KP Tissue Releases Third Quarter 2022 Financial Results

KP Tissue Inc. (KPT) (TSX: KPT) reports the Q3 2022 financial and operational results of KPT and Kruger Products L.P. (KPLP). Kruger Products is Canada’s leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and Bonterra™) and the Away-From-Home (AFH) market and continues to grow in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products. KPT currently holds a 13.9% interest in KPLP.
KPLP Q3 2022 Business and Financial Highlights
• Revenue was $427.0 million in Q3 2022 compared to $391.4 million in Q3 2021, an increase of $35.6 million or 9.1%.
• Adjusted EBITDA1 was $30.7 million in Q3 2022, compared to $40.3 million in Q3 2021, a decrease of $9.6 million.
• Net loss was $38.8 million in Q3 2022 compared to $9.3 million in Q3 2021, a decrease of $29.5 million.
• Declared a quarterly dividend of $0.18 per share to be paid on January 16, 2023.

“We continued to deliver solid top-line growth in the third quarter of 2022 with revenue increasing 9.1% year-over-year, while profitability significantly improved from the previous quarter based on the disciplined execution of a multi-faceted strategy. This included price increases across all segments as well as productivity gains, along with prudent cash management through reductions in working capital and discretionary spending,” stated KP Tissue’s Chief Executive Officer, Dino Bianco.

“I’m very pleased with the strong performance of our AFH segment in the third quarter with sales growth of 37.3% year-overyear and Adjusted EBITDA1 of $5.4 million, signaling a market recovery in Canada and the U.S. post-COVID. For the Consumer segment, revenue growth was 4.1%, as we are seeing slower consumer purchases as they adjust to higher price points. We plan to maintain targeted investments in our consumer brands, including recently launched Bonterra™, SpongeTowels UltraPRO®, UltraLuxe® and White Cloud®, while watching post-pricing price gaps.”

“Although inflationary upward pressure appears to be easing, higher price points for products have created sales volatility with some consumers trading down during these uncertain times. The recovery of our Memphis operations is also taking a little longer than anticipated, but we believe this situation will be largely resolved by early 2023. Despite the volatile business environment, we are moving in the right direction and fully expect to generate profitable growth in the fourth quarter and beyond,” Mr. Bianco concluded.
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