KP Tissue Releases Third Quarter 2025 Financial Results

MISSISSAUGA, Ontario, Nov. 13, 2025 (GLOBE NEWSWIRE) -- KP Tissue Inc. (KPT) (TSX: KPT) reports the Q3 2025 financial and operational results of KPT and Kruger Products Inc. (Kruger Products or the Company). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and Bonterra®) 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 12.1% interest in Kruger Products. Kruger Products Q3 2025 Business and Financial Highlights Revenue was $561.1 million in Q3 2025 compared to $521.1 million in Q3 2024, an increase of $40.0 million or 7.7%. Adjusted EBITDA1 was $85.7 million in Q3 2025 compared to $65.7 million in Q3 2024, an increase of 30.4%. Net income was $14.6 million in Q3 2025 compared to $18.0 million in Q3 2024, a decrease of $3.4 million. Declared a quarterly dividend of $0.18 per share to be paid on January 15, 2026. “We accelerated profitable sales growth in the third quarter of 2025, resulting in Adjusted EBITDA improving 30.4% year-over-year to $85.7 million,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “We are particularly pleased with share gains in the paper towel and facial tissue categories, which grew over a 52-week period on the strength of heightened brand support and innovations in the premium product segment.”  “In terms of our Away-From-Home segment, sales and profitability increased both year-over-year and sequentially, bolstered by consumer brands like Scotties and Cashmere selling well in the commercial market. Our expanded in-sourcing of paper also contributed to generating double-digit Adjusted EBITDA growth for this business.”  “Looking ahead, we are on our way to delivering a third consecutive year of strong financial results. In addition, we have significantly deleveraged our balance sheet to prepare for the next phase of investment in support of our growth focus. Accordingly, we are proud to announce the construction of a new, modern TAD tissue facility—with production estimated to start in 2028—to meet rising demand for our ultra-premium products,” Mr. Bianco added. Outlook for Q4 2025 For the last quarter of 2025, we expect Adjusted EBITDA1 to be in the range of Q3 2025. Kruger Products Q3 2025 Financial Results Revenue was $561.1 million in Q3 2025 compared to $521.1 million in Q3 2024, an increase of $40.0 million or 7.7%. The increase in revenue was due to higher sales volume, primarily 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 $460.0 million in Q3 2025 compared to $437.3 million in Q3 2024, an increase of $22.7 million or 5.2%. The increase in cost of sales was primarily due to higher sales volume and additional manufacturing overhead spend to invest in our sites, partially offset by lower pulp prices compared to the year ago quarter. Freight rates were lower compared to Q3 2024 while warehousing costs increased, related primarily to higher sales volumes. As a percentage of revenue, cost of sales was 82.0% in Q3 2025 compared to 83.9% in Q3 2024. Selling, general and administrative (SG&A) expenses were $47.9 million in Q3 2025 compared to $46.5 million in Q3 2024, an increase of $1.4 million or 3.0%. The increase was primarily due to additional investment in IT and additional headcount and related compensation costs, resulting in lower contracting costs, to support growth, partially offset by foreign exchange gains on working capital compared to losses in Q3 2024 and lower advertising and promotion spend. As a percentage of revenue, SG&A expenses were 8.5% in Q3 2025 compared to 8.9% in Q3 2024. Adjusted EBITDA1 was $85.7 million in Q3 2025 compared to $65.7 million in Q3 2024, an increase of $20.0 million or 30.4%. The increase was primarily due to higher sales volumes and selling prices along with lower pulp costs and freight rates, partially offset by higher manufacturing overhead spend, warehousing costs and SG&A expenses. Net income was $14.6 million in Q3 2025 compared to $18.0 million in Q3 2024, a decrease of $3.4 million. The decrease was primarily due to a foreign exchange loss, higher income tax expense, higher depreciation expense resulting from the Sherbrooke Expansion Project, higher interest expense and other finance costs, partially offset by higher Adjusted EBITDA1 and lower income from non-controlling interest. Kruger Products Q3 2025 Liquidity Total liquidity, representing cash and availability under the revolving credit agreements, was $388.6 million as of September 30, 2025. KPT Q3 2025 Financial Results KPT had net income of $1.5 million in Q3 2025. Included in net income was $1.7 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. New Tissue Plant Investment  After investing more than $1 billion in Canada since 2018 to increase tissue capacity and accelerate the growth of our business, the Company also announced today plans to build a new state-of-the-art tissue plant featuring the most modern through-air-dry (TAD) machine and related converting lines in the western United States.  This facility will allow the Company to better service its fast-growing U.S. business with ultra-premium tissue products.   Location selection is in the final stages and will be announced along with project scope and financing details at a later date.  This new TAD machine will have annual production capacity of approximately 75,000 metric tonnes and is estimated to start production in 2028.   This new tissue investment will be made within an unrestricted subsidiary of Kruger Products and is subject to obtaining financing on satisfactory terms. The project is currently expected to be financed 40% by equity and incentives as well as 60% by project finance debt.  This new facility, along with our Memphis plant and 9 existing Canadian plants, gives us a strong network to service our growing North American business.  Dividends on Common Shares The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on January 15, 2026 to shareholders of record at the close of business on December 31, 2025. Additional Information For additional information please refer to Management’s Discussion and Analysis (MD&A) of KPT and Kruger Products for the third quarter ended September 30, 2025 available on SEDAR+ at www.sedarplus.ca or our website atwww.kptissueinc.com. Third Quarter Results Conference Call Information KPT will hold its third quarter conference call on Thursday, November 13, 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 atwww.kptissueinc.com. A rebroadcast of the conference call will be available until midnight, November 20, 2025 by dialing 1-888-660-6345 or 289-819-1450 and entering passcode 86584. The replay of the webcast will remain available on the website until midnight, November 20, 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 12.1% 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 Bonterra®. 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 3,000 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. Forward-looking statements in this press release include, but are not limited to, items such as plans to build a new TAD tissue plant and its expected annual production capacity, expected date for starting production, the expected financing structure of the project and certain anticipated benefits of the project. 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 obtaining financing on acceptable terms for the project. 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 Q4 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+ atwww.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)                         September 30, 2025     December 31, 2024             $     $     Assets             Current assets               Cash and cash equivalents     149,131     119,460       Restricted cash     44,646     48,375       Trade and other receivables     136,394     138,177       Receivables from related parties     79     80       Inventories     284,638     287,756       Income tax recoverable     5,475     3,208       Prepaid expenses     11,042     6,383             631,405     603,439     Non-current assets               Property, plant and equipment     1,425,192     1,509,592       Right-of-use assets     160,198     186,460       Other long-term assets     10     92       Pensions     94,938     92,661       Goodwill     152,021     152,021       Intangible assets     39,403     42,572       Deferred income taxes     23,556     10,500     Total assets     2,526,723     2,597,337                     Liabilities             Current liabilities               Trade and other payables     321,451     346,264       Payables to related parties     11,350     17,829       Income tax payable     1     3       Dividends payable     14,726     14,308       Current portion of long-term debt     97,913     54,168       Current portion of lease liabilities     43,498     40,156       Current portion of long-term payable to related party   5,800     5,800       Current portion of provisions     6,389     4,184             501,128     482,712     Non-current liabilities               Long-term debt     1,083,522     1,180,488       Long-term lease liabilities     146,972     165,563       Long-term payable to related party     27,602     31,925       Long-term provisions     8,729     9,398       Pensions     17,400     17,845       Post-retirement benefits     48,504     47,140     Total liabilities     1,833,857     1,935,071                     Equity               Share capital     327,887     308,622       Contributed surplus     395,382     395,382       Deficit     (159,004 )   (171,874 )     Accumulated other comprehensive income     92,280     100,177       Equity attributable to Kruger Products     656,545     632,307       Non-controlling interest     36,321     29,959     Total equity     692,866     662,266     Total equity and liabilities     2,526,723     2,597,337                     Kruger Products Inc. Unaudited Condensed Consolidated Statements of Income (thousands of Canadian dollars)                         3-month  period ended September 30, 2025   3-month period ended September 30, 2024     9-month period ended September 30, 2025     9-month period ended September 30, 2024       $   $     $     $                       Revenue   561,145   521,085     1,643,335     1,510,317                       Expenses                   Cost of sales   459,988   437,202     1,373,175     1,262,433   Selling, general and administrative expenses   47,906   46,533     146,277     133,145   Restructuring costs   29   -     3,731     219                       Operating income   53,222   37,350     120,152     114,520                       Interest expense and other finance costs   21,569   17,997     63,826     51,132   Other expense (income)   6,836   (5,266 )   (13,448 )   7,152                       Income before income taxes   24,817   24,619     69,774     56,236                       Current tax expense   242   1,768     2,050     3,149   Deferred tax expense   9,191   3,244     9,274     11,723                       Income tax expense   9,433   5,012     11,324     14,872                       Net income including non-controlling interest   15,384   19,607     58,450     41,364                       Net income attributable to non-controlling interest   838   1,614     6,362     3,823                       Net income attributable to Kruger Products   14,546   17,993     52,088     37,541                       Kruger Products Inc. Unaudited Condensed Consolidated Statements of Cash Flows (thousands of Canadian dollars)       3-month period ended September 30, 2025     3-month period ended September 30, 2024     9-month period ended September 30, 2025     9-month period ended September 30, 2024       $     $     $     $   Cash flows from (used in) operating activities                 Net income including non-controlling interest   15,384     19,607     58,450     41,364   Items not affecting cash                 Depreciation   30,259     26,561     103,875     78,688   Amortization   2,190     1,739     6,170     4,300   Loss (gain) on sale of property, plant and equipment   -     -     (5 )   269   Loss on disposal of leased assets   -     -     23     -   Foreign exchange loss (gain)   6,836     (5,266 )   (13,448 )   8,033   Interest expense and other finance costs   21,569     17,997     63,826     51,132   Pension and post-retirement benefits   2,844     3,680     8,417     8,964   Provisions   1,930     1,297     5,859     3,415   Income tax expense   9,433     5,012     11,324     14,872   Loss on sale of non-financial assets   -     15     -     27   Total items not affecting cash   75,061     51,035     186,041     169,700                     Net change in non-cash working capital   25,097     (7,287 )   (29,471 )   (52,974 ) Contributions to pension and post-retirement benefit plans   (869 )   (1,154 )   (2,884 )   (3,418 ) Provisions paid   (655 )   -     (4,679 )   (3,695 ) Income tax payments, net   (681 )   (680 )   (2,492 )   (3,121 ) Net cash from operating activities   113,337     61,521     204,965     147,856                     Cash flows from (used in) investing activities                 Purchases of property, plant and equipment   (13,451 )   (7,857 )   (23,313 )   (15,821 ) Purchases of property, plant and equipment related to the Sherbrooke Expansion Project                   (1,796 )   (26,740 )   (19,173 )   (116,167 ) Interest paid on credit facilities related to the Sherbrooke Expansion Project                   -     (2,347 )   -     (5,136 ) Government assistance received   (31 )   -     3,119     -   Purchases of software   (989 )   (7 )   (2,083 )   (294 ) Proceeds on sale of property, plant and equipment   -     -     -     28   Net cash used in investing activities   (16,267 )   (36,951 )   (41,450 )   (137,390 )                   Cash flows from (used in) financing activities                 Proceeds from long-term debt   (22,017 )   5,765     9,171     119,197   Repayment of long-term debt   (16,613 )   (11,852 )   (49,118 )   (33,045 ) Payment of deferred financing fees   (30 )   (83 )   (23 )   (1,312 ) Payment of lease liabilities   (8,738 )   (9,191 )   (25,475 )   (26,463 ) Change in restricted cash   31,680     (1,183 )   3,730     (32,381 ) Interest paid on long-term debt   (9,975 )   (15,460 )   (41,396 )   (38,839 ) Payment to related party   -     -     (5,800 )   (5,800 ) Dividends paid, net   (8,136 )   (7,868 )   (24,205 )   (17,425 ) Net cash used in financing activities   (33,829 )   (39,872 )   (133,116 )   (36,068 )                   Effect of exchange rate changes on cash and cash equivalents held in foreign currency                   583     (637 )   (728 )   1,089                     Increase (decrease) in cash and cash equivalents during the period   63,824     (15,939 )   29,671     (24,513 )                   Cash and cash equivalents - Beginning of period   85,307     127,154     119,460     135,728                     Cash and cash equivalents - End of period   149,131     111,215     149,131     111,215                     Kruger Products Inc. Unaudited Segment and Geographic Results (thousands of Canadian dollars)                                   3-month period ended September 30, 2025     3-month period ended September 30, 2024     9-month period ended September 30, 2025     9-month period ended September 30, 2024     $     $     $     $                   Segment Information                               Segment Revenue               Consumer 468,313     429,196     1,382,725     1,255,410   AFH 92,832     91,889     260,610     254,907                   Revenue from external customers 561,145     521,085     1,643,335     1,510,317                   Other segment items                                   Consumer 390,069     366,782     1,159,245     1,070,037       AFH 82,453     85,287     238,479     230,966       Corporate and other costs 2,922     3,351     11,665     11,291                   Total other segment items 475,444     455,420     1,409,389     1,312,294                   Adjusted EBITDA               Consumer 78,244     62,414     223,480     185,373   AFH 10,379     6,602     22,131     23,941   Corporate and other costs (2,922 )   (3,351 )   (11,665 )   (11,291 )                 Total Adjusted EBITDA 85,701     65,665     233,946     198,023                   Reconciliation to net income:                               Depreciation and amortization 32,450     28,300     110,045     82,988   Interest expense and other finance costs 21,569     17,997     63,826     51,132   Loss on sale of property, plant and equipment -     -     18     269   Loss on sale of non-financial assets -     15     -     27   Change in amortized cost of Partnership unit liability -     -     -     (881 ) Restructuring costs, net 29     -     3,731     219   Foreign exchange loss (gain) 6,836     (5,266 )   (13,448 )   8,033                   Income before income taxes 24,817     24,619     69,774     56,236                   Income tax expense 9,433     5,012     11,324     14,872                   Net income including non-controlling interest 15,384     19,607     58,450     41,364                   Geographic Revenue                               Canada 301,360     282,222     889,217     827,363   US 259,785     238,863     754,118     682,954                   Total revenue 561,145     521,085     1,643,335     1,510,317                   KP Tissue Inc. Unaudited Condensed Statements of Financial Position (thousands of Canadian dollars)                                   September 30, 2025     December 31, 2024           $     $     Assets                           Current assets             Dividends receivable     1,801     1,798           1,801     1,798                   Non-current assets             Investment in associate     69,500     69,517                   Total assets     71,301     71,315                   Liabilities                           Current liabilities             Dividend payable     1,801     1,798                   Total liabilities     1,801     1,798                   Equity                           Common shares     22,934     22,762     Contributed surplus     144,819     144,819     Deficit     (115,635 )   (116,673 )   Accumulated other comprehensive income     17,382     18,609                   Total equity     69,500     69,517                   Total liabilities and equity     71,301     71,315                   KP Tissue Inc. Unaudited Condensed Statements of Income (thousands of Canadian dollars, except share and per share amounts)                         3-month period ended September 30, 2025     3-month period ended September 30, 2024     9-month period ended September 30, 2025     9-month period ended September 30, 2024         $     $     $     $                             Share of income   1,700     2,259     6,372     4,758         Depreciation of fair value increments   (264 )   (278 )   (827 )   (847 )                       Equity income   1,436     1,981     5,545     3,911         Dilution gain   114     107     323     500                                             Net income   1,550     2,088     5,868     4,411                                             Basic earnings per share   0.15     0.21     0.59     0.44                         Weighted average number of shares outstanding   10,007,057     9,979,383     10,000,087     9,973,463                         KP Tissue Inc. Unaudited Condensed Statements of Cash Flows (thousands of Canadian dollars)                         3-month period ended September 30, 2025     3-month period ended September 30, 2024     9-month period ended September 30, 2025     9-month period ended September 30, 2024         $     $     $     $     Cash flows from (used in) operating activities                   Net income   1,550     2,088     5,868     4,411     Items not affecting cash                   Equity income   (1,436 )   (1,981 )   (5,545 )   (3,911 )   Dilution gain   (114 )   (107 )   (323 )   (500 )   Total items not affecting cash   (1,550 )   (2,088 )   (5,868 )   (4,411 )                       Decrease in payable to investee   -     (376 )   -     (660 )   Tax refunds, net   -     376     -     660                         Net cash from operating activities   -     -     -     -                         Cash flows from (used in) investing activities                   Dividends received, net   1,739     1,743     5,229     5,239                         Net cash from investing activities   1,739     1,743     5,229     5,239                         Cash flows from (used in) financing activities                   Dividends paid, net   (1,739 )   (1,743 )   (5,229 )   (5,239 )                       Net cash used in financing activities   (1,739 )   (1,743 )   (5,229 )   (5,239 )                       Increase (decrease) in cash and cash equivalents during the period -     -     -     -                         Cash and cash equivalents - Beginning of period   -     -     -     -                         Cash and cash equivalents - End of period   -     -     -     -