CALGARY, ALBERTA--(Marketwired - Aug. 21, 2013) - Superior Plus Corp. ("Superior" or the "Corporation") (TSX:SPB) is announcing that the previously announced expansion of the hydrochloric acid production at its Port Edwards, Wisconsin chloralkali facility has been delayed as a result of a loading accident at the supplier's facility that resulted in significant damage to the hydrochloric acid burner which is required to complete the expansion. The damage occurred while the acid burner was being loaded for shipment to the Port Edwards facility. Discussions on options to expedite the replacement or repair of the acid burner are on-going with the supplier. As a result of this accident, Superior anticipates that the expansion will be delayed by approximately one year with commercial production commencing in the first quarter of 2015. The previously provided cost estimate of the expansion at the Port Edwards facility of $18 million is not impacted as a result of the accident and resulting delay.
Superior is confirming its financial outlook as provided with its 2013 second quarter earnings of adjusted operating cash flow ("AOCF") per share for 2013 of $1.60 to $1.85; financial results for 2013 will not be impacted by the delay of the expansion at the Port Edwards facility. Consistent with prior years, Superior anticipates that the detailed financial outlook for 2014 will be disclosed in November 2013.
The expansion of the hydrochloric acid production at the Saskatoon, Saskatchewan facility remains on time and on budget. As previously disclosed, the expansion at the Saskatoon facility is anticipated to be in commercial production in the second half of 2014 at a capital cost of $25 million. The acid burner currently under production for the Saskatoon facility, which is specifically built for that facility, has not been impacted.
Luc Desjardins, President and Chief Executive Officer stated "Although we are disappointed with the delay of the hydrochloric acid expansion at our Port Edwards facility, Superior remains focused on and is executing the initiatives outlined as part of our Destination 2015 project. Our initiatives remain on track. Superior anticipates that as a result of this delay, the previously provided growth rate of AOCF per share for 2014 and 2015 of 7% to 10% will now be in the range of 5% to 7% for 2014 and 9% to 12% for 2015. The increase in the growth rate for 2015 is due to shifting the financial benefits of the Port Edwards expansion from 2014 into 2015."
Conference Call
Superior will be conducting a conference call and webcast for investors, analysts, brokers and media representatives to discuss the contents of this press release at 8:30 a.m. EST on August 22, 2013. To participate in the call, dial: (866) 223-7781. An archived recording of the call will be available for replay until midnight, October 22, 2013. To access the recording, dial: (800) 408-3053 and enter pass code 3631348 followed by the # key. Internet users can listen to the call live, or as an archived call, on Superior's website at: www.superiorplus.com.
About the Corporation
Superior consists of three primary operating businesses: Energy Services includes the distribution of propane and distillates, providing fixed-price energy services, and supply portfolio management; Specialty Chemicals includes the manufacture and sale of specialty chemicals; and Construction Products Distribution includes the distribution of specialty construction products.
Forward Looking Information
Certain information included herein is forward-looking, within the meaning of applicable Canadian securities laws. Such information is typically identified by words such as "anticipate", "believe", "could", "estimate", "expect", "plan", "intend", "forecast", "future", "guidance", "may", "predict", "project", "should", "strategy", "target", "will" or similar expressions suggesting future outcomes. Forward-looking information in this news release includes forward looking information relating to future financial results, adjusted operating cash flow, expected timing of repair or replacement of the acid burner, growth rates and the timing, execution and capital cost of capital projects. Superior believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such information should not be unduly relied upon.
By its very nature, forward-looking information involves numerous assumptions, risks and uncertainties, both general and specific. Should one or more of these risks and uncertainties materialize or should underlying assumptions prove incorrect, as many important factors are beyond our control, Superior's or Superior LP's actual performance and financial results may vary materially from those estimates and intentions contemplated, expressed or implied in the forward-looking information. These risks and uncertainties include the timing of completion of the repair or replacement of the acid burner, results of Superior's business initiatives, incorrect assessments of value when making acquisitions, increases in debt service charges, the loss of key personnel, fluctuations in foreign currency and exchange rates, inadequate insurance coverage, liability for cash taxes, counterparty risk, compliance with environmental laws and regulations, operational risks involving our facilities, force majeure, our ability to access external sources of debt and equity capital, and the risks identified in (i) Superior's 2013 second quarter management's discussion and analysis under the heading "Risk Factors" and (ii) Superior's most recent Annual Information Form. The preceding list of assumptions, risks and uncertainties is not exhaustive.
Forward-looking information contained in this news release is provided for the purpose of providing information about management's goals, plans and range of expectations for the future and may not be appropriate for other purposes. Any forward-looking information is made as of the date hereof and, except as required by law, Superior does not undertake any obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.
Non-IFRS Financial Measures
Adjusted operating cash flow is equal to cash flow from operating activities as defined by IFRS, adjusted for changes in non-cash working capital, other expenses, non-cash interest expense, current income taxes and finance costs. Superior may deduct or include additional items in its calculation of adjusted operating cash flow; these items would generally, but not necessarily, be items of a non-recurring nature. Adjusted operating cash flow is the main performance measure used by management and investors to evaluate Superior's performance. Readers are cautioned that adjusted operating cash flow is not a defined performance measure under IFRS and that adjusted operating cash flow cannot be assured. Superior's calculation of adjusted operating cash flow may differ from similar calculations used by comparable entities. Adjusted operating cash flow represents cash flow generated by Superior that is available for, but not necessarily limited to, changes in working capital requirements, investing activities and financing activities of Superior.
The seasonality of Superior's individual quarterly results must be assessed in the context of annualized adjusted operating cash flow. Adjustments recorded by Superior as part of its calculation of adjusted operating cash flow include, but are not limited to, the impact of the seasonality of Superior's businesses, principally the Energy Services segment, by adjusting for non-cash working capital items, thereby eliminating the impact of the timing between the recognition and collection/payment of Superior's revenues and expenses, which can differ significantly from quarter to quarter. Adjustments are also made to reclassify the cash flow related to natural gas and electricity customer contract-related costs in a manner consistent with the income statement's recognition of these costs.