PRESS RELEASE
REPAP NEW BRUNSWICK REPORTS 1998 THIRD QUARTER RESULTS
New Brunswick, Canada - Repap New Brunswick Inc. today reported
results for the third quarter ended September 30, 1998. The
Company reported a loss of $8.5 million compared to a loss of
$13.3 million in the third quarter of 1997.
Revenues totaled $172.7 million in the third quarter of 1998, up
by $18.3 million or 12% from the third quarter of 1997 and up
$3.9 million or 2% from the second quarter of 1998. The increase
over the third quarter of 1997 reflects higher pricing and
shipments of coated paper and kraft pulp products, and the
benefits of a lower Canadian dollar. The increase in revenues
over the second quarter of 1998 reflects mainly increased
shipments of coated paper and the benefits of a lower Canadian
dollar, offset by lower pricing in all product lines.
Repap New Brunswick's operating profit before depreciation and
amortization and before non-cash foreign exchange adjustments
("EBITDA") totaled $45.0 million in the third quarter of 1998
compared to $29.9 million in the third quarter of 1997 and $45.2
million in the second quarter of 1998. The improvement over 1997
reflects mainly increased revenues and continuing productivity
improvements and lower costs.
Revenues for the nine months ended September 30, 1998 totaled
$504.8 million compared to $444.6 million for the nine months
ended September 30, 1997, an increase of $60.2 million or 14%.
EBITDA was $135.6 million for the first nine months of 1998
compared to $62.1 million for the same period in 1997, reflecting
higher prices and shipments of paper and lower costs of
manufacturing. Repap New Brunswick reported a loss of $54.4
million for the first nine months of 1998, after unusual charges
of $46.4 million compared to a loss of $84.1 million for the same
period in 1997, after unusual charges of $23.0 million.
Excluding unusual charges, the Company reported a loss of $8.0
million for the first nine months of 1998 compared to a loss of
$61.1 million for the corresponding period in 1997.
Cash flow from operations before net changes in working capital
for the third quarter of 1998 was $12.3 million compared to $4.1
million in the third quarter of 1997. For the nine months ended
September 30, 1998, cash flow from operations was $47.1 million
compared to a cash utilization of $16.1 million in the same
period of 1997.
Repap New Brunswick is an integrated lightweight coated
groundwood paper facility with an annual capacity of 492,000 tons
of coated paper, 235,000 metric tons of northern bleached
softwood kraft pulp, 123,000 metric tons of groundwood pulp and
58 million foot board measure of lumber. It is located in
Miramichi, New Brunswick, Canada.
-30-
For more information contact:
Stephen C. Larson Michelle A. Cormier
President & CEO Vice-President, Finance
(203) 964-6163 (203) 964-6168
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REPAP NEW BRUNSWICK INC.
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED - THOUSANDS OF CANADIAN DOLLARS
<CAPTION>
Yr. Over Qtr. Over
Quarter Ended Yr. Qtr. Year-To-Date
Sept 30/97 Jun 30/98 Sept 30/98 % Chg. % Chg. Sept 30/97 Sept 30/98 % Chg.
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 154,387 $ 168,841 $ 172,665 12% 2% $ 444,565 $ 504,814 14%
Hedged foreign exchange (1,159) (1,728) (1,159) (4,038) (4,047)
adjustment (1)
Net revenues $ 153,228 $ 167,113 $ 171,506 12% 3% $ 440,527 $ 500,767 14%
Net sales 134,544 149,338 152,146 385,694 445,732
Cost of sales excluding 100,687 99,411 101,234 1% 2% 312,222 295,666 -5%
depreciation & amortization
Selling, administrative & 5,123 6,474 7,076 15,439 18,519
research expenses
Depreciation & amortization 16,165 14,849 19,265 40,522 50,110
Operating profit 12,569 28,604 24,571 95% -14% 17,511 81,437 365%
Interest expense 25,609 26,522 27,701 76,833 80,541
Miscellaneous expense 101 1,375 4,681 513 7,232
Unusual items 0 46,272 110 22,999 46,382
Loss before the undernoted (13,141) (45,565) (7,921) (82,884) (52,718)
Provision for income taxes 188 555 555 1,205 1,688
Loss $ (13,329) $ (46,120) $ (8,476) $ (84,089) $ (54,406)
EBITDA (2) $ 29,893 $ 45,181 $ 44,995 51% 0% $ 62,071 $ 135,594 118%
REVENUES BY SEGMENT
Coated Paper $ 131,850 $ 147,976 $ 156,251 $ 365,415 $ 452,480
Pulp 16,580 14,732 11,015 58,456 35,644
Lumber 5,957 6,133 5,399 20,694 16,690
Hedged foreign exchange (1,159) (1,728) (1,160) (4,038) (4,047)
adjustment (1)
Total Revenue $ 153,228 $ 167,113 $ 171,505 $ 440,527 $ 500,767
MARKET SHIPMENTS (in thousands)
Coated Paper (tons) 113 113 117 332 342
Kraft Pulp (tonnes) 21 20 16 79 49
Lumber (Mfbm) 13 15 13 44 41
(1) Represents non-cash impact of hedged currency exchange losses
(2) EBITDA = operating profit plus depreciation and amortization plus
non-cash hedged foreign exchange loss
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REPAP NEW BRUNSWICK INC.
CONSOLIDATED BALANCE SHEET
UNAUDITED - THOUSANDS OF CANADIAN DOLLARS
December 31, September 30,
1997 1998
Assets:
Current assets $ 150,672 $ 149,304
Other assets 169,629 175,967
Net fixed assets 1,007,153 982,572
$1,327,454 $1,307,843
Liabilities:
Current liabilities $ 176,929 $ 173,280
Revolving credit facility 97,459 0
274,388 173,280
Revolving credit facility 0 57,018
Long-term debt 901,342 1,023,486
Repayable grants and other
long-term liabilities 25,550 21,673
926,892 1,102,177
Investment tax credits 147,944 109,342
Grants - non-repayable 23,817 23,037
Shareholders' Deficiency
Preferred shares 154,173 154,173
Common shares 159,075 159,075
Deficit (372,123) (426,529)
Contributed capital 13,288 13,288
Total shareholder's deficiency (45,587) (99,993)
$1,327,454 $1,307,843
<TABLE>
REPAP NEW BRUNSWICK INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
UNAUDITED - THOUSANDS OF CANADIAN DOLLARS
<CAPTION>
Nine Months Ended
3rd Quarter September 30,
1997 1998 1997 1998
<S> <C> <C> <C> <C>
Operating activities:
Loss $ (13,329) $ (8,476) $ (84,089) $ (54,406)
Add items not affecting cash -
Depreciation and amortization 16,165 19,265 40,522 50,110
Unusual item and other 1,304 1,536 27,466 51,408
Cash flow before net changes in non-cash
working capital 4,140 12,325 (16,101) 47,112
Non-cash working capital changes (6,034) 32,211 33,033 26,220
Cash provided by (used in) operations (1,894) 44,536 16,932 73,332
Investing activities:
Additions to fixed assets (4,591) (4,156) (7,259) (12,364)
Deferred charges and other assets 182 (4,668) (185) (21,756)
Cash used in investing activities (4,409) (8,824) (7,444) (34,120)
Financing activities:
Additions to debt 0 82 217 466,578
Repayment of debt (481) (1,564) (1,541) (443,002)
Revolving credit facility, net change (4,576) (34,139) (22,063) (45,570)
Paid in capital 10,020 0 10,020 0
Other 403 296 804 (16,872)
Cash provided by (used in) financing activities 5,366 (35,325) (12,563) (38,866)
Net increase (decrease) in cash (937) 387 (3,075) 346
Cash position at beginning of period 1,305 352 3,443 393
Cash position at end of period $ 368 $ 739 $ 368 $ 739
Represented by:
Cash and short-term deposits $ 368 $ 739 $ 368 $ 739
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