RE: Q3 ResultFortress Paper earns $5.14-million in Q3 2010
Ticker Symbol: C:FTP
Fortress Paper earns $5.14-million in Q3 2010
Fortress Paper Ltd (C:FTP)
Shares Issued 12,595,080
Last Close 11/8/2010 $46.22
Monday November 08 2010 - News Release
Mr. Chadwick Wasilenkoff reports
FORTRESS PAPER ANNOUNCES RECORD THIRD QUARTER 2010 RESULTS
Fortress Paper Ltd.'s reported adjusted net income was $3.9-million for the third quarter of 2010 on sales of $87.0 million. In the third quarter of 2009 the Company reported adjusted net income of $3.8 million on sales of $51.0 million. For the second quarter of 2010, the Company reported adjusted net income of $4.3 million on sales of $60.5 million.
Reported EBITDA for the Company was $8.9 million for the third quarter of 2010, an improvement compared to $8.1 million in the second quarter of 2010 and $7.0 million in the third quarter of 2009. Pulp prices retreated from their peaks during the quarter which reduced the contribution from our Fortress Specialty Cellulose mill, but aided our Dresden mill results. The Landqart mill is undergoing a significant conversion of its PM1. The PM1 is being rebuilt from a specialty paper machine into an efficient bank note paper machine. In addition, the mill encountered an unforeseen disruption from a bank note customer which has delayed higher margin security paper orders. This delay was not the result of any Landqart actions.
The Company's third quarter record EBITDA was the result of significant contribution from the recently acquired Fortress Specialty Cellulose mill and the continued strong performance from the Dresden mill.
For the nine months ended September 30, 2010, Fortress Paper recorded adjusted net income of $11.1 million or $1.03 per share (
.94 per share diluted) on sales of $197.8 million. For the nine months ended September 30, 2009, the Company recorded adjusted net income of $9.1 million or
.88 per share (diluted and non-diluted) on sales of $147.3 million.
Reported EBITDA for the Company was $22.8 million for the nine months ended September 30, 2010, an improvement compared to $17.7 million in the nine months ended September 30, 2009. The EBITDA improvement is primarily due to the contributions of the Fortress Specialty Cellulose mill.
EBITDA is defined as net income before interest, income taxes, depreciation, amortization, non-operating income and expenses and stock based compensation which the Company considers to be a key performance indicator. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to earnings or cash flows as determined in accordance with Canadian generally accepted accounting principles. As there is no standardized method of calculating EBITDA, the Company's use for the term may not be comparable with similarly titled measures used by other companies.
The third quarter of 2010 has been a very busy time for the Company with significant progress being made on several fronts. At Landqart, the rebuilding of PM1 into a banknote machine is on track. At this point, Landqart is on schedule for a January 2011 start. The Company anticipates a challenging fourth quarter from Landqart during the period in which the PM1 is rebuilt. At the Dresden mill, operations continue to run very smoothly. At the Fortress Specialty Cellulose mill, the conversion is on track and we still anticipate a shift to dissolving pulp in the third quarter of next year. The underlying markets for dissolving pulp remain strong which provides us further conviction in our attempts to expand further in this business segment.
Selected Financial Information
The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with, our unaudited consolidated financial statements as at and for the period ended September 30, 2010 and the related notes thereon and our Management's Discussion and Analysis filed on SEDAR.
Three Months Ended September 30, 2010 (thousands of dollars, except shipments, unaudited) Q3 2010 Q2 2010 Q3 2009--------------------------------------------------------------------------- Sales 86,971 60,544 51,000EBITDA(1) 8,930 8,102 6,967Operating income 6,159 1,440 5,198Net income 5,148 40,378 3,467Adjusted net income 3,854 4,261 3,832Paper shipments (tonnes) 16,452 16,324 14,304Pulp shipments (tonnes) 60,469 18,848 -(1)See net income to EBITDA reconciliation. Net income to EBITDA reconciliation:(thousands of dollars, unaudited) Q3 2010 Q2 2010 Q3 2009-------------------------------------------------------------------- Net income $5,148 $40,378 $3,467Income tax 2,243 1,067 1,090Foreign exchange (gain) loss (1,294) 1,638 365Fair value gain on acquisition - (41,804) -Start-up costs - 3,368 -Acquisition costs expensed - 681 -Interest expense 62 160 276Amortization 2,192 2,029 1,350Stock based compensation 579 585 419--------------------------------------------------------------------EBITDA $8,930 $8,102 $6,967
Conference Call
A conference call to discuss the financial results for the third quarter 2010 will be held on November 9, 2010 at 9:30 a.m. (PST). To attend the conference call, please dial one of the following numbers:
North America: 1-877-353-9586
International: 1-403-532-8075
Participant pass code: 22696#
A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-877-353-9587 from North America or 403-699-1055 International. The pass code to access the replay is 388891#
? 2010 Canjex Publishing Ltd.
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