KINGSEY FALLS, QC, Nov. 7, 2013 /CNW Telbec/ - Cascades Inc. (TSX: CAS), a leader in the recovery and manufacturing of green packaging and tissue paper products, announces its unaudited financial results for the three-month period ended September 30, 2013.
Q3 2013 Highlights
- Sales of $995 million
(compared to $982 million in Q2 2013 (+1%) and $906 million in Q3 2012 (+10%)) - Excluding specific items
- EBITDA of $96 million
(compared to $83 million in Q2 2013 (+16%) and $78 million in Q3 2012 (+23%)) - Net earnings per share of $0.07
(compared to net earnings of $0.09 in Q2 2013 and net earnings of $0.05 in Q3 2012)2
- EBITDA of $96 million
- Including specific items
- EBITDA of $83 million
(compared to $82 million in Q2 2013 (+1%) and $83 million in Q3 2012 (+0%)) - Net earnings per share of $0.12
(compared to net earnings of $0.03 in Q2 2013 and net earnings of $0.02 in Q3 2012)2
- EBITDA of $83 million
- Net debt of $1,601 million (compared to $1,675 million as at June 30, 2013), including $128 million of non-recourse net debt.
- Ramp-up of the Greenpac containerboard mill progressing as planned.
- Announcement of plans to convert and start-up a second paper machine at our Tissue Papers Group's Oregon mill.
Mr. Mario Plourde, President and Chief Executive Officer, had the following comments on the third quarter results:
"We are pleased with our third quarter results that represent our best EBITDA performance since 2010. Our two largest sectors, Containerboard and Tissue Papers, performed better, both sequentially and year-over-year. Both sectors benefited from improved productivity. The pricing environment in the Containerboard sector and sustained demand in the Tissue Papers sector have also helped to counterbalance higher raw material costs. In Europe, our boxboard activities also slightly improved their results compared to last year and the sequential decrease in volume is usual for this quarter. The Specialty Products Group continues to improve its financial performance. Our EBITDA was negatively impacted by approximately $4 million during the third quarter following flooding incidents resulting in additional maintenance and repair expenses and unplanned downtime for a shortfall of 5,800 tons at our existing containerboard mill in Niagara Falls and 4,000 tons at our fine paper mill in St-Jérôme.
"The Greenpac mill successfully started its production as planned on July 15. The ramp-up is progressing according to plan and we are pleased with the efficiency of the machine and the quality of the board. Average daily production during the quarter was 532 tons per day with recent peaks at over 1,300 tons on a nameplate capacity of 1,500 tons per day. In addition, although not consolidated in our results, positive operating income before depreciation was achieved in September."
Financial Summary
Segmented OIBD excluding specific items 1
| (in millions of Canadian dollars) | Q3 2013 | Q3 2012 | Q2 2013 | |||
| Packaging Products | ||||||
| Containerboard | 42 | 26 | 33 | |||
| Boxboard Europe | 9 | 7 | 10 | |||
| Specialty Products | 15 | 15 | 16 | |||
| Tissue Papers | 39 | 35 | 33 | |||
| Corporate Activities | (9) | (5) | (9) | |||
| OIBD excluding specific items | 96 | 78 | 83 | |||
| Note 1 - Refer to section "Supplemental information on non-IFRS measures". | ||||||
| Note 2 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits |
Selected consolidated information
| (in millions of Canadian dollars, except amounts per share) | Q3 2013 | Q3 2012 | Q2 2013 | |||||||
| Sales | 995 | 906 | 982 | |||||||
| Excluding specific items 1 | ||||||||||
| Operating income before depreciation and amortization (OIBD or EBITDA) | 96 | 78 | 83 | |||||||
| Operating income | 50 | 33 | 39 | |||||||
| Net earnings 2 | 7 | 4 | 8 | |||||||
| per common share 2 | $ | 0.07 | $ | 0.05 | $ | 0.09 | ||||
| Cash flow from continuing operations (adjusted) | 78 | 44 | 41 | |||||||
| Margin (OIBD or EBITDA) | 9.6 | % | 8.6 | % | 8.5 | % | ||||
| As reported | ||||||||||
| Operating income before depreciation and amortization (OIBD or EBITDA) | 83 | 83 | 82 | |||||||
| Operating income | 37 | 36 | 38 | |||||||
| Net earnings 2 | 11 | 2 | 2 | |||||||
| per common share 2 | $ | 0.12 | $ | 0.02 | $ | 0.03 | ||||
| Cash flow from continuing operations (adjusted) | 78 | 42 | 41 | |||||||
| Note 1 - Refer to section "Supplemental information on non-IFRS measures". | ||||||||||
| Note 2 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits | ||||||||||
Results analysis for the three-month period ended September 30, 2013 (compared to the same period last year)
In comparison with the same period last year, sales increased by 10% to $995 million as a result of higher volumes, favorable exchange rates and higher average selling prices.
Operating income, excluding specific items, increased from $33 million during in Q3 2012 to $50 million for the third quarter of 2013. In addition to the above-mentioned factors, lower energy costs and the impact of plant closures positively contributed to results and helped to offset higher production and administrative expenses. Compared to the third quarter of 2012, our Containerboard Group significantly improved its operating income due to higher volumes, selling prices and the positive effects of plant closures in Ontario in 2012. Our Tissue Papers Group recorded higher operating income due to higher volumes and selling prices. The operating income for our Boxboard Europe segment was slightly higher due to lower energy costs and the depreciation of the Canadian dollar against the Euro. Finally, the costs related to corporate activities increased due to the fact that costs related to the implementation of our new ERP system are no longer capitalized.
When including specific items, operating income amounted to $37 million in comparison to $36 million for the same period of last year. In the third quarter of 2013, the following specific items, before income taxes, impacted our operating income and/or net earnings:
- a $20 million impairment charge recorded within our Specialty Products Group (operating income and net earnings);
- a $7 million unrealized gain on derivative financial instruments (operating income and net earnings);
- a $1 million gain on interest rate swaps (net earnings);
- a $11 million foreign exchange gain on long-term debt and financial instruments (net earnings);
- a $5 million gain on the share of results of associates, joint ventures and non-controlling interest (unrealized gain on derivative financial instruments (net earnings)).
Net earnings excluding specific items amounted to $7 million ($0.07 per share) in the third quarter of 2013 compared to net earnings of $4 million ($0.05 per share) for the same period in 2012. Including specific items, net earnings amounted to $11 million ($0.12 per share) compared to net earnings of $2 million ($0.02 per share) for the same quarter in 2012.
Results analysis for the three-month period ended September 30, 2013 (compared to the previous quarter)
In comparison to the previous quarter, sales increased by 1% to reach $995 million due to favorable foreign exchange rates and higher average selling prices partially offset by lower volume in Europe.
Excluding specific items, operating income increased by more than 28% to reach $50 million. As mentioned above, higher average selling prices improved the operating income along with lower energy and selling and administrative expenses. Net earnings for the third quarter of 2013 were $7 million ($0.07 per share) compared to net earnings of $8 million ($0.09 per share) during the previous quarter. Net earnings for the quarter were negatively affected by a higher income tax rate and our share of the results of our investments which now include the contribution of the Greenpac mill.
Net debt decreased by $74 million to $1,601 million due to the favorable exchange rates and stronger operating results.
For further details, see the tables on IFRS and non-IFRS measures reconciliation, included herewith.
Near-term outlook
In commenting on the outlook, Mr. Plourde added: "The third quarter results confirm our view that the second half of 2013 will be better in terms of profitability. For the next quarter, we also expect to perform better than last year. Inherent seasonality is always associated with the month of December. The volatility of recycled fibre costs should remain manageable and business indicators still seem favorable.
We will continue to ramp-up the Greenpac mill. Our objectives of reaching full capacity within 12 months and achieving break-even OIBD for the year 2013 still stand. In addition, as previously announced, we have started to work on our second tissue paper machine at our existing Oregon mill. We are excited about this project which will strengthen our growing presence in the North American tissue market. Finally, normal seasonal reduction of our working capital and careful monitoring of our capital investments should help to reduce our debt close to the year-end 2012 level."
Dividend on common shares and normal course issuer bid
The Board of Directors of Cascades declared a quarterly dividend of $0.04 per share to be paid December 12, 2013 to shareholders of record at the close of business on November 20, 2013. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada).
In the third quarter of 2013, Cascades did not purchase shares.
Conference call information
Management will comment on the 2013 third quarter financial results during a conference call to be held today at 10:00 a.m.
Financial analysts, investors, media and other interested individuals are invited to listen to the conference call by dialing 1-888-231-8191. The conference call, including the investor presentation, will also be broadcast live on the Cascades corporate website (www.cascades.com, Investors tab on the Home page). The broadcast replay will be available on the Cascades corporate website and by phone until November 15, 2013 by dialing 1-855-859-2056 and by using access code 69773532#.
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Corporation employs more than 12,000 employees, who work in more than 100 units located in North America and Europe. With its management philosophy, half a century of experience in recycling, and continuous efforts in research and development as driving forces, Cascades continues to serve its clients with innovative products. Cascades' shares trade on the Toronto Stock Exchange, under the ticker symbol CAS.
Certain statements in this release, including statements regarding future results and performance, are forward-looking statements (as such term is defined under the Private Securities Litigation Reform Act of 1995) based on current expectations. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially from those projected, including, but not limited to, the effect of general economic conditions, decreases in demand for the Corporation's products, increases in raw material costs, fluctuations in selling prices and adverse changes in general market and industry conditions and other factors listed in the Corporation's Securities and Exchange Commission filings.
CONSOLIDATED BALANCE SHEETS
| (in millions of Canadian dollars) (unaudited) | SEPTEMBER 30, 2013 | DECEMBER 31, 2012 | |
| Assets | |||
| Current assets | |||
| Cash and cash equivalents | 25 | 20 | |
| Accounts receivable | 549 | 513 | |
| Current income tax assets | 36 | 22 | |
| Inventories | 514 | 497 | |
| Financial assets | 2 | 15 | |
| 1,126 | 1,067 | ||
| Long-term assets | |||
| Investments in associates and joint ventures | 249 | 222 | |
| Property, plant and equipment | 1,638 | 1,659 | |
| Intangible assets | 201 | 200 | |
| Financial assets | 23 | 13 | |
| Other assets | 73 | 70 | |
| Deferred income tax assets | 109 | 128 | |
| Goodwill and others | 336 | 335 | |
| 3,755 | 3,694 | ||
| Liabilities and Equity | |||
| Current liabilities | |||
| Bank loans and advances | 71 | 80 | |
| Trade and other payables | 572 | 551 | |
| Current income tax liabilities | 2 | 1 | |
| Current portion of provisions for contingencies and charges | 4 | 6 | |
| Current portion of financial liabilities and other liabilities | 16 | 74 | |
| Current portion of long-term debt | 38 | 60 | |
| 703 | 772 | ||
| Long-term liabilities | |||
| Long-term debt | 1,517 | 1,415 | |
| Provisions for contingencies and charges | 31 | 33 | |
| Financial liabilities | 43 | 36 | |
| Other liabilities | 199 | 264 | |
| Deferred income tax liabilities | 101 | 80 | |
| 2,594 | 2,600 | ||
| Equity attributable to Shareholders | |||
| Capital stock | 482 | 482 | |
| Contributed surplus | 17 | 16 | |
| Retained earnings | 623 | 567 | |
| Accumulated other comprehensive loss | (68) | (87) | |
| 1,054 | 978 | ||
| Non-controlling interest | 107 | 116 | |
| Total equity | 1,161 | 1,094 | |
| 3,755 | 3,694 |
CONSOLIDATED STATEMENTS OF EARNINGS
| For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
|||||||||||
| (in millions of Canadian dollars, except per share amounts and number of shares) (unaudited) | 2013 | 2012 | 2013 | 2012 | ||||||||
| Sales | 995 | 906 | 2,891 | 2,741 | ||||||||
| Cost of sales and expenses | ||||||||||||
| Cost of sales (including depreciation and amortization of $46 million for the 3-month period (2012 — $47 million) and $134 million for the 9-month period (2012 — $141 million)) | 848 | 781 | 2,477 | 2,361 | ||||||||
| Selling and administrative expense | 96 | 92 | 304 | 286 | ||||||||
| Loss (gain) on acquisitions, disposals and others | — | — | 3 | (1) | ||||||||
| Impairment charges and restructuring costs | 20 | 1 | 20 | 6 | ||||||||
| Foreign exchange loss (gain) | 1 | 2 | (3) | 2 | ||||||||
| Gain on derivative financial instruments | (7) | (6) | (5) | (7) | ||||||||
| 958 | 870 | 2,796 | 2,647 | |||||||||
| Operating income | 37 | 36 | 95 | 94 | ||||||||
| Financing expense | 26 | 26 | 77 | 77 | ||||||||
| Interest expense on employee future benefits | 3 | 3 | 9 | 9 | ||||||||
| Foreign exchange loss (gain) on long-term debt and financial instruments | (11) | 5 | (4) | (2) | ||||||||
| Share of results of associates and joint ventures | — | 1 | (2) | (3) | ||||||||
| Profit before income taxes | 19 | 1 | 15 | 13 | ||||||||
| Provision for income taxes | 7 | — | 8 | 4 | ||||||||
| Net earnings from continuing operations including non-controlling interest for the period | 12 | 1 | 7 | 9 | ||||||||
| Net loss from discontinued operations for the period | — | — | — | (2) | ||||||||
| Net earnings including non-controlling interest for the period | 12 | 1 | 7 | 7 | ||||||||
| Net earnings (loss) attributable to non-controlling interest | 1 | (1) | 2 | (3) | ||||||||
| Net earnings attributable to Shareholders for the period | 11 | 2 | 5 | 10 | ||||||||
| Net earnings from continuing operations per common share | ||||||||||||
| Basic | $ | 0.12 | $ | 0.02 | $ | 0.06 | $ | 0.12 | ||||
| Diluted | $ | 0.12 | $ | 0.02 | $ | 0.06 | $ | 0.12 | ||||
| Net earnings per common share | ||||||||||||
| Basic | $ | 0.12 | $ | 0.02 | $ | 0.06 | $ | 0.10 | ||||
| Diluted | $ | 0.12 | $ | 0.02 | $ | 0.06 | $ | 0.10 | ||||
| Weighted average basic number of common shares outstanding | 93,887,849 | 94,056,848 | 93,884,577 | 94,223,991 | ||||||||
| Average number of diluted common shares | 94,936,241 | 94,655,803 | 94,572,518 | 94,670,229 | ||||||||
| Net earnings attributable to Shareholders: | ||||||||||||
| Continuing operations | 11 | 2 | 5 | 12 | ||||||||
| Discontinued operations | — | — | — | (2) | ||||||||
| Net earnings | 11 | 2 | 5 | 10 | ||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| (in millions of Canadian dollars) (unaudited) | For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
||||||
| 2013 | 2012 | 2013 | 2012 | |||||
| Net earnings including non-controlling interest for the period | 12 | 1 | 7 | 7 | ||||
| Other comprehensive income (loss) | ||||||||
| Items that may be reclassified subsequently to earnings | ||||||||
| Translation adjustments | ||||||||
| Change in foreign currency translation of foreign subsidiaries | (7) | (21) | 28 | (26) | ||||
| Change in foreign currency translation related to net investment hedging activities | 9 | 15 | (15) | 14 | ||||
| Income taxes | (1) | (2) | 2 | (2) | ||||
| Cash flow hedges | ||||||||
| Change in fair value of foreign exchange forward contracts | 1 | 4 | (3) | 7 | ||||
| Change in fair value of interest rate swaps | 1 | (2) | 11 | (6) | ||||
| Change in fair value of commodity derivative financial instruments | — | 2 | 5 | 3 | ||||
| Income taxes | — | — | (5) | — | ||||
| 3 | (4) | 23 | (10) | |||||
| Items that are reclassified to retained earnings | ||||||||
| Actuarial gain (loss) on post-employment benefit obligations | 41 | (32) | 74 | (50) | ||||
| Income taxes | (11) | 9 | (20) | 14 | ||||
| 30 | (23) | 54 | (36) | |||||
| Other comprehensive income (loss) | 33 | (27) | 77 | (46) | ||||
| Comprehensive income (loss) including non-controlling interest for the period | 45 | (26) | 84 | (39) | ||||
| Comprehensive income (loss) attributable to non-controlling interest for the period | 2 | (4) | 6 | (8) | ||||
| Comprehensive income (loss) attributable to Shareholders for the period | 43 | (22) | 78 | (31) | ||||
| Comprehensive income (loss) attributable to Shareholders: | ||||||||
| Continuing operations | 43 | (22) | 78 | (29) | ||||
| Discontinued operations | — | — | — | (2) | ||||
| Comprehensive income (loss) | 43 | (22) | 78 | (31) | ||||
CONSOLIDATED STATEMENTS OF EQUITY
| For the 9-month period ended September 30, 2013 | ||||||||||||||
| (in millions of Canadian dollars) (unaudited) | CAPITAL STOCK |
CONTRIBUTED SURPLUS |
RETAINED EARNINGS |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS |
NON-CONTROLLING INTEREST |
TOTAL EQUITY |
|||||||
| Balance - Beginning of period | 482 | 16 | 567 | (87) | 978 | 116 | 1,094 | |||||||
| Comprehensive income | ||||||||||||||
| Net earnings | — | — | 5 | — | 5 | 2 | 7 | |||||||
| Other comprehensive income | — | — | 54 | 19 | 73 | 4 | 77 | |||||||
| — | — | 59 | 19 | 78 | 6 | 84 | ||||||||
| Dividends | — | — | (12) | — | (12) | — | (12) | |||||||
| Stock options | — | 1 | — | — | 1 | — | 1 | |||||||
| Acquisition of non-controlling interest | — | — | 9 | — | 9 | (15) | (6) | |||||||
| Balance - End of period | 482 | 17 | 623 | (68) | 1,054 | 107 | 1,161 | |||||||
| For the 9-month period ended September 30, 2012 | ||||||||||||||
| (in millions of Canadian dollars) (unaudited) | CAPITAL STOCK |
CONTRIBUTED SURPLUS |
RETAINED EARNINGS |
ACCUMULATED OTHER COMPREHENSIVE LOSS |
TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS |
NON-CONTROLLING INTEREST |
TOTAL EQUITY |
|||||||
| Balance - Beginning of period | 486 | 14 | 615 | (86) | 1,029 | 136 | 1,165 | |||||||
| Comprehensive income (loss) | ||||||||||||||
| Net earnings (loss) | — | — | 10 | — | 10 | (3) | 7 | |||||||
| Other comprehensive income (loss) | — | — | (36) | (5) | (41) | (5) | (46) | |||||||
| — | — | (26) | (5) | (31) | (8) | (39) | ||||||||
| Dividends | — | — | (11) | — | (11) | — | (11) | |||||||
| Stock options | — | 1 | — | — | 1 | — | 1 | |||||||
| Redemption of common shares | (4) | 1 | — | — | (3) | — | (3) | |||||||
| Acquisition of non-controlling interest | — | — | 3 | — | 3 | (5) | (2) | |||||||
| Balance - End of period | 482 | 16 | 581 | (91) | 988 | 123 | 1,111 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
||||
| (in millions of Canadian dollars) (unaudited) | 2013 | 2012 | 2013 | 2012 | |
| Operating activities from continuing operations | |||||
| Net earnings attributable to Shareholders for the period | 11 | 2 | 5 | 10 | |
| Net loss from discontinued operations for the period | — | — | — | 2 | |
| Net earnings from continuing operations | 11 | 2 | 5 | 12 | |
| Adjustments for: | |||||
| Financing expense and interest expense on employee future benefits | 29 | 29 | 86 | 86 | |
| Depreciation and amortization | 46 | 47 | 134 | 141 | |
| Loss (gain) on acquisitions, disposals and others | — | — | 3 | (1) | |
| Impairment charges and restructuring costs | 20 | (1) | 20 | 1 | |
| Unrealized gain on derivative financial instruments | (7) | (6) | (5) | (6) | |
| Foreign exchange loss (gain) on long-term debt and financial instruments | (11) | 5 | (4) | (2) | |
| Provision for income taxes | 7 | — | 8 | 4 | |
| Share of results of associates and joint ventures | — | 1 | (2) | (3) | |
| Net loss (earnings) attributable to non-controlling interest | 1 | (1) | 2 | (3) | |
| Net financing expense paid | (16) | (15) | (65) | (65) | |
| Income taxes received (paid) | 4 | (10) | 3 | (20) | |
| Dividend received | 6 | 5 | 7 | 5 | |
| Employee future benefits and others | (12) | (14) | (27) | (22) | |
| 78 | 42 | 165 | 127 | ||
| Changes in non-cash working capital components | 31 | 12 | (19) | (16) | |
| 109 | 54 | 146 | 111 | ||
| Investing activities from continuing operations | |||||
| Investments in associates and joint ventures | (16) | — | (17) | (19) | |
| Purchases of property, plant and equipment | (26) | (33) | (101) | (114) | |
| Proceeds on disposals of property, plant and equipment | 3 | 10 | 9 | 20 | |
| Change in intangible and other assets | (1) | (2) | (21) | (29) | |
| Business acquisition, net of cash acquired | — | — | — | (14) | |
| (40) | (25) | (130) | (156) | ||
| Financing activities from continuing operations | |||||
| Bank loans and advances | (13) | 8 | (12) | 7 | |
| Change in revolving credit facilities | (27) | (38) | 78 | 104 | |
| Purchase of senior notes | — | — | (10) | (3) | |
| Increase in other long-term debt | — | 1 | 13 | 2 | |
| Payments of other long-term debt | (7) | (5) | (36) | (43) | |
| Settlement of derivative financial instruments | — | — | (14) | — | |
| Redemption of common shares | — | (1) | — | (3) | |
| Partial disposal of a subsidiary to non-controlling interest | — | — | — | 3 | |
| Acquisition of non-controlling interest including dividend paid | — | (1) | (19) | (2) | |
| Dividends paid to the Corporation's Shareholders | (4) | (3) | (12) | (11) | |
| (51) | (39) | (12) | 54 | ||
| Change in cash and cash equivalents during the period from continuing operations | 18 | (10) | 4 | 9 | |
| Change in cash and cash equivalents from discontinued operations | — | (3) | — | (5) | |
| Net change in cash and cash equivalents during the period | 18 | (13) | 4 | 4 | |
| Currency translation on cash and cash equivalents | — | — | 1 | — | |
| Cash and cash equivalents - Beginning of period | 7 | 29 | 20 | 12 | |
| Cash and cash equivalents - End of period | 25 | 16 | 25 | 16 | |
SEGMENTED INFORMATION
The Corporation analyzes the performance of its operating segments based on their operating income before depreciation and amortization, which is not a measure of performance under International Financial Reporting Standards ("IFRS"); however, the chief operating decision-maker ("CODM") uses this performance measure to assess the operating performance of each reportable segment. Earnings for each segment are prepared on the same basis as those of the Corporation. Intersegment operations are recorded on the same basis as sales to third parties, which are at fair market value. The accounting policies of the reportable segments are the same as the Corporation's accounting policies described in its most recent audited consolidated financial statements for the year ended December 31, 2012.
The Corporation's operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The Chief Executive Officer has authority for resource allocation and assessment of the Corporation's performance, and is therefore the CODM.
The Corporation's operations are managed in four segments: Containerboard, Boxboard Europe, Specialty Products (which constitutes the Packaging Products of the Corporation) and Tissue Papers.
| SALES | |||||
| For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
||||
| (in millions of Canadian dollars) (unaudited) | 2013 | 2012 | 2013 | 2012 | |
| Packaging Products | |||||
| Containerboard | 353 | 299 | 986 | 883 | |
| Boxboard Europe | 194 | 181 | 621 | 593 | |
| Specialty Products | 197 | 197 | 582 | 608 | |
| Intersegment sales | (15) | (17) | (46) | (54) | |
| 729 | 660 | 2,143 | 2,030 | ||
| Tissue Papers | 279 | 253 | 784 | 737 | |
| Intersegment sales and others | (13) | (7) | (36) | (26) | |
| Total | 995 | 906 | 2,891 | 2,741 | |
| OPERATING INCOME (LOSS) BEFORE DEPRECIATION AND AMORTIZATION |
|||||
| For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
||||
| (in millions of Canadian dollars) (unaudited) | 2013 | 2012 | 2013 | 2012 | |
| Packaging Products | |||||
| Containerboard | 49 | 24 | 109 | 65 | |
| Boxboard Europe | 9 | 8 | 30 | 30 | |
| Specialty Products | (5) | 15 | 22 | 41 | |
| 53 | 47 | 161 | 136 | ||
| Tissue Papers | 39 | 35 | 101 | 106 | |
| Corporate | (9) | 1 | (33) | (7) | |
| Operating income before depreciation and amortization | 83 | 83 | 229 | 235 | |
| Depreciation and amortization | (46) | (47) | (134) | (141) | |
| Financing expense and interest expense on employee future benefits | (29) | (29) | (86) | (86) | |
| Foreign exchange (loss) gain on long-term debt and financial instruments | 11 | (5) | 4 | 2 | |
| Share of results of associates and joint ventures | — | (1) | 2 | 3 | |
| Profit before income taxes | 19 | 1 | 15 | 13 | |
| PURCHASES OF PROPERTY, PLANT AND EQUIPMENT | |||||
| For the 3-month periods ended September 30, |
For the 9-month periods ended September 30, |
||||
| (in millions of Canadian dollars) (unaudited) | 2013 | 2012 | 2013 | 2012 | |
| Packaging Products | |||||
| Containerboard | 8 | 16 | 26 | 47 | |
| Boxboard Europe | 10 | 9 | 19 | 19 | |
| Specialty Products | 7 | 3 | 14 | 10 | |
| 25 | 28 | 59 | 76 | ||
| Tissue Papers | 13 | 1 | 25 | 13 | |
| Corporate | 2 | 9 | 11 | 14 | |
| Total purchases | 40 | 38 | 95 | 103 | |
| Proceeds on disposal of property, plant and equipment | (3) | (10) | (9) | (20) | |
| Capital-lease acquisitions | (2) | (4) | (3) | (4) | |
| 35 | 24 | 83 | 79 | ||
| Purchases of property, plant and equipment included in trade and other payables | |||||
| Beginning of period | 7 | 9 | 28 | 25 | |
| End of period | (19) | (10) | (19) | (10) | |
| Purchases of property, plant and equipment net of proceeds on disposals | 23 | 23 | 92 | 94 | |
SUPPLEMENTAL INFORMATION ON NON-IFRS MEASURES
Operating income before depreciation and amortization, earnings before interest, income taxes, depreciation and amortization, operating income and cash flow from operations are not measures of performance under IFRS. The Corporation includes operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations because they are measures used by management to assess the operating and financial performance of the Corporation's operating segments. Additionally, the Corporation believes that these items provide additional measures often used by investors to assess a company's operating performance and its ability to meet debt service requirements. However, operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations do not represent, and should not be used as a substitute for, net earnings or cash flows from operating activities as determined in accordance with IFRS, and they are not necessarily an indication of whether cash flow will be sufficient to fund our cash requirements. In addition, our definition of operating income before depreciation and amortization, earnings before interest, taxes, depreciation and amortization, operating income and cash flow from operations may differ from those of other companies. Cash flow from operations is defined as cash flow from operating activities as determined in accordance with IFRS excluding the change in working capital components.
Operating income before depreciation and amortization excluding specific items, earnings before interest, income taxes, depreciation and amortization excluding specific items, operating income excluding specific items, net earnings excluding specific items, net earnings per common share excluding specific items and cash flow from operations excluding specific items are non-IFRS measures. The Corporation believes that it is useful for investors to be aware of specific items that have adversely or positively affected its IFRS measures, and that the above mentioned non-IFRS measures provide investors with a measure of performance with which to compare its results between periods without regard to these specific items. The Corporation's measures excluding specific items have no standardized meaning prescribed by IFRS and are not necessarily comparable to similar measures presented by other companies and therefore should not be considered in isolation.
Specific items are defined to include charges for impairment of assets, charges for facility or machine closures, accelerated depreciation of assets due to restructuring measures, debt restructuring charges, gains or losses on the acquisition or sale of a business unit, unrealized gains or losses on derivative financial instruments that do not qualify for hedge accounting, foreign exchange gains or losses on long-term debt and other significant items of an unusual or non-recurring nature.
The following table reconciles net earnings (loss) and net earnings (loss) per share with net earnings (loss) excluding specific items and net earnings (loss) per share excluding specific items:
| (in millions of Canadian dollars, except amounts per share) | Net earnings (loss) | Net earnings (loss) per share 1 | ||||||||||||
| Q3 2013 | Q3 2012 | Q2 2013 | Q3 2013 | Q3 2012 | Q2 2013 | |||||||||
| As per IFRS 2 | 11 | 2 | 2 | $ | 0.12 | $ | 0.02 | $ | 0.03 | |||||
| Specific items : | ||||||||||||||
| Gain on acquisitions, disposals and others | — | — | (2) | — | — | $ | (0.01) | |||||||
| Impairment charges | 20 | 1 | — | $ | 0.16 | — | — | |||||||
| Unrealized loss (gain) on financial instruments | (7) | (6) | 3 | $ | (0.06) | $ | (0.04) | $ | 0.03 | |||||
| Accelerated depreciation due to restructuring measures | — | 2 | — | — | $ | 0.02 | — | |||||||
| Unrealized gain on interest rate swaps | (1) | — | — | $ | (0.01) | — | — | |||||||
| Foreign exchange loss (gain) on long-term debt and financial instruments | (11) | 5 | 5 | $ | (0.10) | $ | 0.05 | $ | 0.04 | |||||
| Share of results of associates, joint ventures and non-controlling interest (unrealized gain on financial instruments) | (5) | — | — | (0.04) | — | — | ||||||||
| Tax effect on specific items and other tax adjustments 1 | — | — | — | — | — | — | ||||||||
| (4) | 2 | 6 | $ | (0.05) | $ | 0.03 | $ | 0.06 | ||||||
| Excluding specific items 2 | 7 | 4 | 8 | $ | 0.07 | $ | 0.05 | $ | 0.09 | |||||
| Note 1 - Specific amounts per share are calculated on an after-tax basis. | ||||||||||||||
| Note 2 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits | ||||||||||||||
| Per share amounts of line item "Tax effect on specific items and other tax adjustments" only include the effect of tax adjustments. | ||||||||||||||
Net earnings, which is a performance measure defined by IFRS, is reconciled below with operating income, operating income excluding specific items and operating income before depreciation excluding specific items or earnings before interest, income taxes, depreciation and amortization excluding specific items:
| (in millions of Canadian dollars) | Q3 2013 | Q3 2012 | Q2 2013 | ||
| Net earnings attributable to Shareholders for the period 1 | 11 | 2 | 2 | ||
| Net earnings (loss) attributable to non-controlling interest | 1 | (1) | 1 | ||
| Share of results of associates and joint ventures | — | 1 | 1 | ||
| Provision for income taxes 1 | 7 | — | — | ||
| Foreign exchange loss (gain) on long-term debt and financial instruments | (11) | 5 | 5 | ||
| Financing expense and interest on employee future benefits 1 | 29 | 29 | 29 | ||
| Operating income | 37 | 36 | 38 | ||
| Specific items : | |||||
| Gain on acquisitions, disposals and others | — | — | (2) | ||
| Impairment charges | 20 | 1 | — | ||
| Unrealized loss (gain) on financial instruments | (7) | (6) | 3 | ||
| Accelerated depreciation and amortization due to restructuring measures | — | 2 | — | ||
| 13 | (3) | 1 | |||
| Operating income - excluding specific items | 50 | 33 | 39 | ||
| Depreciation and amortization, excluding specific items | 46 | 45 | 44 | ||
| Operating income before depreciation and amortization (OIBD or EBITDA) - excluding specific items | 96 | 78 | 83 | ||
| Note 1 - 2012 figures have been restated following the new IFRS standard IAS19 - Employee benefits |
The following table reconciles cash flow provided by operating activities with cash flow (adjusted) from operations excluding specific items:
| Cash flow from operations | ||||||
| (in millions of Canadian dollars) | Q3 2013 | Q3 2012 | Q2 2013 | |||
| Cash flow provided by operating activities | 109 | 54 | 15 | |||
| Changes in non-cash working capital components | (31) | (12) | 26 | |||
| Cash flow (adjusted) from operations | 78 | 42 | 41 | |||
| Specific items, net of current income tax: | ||||||
| Restructuring costs | — | 2 | — | |||
| Excluding specific items | 78 | 44 | 41 | |||
SOURCE Cascades Inc.
Media:
Hugo D'Amours
Vice-President, Communications and Public Affairs
(819) 363-5184
Source:
Allan Hogg
Vice-President and Chief Financial Officer
Investors:
Riko Gaudreault
Director, Investor relations
(514) 282-2697
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