Cascades Finishes the Year with Improving Results; Part 2 of 2 - Financial Tables.MONTREAL--(BUSINESS WIRE)--Jan. 29, 1998--CASCADES(ME:CAS.) (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :CAS.)
CASCADES INC.
CONSOLIDATED BALANCE SHEETS
(in thousands of dollars)
As at December 31
1997 1996
ASSETS
Current assets
Cash and temporary investments 56,500 65,482
Accounts receivable 412,075 316,912
Inventories 344,904 267,856
813,479 650,250
Capital assets 1,314,040 1,113,685
Other assets 195,540 110,048
2,323,059 1,873,983
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Bank loans and overdraft 50,128 69,668
Trade accounts payable and
accrued liabilities 350,069 275,337
Current portion of long-term debt 85,020 87,521
485,217 432,526
Long-term debt 991,459 602,828
Deferred income taxes 75,642 70,485
Non-controlling interests 208,462 177,514
Shareholders' equity
Equity component of the
convertible debentures - 74,094
Capital stock 155,955 134,960
Retained earnings 389,658 356,617
Cumulative translation adjustments 16,666 24,959
562,279 590,630
2,323,059 1,873,983
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CASCADES INC.
SEGMENTED ANALYSIS - BOXBOARD GROUP
Paperboard Industries International Inc.
(Public subsidiary, 69.4 percent owned by Cascades Inc.)
For the 3 month periods For the years
ended December 31 ended December 31
1997 1996 1997 1996
Sales (in thousands $)
North America 98,080 91,360 389,588 437,811
Europe 117,830 102,170 406,206 436,228
Consolidated total 215,910 193,530 795,794 874,039
Operating income
(in thousands $)
North America 6,277 9,561 30,554 46,648
Europe 8,144 2,351 19,369 14,353
Consolidated total 14,421 11,912 49,923 61,001
Shipments
(in metric tons)
Boxboard - North
America 73,848 75,423 306,495 294,819
Boxboard - Europe 103,553 69,317 350,658 277,183
Transformation -
North America 31,250 32,459 132,368 152,283
Fluff pulp - Europe 20,169 16,564 80,042 67,762
- The strong contribution of the boxboard mill located in Arnsberg,
Germany, acquired on August 1, 1997, and a return to profitability of
the Tartas fluff pulp mill compensated for the decrease in
profitability of the North American plants. This decrease in
profitability comes essentially from a temporary reduction in
productivity related to the installation of new equipment and to major
maintenance on existing equipment in Montreal. The boxboard mills were
affected by a temporary decrease in productivity related to the
installation of new equipment. The mills consequently produced a
larger volume of second-grade board and were unable to run at full
capacity. The Jonquiere mill was also affected by a small market price
increase for virgin pulp.
- To better serve the American market, Paperboard opened a new
sheeting and distribution centre in Maryland, U.S.A. in January 1998.
In the coming months, Paperboard will select a U.S. location to open a
new folding carton plant for its Somerville Packaging operations.
Paperboard will also open a sheeting and warehousing facility in
England. In the first quarter of 1998, will finalize the installation
of the new winder and of an automated conveyor system at the Toronto
mill. This will allow the mill to increase the quality of its products
while reducing production costs. At the Jonquiere mill, the start-up
of a new pulper will enable the production of light-weight boxboard
made of 100 percent recycled fibre, a new market niche for this mill.
- Paperboard is enjoying strong backlogs and foresees sustained demand
for its products given that no major increase in capacity is
anticipated in the coated boxboard industry. Recent investments will
allow the corporation to increase its production and the quality of
its products. Thus, the results should improve in 1998.
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CASCADES INC.
SEGMENTED ANALYSIS - FINE PAPERS GROUP
Rolland Inc. (Public subsidiary,
73.4 percent owned by Cascades Inc.)
For the 3 month periods For the years
ended December 31 ended December 31
1997 1996 1997 1996
Sales
(in thousands $) 169,071 108,567 577,227 409,948
Operating income
(in thousands $) 6,195 6,948 22,797 19,108
Shipments
(in metric tons)
Fine papers -
coated 28,842 28,539 119,841 110,257
Fine papers -
uncoated 36,433 - 97,935 -
Deinked pulp 10,789 9,208 30,050 36,515
- Sales in 1997 were $577 M, an increase of 41 percent from the $410 M
level of 1996. This increase is mainly due to improved sales from the
Fine Papers Division, the important contribution of Provincial Papers
Inc., acquired on April 30, 1997 and the expansion of the Distribution
Division network.
- The increase of the 1997 operating income compared to the
corresponding period in 1996 is essentially the result of a continuing
improvement to the profitability of the Fine Papers Division and the
significant contribution of Provincial Papers Inc.
- In 1998, Rolland's earnings should continue to grow as a result of
fine paper price increases and the contribution of Provincial Papers
Inc. for a full year. The Fine Papers Division will continue to
improve its product mix, while Provincial Papers Inc. will optimize
its production capacity and introduce new products.
- In March 1998, the new Distribution and Conversion Centre should
start operating. In October 1998, FjordCell Inc., a new company in
which Rolland will hold a 32 percent interest, should start producing
softwood pulp.
- Rolland will also continue to look for new acquisition opportunities
to add to its manufacturing capacity.
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CASCADES INC.
SECTORIAL ANALYSIS - TISSUE PAPERS GROUP
Perkins Papers Ltd. (Public subsidiary,
73.2 percent owned by Cascades Inc.)
For the 3 month periods For the years
ended December 31 ended December 31
1997 1996 1997 1996
Sales (in thousands $) 54,268 63,234 236,658 242,559
Operating income
(in thousands $) 10,017 13,466 43,527 54,641
Shipments
(in metric tons)
Jumbo rolls and
converted products 37,966 42,014 162,971 153,902
- Perkins Papers Ltd. have succeeded in maintaining its excellent
performance throughout 1997, despite intense competition which lowered
tissue prices. This reduction and a small rise in the cost of recycled
fibre were partially offset by increased shipments.
- To meet consumers' growing needs, the Kingsey Falls mill
successfully completed an upgrade of Paper Machine No. 3 in January
1998, thereby increasing the machine's production capacity by over 50
percent (11,000 short tons). This upgrade was completed on time and
within budget allowing the corporation to increase capacity at an
incremental cost of $909 per short ton. This additional capacity will
also supply a new sanitary tissue conversion line due to come on
stream in June 1998. These new, state-of-the-art equipments will
improve production efficiency and product quality
- In the coming quarters, the corporation be adding new converting
equipment for paper towelling and table napkins at the Lachute and
Laval mills, in accordance with the capital investment plan announced
in early 1997. We will also undertake an expanded marketing program to
enhance product recognition and use an extensive sales network to
increase our market share. We are therefore, well-positioned to
maintain or increase our earnings.
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CASCADES INC.
SEGMENTED ANALYSIS - CONTAINERBOARD GROUP
(100 percent owned by Cascades Inc.)
For the 3 month periods For the years
ended December 31 ended December 31
1997 1996 1997 1996
Sales
(in thousands $) 83,110 54,900 300,227 269,007
Operating income
(in thousands $) 3,814 1,081 (1,698) 16,474
Shipments
Linerboard and
corrugated medium
(in metric tons) 121,364 92,597 468,567 370,992
Corrugated products
(in thousands of
square feet) 410,633 388,985 1,688,508 1,553,758
- The new entity created as a result of the merger of Cascades' and
Domtar's containerboard assets, began operating on December 30, 1997.
Having an a normal capacity of 1.1 million tonnes, Norampac Inc. is
the leading manufacturer of containerboard in Canada and the 10th
largest in North America. Norampac is also the leading manufacturer of
corrugated products in Canada.
- The results described above include only the Cascades operations for
the relevant periods. Beginning in the next quarter, Cascades will
include 50 percent of the results of Norampac in is consolidated
results.
- An increase of US$50 a short ton for linerboard and corrugating
medium combined with a decrease in the cost of old corrugated
containers resulted in a significant increase in the profitability of
this group during the fourth quarter of 1997 in comparison with the
preceeding quarter. Operating income for this group increased from a
loss of $1.7 M to operating income of $3.8 M. This results do not
reflect the full benefit of the price increase implemented gradually
during the quarter.
- Demand for linerboard and corrugating medium as well as corrugated
products remains strong. As a result, a majority of manufacturers have
announced price increases for linerboard and corrugating medium for
March 1998. The price of recycled paper has remained stable and no
price increase is expected in the short term.
- During the coming quarters, Norampac aims to realise the different
synergies identified at the time of the merger and to implement its
management strategy based on decentralization and improved
profitability. In addition the company will work toward increasing
productivity of products having a higher value-added and to better
respond to client needs. Norampac aims to profit from its strong
competitive position to innovate and offer a more complete line of
products to its clients.
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CASCADES INC.
SEGMENTED ANALYSIS - SPECIALTY PRODUCTS
(100 percent owned by Cascades Inc.)
For the 3 month periods For the years
ended December 31 ended December 31
1997 1996 1997 1996
Sales (in thousands $) 91,736 87,957 352,825 367,277
Operating income
(in thousands $) 8,984 10,646 35,629 45,049
- In 1997 this group set records for sales, profitability, and shipping volumes for its units specializing in the conversion and uncoated board sectors. These excellent results are due mainly to development of new customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . It should also be noted that the conversion sector offers potential for increased growth particularly in honeycomb honeycomb a mosaic of closely packed units with depressed centers giving a honeycomb appearance. honeycomb ringworm see favus. honeycomb stomach reticulum. products, for which demand is very strong as they respond to new applications. We will therefore continue to innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. in this very specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. sector. - In the moulded pulp sector, four of the five plants performed well. The least productive plant has, however, recently developed new products in order to better respond to customers' needs. Investments have been made in some plants to increase the performance of existing equipment. - In coming quarters, we will continue to invest in order to increase production capacity, improve the quality of our products, and reduce our manufacturing costs. The year 1998 looks favourable for most of our sectors of activity, with good demand and planned price increases. We are also studying possible acquisitions in the United States that will allow us to further diversified diversified (di·verˑ·s the specialized products we presently offer. CONTACT: Cascades Inc. Mr. Andre An·dré , John 1751-1780. British army officer hanged as a spy in the American Revolution for conspiring with Benedict Arnold. Belzile, 514/ 282-2600 abelzile@cascades.com or Cascades Inc. Mr. Stephane Milot, 514/ 282-2681 smilot@cascades.com |
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