Resolute Forest Products Inc. reported net income for the quarter ended December 31, 2014, excluding special items, of $36 million, or $0.38 per share, an increase of $4 million, or $0.04 per share, from the same period in 2013. Sales were $1.1 billion in the quarter, down $95 million, or 8%, from the fourth quarter of 2013. GAAP net loss was $109 million, or $1.15 per share, compared to a net loss of $3 million, or $0.03 per share, in the fourth quarter of 2013. The company’s adjusted EBITDA was $106 million in the quarter, down $4 million from the fourth quarter of 2013.
For 2014, Resolute generated net income of $46 million, or $0.49 per share, excluding special items, down from net income, excluding special items, of $107 million, or $1.13 per share, in the previous year. Sales were $4.3 billion, down $203 million, or 5%, from 2013. GAAP net loss was $277 million, or $2.93 per share, compared to a net loss of $639 million, or $6.75 per share, in 2013, as the 2013 results were significantly affected by a $572 million non-cash income tax charge. The company’s adjusted EBITDA was $366 million in 2014, down $11 million from 2013.
“Our market pulp and wood products segments generated $221 million of EBITDA in 2014, a 30% improvement over 2013,” said Richard Garneau, president and chief executive officer. “Their strong performance helped us to deliver three solid consecutive quarters to finish the year with $366 million of adjusted EBITDA, even as the abnormally cold winter of 2014 set us back by $55 million. We grew lumber shipments by 105 million board feet in 2014, and we’re on track to reach another three hundred million of annualized capacity in 2015 as we ramp-up our Ignace and Atikokan sawmills. We’re also making excellent progress on our continuous digester project at Calhoun, where we expect to start the ramp-up process in the fourth quarter; at capacity, we will have an additional 100,000 metric tons of market pulp available on an annualized basis. This world-class equipment will help to significantly lower the mill’s overall costs and improve the quality of its products.
“When compared to last quarter, the fourth quarter EBITDA essentially reflected lower paper manufacturing costs due to the weaker Canadian dollar, offset by price erosion – mainly newsprint – and seasonally lower volumes of wood products and specialty papers.
“Safety remains our first priority, and we all strive for zero injury. I’m proud to announce that in 2014 we beat the ambitious target we set for ourselves, achieving an Occupational Safety and Health Administration (or “OSHA”) incident rate of 0.83, even better than last year’s world-class rate of 1.02. This accomplishment reflects our employees’ focus, dedication and vigilance, for which they deserve our recognition.”
Non-GAAP financial measures, such as adjustments for special items and adjusted EBITDA, are explained and reconciled below.
In the picture: Richard Garneau, president and chief executive officer.