 932 | 37,292 | (2,280 | ) | ||||||
Items not affecting cash | |||||||||||
Depreciation | 16,515 | 14,516 | 32,960 | 28,896 | |||||||
Amortization | 399 | 370 | 773 | 732 | |||||||
(Gain) loss on sale of property, plant and equipment | 49 | - | 49 | (5 | ) | ||||||
Change in amortized cost of Partnership units liability | 2,520 | 1,547 | 5,040 | 3,094 | |||||||
Foreign exchange (gain) loss | (5,789 | ) | (960 | ) | 3,472 | (1,658 | ) | ||||
Change in fair value of derivatives | - | 277 | (360 | ) | 277 | ||||||
Interest expense | 11,333 | 11,433 | 21,913 | 22,730 | |||||||
Pension and post-retirement benefits | 3,694 | 2,756 | 7,474 | 5,201 | |||||||
Provisions | 1,844 | 503 | 3,599 | 673 | |||||||
Income taxes | 8,811 | 1,114 | 8,682 | 928 | |||||||
Loss on sale of non-financial assets | - | 6 | 1 | 6 | |||||||
Total items not affecting cash | 39,376 | 31,562 | 83,603 | 60,874 | |||||||
Net change in non-cash working capital | 47,540 | 7,819 | 26,035 | (44,806 | ) | ||||||
Contributions to pension and post-retirement benefit plans | (3,853 | ) | (4,041 | ) | (7,938 | ) | (7,153 | ) | |||
Provisions paid | (1,663 | ) | (407 | ) | (1,871 | ) | (472 | ) | |||
Income tax payments | (13 | ) | (1,338 | ) | (13 | ) | (1,597 | ) | |||
Net cash from operating activities | 110,291 | 34,527 | 137,108 | 4,566 | |||||||
Cash flows from (used in) investing activities | |||||||||||
Purchases of property, plant and equipment | (3,405 | ) | (6,759 | ) | (7,451 | ) | (12,280 | ) | |||
Purchases of property, plant and equipment related to the | (67,320 | ) | (31,092 | ) | (132,013 | ) | (42,208 | ) | |||
Interest paid on credit facilities related to the | (2,054 | ) | (769 | ) | (4,204 | ) | (1,453 | ) | |||
Purchases of software | (548 | ) | (116 | ) | (1,593 | ) | (1,334 | ) | |||
Proceeds on sale of shares | - | - | 992 | - | |||||||
Proceeds on sale of property, plant and equipment | - | - | - | 5 | |||||||
Net cash used in investing activities | (73,327 | ) | (38,736 | ) | (144,269 | ) | (57,270 | ) | |||
Cash flows from (used in) financing activities | |||||||||||
Proceeds from long-term debt | 26,754 | 10,411 | 132,327 | 35,188 | |||||||
Repayment of long-term debt | (32,434 | ) | (6,032 | ) | (33,701 | ) | (7,286 | ) | |||
Payment of deferred financing fees | (488 | ) | (67 | ) | (493 | ) | (353 | ) | |||
Payment of lease liabilities | (5,426 | ) | (4,041 | ) | (9,917 | ) | (8,266 | ) | |||
Interest paid on long-term debt | (19,702 | ) | (11,359 | ) | (21,622 | ) | (13,947 | ) | |||
Distributions and advances paid, net | (3,724 | ) | (3,574 | ) | (10,221 | ) | (5,544 | ) | |||
Net cash from (used in) financing activities | (35,020 | ) | (14,662 | ) | 56,373 | (208 | ) | ||||
Effect of exchange rate changes on cash and cash | |||||||||||
equivalents held in foreign currency | (2,395 | ) | (699 | ) | 1,835 | (1,537 | ) | ||||
Increase (decrease) in cash and cash equivalents during the period | (451 | ) | (19,570 | ) | 51,047 | (54,449 | ) | ||||
Cash and cash equivalents - Beginning of period | 144,639 | 135,005 | 93,141 | 169,884 | |||||||
Cash and cash equivalents - End of period | 144,188 | 115,435 | 144,188 | 115,435 | |||||||
Segment and Geographic Results | |||||||||||
(thousands of Canadian dollars) | |||||||||||
3-month period ended | 3-month period ended | 6-month period ended | 6-month period ended | ||||||||
$ | $ | $ | $ | ||||||||
Segment Information | |||||||||||
Segment Revenue | |||||||||||
Consumer | 338,242 | 299,663 | 651,531 | 595,848 | |||||||
AFH | 48,521 | 66,011 | 110,378 | 120,803 | |||||||
Total segment revenue | 386,763 | 365,674 | 761,909 | 716,651 | |||||||
Adjusted EBITDA | |||||||||||
Consumer | 69,580 | 35,354 | 123,929 | 65,446 | |||||||
AFH | (2,145 | ) | (3,045 | ) | (3,166 | ) | (9,629 | ) | |||
Corporate and other costs | (3,012 | ) | (820 | ) | (5,389 | ) | (778 | ) | |||
Total Adjusted EBITDA | 64,423 | 31,489 | 115,374 | 55,039 | |||||||
Reconciliation to Net Income (Loss): | |||||||||||
Depreciation and amortization | 16,914 | 14,886 | 33,733 | 29,628 | |||||||
Interest expense | 11,333 | 11,433 | 21,913 | 22,730 | |||||||
Change in amortized cost of Partnership units liability | 2,520 | 1,547 | 5,040 | 3,094 | |||||||
Change in fair value of derivatives | - | 277 | (360 | ) | 277 | ||||||
(Gain) loss on sale of property, plant and equipment | 49 | - | 49 | (5 | ) | ||||||
Loss on sale of non-financial assets | - | 6 | 1 | 6 | |||||||
Restructuring costs, net | 483 | 232 | 1,221 | 297 | |||||||
Foreign exchange (gain) loss | (5,789 | ) | (960 | ) | 3,472 | (1,658 | ) | ||||
Consulting costs | |||||||||||
related to operational transformation initiatives | 1,198 | 1,283 | 4,331 | 1,283 | |||||||
Corporate development related costs | - | 739 | - | 739 | |||||||
Income (loss) before income taxes | 37,715 | 2,046 | 45,974 | (1,352 | ) | ||||||
Income taxes | 8,811 | 1,114 | 8,682 | 928 | |||||||
Net income (loss) | 28,904 | 932 | 37,292 | (2,280 | ) | ||||||
Geographic Revenue | |||||||||||
218,438 | 208,163 | 448,533 | 405,579 | ||||||||
US | 168,325 | 132,063 | 313,376 | 259,576 | |||||||
- | 25,448 | - | 51,496 | ||||||||
Total revenue | 386,763 | 365,674 | 761,909 | 716,651 | |||||||
Unaudited Condensed Statement of Financial Position | |||||
(thousands of Canadian dollars) | |||||
$ | $ | ||||
Assets | |||||
Current assets | |||||
Distributions receivable | 1,745 | 1,733 | |||
Receivable from Partnership | 73 | 247 | |||
1,818 | 1,980 | ||||
Non-current assets | |||||
Investment in associate | 77,176 | 81,052 | |||
Total Assets | 78,994 | 83,032 | |||
Liabilities | |||||
Current liabilities | |||||
Dividend payable | 1,745 | 1,733 | |||
Current portion of advances from Partnership | 360 | 80 | |||
Income tax payable | 1,281 | 944 | |||
3,386 | 2,757 | ||||
Non-current liabilities | |||||
Deferred income taxes | 1,551 | 3,158 | |||
Total liabilities | 4,937 | 5,915 | |||
Equity | |||||
Common shares | 19,669 | 18,997 | |||
Contributed surplus | 144,819 | 144,819 | |||
Deficit | (106,559 | ) | (100,696 | ) | |
Accumulated other comprehensive income | 16,128 | 13,997 | |||
Total equity | 74,057 | 77,117 | |||
Total liabilities and equity | 78,994 | 83,032 | |||
Unaudited Condensed Statement of Comprehensive Loss | |||||||||||
(thousands of Canadian dollars, except share and per share amounts) | |||||||||||
3-month period ended | 3-month period ended | 6-month period ended | 6-month period ended | ||||||||
$ | $ | $ | $ | ||||||||
Equity income (loss) | 2,925 | (1,288 | ) | 2,800 | (3,237 | ) | |||||
Dilution gain | 231 | 142 | 451 | 231 | |||||||
Income (loss) before income taxes | 3,156 | (1,146 | ) | 3,251 | (3,006 | ) | |||||
Income taxes | 3,279 | 1,437 | 1,673 | 1,529 | |||||||
Net income (loss) for the period | (123 | ) | (2,583 | ) | 1,578 | (4,535 | ) | ||||
Other comprehensive income (loss) | |||||||||||
net of tax expense (recovery) | |||||||||||
Items that will not be reclassified to net income (loss): | |||||||||||
Remeasurements of pensions | (12,347 | ) | (6,827 | ) | (3,655 | ) | (6,550 | ) | |||
Remeasurements of post-retirement benefits | (906 | ) | (390 | ) | (309 | ) | (586 | ) | |||
Items that may be subsequently reclassified to net income (loss): | |||||||||||
Cumulative translation adjustment | (1,950 | ) | (1,012 | ) | 2,131 | (2,112 | ) | ||||
Total other comprehensive loss for the period | (15,203 | ) | (8,229 | ) | (1,833 | ) | (9,248 | ) | |||
Comprehensive loss for the period | (15,326 | ) | (10,812 | ) | (255 | ) | (13,783 | ) | |||
Basic earnings (loss) per share | (0.01 | ) | (0.27 | ) | 0.16 | (0.48 | ) | ||||
Weighted average number of shares outstanding | 9,689,578 | 9,515,910 | 9,672,481 | 9,490,276 | |||||||
Unaudited Condensed Statement of Cash Flows | |||||||||||
(thousands of Canadian dollars) | |||||||||||
3-month period ended | 3-month period ended | 6-month period ended | 6-month period ended | ||||||||
$ | $ | $ | $ | ||||||||
Cash flows from (used in) operating activities | |||||||||||
Net income (loss) for the period | (123 | ) | (2,583 | ) | 1,578 | (4,535 | ) | ||||
Items not affecting cash | |||||||||||
Equity (income) loss | (2,925 | ) | 1,288 | (2,800 | ) | 3,237 | |||||
Dilution gain | (231 | ) | (142 | ) | (451 | ) | (231 | ) | |||
Income taxes | 3,279 | 1,437 | 1,673 | 1,529 | |||||||
Total items not affecting cash | 123 | 2,583 | (1,578 | ) | 4,535 | ||||||
Net change in non-cash working capital | 1 | - | 94 | - | |||||||
Tax payments | (361 | ) | - | (1,235 | ) | - | |||||
Tax Distribution | - | - | 781 | - | |||||||
Advances received | 360 | - | 360 | - | |||||||
Net cash from (used in) operating activities | - | - | - | - | |||||||
Cash flows from investing activites | |||||||||||
Partnership unit distributions received | 1,400 | 1,279 | 2,793 | 2,427 | |||||||
Net cash from investing activities | 1,400 | 1,279 | 2,793 | 2,427 | |||||||
Cash flows used in financing activities | |||||||||||
Dividends paid | (1,400 | ) | (1,279 | ) | (2,793 | ) | (2,427 | ) | |||
Net cash used in financing activities | (1,400 | ) | (1,279 | ) | (2,793 | ) | (2,427 | ) | |||
Increase (decrease) in cash and cash equivalents during the period | - | - | - | - | |||||||
Cash and cash equivalents - Beginning of period | - | - | - | - | |||||||
Cash and cash equivalents - End of period | - | - | - | - | |||||||
Source:
2020 GlobeNewswire, Inc., source