Correction From Source - Cascades Maintains Strong Results Despite Difficult Industry Conditions.MONTREAL--(BUSINESS WIRE)--Jan. 30, 1997-- CASCADES (ME;TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). CAS) Cascades Inc. announces net earnings of $85.2 M ($1.37 per share) for the year ended December December: see month. 31, 1996 compared with earnings of $113,4 M ($1.84 per share ) for the same period in 1995. In commenting these results Mr. Laurent Laurent may refer to: Geography
pl.n. Alternating periods of good and bad fortune or spirits. ups and downs Noun, pl alternating periods of good and bad luck or high and low spirits that accompany the industry cycles. By maintaining profitability Cascades is better able to take advantage of business opportunities which often appear during an industry downturn Downturn The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. ." The net earnings include non-recurring gains of $13,2 M, after taxes and non-controlling interests. The gains resulted principally from divestures undertaken by Cascades and its subsidiaries as part of their strategy of concentrating in paperboard paperboard, material similiar in shape and composition to paper, but generally thicker, stronger, and more rigid. Paper machines, e.g., Fourdrinier machines, are used to make sheets of paperboard. for folding cartons The folding carton created the packaging industry as it is known today, beginning in the late 19th century. Basically, a folding carton is made of paperboard, and is cut, folded, laminated and printed for transport to manufacturers. , corrugated cor·ru·gate v. cor·ru·gat·ed, cor·ru·gat·ing, cor·ru·gates v.tr. To shape into folds or parallel and alternating ridges and grooves. v.intr. containers, tissue paper and fine paper. For the three month period ending December 31, 1996, consolidated net earnings were $12,6 M ($0.19 per share) compared with $20,3 M ($0.33 per share) for the same period in 1995. Sales Sales for the twelve months ending December 31, 1996 were $2,1 billion compared with $2,3 billion in 1995. The 8 percent decline resulted principally from the divestures as well as significant reductions in the price of paperboard, corrugating medium, fine papers and pulp. However the quick turn-around of Perkins Papers Ltd. and the inclusion of its sales for a full fiscal year offset the impact of the above factors. In addition, shipments increased in all sectors except fine papers and pulp which showed a slight decline. For the fourth quarter of 1996, sales were $492,8 M compared with $547,7 for the same period in 1995, a decline of 11 percent. This decline is principally attributable to the same factors as those affecting sales for the year discussed above. Despite the decline in sales, shipments in all sectors except de-inked pulp De-inked pulp is recycled paper which has been processed by chemicals, thus removing ink and other unwanted elements. The pulp is then used (often in a combination with newly produced pulp) to produce paper. increased over the previous year. The overall increase in shipments over 1995 was approximately 16 percent. Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Operating income for the year ending December 31, 1996 was $195,8 M compared with $223,1M in 1995. The decline in operating income is essentially attributable to the significant reduction in selling prices encountered in the paperboard, corrugated container and fine paper groups. The corrugated container group was particularly hard hit by difficult market conditions caused by significant new production capacity and a resulting steep decline in prices. The rapid turn-around of Perkins Papers Ltd. and the inclusion for a full fiscal year of the results of the assets acquired in August 1995, enabled the tissue paper group to significantly increase its operating income. In addition to this, the other sectors of the Company continued to perform well with operating income which improved slightly despite a decline in sales. This group contributed for 23 percent of consolidated operating income. For the fourth quarter of 1996, operating income remained stable at $44M compared to $45M in 1995. During the quarter operating income for the fine paper group more than doubled while the tissue group increased operating income form $7,9M in 1995 to 13,5M in 1996. On the other hand operating income for the corrugating container group declined sharply from $12,7M in 1995 to $1.1M in 1996. Operating income for the other sectors increased during the last quarter by 17 percent despite a decline in sales of 20 percent. Cash Flow For the year ended December 31, 1996, consolidated cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses was $196,8M ($3.28 per share) compared to $209,4M ($3.45per share) in 1995. Cash flow plus net proceeds Net Proceeds The amount received after all costs are deducted from the sale of a piece of property or security. Notes: In the case of an investor selling a security, net proceeds represent the proceeds from the sale minus any trading costs (i.e. commissions). from divestitures totalled $280,7M. These funds were used to: - fund capital investments totalling $117,9M; - diverse financing activities totalling $64,3M, including reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. , redemption of minority interests in certain subsidiaries and the redemption of common shares pursuant to a normal course issuer bid by the Company; and - increase net liquidity by $62,2M. At the end of 1996, Cascades reduced its short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. bank indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. to $4,2M compared to $66,5M at December 31, 1995. In addition, an amount of $24M is held in trust by Paperboard Industries International Inc to finance future capital investments. Outlook In 1997 we will continue our strategy of concentrating in our core activities and optimizing our existing installations. In addition, the company will continue to develop synergies between our various groups. We are also reviewing different opportunities for acquisitions, joint ventures and capital investments within each of our groups. We anticipate that 1997 will be a good year with respect to demand for our products and we believe prices for most products will increase. If this occurs we will be able to profit from recent investments which enabled us to increase shipments by an average of 16 percent during the fourth quarter compared to the same period last year. More particularly, in paperboard and folding cartons we believe the strong demand in this sector combined with very slight additions to capacity will lead to an increase in prices. With respect to fine paper, we expect that prices will also increase and Rolland should perform well. While prices in the corrugating container market have probably reached bottom we feel this industry will continue to suffer the effect of excess capacity during the up-coming quarters. With respect to the other sectors we expect continued strong performance and significant contribution to consolidated results of the company. -0-
FINANCIAL HIGHLIGHTS
for periods ended December 31
(in thousands of dollars, except per share amounts)
1996 1995 1996 1995
3 months 3 months 12 months 12 months
________ ________ _________ _________
Total sales 492,780 547,737 2,101,106 2,270,559
Net earnings 12,638 20,274 85,182 113,416
per share $0.19 $0.33 $1.37 $1.84
per share fully
diluted $0.17 $0.27 $1.12 $1.51
Cash flow
from operations 44,586 45,521 196,812 209,408
per share $0.74 $0.74 $3.28 $3.45
per share fully
diluted $0.61 $0.60 $2.67 $2.79
CONTACT: Cascades Inc. Andre Belzile, 514/282-2600 or Cascades Inc. Stephane Milot, 514/282-2600 |
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