|By PR Newswire||
|November 13, 2012 09:25 PM EST||
RICHMOND, BC, Nov. 13, 2012 /PRNewswire/ - A significant one-time credit arising from reorganization gains and "fresh-start accounting" valuation adjustments resulted in third quarter net earnings of $655.7 million for Catalyst Paper. The company emerged from creditor protection on September 13, 2012 with significant debt and cost-structure improvements.
Net earnings this quarter contrast with a net loss of $11.7 million the quarter before. Sales were essentially unchanged at $265.7 million. The net after-tax restructuring-related credit was $688.1 million. An after-tax foreign exchange gain on translation of U.S. dollar denominated debt of $25.2 million further supported Q3 earnings.
Before these and other specific items, Catalyst posted a net loss for the third quarter of $48.7 million, compared to a net loss of $5.0 million in the prior quarter. Earnings before interest, tax, depreciation and amortization (EBITDA) in the third quarter were $13.8 million and EBITDA before restructuring costs was $14.0 million, compared with EBITDA of $17.0 million and EBITDA before restructuring costs of $16.9 million in the second quarter.
"The third quarter marked a turning point for Catalyst as we exited creditor protection with a stronger balance sheet, lower interest costs and lower annual operating costs going forward," said President and CEO Kevin J. Clarke. "This puts us on stronger operational footing to address ongoing market dynamics. And it means Catalyst can now take a much more active role in the transformation of the industry as a whole."
Creditor Protection and Restructuring Process
After filing for creditor protection on January 31, 2012, Catalyst secured 99% approval from voting creditors for its second amended plan of arrangement under the CCAA on June 25, 2012. The plan subsequently received court sanction in British Columbia and was confirmed by the US Court in Delaware. A new asset-based loan (ABL) facility was in place on September 13, 2012, meeting the final pre-condition for implementation of the plan.
Previous secured note holders received shares and US $250 million of new senior secured notes due 2017 in exchange for their US$390 million of secured notes due 2016. In addition, we issued US$35 million of new exit notes under a secured exit financing facility on September 13, 2012, to pay restructuring costs and expenses and to manage other contingencies on exit from CCAA protection.
The restructuring has reduced Catalyst's debt by $390 million, eliminated $80 million of accrued interest, and reduced annual interest expense and other cash costs by $70 million.
Catalyst's operations are continuing in substantially the same form, and a new board of directors took office upon exit from CCAA. Previous secured note holders now own all of the 14.4 million new common shares that are presently issued and outstanding. An addition of approximately 135,000 common shares will be issued to unsecured creditors who made an equity election in respect of their claims under the plan. Additional shares may be issued under a new management incentive plan that may be adopted in future. An application has been submitted to the Toronto Stock Exchange for a public listing of the new common shares.
Fresh start accounting has been applied as of September 30, 2012, in accordance with U.S. Generally Accepted Accounting Principles. This involved use of independent financial advice to determine an enterprise value for the company and the fair value of Catalyst's assets and liabilities.
The previously announced permanent closure of the Snowflake mill in Arizona, which primarily manufactured recycled newsprint, was implemented on September 30, 2012. This will stem operating losses and reduce annualized selling, general and administrative expenses. A court-approved sales process for the mill and associated assets was announced on September 17, 2012.
The closure is expected to result in one-time cost of approximately $10 million ($8.7 million of which had been paid or accrued by quarter-end) and ongoing costs of approximately $0.6 million per month until disposition. These costs are expected to be largely recouped by sales proceeds.
Performance and Market Overview
Operating earnings of $5.9 million were up from the same quarter last year and on a year-to-date basis but lagged Q2 operating earnings of $9.3 million. They were negatively impacted by reduced pulp transaction prices, a stronger Canadian dollar, increased power costs, and a pulp inventory write-down. Offsetting factors included higher overall sales volumes, lower maintenance costs and lower labour costs - the final factor being an outcome of new collective agreements reached during the restructuring.
North American demand was down year-over-year across specialty paper product lines - most notably by 18.0% for uncoated grades and by 15.4% for directory. Benchmark prices were up moderately for coated grades from the second quarter, but unchanged for other specialty products. Sales volumes decreased while average sales revenue remained flat year-over-year.
North American newsprint demand saw a marginal 1.4% year-over-year increase, although the average benchmark price dropped from the second quarter due to marketplace inventory buildup. Sales volumes increased while average sales revenue was down year-over-year.
Markets for Northern Bleached Softwood Kraft pulp remained weak as a result of end-user inventory in China, and the benchmark price for that market dropped by 8.7% from the second quarter. There were year-over-year declines in both sales volumes and average sales revenue.
Quarter-end liquidity of $96.8 million was down from $125.9 million a year prior, but up from $71.8 million at the end of the second quarter due to a larger borrowing base under the new ABL facility. Cash on hand was down mainly due to payment of success fees of $6.9 million on emergence from creditor protection and debt issuance costs of $9.3 million.
(In millions of Canadian dollars, except where
|Operating earnings (loss) 2||24.8||5.9||9.3||9.6||(17.6)||5.5||(17.4)||(5.7)|
|Depreciation and amortization 2||23.4||7.9||7.7||7.8||74.6||25.5||24.7||24.4|
|EBITDA 1, 2||48.2||13.8||17.0||17.4||55.9||30.2||7.0||18.7|
|- before restructuring costs 1, 2||53.5||14.0||16.9||22.6||55.9||30.2||7.0||18.7|
|Net earnings (loss) attributable to the company||618.4||655.7||(11.7)||(25.6)||(266.0)||(205.7)||(47.4)||(12.9)|
|- before specific items 1||(63.3)||(48.7)||(5.0)||(9.6)||(84.6)||(14.1)||(46.9)||(23.6)|
|EBITDA margin 1, 2||6.0%||5.2%||6.4%||6.5%||6.9%||10.3%||2.7%||7.3%|
|- before restructuring costs 1, 2||6.7%||5.3%||6.4%||8.5%||6.9%||10.3%||2.7%||7.3%|
Net earnings (loss) per share attributable
to the company's common shareholders
(in dollars) 3
|- basic and diluted from continuing operations||$||1.63||$||1.73||$||(0.03)||$||(0.07)||$||(0.22)||$||(0.12)||$||(0.08)||$||(0.02)|
|- basic and diluted from discontinued operations||(0.01)||(0.01)||-||-||(0.47)||(0.41)||(0.05)||(0.01)|
|- before specific items 1||(0.17)||(0.13)||(0.01)||(0.03)||(0.22)||(0.04)||(0.12)||(0.06)|
|1||Refer to section 7, Non-GAAP measures.|
|2||Numbers exclude the Snowflake mill's results from operations which have been reclassified as discontinued operations; losses from discontinued operations, net of tax, are shown separately from continuing operations in the consolidated statements of earnings (loss) (see the consolidated statements of earnings (loss) in the interim consolidated financial statements for the three and nine months ended September 30, 2012).|
|3||Earnings per share are based on weighted average common shares of 381,900,450. These shares were cancelled on September 13, 2012 and new common shares were issued to the holders of the new 2017 Notes. At September 30, 2012 14,400,000 common shares were outstanding.|
The U.S. economic recovery in the first half of 2012 moderated somewhat though employment data, housing and financial markets held steady. The Canadian dollar remains near par and currency volatility is expected to ease somewhat through year-end and early 2013.
Specialty printing paper markets will be positively affected by seasonally strong demand in the fourth quarter. Producer and consumer inventories are relatively low with good industry operating rates for most specialty grades, especially coated and high gloss. Price increases for coated grades announced for October 1st are expected to be partially implemented though the Port Hawkesbury mill restart will make seasonally slow specialty markets even more challenging in the first quarter of 2013.
Newsprint demand is expected to decline modestly through the remainder of the year and exports are likely to remain sluggish. However, the Snowflake mill closure has tightened operating rates in the West and prices are expected to increase marginally in our freight-logical markets while remaining flat in Eastern markets.
Demand for NBSK pulp is expected to increase slightly in the fourth quarter driven primarily by China. Prices are expected to recover from the lows they reached in the third quarter. Further price appreciation is dependent on global demand and supply dynamics and growth in Chinese consumption.
On the operations side, price pressure is expected to ease on fibre and some chemicals. Maintenance costs are expected to increase with two boiler outages and a scheduled 12-day outage on one of our pulp lines and recovery boilers. Crofton # 1 paper machine will continue to be indefinitely curtailed for the foreseeable future.
Capital spending in 2012 is forecasted to be approximately $25 million, and energy efficiency projects funded through the Federal Green Transformation Program are complete and on track to deliver EBITDA in excess of $5.0 million in 2012.
Further Quarterly Results Materials
This release, along with the full quarterly report (Management Discussion &Analysis, Financial Statements and accompanying notes) are available at www.catalystpaper.com/Investors. This material is also filed with SEDAR in Canada and EDGAR in the United States.
Kevin J. Clarke, president and CEO, and Brian Baarda, vice-president finance and CFO, will hold a conference call on Wednesday November 14, 2012, at 11 a.m. ET, 8 a.m. PT to present the company's third quarter results. Financial analysts and institutional investors are invited to dial 1-888-231-8191 (North America) or 1-647-427-7450 (Toronto / International) reservation number 56717173#. Media and other interested people may join the live webcast in listen-only mode at www.catalystpaper.com
Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.
Certain matters in this news release, including statements with respect to general economic and market conditions, demand for products, pricing expectations, anticipated cost savings and capital expenditures, are forward looking. These forward-looking statements reflect management's current views and are based on certain assumptions including assumptions as to future economic conditions, demand for products, levels of advertising, product pricing, ability to achieve operating and labour cost reductions, currency fluctuations, production flexibility and related courses of action, as well as other factors management believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including those risks and uncertainties identified under the heading "Risks and Uncertainties" in Catalyst's management's discussion and analysis contained in Catalyst's third quarter interim report and the annual report for the year ended December 31, 2011, available on the company's website at www.catalystpaper.com/investors and at www.sedar.com.
SOURCE Catalyst Paper Corporation
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
May. 26, 2016 08:15 AM EDT Reads: 2,392
Join us at Cloud Expo | @ThingsExpo 2016 – June 7-9 at the Javits Center in New York City and November 1-3 at the Santa Clara Convention Center in Santa Clara, CA – and deliver your unique message in a way that is striking and unforgettable by taking advantage of SYS-CON's unmatched high-impact, result-driven event / media packages.
May. 26, 2016 08:15 AM EDT Reads: 2,085
SYS-CON Events announced today that BMC Software has been named "Siver Sponsor" of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. BMC is a global leader in innovative software solutions that help businesses transform into digital enterprises for the ultimate competitive advantage. BMC Digital Enterprise Management is a set of innovative IT solutions designed to make digital business fast, seamless, and optimized from mainframe to mo...
May. 26, 2016 08:00 AM EDT Reads: 1,927
The IoTs will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, will demonstrate how to move beyond today's coding paradigm and share the must-have mindsets for removing complexity from the development proc...
May. 26, 2016 07:45 AM EDT Reads: 1,832
18th Cloud Expo, taking place June 7-9, 2016, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy. Meanwhile, 94% of enterprises are using some...
May. 26, 2016 07:45 AM EDT Reads: 2,906
SoftLayer operates a global cloud infrastructure platform built for Internet scale. With a global footprint of data centers and network points of presence, SoftLayer provides infrastructure as a service to leading-edge customers ranging from Web startups to global enterprises. SoftLayer's modular architecture, full-featured API, and sophisticated automation provide unparalleled performance and control. Its flexible unified platform seamlessly spans physical and virtual devices linked via a world...
May. 26, 2016 07:45 AM EDT Reads: 1,853
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, will provide an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life ...
May. 26, 2016 07:30 AM EDT Reads: 1,815
SYS-CON Events announced today that Tintri Inc., a leading producer of VM-aware storage (VAS) for virtualization and cloud environments, will exhibit at the 18th International CloudExpo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, New York, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
May. 26, 2016 07:15 AM EDT Reads: 2,150
Designing IoT applications is complex, but deploying them in a scalable fashion is even more complex. A scalable, API first IaaS cloud is a good start, but in order to understand the various components specific to deploying IoT applications, one needs to understand the architecture of these applications and figure out how to scale these components independently. In his session at @ThingsExpo, Nara Rajagopalan is CEO of Accelerite, will discuss the fundamental architecture of IoT applications, ...
May. 26, 2016 06:45 AM EDT Reads: 1,023
The IoT is changing the way enterprises conduct business. In his session at @ThingsExpo, Eric Hoffman, Vice President at EastBanc Technologies, discuss how businesses can gain an edge over competitors by empowering consumers to take control through IoT. We'll cite examples such as a Washington, D.C.-based sports club that leveraged IoT and the cloud to develop a comprehensive booking system. He'll also highlight how IoT can revitalize and restore outdated business models, making them profitable...
May. 26, 2016 06:30 AM EDT Reads: 2,658
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
May. 26, 2016 06:30 AM EDT Reads: 2,833
Companies can harness IoT and predictive analytics to sustain business continuity; predict and manage site performance during emergencies; minimize expensive reactive maintenance; and forecast equipment and maintenance budgets and expenditures. Providing cost-effective, uninterrupted service is challenging, particularly for organizations with geographically dispersed operations.
May. 26, 2016 06:15 AM EDT Reads: 1,703
SYS-CON Events announced today Object Management Group® has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA.
May. 26, 2016 06:15 AM EDT Reads: 2,283
SYS-CON Events announced today that Alert Logic, Inc., the leading provider of Security-as-a-Service solutions for the cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Alert Logic, Inc., provides Security-as-a-Service for on-premises, cloud, and hybrid infrastructures, delivering deep security insight and continuous protection for customers at a lower cost than traditional security solutions. Ful...
May. 26, 2016 05:45 AM EDT Reads: 2,651
SYS-CON Events announced today that MobiDev will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MobiDev is a software company that develops and delivers turn-key mobile apps, websites, web services, and complex software systems for startups and enterprises. Since 2009 it has grown from a small group of passionate engineers and business managers to a full-scale mobile software company with over 200 develope...
May. 26, 2016 05:15 AM EDT Reads: 2,416
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, will discuss the importance of WebRTC and how it enables companies to fo...
May. 26, 2016 05:00 AM EDT Reads: 2,464
SYS-CON Events announced today that EastBanc Technologies will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. EastBanc Technologies has been working at the frontier of technology since 1999. Today, the firm provides full-lifecycle software development delivering flexible technology solutions that seamlessly integrate with existing systems – whether on premise or cloud. EastBanc Technologies partners with p...
May. 26, 2016 05:00 AM EDT Reads: 1,996
SYS-CON Events announced today TechTarget has been named “Media Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. TechTarget is the Web’s leading destination for serious technology buyers researching and making enterprise technology decisions. Its extensive global networ...
May. 26, 2016 04:30 AM EDT Reads: 3,086
SYS-CON Events announced today BZ Media LLC has been named “Media Sponsor” of SYS-CON's 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. BZ Media LLC is a high-tech media company that produces technical conferences and expositions, and publishes a magazine, newsletters and websites in the software development, SharePoint, mobile development and Commercial Drone markets.
May. 26, 2016 03:00 AM EDT Reads: 3,457
SYS-CON Events announced today that MangoApps will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. MangoApps provides modern company intranets and team collaboration software, allowing workers to stay connected and productive from anywhere in the world and from any device. For more information, please visit https://www.mangoapps.com/.
May. 26, 2016 12:45 AM EDT Reads: 593