Resolute Reports Preliminary Fourth Quarter and 2017 Results

Q4 GAAP net income of $13 million or $0.14 per share / 2017 GAAP net loss of $84 million or $0.93 per share
Adjusted EBITDA of $102 million / $364 million for the full year
Higher realized pricing across most segments
Further $51 million of debt repaid in the quarter
Selection and appointment of Yves Laflamme as president and CEO, succeeding Richard Garneau

Resolute Forest Products Inc. (NYSE: RFP) (TSX: RFP) today reported net income for the quarter ended December 31, 2017, of $13 million, or $0.14 per share, compared to a net loss of $45 million, or $0.50 per share, in the same period in 2016. Sales were $898 million in the quarter, an increase of $9 million from the fourth quarter of 2016. Excluding special items, the company reported net income of $14 million, or $0.15 per share, compared to a net loss, excluding special items, of $7 million, or $0.08 per share, in the fourth quarter of 2016.

For the year, the company reported a GAAP net loss of $84 million, or $0.93 per share, compared to a net loss of $81 million, or $0.90 per share, in 2016. Sales were $3.5 billion, down 1%, from the previous year. Excluding special items, the company reported net income of $12 million, or $0.13 per share, compared to a net loss of $12 million, or $0.13 per share, in 2016.

“An otherwise solid quarter was impacted by the ongoing restructuring at our Calhoun paper operations, as well as maintenance outages at several locations. Also, the appreciation in our share price in the quarter, and company performance increased our share-based compensation expense,” said Richard Garneau, president and chief executive officer. “Overall, we are pleased with the performance of our lumber and newsprint segments, as well as our pulp business, which realized one of its best quarters.”

Non-GAAP financial measures, such as adjustments for special items and adjusted EBITDA, are explained and reconciled below.

Resolute also today announced the selection and appointment of Yves Laflamme as the company’s new president and chief executive officer, and a member of the Board of Directors, succeeding Richard Garneau.

Consolidated
The company recorded operating income of $54 million in the quarter, an improvement of $6 million compared to the third quarter of 2017. The company’s operating results benefitted from higher selling prices across most segments ($29 million), a gain on the disposition of assets of our Mokpo (South Korea) paper mill, and lower closure-related costs. Despite higher shipments in market pulp and newsprint, overall volumes decreased, reflecting lower shipments of specialty papers following the closure of two paper machines at Calhoun (Tennessee), and seasonally lower volumes in wood products. Operating results were also unfavorably affected by higher planned maintenance costs, and seasonally higher fuel expenses, and fiber costs. As a result of the company’s performance and the 119% increase in share price in the quarter, an $8 million increase in share-based compensation expense was recorded in the fourth quarter.

The company reported operating income of $49 million in 2017, compared to a loss of $26 million in 2016, mostly due to higher selling prices ($191 million). The average transaction price increased by 23% for wood products ($148 million), 6% for market pulp and 2% for newsprint, offset only in part by a decrease in specialty papers. The improvement in overall manufacturing costs achieved as a result of the company’s restructuring initiatives ($79 million), and the decrease in total pension and other postretirement benefit (“OPEB”) expenses ($21 million) were partially offset by higher natural gas pricing, increased fiber costs, and additional maintenance ($45 million). Freight costs also rose in the year ($33 million), largely because of increases in rates, shipping distances and various transportation issues related to the shortage of truck drivers. Overall volumes were lower as a result of capacity rationalizations in newsprint and specialty papers, but were higher in wood products and market pulp. The stronger Canadian dollar ($20 million), as well as higher start-up costs ($19 million) and inventory write-downs related to closures ($17 million) also unfavorably impacted the company’s results.
more detail at:  http://resolutefp.mediaroom.com/2018-02-01-Resolute-Reports-Preliminary-Fourth-Quarter-and-2017-Results

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