Cascades Reports Results for the First Quarter of 2026

• Cascades Inc. reported Q1 2026 sales of $1,125 million, a decrease compared to both the previous quarter ($1,197 million) and the same period last year ($1,154 million).
• Operating income rose to $81 million, up from $76 million in Q4 2025 and $50 million in Q1 2025.
• Net earnings per common share (as reported): $0.38 (vs. $0.37 in Q4 2025; vs. $0.07 in Q1 2025).
• Adjusted EBITDA (A): $118M (vs. $155M in Q4 2025; vs. $125M in Q1 2025).
• Adjusted Net Earnings per common share: $0.07 (vs. $0.40 in Q4 2025; vs. $0.13 in Q1 2025).
• Net Debt: $1,901M as of March 31, 2026 (vs. $1,896M as of Dec 31, 2025).
• Net debt to EBITDA (A) ratio: 3.3x (stable).
• Asset Sale Proceeds: Generated $91M in Q1 2026; total proceeds for 2025-2026 period reached $149M (Target: $230M by end of Q3 2026).
• Management expects Q2 results to be modestly lower sequentially due to cautious packaging volumes and input cost volatility.
• Specific One-Time Items Impacting Results included a $49 million gain from the sale of a business and assets in Canada, offsetting an $8 million impairment on building and equipment (US plant closure).

• The Q1 2026 results confirm the negative outlook revised by management on April 10, 2026.
• While Adjusted EBITDA of $118M fell within the revised guidance range ($115M-$120M), the sequential decline in core profitability is severe.
• Adjusted Net EPS dropped from $0.40 in Q4 2025 to $0.07 in Q1 2026, indicating a significant erosion of earnings power despite operating income growth driven by one-time gains ($49M).
• Sales declined both sequentially and year-over-year, validating the "cautious packaging volume" warning issued in April.
• The forward outlook for Q2 is explicitly lower sequentially, adding downside risk to valuation multiples beyond the current quarter's results.
• Asset sale progress ($149M of $230M target) remains on track but requires continued execution to meet debt reduction targets by end of 2026.

• Cascades Inc. is a North American packaging, hygiene, and recovery solutions provider.
• Flagship Projects include the Cabano plant (secured long-term timber supply via Solifor partnership) and Kingsey Falls uncoated recycled boxboard plant ($6.9M CapEx upgrade).
• The company operates in Packaging Products, Tissue Papers, and Corporate/Recovery segments.
• Strategic focus is on optimizing non-core assets to reduce debt and improve profitability margins.