Displaying items by tag: catalyst paper

catalyst logoCatalyst Paper (TSX:CYT) is reaching higher to expand an already broad mechanical printing product range with the addition of Ascent, a coated three paper. Made at the Port Alberni mill on the only coated mechanical paper machine in Western North America, Ascent went from idea to market in the space of a few short months.

"Our product development team brought tremendous cross-disciplinary expertise to the initiative, along with the understanding that a new product had to be hands down excellent to meet the quality expectations of customers when there is so much choice in the marketplace," said Tom Crowley, senior vice-president, sales and marketing. "Ascent was lab tested, trialled in pressrooms, and when it comes to printing, there's no better proof of how well it shows, than Catalyst's most recent sustainability report which was printed on Ascent."

Catalyst has long specialized in lower-basis weight production across a wide range of papers from newsprint and directory grades, to specialty papers ideal for retail inserts and flyers, to high quality glossy mechanical papers popular with commercial printers, magazine, catalogue and book publishers.

"We're adding a third branch to our coated family of products - Electracote, Pacificote and now Ascent - and they all offer the benefit of bulk without weight. It's a great advantage for postage-sensitive customers who are bracing for another round of rate hikes," said Mr. Crowley. "Like many of our products, Ascent is available under our Sage program for those who value the assurance of a top notch sustainability partner who reinforces their own brand promise to environmentally aware consumers."  Port Alberni mill has one of North America's greenest footprints with 91% of the energy coming from renewable biomass fuels and hydroelectric power.

SOURCE: Catalyst Paper Corporation

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catalyst logoCatalyst Paper (TSX:CYT) results in the fourth quarter were negatively impacted by lower sales volumes, higher maintenance spending and a stronger Canadian dollar.

Catalyst posted a net loss of $35.2 million for the quarter, in contrast to net earnings of $655.7 million in the third quarter, when the one-time gains realized on emergence from creditor protection were booked. Before specific items, net losses were $15.7 million and $7.5 million in Q4 and Q3 respectively. Adjusted EBITDA was $7.2 million in Q4, with no impact from restructuring costs, and $13.8 million in Q3 ($14.0 million before restructuring costs).

Market conditions were mixed during the fourth quarter, with North American paper demand down from the third quarter for directory and newsprint, and up for coated and uncoated grades. Benchmark prices were up for newsprint and coated and otherwise stable for paper, while there was moderate benchmark price recovery for pulp. A market curtailment at Powell River was necessary over the holidays to balance production with orders, and Catalyst incurred a loss from discontinued operations largely due to an increased estimated pension withdrawal liability associated with the Snowflake closure.

“We saw lower prices for coated and newsprint and weaker demand across our paper product lines in 2012. However, capacity reductions helped mitigate the demand impacts,” said Catalyst President and CEO Kevin J. Clarke. “Pulp prices took a hit as markets weakened in China due to overstocked inventories. These sorts of challenges aren’t going away, but with a better cost structure across all product segments, and continued market share momentum, we’re better positioned to take them on.”

Results for the Year

Net earnings of $583.2 million for 2012 were heavily impacted by one-time non-cash restructuring credits and fair value accounting adjustments. This compared with a $974.0 million net loss in 2011 which was driven largely by asset impairment charges.

Catalyst entered creditor protection on January 31, 2012, and exited on September 13, having achieved a US$390.4 million or 60 per cent reduction in its debt, savings in annual interest expense of US$33.9 million, and a range of other cost reductions. The restructuring included the permanent closure of its Snowflake mill at the end of the third quarter. Results from this discontinued operation are excluded from those being reported, with comparative periods having been restated accordingly.

Before specific items – which also included restructuring-related fees, closure costs at Snowflake, and a foreign exchange gain on translation of US dollar-denominated debt – Catalyst posted a net loss of $37.8 million ($2.62 per common share), in contrast to a net loss of $126.3 million in 2011 ($0.33 per common share). Total sales were $1,058.2 million, slightly below $1,079.7 million in 2011.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $55.4 million for 2012 ($60.7 million before specific items), down from $62.8 million for 2011 ($68.7 million before specific items). A significant drop in pulp transaction prices and lower average paper transaction prices were only partially offset by cost reductions, higher sales volumes and favourable currency impacts.

Liquidity

Total liquidity stood at $97.9 million at the end of 2012, compared to $96.7 million a year earlier. The borrowing base on the new Asset Backed Loan (ABL) facility put in place upon the conclusion of the restructuring was down  mainly due to lower accounts receivable and inventories as a result of the Snowflake shutdown.  Letters of credit, amounts drawn and cash on hand were also down.  Free cash flow was negative $47.2 million largely due to reorganization costs of $37.5 million and salaried defined benefit pension solvency funding of $11.8 million, in comparison with negative $58.8 million in 2011.

Internally generated cash flows from operations, in combination with advances under the ABL facility, are expected to be sufficient to meet future operating cash requirements.

Restructuring

Catalyst issued 14,400,000 new common shares to holders of its now-cancelled 2016 Notes upon its exit from creditor protection in September. A further 127,571 common shares were issued in December to unsecured creditors who elected this option in lieu of participating in the proceeds pool from specified asset sales. On January 7, 2013, Catalyst’s new common shares were listed on the Toronto Stock Exchange under the symbol “CYT”.

In addition to savings associated with the cancellation of its previous notes, additional annual cost reductions include new competitive five-year labour agreements ($18-$20 million), lower municipal taxes ($6.1 million), and pension funding relief ($7 million). The closure of the Snowflake recycled paper mill will also eliminate financial losses due to intense input-cost and market-related pressures, and significantly reduce working capital requirements.

The US court-approved sale of the assets of the Snowflake mill and the shares of the Apache Railway closed on January 30, 2013, for US$13.5 million and other non-monetary consideration. Closure costs were $18.6 million. Agreements were also reached in 2012 to sell smaller non-core assets in both Port Alberni and Powell River, and efforts continue to market the site of the former Elk Falls operation and Catalyst’s remaining poplar plantation lands.

On February 13, 2013, Catalyst agreed to sell its interest in Powell River Energy for $33 million. Catalyst will continue to purchase electricity under the existing power purchase agreement which expires in 2016, with possible extension to 2021 in one-year terms at Catalyst’s option.

Under the terms of the Plan of Arrangement, unsecured creditors who did not elect to receive shares in settlement of their claims will receive their pro rata share of the net sale proceeds. Given that many creditors elected to receive shares, this will result in a distribution of approximately 40% of the net proceeds of the sale. Catalyst will offer to purchase a portion of the notes issued as part of its exit financing arrangements with the balance of the sale proceeds. The sale is expected to close in the first quarter of 2013.

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catalyst logoCatalyst Paper has announced that it has agreed, subject to court approval, to sell its approximately 50% interest in Powell River Energy Inc. and Powell River Energy Limited Partnership to Powell River Energy Trust, a Brookfield Renewable Energy affiliate for $33 million. Powell River Energy Trust currently holds the other 50% stake in the Powell River Energy joint venture originally established in 2001.

“Sale of this energy asset to our joint venture partner enables a smooth operational transition, maintains reliable electricity supply for our Powell River paper mill under a power purchase agreement and ensures we meet the terms of the plan of arrangement in a timely way,” said President and Chief Executive Officer Kevin J. Clarke. All electricity generated by Powell River Energy will be sold to Catalyst under a power purchase agreement which expires in 2016 with possible extension to 2021 at Catalyst’s discretion.

Pursuant to its plan of arrangement under the Companies’ Creditors Arrangement Act which became effective September 13, 2012, Catalyst is required to sell its stake in Powell River Energy and to distribute to certain unsecured creditors of Catalyst who did not elect to receive shares in Catalyst in settlement of their claims, their pro rata share of 50% of the net proceeds of the sale (which, given that many creditors elected to instead receive shares, will result in a distribution of approximately 40% of the net proceeds of the sale).  The company will offer to purchase a portion of its Floating Rate Senior Secured Notes with the balance of the net proceeds. The sale is expected to complete in the first quarter of 2013 and is subject to various closing conditions. The company expects to apply to the British Columbia Supreme Court for approval of the sale in the next 10 days.

 

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catalyst logoCatalyst Paper Corporation announced today that final approval has been received for listing on the Toronto Stock Exchange (TSX) of its new class of common shares (new Shares) created pursuant to its reorganization under the Companies’ Creditors Arrangement Act that completed on September 13, 2012. The new Shares will begin trading on the TSX on January 7, 2013 under the trading symbol “CYT”.

Catalyst also announced that it has initiated a Small Shareholder Selling Program (SSSP). The program gives shareholders of record as of January 3, 2013 holding 99 or fewer new Shares the opportunity to sell all of these Shares without incurring commission charges thereby minimizing their cost and inconvenience. While the SSSP does not include a mechanism to buy new Shares, the TSX listing will provide that opportunity for those who wish to purchase additional new Shares.

The SSSP will begin on January 7, 2013 and will expire on February 28, 2013, unless extended. Shareholders wishing to participate in the SSSP must sell all of their new Shares. Catalyst will arrange for orders received pursuant to the program to be sent to a participating organization of the TSX (the Broker) for execution after clearance of such orders for trading. Orders received and cleared for execution will be placed with the Broker no later than 12:00 p.m. on the next business day for execution by the TSX. Orders may be aggregated, but not netted, by Catalyst or the Broker. The price received by shareholders for their new Shares will be the average price received on all orders placed with the Broker for execution on a given day, regardless of when any individual orders are executed on that day.

Catalyst and its Board of Directors are making no recommendation as to whether any shareholder should sell their new Shares pursuant to the SSSP or purchase any additional new Shares. The SSSP is entirely voluntary and shareholders are advised to contact their broker or other financial adviser as to the suitability of participating.

As previously announced, all common shares of Catalyst that were outstanding prior to the reorganization on September 13, 2012 and that were formerly traded under the symbol “CTL” were cancelled pursuant to the reorganization for no consideration and will not be listed on the TSX.

Additional information concerning the SSSP can be obtained by contacting Catalyst’s program manager – Canadian Stock Transfer Company Inc. by telephone at (416) 682-3860 or toll-free at 1-800-387-0825, or through e-mail to This email address is being protected from spambots. You need JavaScript enabled to view it..

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cat logo edgeCatalyst Paper has announced that the sale of its Elk Falls site in Campbell River to Pacifica Deep Sea Terminals Incorporated did not close and the sale agreement has been terminated. The sale of the 400-acre industrial site and adjacent properties was initially expected to close on September 5, 2012.  A non-refundable prepayment of a portion of the purchase price was received and the transaction timeline was extended multiple times up to the ultimate deadline of December 18, 2012.

“It’s disappointing that this transaction with Pacifica could not be completed even with the extended timeline. This is a fully serviced property in an excellent location and we remain confident that the right fit between site and buyer will be found that will bring new jobs and opportunities to Campbell River,” said Kevin J. Clarke, Catalyst President and Chief Executive Officer. “In the meantime, site personnel are maintaining safety, security and environmental requirements and complying with all applicable legislation.”

The former pulp and paper site was indefinitely curtailed in 2009 and closed permanently in 2010. It has since been decommissioned with removal of chemicals, process wastes, and key papermaking equipment.  The landfills remain intact as does the wastewater system which continues to operate in preparation for the site’s redevelopment to other industrial uses. The Elk Falls mill began operation in 1952, and at its peak, produced 784,000 tonnes of pulp, paper and kraft paper annually.

Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.

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catalyst logoCatalyst Paper announced that it has accepted a qualified stalking horse bid from MLR Ventures, LLC (the Stalking Horse) as part of the sales process for disposition of the Snowflake facility and Apache Railway.

“We have received a $12.0 million Stalking Horse bid for the assets and land associated with the Snowflake facility and the equity of Apache Railway,” said President and Chief Executive Officer Kevin J. Clarke. “We look forward to beginning the next phase of the sale process and to identifying a qualified buyer in the near term.”

The bid by the Stalking Horse is subject to higher and better offers obtained through the US Court-approved sale and investor solicitation procedures. Catalyst Paper expects to receive binding bids for the assets from qualified bidders on December 7, 2012 and expects to hold an auction among qualified bidders on December 17, 2012 in New York City. A hearing in the US Court is scheduled for December 19, 2012 to consider approval of the sale.

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catalyst logoCatalyst Paper has announced that it has received conditional approval for the listing of its new common shares on the Toronto Stock Exchange.

The listing is subject to standard conditions and Catalyst expects to satisfy these conditions in the near future. Catalyst anticipates that its common shares will be listed for trading within the next 30 days and will issue a release in advance of the anticipated listing date.

Catalyst Paper manufactures diverse specialty mechanical printing papers, newsprint and pulp. Its customers include retailers, publishers and commercial printers in North America, Latin America, the Pacific Rim and Europe. With three mills, located in British Columbia, Catalyst has a combined annual production capacity of 1.5 million tonnes. The company is headquartered in Richmond, British Columbia, Canada and is ranked by Corporate Knights magazine as one of the 50 Best Corporate Citizens in Canada.

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Wednesday, 14 November 2012 09:11

Reorganization drives Q3 profit for Catalyst Paper

A significant one-time credit arising from reorganization gains and “fresh-start accounting” valuation adjustments resulted in third quarter net earnings of $655.7 million for Catalyst Paper. The company emerged from creditor protection on September 13, 2012 with significant debt and cost-structure improvements.

Net earnings this quarter contrast with a net loss of $11.7 million the quarter before. Sales were essentially unchanged at $265.7 million. The net after-tax restructuring-related credit was $688.1million. An after-tax foreign exchange gain on translation of U.S. dollar denominated debt of $25.2 million further supported Q3 earnings.

Before these and other specific items, Catalyst posted a net loss for the third quarter of $48.7 million, compared to a net loss of $5.0 million in the prior quarter. Earnings before interest, tax, depreciation and amortization (EBITDA) in the third quarter were $13.8 million and EBITDA before restructuring costs was $14.0 million, compared with EBITDA of $17.0 million and EBITDA before restructuring costs of $16.9 million in the second quarter.

“The third quarter marked a turning point for Catalyst as we exited creditor protection with a stronger balance sheet, lower interest costs and lower annual operating costs going forward,” said President and CEO Kevin J. Clarke. “This puts us on stronger operational footing to address ongoing market dynamics. And it means Catalyst can now take a much more active role in the transformation of the industry as a whole.”

Creditor Protection and Restructuring Process

After filing for creditor protection on January 31, 2012, Catalyst secured 99% approval from voting creditors for its second amended plan of arrangement under the CCAA on June 25, 2012. The plan subsequently received court sanction in British Columbia and was confirmed by the US Court in Delaware. A new asset-based loan (ABL) facility was in place on September 13, 2012, meeting the final pre-condition for implementation of the plan.

Previous secured note holders received shares and US $250 million of new senior secured notes due 2017 in exchange for their US$390 million of secured notes due 2016. In addition, we issued US$35 million of new exit notes under a secured exit financing facility on September 13, 2012, to pay restructuring costs and expenses and to manage other contingencies on exit from CCAA protection.

The restructuring has reduced Catalyst’s debt by $390 million, eliminated $80 million of accrued interest, and reduced annual interest expense and other cash costs by $70 million.

Catalyst’s operations are continuing in substantially the same form, and a new board of directors took office upon exit from CCAA. Previous secured note holders now own all of the 14.4 million new common shares that are presently issued and outstanding. An addition of approximately 135,000 common shares will be issued to unsecured creditors who made an equity election in respect of their claims under the plan. Additional shares may be issued under a new management incentive plan that may be adopted in future. An application has been submitted to the Toronto Stock Exchange for a public listing of the new common shares.

Fresh start accounting has been applied as of September 30, 2012, in accordance with U.S. Generally Accepted Accounting Principles. This involved use of independent financial advice to determine an enterprise value for the company and the fair value of Catalyst’s assets and liabilities.

Snowflake Closure

The previously announced permanent closure of the Snowflake mill in Arizona, which primarily manufactured recycled newsprint, was implemented on September 30, 2012. This will stem operating losses and reduce annualized selling, general and administrative expenses. A court-approved sales process for the mill and associated assets was announced on September 17, 2012.

The closure is expected to result in one-time cost of approximately $9.7 million ($8.7 million of which had been paid or accrued by quarter-end) and ongoing costs of approximately $0.6 million per month until disposition. These costs are expected to be largely recouped by sales proceeds.

Performance and Market Overview

Operating earnings of $5.9 million were up from the same quarter last year and on a year-to-date basis but lagged Q2 operating earnings of $9.3 million. They were negatively impacted by reduced pulp transaction prices, a stronger Canadian dollar, increased power costs, and a pulp inventory write-down. Offsetting factors included higher overall sales volumes, lower maintenance costs and lower labour costs – the final factor being an outcome of new collective agreements reached during the restructuring.

North American demand was down year-over-year across specialty paper product lines – most notably by 18.0% for uncoated grades and by 15.4% for directory. Benchmark prices were up moderately for coated grades from the second quarter, but unchanged for other specialty products. Sales volumes decreased while average sales revenue remained flat year-over-year.

North American newsprint demand saw a marginal 1.4% year-over-year increase, although the average benchmark price dropped from the second quarter due to marketplace inventory buildup. Sales volumes increased while average sales revenue was down year-over-year.

Markets for Northern Bleached Softwood Kraft pulp remained weak as a result of end-user inventory in China, and the benchmark price for that market dropped by 8.7% from the second quarter. There were year-over-year declines in both sales volumes and average sales revenue.

Liquidity

Quarter-end liquidity of $96.8 million was down from $125.9 million a year prior, but up from $71.8 million at the end of the second quarter due to a larger borrowing base under the new ABL facility. Cash on hand was down mainly due to payment of success fees of $6.9 million on emergence from creditor protection and debt issuance costs of $9.3 million.

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(click picture to enlarge)

Outlook

The U.S. economic recovery in the first half of 2012 moderated somewhat though employment data, housing and financial markets held steady. The Canadian dollar remains near par and currency volatility is expected to ease somewhat through year-end and early 2013.

Specialty printing paper markets will be positively affected by seasonally strong demand in the fourth quarter.  Producer and consumer inventories are relatively low with good industry operating rates for most specialty grades, especially coated and high gloss.  Price increases for coated grades announced for October 1st are expected to be partially implemented though the Port Hawkesbury mill restart will make seasonally slow specialty markets even more challenging in the first quarter of 2013. 

Newsprint demand is expected to decline modestly through the remainder of the year and exports are likely to remain sluggish.  However, the Snowflake mill closure has tightened operating rates in the West and prices are expected to increase marginally in our freight-logical markets while remaining flat in Eastern markets.

Demand for NBSK pulp is expected to increase slightly in the fourth quarter driven primarily by China. Prices are expected to recover from the lows they reached in the third quarter.  Further price appreciation is dependent on global demand and supply dynamics and growth in Chinese consumption. 

On the operations side, price pressure is expected to ease on fibre and some chemicals. Maintenance costs are expected to increase with two boiler outages and a scheduled 12-day outage on one of our pulp lines and recovery boilers. Crofton No. 1 paper machine will continue to be indefinitely curtailed for the foreseeable future.

Capital spending in 2012 is forecasted to be approximately $25 million, and energy efficiency projects funded through the Federal Green Transformation Program are complete and on track to deliver EBITDA in excess of $5.0 million in 2012.

Further Quarterly Results Materials

This release, along with the full quarterly report (Management Discussion &Analysis, Financial Statements and accompanying notes) are available at www.catalystpaper.com/Investors. This material is also filed with SEDAR in Canada and EDGAR in the United States.

Kevin J. Clarke, president and CEO, and Brian Baarda, vice-president finance and CFO, will hold a conference call on Wednesday November 14, 2012, at 11 a.m. ET, 8 a.m. PT to present the company’s third quarter results.  Financial analysts and institutional investors are invited to dial 1-888-231-8191 (North America) or 1-647-427-7450 (Toronto / International) reservation number 56717173#.  Media and other interested people may join the live webcast in listen-only mode at www.catalystpaper.com 

 

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catalyst logoCatalyst Paper Corporation will hold a conference call on Wednesday November 14 at 8:00 a.m. Pacific, 11:00 a.m. Eastern, to review the Company's quarterly results which will be released on Tuesday November 13, 2012. 

To access the LIVE WEBCAST click HERE

Kevin J. Clarke, President and Chief Executive Officer, and Brian Baarda, Vice-President Finance and Chief Financial Officer, will host the call.

If you wish to participate and are calling from within North America, dial 888-231-8191.  If you are calling from either the Toronto area or outside North America, dial 647-427-7450.  Please place your call ten minutes prior to the start of the conference, provide the conference administrator with your name and company name, and ask for the Catalyst Paper third quarter 2012 earnings conference call or quote conference ID#56717173.  Initially, all participants will be in a listen-only mode for a short recap of our quarterly results followed by a question-and-answer session.  You will be queued with the conference administrator and polled individually during this portion of the conference.

If you are unable to participate in the call, you are invited to listen to a replay of the conference by dialling 855-859-2056 (within North America) or 416-849-0833 (Toronto area and outside North America) and quote ID#56717173.  The replay service will be available until end of day November 28, 2012. 

The archived webcast will be available at www.catalystpaper.com/investors

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Catalyst Paper announced today that it has begun a sale process for its Snowflake mill and associated assets in accordance with the US Court-approved sale and investor solicitation procedures (SISP).

The Snowflake facility is located in the foothills of the White Mountains in northeastern Arizona.  The assets for sale under the sale process include the equipment and other assets associated with the paper mill, approximately 19,000 acres of land and The Apache Railway Company.

The steps and timeline for soliciting bids to purchase the Snowflake mill and associated assets will be implemented as follows:

(a)  an initial offering summary and confidentiality agreement will be distributed to known potential bidders on September 17, 2012;

(b) potential bidders are to submit certain information and an executed confidentiality agreement not later than 5:00 p.m. (Vancouver time) on October 1, 2012;

(c) qualified bidders will be determined within three business days after such potential bidders have delivered their materials;

(d) qualified bidders are to submit a non-binding indication of interest not later than 5:00 p.m. (Vancouver time) on November 1, 2012 (the Phase 1 Bid Deadline);

(e) the non-binding indication of interest will be assessed within three business days after the Phase 1 Bid Deadline;

(f) once the non-binding indication of interest has been determined to likely be consummated, the bidder will submit a purchase bid or investment bid not later than 5:00 p.m. (Vancouver time) 30 calendar days from being advised by Catalyst to do so (the Phase 2 Bid Deadline);

(g) the purchase bid or investment bid will be assessed within the three business days following the Phase 2 Bid Deadline; and

(h) in the event that Catalyst determines there is more than one qualified purchase bid or investment bid, an auction will be conducted on a date and at a time and location to be advised by Catalyst to such qualified bidders.

Potential bidders who have questions about the recapitalization may contact Nancy Turner of Perella Weinberg Partners, the financial advisor for Catalyst Paper, at +1-415-671-4550.

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