Fortress Paper Ltd. reported net income of $3.4 million for the second quarter of 2008 on sales of $49.1 million or basic and diluted earnings per share of $0.33. In the first quarter of 2008 the Company reported net income of $4.2 million on sales of $49.8 million or basic and diluted earnings per share of $0.41 and $0.38, respectively.
For the second quarter of 2007 the Company reported net income of $1.7 million on sales of $35.4 million or basic and diluted earnings per share of $0.40 and $0.38, respectively. The number of shares outstanding was significantly higher in the first and second quarters of 2008 when compared to the second quarter of 2007.
Highlights
EBITDA was $6.2 million or 12.6% of sales for the three months ended June 30, 2008. For the three months ended June 30, 2007 EBITDA was $4.3 million or 12.1% of sales. For a reconciliation of net income to EBITDA please see the Management's Discussion and Analysis available on SEDAR at www.sedar.com. The increase in EBITDA relative to the prior year comparative period was primarily due to the continued focus at the Dresden mill, towards more non-woven wallpaper base which typically offers higher sales per tonne and higher EBITDA margins.
EBITDA is defined as net income before interest, income taxes, depreciation, amortization, non-operating income and expenses and stock based compensation which the Company considers to be a key performance indicator. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to earnings or cash flows as determined in accordance with Canadian generally accepted accounting principles. As there is no standardized method of calculating EBITDA, the Company's use for the term may not be comparable with similarly titled measures used by other companies.
Operational Results
Sales for the three months ended June 30, 2008 totaled $49.1 million. The Landqart Mill contributed $20.0 million and the Dresden Mill contributed $29.1 million of sales revenue. In the three months ended June 30, 2007 sales totaled $35.4 million. The Landqart Mill and Dresden Mill contributed $15.7 million and $19.7 million, respectively. Sales for the three months ended June 30, 2008 were significantly higher relative to the prior year comparative period primarily due to capacity increases at both mills and the continued focus at the Dresden mill, towards more non-woven wallpaper base.
Landqart produces various specialty and security papers. Security paper production includes banknotes which result in varying degrees of EBITDA margin depending on the complexity of the features included.
Total shipments during the three months ended June 30, 2008 were 14,125 tonnes, comprised of 4,473 tonnes of security and specialty papers from the Landqart Mill and 9,652 tonnes of wallpaper base from the Dresden Mill. Total shipments during the three months ended June 30, 2007 were 12,578 tonnes, comprised of 3,841 tonnes of security and specialty papers from the Landqart Mill and 8,737 tonnes of wallpaper base from the Dresden Mill. -- www.cnxmarketlink.com
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