MISSISSAUGA, Ontario, May  14, 2025  (GLOBE NEWSWIRE) -- KP Tissue Inc. (KPT) (TSX: KPT) reports the Q1 2025 financial and operational results of KPT and Kruger Products Inc. (Kruger Products). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and BonterraTM) and the Away-From-Home (AFH) market and continues to grow in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products. KPT currently holds a 12.3% interest in Kruger Products.

Kruger Products Q1 2025 Business and Financial Highlights

Revenue was $546.1 million in Q1 2025 compared to $479.4 million in Q1 2024, an increase of $66.7 million or 13.9%.Adjusted EBITDA1 was $75.8 million in Q1 2025 compared to $67.1 million in Q1 2024, an increase of 12.9%.Net income was $15.4 million in Q1 2025 compared to net income of $9.0 million in Q1 2024, an increase of $6.4 million.Declared a quarterly dividend of $0.18 per share to be paid on July 15, 2025.

“We are pleased with our strong first-quarter results, especially considering the uncertain and volatile economic environment,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “Adjusted EBITDA reached $75.8 million in the quarter on revenue that increased nearly 14% year-over-year. Revenue for the Consumer segment was driven by higher sales volume in Canada and in the U.S., and improved pricing. Our Away-from-Home business, which has been rebranded Kruger PRO, also generated higher sales volume than the same period last year, although profitability was unfavourably impacted by freight costs, warehousing costs and the purchase of external products. We expect that our newly deployed LDC paper machine in Sherbrooke will essentially meet all in-house paper requirements beginning in the second quarter of 2025. The LDC paper machine and new facial tissue converting line, part of the overall Sherbrooke Expansion Project, have exceeded start-up expectations, while TAD paper machine and converting output remains strong year-over-year.”

“Given the changing tariff announcements affecting North America, the impact to our business in the first quarter was not significant. We continue to closely monitor the impact of potential tariffs on our business and have developed contingency plans to mitigate any financial risk,” Mr. Bianco added.

Outlook for Q2 2025
Assuming a similar tariff environment, we expect Q2 2025 Adjusted EBITDA1 to be in the range of $70 million to $75 million.

Kruger Products Q1 2025 Financial Results Revenue was $546.1 million in Q1 2025 compared to $479.4 million in Q1 2024, an increase of $66.7 million or 13.9%. The increase in revenue was primarily due to higher sales volume in the Consumer segment and favourable selling prices across both segments. Revenue was also favourably impacted by foreign exchange fluctuations on U.S. dollar sales.

Cost of sales was $451.0 million in Q1 2025 compared to $394.0 million in Q1 2024, an increase of $57.0 million or 14.5%. The increase in cost of sales was primarily due to higher sales volume and pulp prices along with the unfavourable impact of foreign exchange fluctuations on U.S. dollar costs, partially offset by lower manufacturing overhead costs due primarily to overhead cost absorption resulting from higher inventory levels in the quarter. Freight costs were higher compared to Q1 2024, including the impact of tariffs, while warehousing costs increased as a result of handling costs related to higher sales volume. As a percentage of revenue, cost of sales was 82.6% in Q1 2025 compared to 82.2% in Q1 2024.

Selling, general and administrative (SG&A) expenses were $51.2 million in Q1 2025 compared to $44.1 million in Q1 2024, an increase of $7.1 million or 16.1%. The increase was primarily due to additional investment in advertising and promotion and IT, along with additional headcount costs to support growth, resulting in lower consulting costs, and higher selling expense related to sales volume, partially offset by lower operational and corporate initiatives compared to the year ago quarter and lower bad debt expenses. As a percentage of revenue, SG&A expenses were 9.4% in Q1 2025 compared to 9.2% in Q1 2024.

Adjusted EBITDA1 was $75.8 million in Q1 2025 compared to $67.1 million in Q1 2024, an increase of $8.7 million or 12.9%. The increase was primarily due to higher sales volumes and selling prices along with lower manufacturing overhead costs as a result of overhead cost absorption, partially offset by higher pulp prices and freight costs as described above, and warehousing and SG&A expenses.

Net income was $15.4 million in Q1 2025 compared to $9.0 million in Q1 2024, an increase of $6.4 million. The increase was primarily due to a higher foreign exchange gain and higher Adjusted EBITDA1, partially offset by higher depreciation expense and higher interest expense and other finance costs.

Kruger Products Q1 2025 Liquidity Total liquidity, representing cash and availability under the revolving credit agreements, was $356.8 million as of March 31, 2025. In addition, $4.4 million of cash was held for the Sherbrooke Expansion Project.

KPT Q1 2025 Financial Results
KPT had net income of $1.7 million in Q1 2025. Included in the net income was $1.9 million representing KPT’s share of Kruger Products’ net income, a dilution gain of $0.1 million and depreciation expense of $0.3 million related to adjustments to carrying amounts on acquisition.

Dividends on Common Shares
The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on July 15, 2025 to shareholders of record at the close of business on June 30, 2025.

Additional Information
For additional information please refer to Management’s Discussion and Analysis (MD&A) of KPT and Kruger Products for the first quarter ended March 31, 2025 available on SEDAR+ at www.sedarplus.ca or our website at www.kptissueinc.com.

First Quarter Results Conference Call Information
KPT will hold its first quarter conference call on Wednesday, May 14, 2025 at 8:30 a.m. Eastern Time.

Via telephone: 1-888-699-1199 or 416-945-7677

Via the internet at: www.kptissueinc.com

Presentation material referenced during the conference call will be available at www.kptissueinc.com.

A rebroadcast of the conference call will be available until midnight, May 21, 2025 by dialing 1-888-660-6345 or 289-819-1450 and entering passcode 89122.

The replay of the webcast will remain available on the website until midnight, May 21, 2025.

About KP Tissue Inc.

KPT was created to acquire, and its business is limited to holding, a limited equity interest in Kruger Products, which is accounted for as an investment on the equity basis. KPT currently holds a 12.3% interest in Kruger Products. For more information visit www.kptissueinc.com.

About Kruger Products Inc.
Kruger Products is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. Kruger Products serves the Canadian consumer market with such well-known brands as Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and BonterraTM. In the U.S., Kruger Products manufactures the White Cloud® brand, as well as many private label products. The Away-From-Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. Kruger Products has approximately 2,800 employees and operates ten FSC® COC-certified (FSC® C-104904) production facilities in North America. For more information visit www.krugerproducts.ca.

Non-GAAP Financial Measures This press release uses certain non-GAAP financial measures which Kruger Products believes provide useful information to management of Kruger Products and the readers of the financial information in measuring the financial performance and financial condition of Kruger Products. These measures do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similarly titled measures presented by other companies. An example of such a measure is Adjusted EBITDA. Adjusted EBITDA is not a measurement of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with GAAP. “Adjusted EBITDA” is calculated by Kruger Products as net income (loss) before (i) interest expense and other finance costs, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) loss on sale of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) foreign exchange loss (gain), (viii) costs related to restructuring activities and (ix) changes in amortized cost of Partnership units liability. A reconciliation of Adjusted EBITDA to the relevant reported results can be found in the Segment and Geographic Results table of this news release.

Forward-Looking Statements
Certain statements in this press release about KPT’s and Kruger Products' current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. The forward-looking statements are based on certain key expectations and assumptions made by KPT or Kruger Products, including the moderation of inflationary pressure on input costs and continued inflationary pressure on SG&A as labour, marketing and IT costs continue to rise. Although KPT and Kruger Products believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that such expectations and assumptions will prove to be correct.

The outlook provided in respect of Adjusted EBITDA1 for Q2 2025 is forward-looking information and is based on the assumptions and subject to the risk and uncertainties referred to below. The purpose of the outlook is to provide the reader with an indication of management’s expectations, at the date of this press release, regarding Kruger Products’ future financial performance. Readers are cautioned that this information may not be appropriate for other purposes.

Many factors could cause Kruger Products’ actual results, level of activity, performance or achievements or future events or developments (which could in turn affect the economic benefits derived from KPT’s economic interest in Kruger Products), to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the “Risk Factors – Risks Related to Kruger Products’ Business” section of the KPT Annual Information Form dated March 5, 2025 available on SEDAR+ at www.sedarplus.ca: Kruger Inc.’s influence over Kruger Products; Kruger Products’ reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the ownership of the TAD Sherbrooke Project; risks associated with the operation of the TAD Sherbrooke Project; risks associated with the Sherbrooke Expansion Project; operational risks; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; Kruger Products’ inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of Kruger Products or Kruger Products’ brands; Kruger Products’ sales being less than anticipated; Kruger Products’ failure to implement its business and operating strategies; Kruger Products’ obligation to make regular capital expenditures; Kruger Products entering into unsuccessful acquisitions; Kruger Products’ dependence on key personnel; Kruger Products’ inability to retain its existing customers or obtain new customers; Kruger Products’ loss of key suppliers; Kruger Products’ failure to adequately protect its intellectual property rights; Kruger Products’ reliance on third party intellectual property licenses; adverse litigation and other claims affecting Kruger Products; material expenditures due to comprehensive environmental regulation affecting Kruger Products’ cash flow; Kruger Products’ pension obligations are significant and can be materially higher than predicted if Kruger Products Management’s underlying assumptions are incorrect; labour disputes adversely affecting Kruger Products’ cost structure and Kruger Products’ ability to run its plants; exchange rate and U.S. competitors; Kruger Products’ inability to service all of its indebtedness; exposure to potential consumer product liability; covenant compliance; interest rate and refinancing risk; and risks relating to information technology; cyber-security; insurance; internal controls, trade and tax.

Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release and KPT undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.

INFORMATION:
Francois Paroyan
General Counsel and Corporate Secretary
KP Tissue Inc.
905-812-6936
[email protected]

INVESTORS:
Doris Grbic
Director, Investor Relations
KP Tissue Inc.
437-882-2596
[email protected]

________________________
1 Adjusted EBITDA is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures section of this news release for more information on these measures

Kruger Products Inc. Unaudited Condensed Consolidated Statements of Financial Position(thousands of Canadian dollars)    March 31, 2025  December 31, 2024  $  $ Assets Current assets  Cash and cash equivalents141,778  119,460  Restricted cash50,364  48,375  Trade and other receivables133,345  138,177  Receivables from related parties80  80  Inventories307,684  287,756  Income tax recoverable1,774  3,208  Prepaid expenses20,104  6,383  655,129  603,439 Non-current assets  Property, plant and equipment1,490,571  1,509,592  Right-of-use assets175,001  186,460  Other long-term assets55  92  Pensions87,343  92,661  Goodwill152,021  152,021  Intangible assets41,309  42,572  Deferred income taxes6,011  10,500 Total assets2,607,440  2,597,337  Liabilities Current liabilities  Trade and other payables320,119  346,264  Payables to related parties38,186  17,829  Income tax payable3  3  Dividends payable14,449  14,308  Current portion of long-term debt61,028  54,168  Current portion of lease liabilities39,923  40,156  Current portion of long-term payable to related party5,800  5,800  Current portion of provisions4,648  4,184  484,156  482,712 Non-current liabilities  Long-term debt1,186,720  1,180,488  Long-term lease liabilities158,935  165,563  Long-term payable to related party32,446  31,925  Long-term provisions11,938  9,398  Pensions17,661  17,845  Post-retirement benefits48,352  47,140 Total liabilities1,940,208  1,935,071  Equity  Share capital314,907  308,622  Contributed surplus395,382  395,382  Deficit(174,472) (171,874) Accumulated other comprehensive income99,972  100,177  Equity attributable to Kruger Products635,789  632,307  Non-controlling interest31,443  29,959 Total equity667,232  662,266 Total equity and liabilities2,607,440  2,597,337

Kruger Products Inc.Unaudited Condensed Consolidated Statements of Income(thousands of Canadian dollars)   3-month
period ended
March 31, 2025  3-month
period ended
March 31, 2024 $  $ Revenue 546,110  479,432 Expenses Cost of sales450,983  394,003Selling, general and administrative expenses51,215  44,142Restructuring costs-  216 Operating income 43,912  41,071 Interest expense and other finance costs20,951  16,280Other expense (income)(343) 8,473 Income before income taxes23,304  16,318 Current tax expense730  769Deferred tax expense5,695  5,471 Income tax expense6,425  6,240 Net income including non-controlling interest16,879  10,078 Net income attributable to non-controlling interest1,484  1,122 Net income attributable to Kruger Products15,395  8,956

Kruger Products Inc.Unaudited Condensed Consolidated Statements of Cash Flows(thousands of Canadian dollars)    3-month
period ended
March 31, 2025  3-month
period ended
March 31, 2024  $  $ Cash flows from (used in) operating activities Net income including non-controlling interest16,879  10,078 Items not affecting cash Depreciation29,889  24,451 Amortization1,972  1,065 Loss (gain) on sale of property, plant and equipment(5) 271 Loss on disposal of leased assets-  632 Foreign exchange loss (gain)(343) 9,355 Interest expense and other finance costs20,951  16,280 Pension and post-retirement benefits2,745  2,576 Provisions2,864  1,073 Income tax expense6,425  6,240 Loss on sale of non-financial assets-  12 Total items not affecting cash64,498  61,955  Net change in non-cash working capital(25,056) (86,070)Contributions to pension and post-retirement benefit plans(1,009) (1,153)Provisions paid-  (470)Income tax payments, net654  (340)Net cash from (used in) operating activities55,966  (16,000) Cash flows from (used in) investing activities Purchases of property, plant and equipment(2,145) (4,041)Purchases of property, plant and equipment related to the Sherbrooke Expansion Project(15,386) (45,873)Interest paid on credit facilities related to the Sherbrooke Expansion Project-  (116)Government assistance received3,150  - Purchases of software40  (47)Proceeds on sale of property, plant and equipment-  (4)Net cash used in investing activities(14,341) (50,081) Cash flows from (used in) financing activities Proceeds from long-term debt22,188  74,864 Repayment of long-term debt(9,998) (7,147)Payment of deferred financing fees(32) (864)Payment of lease liabilities(9,023) (8,650)Change in restricted cash(1,989) (1,412)Interest paid on long-term debt(12,426) (8,863)Dividends paid, net(8,000) (1,753)Net cash from (used in) financing activities(19,280) 46,175  Effect of exchange rate changes on cash and cash equivalents held in foreign currency(27) 1,298  Increase (decrease) in cash and cash equivalents during the period22,318  (18,608) Cash and cash equivalents - Beginning of period119,460  135,728  Cash and cash equivalents - End of period141,778  117,120

Kruger Products Inc.Unaudited Segment and Geographic Results(thousands of Canadian dollars)   3-month
period ended
March 31, 2025  3-month
period ended
March 31, 2024  $  $  Segment Information  Segment Revenue Consumer465,190  404,289 AFH80,920  75,143  Revenue from external customers546,110  479,432  Other segment items   Consumer389,137  341,627  AFH78,131  67,373  Corporate and other costs3,074  3,345  Total other segment items470,342  412,345  Adjusted EBITDA Consumer76,053  62,662 AFH2,789  7,770 Corporate and other costs(3,074) (3,345) Total Adjusted EBITDA75,768  67,087  Reconciliation to net income:  Depreciation and amortization31,861  25,516 Interest expense and other finance costs20,951  16,280 Loss (gain) on sale of property, plant and equipment(5) 271 Loss on sale of non-financial assets-  12 Change in amortized cost of Partnership unit liability-  (881)Restructuring costs, net-  216 Foreign exchange loss (gain)(343) 9,355  Income before income taxes23,304  16,318  Income tax expense6,425  6,240  Net income including non-controlling interest16,879  10,078  Geographic Revenue  Canada286,522  266,172 US259,588  213,260  Total revenue546,110  479,432

KP Tissue Inc.Unaudited Condensed Statements of Financial Position(thousands of Canadian dollars)   Monday, March 31, 2025  December 31, 2024  $  $ Assets  Current assets Dividends receivable1,799  1,798  1,799  1,798  Non-current assets Investment in associate68,952  69,517  Total assets70,751  71,315  Liabilities  Current liabilities Dividend payable1,799  1,798  Total liabilities1,799  1,798  Equity  Common shares22,816  22,762 Contributed surplus144,819  144,819 Deficit(117,169) (116,673)Accumulated other comprehensive income18,486  18,609  Total equity68,952  69,517  Total liabilities and equity70,751  71,315

KP Tissue Inc.Unaudited Condensed Statements of Income (thousands of Canadian dollars, except share and per share amounts)  3-month
period ended
March 31, 2025  3-month
period ended
March 31, 2024  $  $  Share of income1,917  1,155 Depreciation of fair value increments(284) (286) Equity income1,633  869 Dilution gain114  262  Net income 1,747  1,131   Basic earnings per share0.17  0.11  Weighted average number of shares outstanding9,993,168  9,967,627

KP Tissue Inc.Unaudited Condensed Statements of Cash Flows(thousands of Canadian dollars)  3-month
period ended
March 31, 2025  3-month
period ended
March 31, 2024  $  $ Cash flows from (used in) operating activities Net income1,747  1,131 Items not affecting cash Equity income(1,633) (869)Dilution gain(114) (262)Total items not affecting cash(1,747) (1,131) Decrease in payable to investee-  (84)Tax refunds, net-  84  Net cash from (used in) operating activities-  -  Cash flows from investing activities Dividends received, net1,744  1,752  Net cash from investing activities1,744  1,752  Cash flows used in financing activities Dividends paid, net(1,744) (1,752) Net cash used in financing activities(1,744) (1,752) Increase (decrease) in cash and cash equivalents during the period-  -  Cash and cash equivalents - Beginning of period-  -  Cash and cash equivalents - End of period-  -