KINGSEY FALLS, QC, Aug. 10, 2011 /PRNewswire/ - Cascades Inc. (TSX: CAS), a leader in the recovery of recyclable materials and the manufacturing of green packaging and tissue paper products, announces its financial results for the three-month and six-month periods ended June 30, 2011.
Commenting on the second quarter results, Mr. Alain Lemaire, President and Chief Executive Officer stated: "Following a challenging first quarter, we are encouraged by the fact that our results have started to rebound in spite of the rise of several of our costs, including the recycled fibre, the appreciation of the Canadian dollar and continuing weak demand for packaging. Three of our four segments, and more particularly our tissue paper operations, experienced an improvement in their sequential financial performance. Moreover, we have taken other significant steps to improve profitability as demonstrated by the divestiture and the closure of three less-performing units. We will continue implementing optimization programs to support the progress observed in the past three months".
Strategic initiatives
- Divestiture of the Versailles (Connecticut) and Hebron (Kentucky) boxboard facilities.
- Announcement of an investment in Greenpac Mill LLC, a corporation created for the purpose of constructing and operating a state of the art containerboard mill to be located in Niagara Falls (New York).
- Closure of the corrugated box plant of Leominster (Massachusetts).
Financial highlights
- Net earnings per share of $1.21 compared to net earnings of $0.29 in the corresponding period of last year.
- Excluding specific items, net loss per share of $0.06 compared to net earnings of $0.27 in the second quarter of 2010.
- Financial results and balance sheet reflecting:
- the full consolidation1 of Reno De Medici's numbers, the second largest European producer of coated recycled boxboard;
- the divestiture of Dopaco, Cascades' paper cup and carton converting business for the quick-service restaurant and foodservice industries (considered as discontinued operations).
- Without the impact of these two factors, improving operating results compared to Q1 2011, despite the significant inflation of input costs and the Canadian dollar in the past 9 months.
- Operating income before depreciation and amortization (EBITDA) excluding specific items of $62 million compared to $37 million (or $52 million including 100% of Reno De Medici) in the first quarter of 2011. In the second quarter of 2010, Cascades' EBITDA excluding specific items was $85 million.
- Notwithstanding the unfavourable seasonality and the Canada Post strike which negatively impacted the working capital and cash flow, net debt down $157 million (11%) compared to the previous quarter. Excluding the impact of the full consolidation of Reno De Medici, the net debt would have decreased more than $300 million (21%).
Financial Summary
| Selected consolidated information | ||||||||
| (in millions of Canadian dollars, except amounts per share) | Q2/2011 | Q2/2010 | Q1/2011 | |||||
| Sales | 991 | 808 | 774 | |||||
| Excluding specific items 1 | ||||||||
| Operating income before depreciation and amortization (OIBD or EBITDA) | 62 | 85 | 37 | |||||
| Operating income | 15 | 48 | 1 | |||||
| Net earnings (loss) | (6) | 26 | 1 | |||||
| per common share | $(0.06) | $0.27 | $0.01 | |||||
| Cash flow from operations (adjusted) | 17 | 41 | 15 | |||||
| As reported | ||||||||
| Operating income before depreciation and amortization (OIBD or EBITDA) 1 | 65 | 82 | 30 | |||||
| Operating income (loss) | 18 | 45 | (6) | |||||
| Net earnings (loss) | 117 | 28 | (8) | |||||
| per common share | $1.21 | $0.29 | $(0.08) | |||||
| Cash flow from operations (adjusted) 1 | 16 | 41 | 15 | |||||
| Note 1 - see the supplemental information on non-IFRS measures. | ||||||||
Results analysis for the three-month period ended June 30, 2011 (compared to the same period of the previous year and reflecting the reclassification of Dopaco as discontinued operations)
In comparison with the same period last year, sales rose by 23% to $991 million as of result of higher selling prices and the full consolidation of Reno De Medici's results. These factors were partly offset by the 6% appreciation of the Canadian dollar, the impact of the divestiture of one of our containerboard mills and lower shipments in our packaging operations.
The operating income, excluding specific items, amounted to $15 million compared to $48 million in Q2 2010. Improved selling prices and the effect of the full consolidation of Reno De Medici's results were unfortunately offset by the rise of all main variable costs, namely recycled fibre, pulp, energy, chemical products and freight, and again, the appreciation of the Canadian dollar. On a segmented basis, all groups were negatively affected by the increase of the Canadian currency and posted weaker profitability. The containerboard and tissue paper operations were also particularly impacted by the cost inflation of raw materials. When including specific items, the operating income amounted to $18 million in comparison to $45 million in the same period of last year.
In the second quarter of 2011, these specific items impacted our operating income and/or net earnings (before tax):
- a $8 million gain on disposal and others (impact on operating income and net earnings);
- a loss of $6 million on the inventory adjustment resulting from business acquisition (impact on operating income and net earnings);
- a $2 million unrealized gain on financial instruments (impact on operating income and net earnings);
- $1 million in closure and restructuring costs (impact on operating income and net earnings);
- a gain related to the divestiture of Dopaco (discontinued operations) of $193 million ($110 million net of tax, impact on net earnings);
- a $5 million foreign exchange loss on long-term debt and financial instruments (impact on net earnings).
For further details, see the two following tables on IFRS and non-IFRS measures reconciliation.
The net loss excluding specific items amounted to $6 million ($0.06 per share) in the second quarter of 2011 compared to net earnings of $26 million ($0.27 per share) for the same period of last year. Including specific items, net earnings reached $117 million ($1.21 per share) compared to net earnings of $28 million ($0.29 per share) for the same quarter in 2010.
Notwithstanding the unfavourable seasonality and the Canada Post strike which negatively impacted the working capital and cash flow, the net debt decreased by 11% to $1,288 million compared to March 31, 2011. However, this amount includes the consolidation of Reno De Medici's net debt of $146 million. Excluding this amount, Cascades' net debt would have amounted to $1,142 million on June 30, 2011, a decline of $303 million (21%) and $366 million (24%) compared to March 31, 2011 and June 30, 2010 respectively. Cascades' net debt as of June 30, 2011 also includes an investment of $50 million in Greenpac Mill LLC.
Results analysis for the three-month period ended June 30, 2011 (compared to the previous quarter and reflecting the reclassification of Dopaco as discontinued operations)
In comparison to the previous quarter, sales jumped 28% mostly due to better selling prices and the full consolidation of Reno De Medici's results. The operating income also improved as a result of the two latter factors, combined with higher volumes (excluding the effect of closures and divestitures) and lower energy costs. All this more than offset the rise of many variable costs (recycled fibre, chemical products, freight) and the appreciation of the Canadian currency.
Near-term outlook
Mr. Alain Lemaire, President and Chief Executive Officer added: "Looking ahead to the next quarter, demand should slightly improve along with seasonality. In addition, we should benefit from the current and future implementation of selling price increases in our tissue paper, specialty products and North American boxboard segments. We also anticipate that our results will be positively impacted by the realization of restructuring initiatives and better operating rates and efficiency. Elevated input costs and the strong Canadian dollar should however continue to put pressure on our profitability".
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 September 16, 2011 to shareholders of record at the close of business on September 2, 2011. This dividend paid by Cascades is an "eligible dividend" as per the Income Tax Act (Bill C-28, Canada). In addition, in the second quarter of 2011, in accordance with its normal course issuer bid program, Cascades purchased for cancellation 402,600 shares at an average price of $6.63 representing an aggregate amount of approximately $2.7 million. In the first half of the year, Cascades purchased for cancellation 576,463 shares at an average price of $6.80 representing an aggregate amount of approximately $3.9 million
Transition to International Financial Reporting Standards (IFRS)
All financial information, including comparative figures pertaining to Cascades' 2010 results, has been prepared in accordance with International Financial Reporting Standards (IFRS). In previous periods, the Corporation prepared its consolidated financial statements and interim financial statements in accordance with Canadian generally accepted accounting principles (GAAP), in effect prior to January 1, 2011 (previous GAAP). Comparative figures presented pertaining to Cascades' 2010 results have been restated to be in accordance with IFRS. A reconciliation of certain comparative figures from previous GAAP to IFRS is provided in the table below and the Second Quarter results investor presentation. For further details, please refer to the investor presentation on the impact of adoption of IFRS, the first quarter 2011 report and the 2010 annual report. These documents are available at www.cascades.com/investors.
The table below provides the reconciliation of the second quarter 2010 sales, the operating income and the operating income before depreciation and amortization, excluding specific items, reported under the previous GAAP and the IFRS:
| Sales 1 | Operating income, excluding specific items |
Operating income before depreciation and amortization (EBITDA), excluding specific items |
||
| (in millions of Canadian dollars) | Q2/2010 | Q2/2010 | Q2/2010 | |
| As reported in 2010 (previous Can GAAP) | 998 | 56 | 107 | |
| Less: IFRS adjustments: | ||||
| Joint ventures | 80 | (5) | (8) | |
| Depreciation and amortization | - | 4 | - | |
| Others | - | 2 | 1 | |
| Including IFRS adjustment | 918 | 57 | 100 | |
| Less: discontinued operations | (110) | (9) | (15) | |
| As reported (IFRS) | 808 | 48 | 85 | |
| Note 1 - Sales of discontinued operations and joint ventures are net of intercompany. | ||||
The following table provides the second quarter 2011 sales and operating income before depreciation and amortization, excluding specific items, including those of the discontinued operations and our joint ventures:
| Sales 1 | Operating income before depreciation and amortization (EBITDA), excluding specific items |
||
| (in millions of Canadian dollars) | Q2/2011 | Q2/2011 | |
| As reported (IFRS) | 991 | 62 | |
| Add back: | |||
| Discontinued operations | 40 | 4 | |
| Joint ventures | 21 | 3 | |
| Including discontinued operations and joint ventures | 1,052 | 69 | |
| Note 1 - Sales of discontinued operations and joint ventures are net of intercompany. | |||
Supplemental information on non-IFRS measures
Operating income before depreciation and amortization, earnings before interests, 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 interests, 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 corporation's operating performance and its ability to meet debt service requirements. However, operating income before depreciation and amortization, earnings before interests, 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 interests, 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 interests, 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, debt restructuring charges, gains or losses on sale of 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.
Net earnings (loss), which is a performance measure defined by IFRS is reconciled below to operating income (loss), operating income excluding specific items and operating income before depreciation excluding specific items or earnings before interests, taxes, depreciation and amortization excluding specific items:
| (in millions of Canadian dollars) | Q2/2011 | Q2/2010 | Q1/2011 |
| Net earnings (loss) | 117 | 28 | (8) |
| Net earnings from discontinued operations | (108) | (6) | (6) |
| Non-controlling interest | 1 | 1 | - |
| Share of results of associates and joint ventures | (2) | (4) | (8) |
| Provision for (recovery of) income taxes | (22) | 6 | (14) |
| Foreign exchange loss (gain) on long-term debt and financial instruments | 5 | (6) | 5 |
| Financing expense | 27 | 26 | 25 |
| Operating income (loss) | 18 | 45 | (6) |
| Specific items : | |||
| Inventory adjustment resulting from business acquisition | 6 | - | - |
| Loss (gain) on disposal and others | (8) | - | 1 |
| Net impairment loss | - | - | 1 |
| Closure and restructuring costs | 1 | - | 3 |
| Unrealized loss (gain) on financial instruments | (2) | 3 | 2 |
| (3) | 3 | 7 | |
| Operating income - excluding specific items | 15 | 48 | 1 |
| Depreciation and amortization | 47 | 37 | 36 |
| Operating income before depreciation and amortization (OIBD or EBITDA) - excluding specific items |
62 | 85 | 37 |
The following table reconciles net earnings (loss) and net earnings (loss) per share to 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 | |||||
| Q2/2011 | Q2/2010 | Q1/2011 | Q2/2011 | Q2/2010 | Q1/2011 | ||
| As per IFRS | 117 | 28 | (8) | $1.21 | $0.29 | $(0.08) | |
| Specific items : | |||||||
| Inventory adjustment resulting from business acquisition | 6 | - | - | $0.04 | $ - | $ - | |
| Loss (gain) on disposal and others | (8) | - | 1 | $(0.22) | $ - | $0.01 | |
| Net impairment loss | - | - | 1 | $ - | $ - | $0.01 | |
| Closure and restructuring costs | 1 | - | 3 | $0.01 | $ - | $0.02 | |
| Unrealized loss (gain) on financial instruments | (2) | 3 | 2 | $(0.02) | $0.03 | $0.02 | |
| Foreign exchange loss (gain) on long-term debt and financial instruments | 5 | (6) | 5 | $0.05 | $(0.05) | $0.04 | |
| Included in discontinued operations, net of tax | (110) | - | (1) | $(1.13) | $ - | $(0.01) | |
| Tax effect on specific items | (15) | 1 | (2) | ||||
| (123) | (2) | 9 | $(1.27) | $(0.02) | $0.09 | ||
| Excluding specific items | (6) | 26 | 1 | $(0.06) | $0.27 | $0.01 | |
| Note 1 - specific amounts per share are calculated on an after-tax basis. | |||||||
The following table reconciles cash flow (adjusted) from operations activities to cash flow from operations excluding specific items:
| Cash flow from operations | |||
| (in millions of Canadian dollars) | Q2/2011 | Q2/2010 | Q1/2011 |
| Cash flow used from operating activities | (27) | (5) | (12) |
| Changes in non-cash working capital components | 43 | 46 | 27 |
| Cash flow (adjusted) from operations | 16 | 41 | 15 |
| Specific items, net of current income taxes : | |||
| Closure and restructuring costs | 1 | - | - |
| Excluding specific items | 17 | 41 | 15 |
Consolidated Balance Sheets
| (in millions of Canadian dollars) (unaudited) | June 30, 2011 |
December 31, 2010 |
||
| Assets | ||||
| Current assets | ||||
| Cash and cash equivalents | 18 | 6 | ||
| Accounts receivable | 712 | 490 | ||
| Current income tax assets | 17 | 21 | ||
| Inventories | 530 | 476 | ||
| Financial assets | 10 | 12 | ||
| 1,287 | 1,005 | |||
| Long-term assets | ||||
| Investments in associates and joint ventures | 195 | 262 | ||
| Property, plant and equipment | 1,686 | 1,553 | ||
| Intangible assets | 133 | 126 | ||
| Financial assets | 20 | 2 | ||
| Other assets | 155 | 94 | ||
| Deferred income tax assets | 69 | 82 | ||
| Goodwill | 290 | 313 | ||
| 3,835 | 3,437 | |||
| Liabilities and Shareholders' Equity | ||||
| Current liabilities | ||||
| Bank loans and advances | 105 | 42 | ||
| Accounts payable and accrued liabilities | 659 | 440 | ||
| Current income tax liabilities | 68 | 2 | ||
| Provisions for contingencies and charges | 14 | 23 | ||
| Current portion of financial liabilities and other liabilities | 12 | 14 | ||
| Current portion of long-term debt | 33 | 7 | ||
| Revolving credit facility, renewed in 2011 | - | 394 | ||
| 891 | 922 | |||
| Long-term liabilities | ||||
| Long-term debt | 1,168 | 960 | ||
| Provisions for contingencies and charges | 24 | 37 | ||
| Financial liabilities | 116 | 83 | ||
| Other liabilities | 229 | 196 | ||
| Deferred income tax liabilities | 124 | 167 | ||
| 2,552 | 2,365 | |||
| Equity attributable to Shareholders | ||||
| Capital stock | 493 | 496 | ||
| Contributed surplus | 13 | 14 | ||
| Retained earnings | 677 | 576 | ||
| Accumulated other comprehensive income (loss) | (48) | (37) | ||
| 1,135 | 1,049 | |||
| Non-controlling interest | 148 | 23 | ||
| Total equity | 1,283 | 1,072 | ||
| 3,835 | 3,437 |
| Consolidated Statements of Earnings | ||||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| (in millions of Canadian dollars, except per share amounts and number of shares) (unaudited) | 2011 | 2010 | 2011 | 2010 | ||
| Sales | 991 | 808 | 1,765 | 1,567 | ||
| Cost of sales and expenses | ||||||
| Cost of sales (excluding depreciation and amortization) | 838 | 644 | 1,499 | 1,259 | ||
| Depreciation and amortization | 47 | 37 | 83 | 77 | ||
| Selling and administrative expenses | 97 | 83 | 174 | 164 | ||
| Gain on disposal and others | (8) | - | (7) | - | ||
| Net impairment loss and other restructuring costs | 1 | - | 5 | - | ||
| Foreign exchange loss (gain) | 1 | (3) | 1 | 1 | ||
| Loss on financial instruments | (3) | 2 | (2) | 2 | ||
| 973 | 763 | 1,753 | 1,503 | |||
| Operating income | 18 | 45 | 12 | 64 | ||
| Financing expense | 27 | 26 | 52 | 54 | ||
| Loss on refinancing of long-term debt | - | - | - | 3 | ||
| Foreign exchange loss (gain) on long-term debt and financial instruments | 5 | (6) | 10 | (5) | ||
| (14) | 25 | (50) | 12 | |||
| Provision for (recovery of) income taxes | (22) | 6 | (36) | 1 | ||
| Share of results of associates and joint ventures | (2) | (4) | (10) | (7) | ||
| Net earnings (loss) from continuing operations including non-controlling interest for the period | 10 | 23 | (4) | 18 | ||
| Net earnings from discontinued operations for the period | 108 | 6 | 114 | 12 | ||
| Net earnings including non-controlling interest for the period | 118 | 29 | 110 | 30 | ||
| Less: Non-controlling interest | 1 | 1 | 1 | 1 | ||
| Net earnings attributable to Shareholders for the period | 117 | 28 | 109 | 29 | ||
| Net earnings (loss) from continuing operations per common share | ||||||
| Basic | $0.09 | $0.22 | ($0.06) | $0.17 | ||
| Diluted | $0.09 | $0.22 | ($0.06) | $0.17 | ||
| Net earnings per common share | ||||||
| Basic | $1.21 | $0.29 | $1.13 | $0.30 | ||
| Diluted | $1.19 | $0.29 | $1.11 | $0.30 | ||
| Weighted average basic number of common shares outstanding | 96,367,221 | 96,895,355 | 96,486,160 | 96,990,471 | ||
| Consolidated Statements of Comprehensive Income | ||||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| (in millions of Canadian dollars) (unaudited) | 2011 | 2010 | 2011 | 2010 | ||
| Net earnings including non-controlling interest for the period | 118 | 29 | 110 | 30 | ||
| Other comprehensive income (loss) | ||||||
| Translation adjustments | ||||||
| Change in foreign currency translation of foreign subsidiaries | (15) | 20 | (24) | (11) | ||
| Change in foreign currency translation related to net investment hedging activities | 4 | (24) | 19 | (8) | ||
| Income taxes | (1) | 3 | (3) | 1 | ||
| Cash flow hedges | ||||||
| Change in fair value of foreign exchange forward contracts | 5 | (6) | 4 | (2) | ||
| Change in fair value of interest rate swap agreements | (2) | (1) | (1) | (3) | ||
| Change in fair value of commodity derivative financial instruments | (9) | (2) | (5) | (10) | ||
| Income taxes | - | 3 | (1) | 5 | ||
| Available-for-sale financial assets | - | (1) | - | - | ||
| (18) | (8) | (11) | (28) | |||
| Comprehensive income including non-controlling interest for the period | 100 | 21 | 99 | 2 | ||
| Less: Comprehensive income attributable to non-controlling interest for the period | 1 | 1 | 1 | 1 | ||
| Comprehensive income attributable to Shareholders | 99 | 20 | 98 | 1 | ||
| Consolidated Statements of Equity | ||||||||||||
| For the 6-month period ended June 30, 2011 | ||||||||||||
| (in millions of Canadian dollars) (unaudited) | Capital stock | Contributed surplus | Retained earnings | Accumulated other comprehensive income (loss) |
Total equity attributable to Shareholders |
Non-controlling interest | Total equity |
|||||
| Balance—Beginning of period | 496 | 14 | 576 | (37) | 1,049 | 23 | 1,072 | |||||
| Net earnings for the period | - | - | 109 | - | 109 | 1 | 110 | |||||
| Business acquisitions | - | - | - | - | - | 124 | 124 | |||||
| Other comprehensive income (loss) | - | - | - | (11) | (11) | - | (11) | |||||
| Dividends | - | - | (8) | - | (8) | - | (8) | |||||
| Stock options | - | - | - | - | - | - | - | |||||
| Redemption of common shares | (3) | (1) | - | - | (4) | - | (4) | |||||
| Balance—End of period | 493 | 13 | 677 | (48) | 1,135 | 148 | 1,283 | |||||
| For the 6-month period ended June 30, 2010 | ||||||||||||
| (in millions of Canadian dollars) (unaudited) | Capital stock | Contributed surplus | Retained earnings | Accumulated other comprehensive income (loss) |
Total equity attributable to Shareholders |
Non-controlling interest |
Total equity |
|||||
| Balance—Beginning of period | 499 | 14 | 575 | 3 | 1,091 | 21 | 1,112 | |||||
| Net earnings for the period | - | - | 29 | - | 29 | 1 | 30 | |||||
| Other comprehensive income (loss) | - | - | - | (28) | (28) | - | (28) | |||||
| Dividends | - | - | (8) | - | (8) | - | (8) | |||||
| Stock options | - | - | - | - | - | - | - | |||||
| Redemption of common shares | (3) | (1) | - | - | (4) | - | (4) | |||||
| Balance—End of period | 496 | 13 | 596 | (25) | 1,080 | 22 | 1,102 | |||||
| Consolidated Statements of Cash Flows | ||||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| (in millions of Canadian dollars) (unaudited) | 2011 | 2010 | 2011 | 2010 | ||
| Operating activities from continuing operations | ||||||
| Net earnings attributable to Shareholders for the period | 117 | 28 | 109 | 29 | ||
| Net earnings from discontinued operations for the period | (108) | (6) | (114) | (12) | ||
| Net earnings (loss) from continuing operations | 9 | 22 | (5) | 17 | ||
| Adjustments for | ||||||
| Financing expense | 27 | 26 | 52 | 54 | ||
| Depreciation and amortization | 47 | 37 | 83 | 77 | ||
| Gain on disposal and others | (8) | - | (7) | - | ||
| Net impairment loss and other restructuring costs | - | - | 4 | - | ||
| Unrealized loss (gain) on financial instruments | (2) | 3 | - | 3 | ||
| Foreign exchange loss (gain) on long-term debt and financial instruments | 5 | (6) | 10 | (5) | ||
| Provision for (recovery of) income taxes | (22) | 6 | (36) | 1 | ||
| Share of results of associates and joint ventures | (2) | (4) | (10) | (7) | ||
| Non-controlling interest | 1 | 1 | 1 | 1 | ||
| Financing expense paid | (34) | (35) | (51) | (45) | ||
| Income tax paid | (6) | (4) | (9) | (8) | ||
| Others | 1 | (5) | (1) | (7) | ||
| 16 | 41 | 31 | 81 | |||
| Changes in non-cash working capital components | (43) | (46) | (70) | (61) | ||
| (27) | (5) | (39) | 20 | |||
| Investing activities from continuing operations | ||||||
| Purchases of property, plant and equipment | (22) | (18) | (57) | (48) | ||
| Increase in other assets and investment in associates and joint ventures | (23) | (16) | (33) | (19) | ||
| Business acquisitions, net of cash acquired | (1) | - | (1) | (2) | ||
| Business dispositions, net of cash disposed | 6 | - | 6 | - | ||
| (40) | (34) | (85) | (69) | |||
| Financing activities from continuing operations | ||||||
| Bank loans and advances | 19 | 10 | 23 | 7 | ||
| Change in revolving credit facilities | (308) | 16 | (257) | 201 | ||
| Purchase of senior notes | - | (4) | - | (165) | ||
| Increase in other long-term debt | 1 | (1) | 1 | - | ||
| Payments of other long-term debt | (7) | (2) | (9) | (4) | ||
| Redemption of common shares | (3) | (2) | (4) | (4) | ||
| Dividend paid to Corporation's Shareholder | (4) | (4) | (8) | (8) | ||
| (302) | 13 | (254) | 27 | |||
| Change in cash and cash equivalents during the period from continuing operations | (369) | (26) | (378) | (22) | ||
| Change in cash and cash equivalents from discontinued operations, including proceeds on disposal during the period | 377 | 25 | 390 | 28 | ||
| Net change in cash and cash equivalents during the period | 8 | (1) | 12 | 6 | ||
| Cash and cash equivalents—Beginning of period | 10 | 15 | 6 | 8 | ||
| Cash and cash equivalents—End of period | 18 | 14 | 18 | 14 | ||
| Segmented Information | ||||||
| (in millions of Canadian dollars) (unaudited) | SALES | |||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| 2011 | 2010 | 2011 | 2010 | |||
| Packaging products | ||||||
| Boxboard | ||||||
| Manufacturing | 322 | 119 | 448 | 234 | ||
| Converting | 81 | 161 | 225 | 312 | ||
| Intersegment sales | (13) | (11) | (24) | (20) | ||
| Discontinued operations of converting segment | (42) | (120) | (148) | (231) | ||
| 348 | 149 | 501 | 295 | |||
| Containerboard | ||||||
| Manufacturing | 116 | 148 | 255 | 282 | ||
| Converting | 204 | 217 | 399 | 411 | ||
| Intersegment sales | (77) | (94) | (157) | (167) | ||
| 243 | 271 | 497 | 526 | |||
| Specialty products | ||||||
| Industrial packaging | 31 | 28 | 61 | 55 | ||
| Consumer packaging | 28 | 21 | 46 | 38 | ||
| Specialty papers | 72 | 78 | 145 | 156 | ||
| Recovery and recycling | 91 | 73 | 174 | 145 | ||
| Intersegment sales | (3) | (2) | (5) | (4) | ||
| 219 | 198 | 421 | 390 | |||
| Intersegment sales | (30) | (25) | (58) | (51) | ||
| 780 | 593 | 1,361 | 1,160 | |||
| Tissue papers | ||||||
| Manufacturing and converting | 218 | 218 | 417 | 415 | ||
| Intersegment sales and others | (7) | (3) | (13) | (8) | ||
| Total | 991 | 808 | 1,765 | 1,567 | ||
| Operating income before depreciation and amortization | ||||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| (in millions of Canadian dollars) (unaudited) | 2011 | 2010 | 2011 | 2010 | ||
| Packaging products | ||||||
| Boxboard | ||||||
| Manufacturing | 10 | 10 | 13 | 15 | ||
| Converting | 4 | 18 | 13 | 33 | ||
| Others | - | (2) | - | (2) | ||
| Discontinued operations of converting segment | (4) | (15) | (12) | (28) | ||
| 10 | 11 | 14 | 18 | |||
| Containerboard | ||||||
| Manufacturing | 4 | 16 | 10 | 26 | ||
| Converting | 18 | 26 | 28 | 47 | ||
| Others | 8 | (6) | 5 | (5) | ||
| 30 | 36 | 43 | 68 | |||
| Specialty products | ||||||
| Industrial packaging | 2 | 3 | 4 | 7 | ||
| Consumer packaging | 3 | 2 | 3 | 3 | ||
| Specialty papers | (1) | 6 | (1) | 11 | ||
| Recovery and recycling | 8 | 6 | 12 | 12 | ||
| Others | - | - | 1 | - | ||
| 12 | 17 | 19 | 33 | |||
| 52 | 64 | 76 | 119 | |||
| Tissue papers | ||||||
| Manufacturing and converting | 16 | 23 | 26 | 42 | ||
| Corporate | (3) | (5) | (7) | (20) | ||
| Operating income before depreciation and amortization | 65 | 82 | 95 | 141 | ||
| Depreciation and amortization | ||||||
| Boxboard | (14) | (9) | (21) | (18) | ||
| Containerboard | (16) | (15) | (31) | (34) | ||
| Specialty products | (8) | (8) | (14) | (14) | ||
| Tissue papers | (9) | (9) | (19) | (20) | ||
| Corporate and eliminations | (2) | (2) | (4) | (3) | ||
| Discontinued operations of boxboard converting segment | 2 | 6 | 6 | 12 | ||
| (47) | (37) | (83) | (77) | |||
| Operating income | 18 | 45 | 12 | 64 | ||
| Purchases of property, plant and equipment |
||||||
| For the 3-month periods ended June 30, |
For the 6-month periods ended June 30, |
|||||
| (in millions of Canadian dollars) (unaudited) | 2011 | 2010 | 2011 | 2010 | ||
| Packaging products | ||||||
| Boxboard | ||||||
| Manufacturing | 15 | 2 | 17 | 4 | ||
| Converting | 1 | 1 | 2 | 1 | ||
| Discontinued operations of converting segment | - | - | (1) | - | ||
| 16 | 3 | 18 | 5 | |||
| Containerboard | ||||||
| Manufacturing | - | 5 | 3 | 10 | ||
| Converting | 5 | 3 | 9 | 7 | ||
| 5 | 8 | 12 | 17 | |||
| Specialty products | ||||||
| Industrial packaging | 1 | - | 1 | - | ||
| Consumer packaging | 1 | 1 | 1 | 2 | ||
| Specialty papers | - | 2 | 4 | 3 | ||
| Recovery and recycling | 1 | 1 | 3 | 2 | ||
| 3 | 4 | 9 | 7 | |||
| 24 | 15 | 39 | 29 | |||
| Tissue papers | ||||||
| Manufacturing and converting | 9 | 2 | 15 | 10 | ||
| Corporate | - | 3 | 2 | 7 | ||
| Total purchases | 33 | 20 | 56 | 46 | ||
| Disposal of property, plant and equipment | (2) | (1) | (2) | (3) | ||
| 31 | 19 | 54 | 43 | |||
| Purchases of property, plant and equipment included in accounts payable |
||||||
| Beginning of period | 6 | 7 | 18 | 13 | ||
| End of period | (15) | (8) | (15) | (8) | ||
| Total investing activities | 22 | 18 | 57 | 48 | ||
Founded in 1964, Cascades produces, converts and markets packaging and tissue products that are composed mainly of recycled fibres. The Corporation employs close to 11,000 employees, who work in more than 100 units located in North America and Europe. Its management philosophy, its more than 45 years of experience in recycling and its continued efforts in research and development are strengths that enable Cascades to create new products for its customers. 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.
_____________________________
1 Cascades' ownership in Reno De Medici S.p.A. ("RDM") stands at 41%. In addition to this stake, Cascades also has a call option over RDM shares by virtue of which we are entitled to acquire up to a maximum 9.07% of its current shares outstanding. Considering these facts, starting in the second quarter of 2011, our consolidated figures include those of RDM at 100% and net results are reported net of non-controlling interests. Prior to the second quarter, our investment in RDM was accounted for using the equity method.
SOURCE CASCADES INC.
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