KPT KP Tissue Inc

KP Tissue Inc. (KPT) (TSX: KPT) reports the Q2 2023 financial and operational results of KPT and Kruger Products Inc. (Kruger Products). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and BonterraTM) 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 13.3% interest in Kruger Products.

Kruger Products Q2 2023 Business and Financial Highlights

• Revenue was $466.3 million in Q2 2023 compared to $397.5 million in Q2 2022, an increase of $68.8 million or 17.3%.
• Adjusted EBITDA1 was $55.0 million in Q2 2023, compared to $11.8 million in Q2 2022, an increase of 365.8%.
• Net income was $14.5 million in Q2 2023 compared to a net loss of $35.5 million in Q2 2022, an increase of $50.0 million.
• Declared a quarterly dividend of $0.18 per share to be paid on October 16, 2023.

“We are pleased that margin recovery, along with improved sales volume and a better mix in our Consumer business, generated strong Adjusted EBITDA of $55.0 million in the second quarter of 2023,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “Ongoing cost management initiatives, including productivity gains and cost controls, also contributed to increasing profitability. In addition, our Away-From-Home segment delivered a fourth consecutive quarter of positive Adjusted EBITDA to maintain its growth momentum. As a result, our financial performance in the second quarter normalized versus a more challenging market and operating environment in the same period last year. On a sequential basis, revenue and Adjusted EBITDA continued to improve, rising 3.4% and 10.2% in the quarter, respectively.”

“Looking ahead to the second half of 2023, we anticipate a more favourable landscape as input costs trend downwards, TAD Sherbrooke and the Sherbrooke Expansion Project continue to ramp up production capacity to meet customer demand, and margins are restored to their pre-pandemic levels,” Mr. Bianco added.

Outlook for Q3 2023For the third quarter of 2023, as commodity and other input costs begin to decline, we will focus on maintaining our margins while also continuing to reinvest in the business to drive long-term value. Accordingly, Adjusted EBITDA1 in Q3 2023 is expected to be in the range of Q2 2023.

Kruger Products Q2 2023 Financial ResultsRevenue was $466.3 million in Q2 2023 compared to $397.5 million in Q2 2022, an increase of $68.8 million or 17.3%. The increase in revenue was primarily due to the favourable impact of selling price increases implemented across all segments and regions during 2022, along with favourable sales mix and higher sales volume in the Consumer business. Revenue was also favourably impacted by foreign exchange fluctuations on U.S. dollar sales.

Cost of sales was $395.8 million in Q2 2023 compared to $372.5 million in Q2 2022, an increase of $23.3 million or 6.2%. Higher sales volumes increased cost of sales, along with the unfavourable impact of foreign exchange fluctuations on U.S. dollar costs, partially offset by improvements in Memphis operations. While the significant inflation experienced during 2022 has moderated in the second quarter of 2023, manufacturing input costs remain higher than the year ago quarter. Freight rates were lower compared to Q2 2022 as supply constraints and inflation moderated, while warehousing costs increased as a result of additional logistics network costs. As a percentage of revenue, cost of sales was 84.9% in Q2 2023 compared to 93.7% in Q2 2022.

Selling, general and administrative (SG&A) expenses were $40.6 million in Q2 2023 compared to $35.1 million in Q2 2022, an increase of $5.5 million or 15.7%. The increase was primarily due to higher personnel costs, foreign exchange losses related to foreign denominated working capital and a loss on disposal of fixed assets, partially offset by lower advertising spend in the quarter. As a percentage of revenue, SG&A expenses were 8.7% in Q2 2023 compared to 8.8% in Q2 2022.

Adjusted EBITDA1 was $55.0 million in Q2 2023 compared to $11.8 million in Q2 2022, an increase of $43.2 million or 365.8%. The significant increase was primarily due to a combination of factors: selling price increases in 2022, favourable sales mix along with higher sales volumes, improvements in Memphis operations and lower freight rates. These factors were partially offset by inflation on input costs compared to Q2 2022, higher warehousing and SG&A expenses and the unfavourable impact of foreign exchange fluctuations.

Net income was $14.5 million in Q2 2023 compared to a loss of $35.5 million in Q2 2022, an increase of $50.0 million. The increase was primarily due to higher Adjusted EBITDA1 and higher foreign exchange gains, partially offset by higher income tax and depreciation expenses, higher interest expense and other finance costs and a loss on sale of fixed assets.

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 Q2 2023 LiquidityTotal liquidity, representing cash and availability under the revolving credit agreements, was $181.5 million as of June 30, 2023. In addition, $13.8 million of cash was held by Kruger Products for the Sherbrooke Expansion Project.

KPT Q2 2023 Financial ResultsKPT had net income of $2.0 million in Q2 2023. Included in net income was $2.1 million representing KPT’s share of Kruger Products’ net income, a dilution gain of $0.2 million and depreciation expense of $0.3 million related to adjustments to carrying amounts on acquisition.

Dividends on Common SharesThe Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on October 16, 2023 to shareholders of record at the close of business on October 2, 2023.

Additional InformationFor additional information please refer to Management’s Discussion and Analysis (MD&A) of KPT and Kruger Products for the second quarter ended June 30, 2023 available on SEDAR at www.sedar.com or our website at www.kptissueinc.com.

Second Quarter Results Conference Call InformationKPT will hold its second quarter conference call on Thursday, August 10, 2023 at 8:30 a.m. Eastern Time.

Via telephone: 1-800-319-4610 or 604-638-5340

Via the internet at: www.kptissueinc.com

Presentation material referenced during the conference call will be available at www.kptissueinc.com.

A rebroadcast of the conference call will be available until midnight, August 17, 2023 by dialing 1-855-669-9658 or 604-674-8052 and entering passcode 0272.

The replay of the webcast will remain available on the website until midnight, August 17, 2023.

About KP Tissue Inc. (KPT)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 13.3% interest in Kruger Products. For more information visit www.kptissueinc.com.

About Kruger ProductsKruger 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 BonterraTM. 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 2,700 employees and operates nine FSC® COC-certified (FSC® C-104904) production facilities in North America. For more information visit www.krugerproducts.ca.

Non-GAAP Financial MeasuresThis 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) impairment (gain 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, (ix) changes in amortized cost of Partnership units liability, (x) change in fair value of derivatives, (xi) consulting costs related to operational transformation initiatives, (xii) corporate development related costs and (xiii) loss (gain) on sale of shares. 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 StatementsCertain 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, statements regarding continued growth in the U.S. Consumer tissue business with the White Cloud® brand and premium private label products, the expected impact of our Sherbrooke Expansion Project, the expected start-up dates of the facial tissue line and paper machine of the Sherbrooke Expansion Project, expected growth and profitability in 2023 and our expectation that Adjusted EBITDA1 in Q3 2023 will be in the range of Q2 2023. 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 that inflationary pressure has stabilized. 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 Q3 2023 and expected growth and profitability in 2023 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 9, 2023 available on SEDAR at www.sedar.com; 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 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 risks related to COVID-19.

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 ParoyanGeneral Counsel and Corporate SecretaryKP Tissue Inc.Tel.: 905.812.6936francois.paroyan@krugerproducts.ca

INVESTORS:

Mike BaldesarraDirector of Investor RelationsKP Tissue Inc.Tel.: 905.812.6962IR@KPTissueinc.com

Kruger Products Inc.
Unaudited Condensed Consolidated Statements of Financial Position
(thousands of Canadian dollars)
		June 30, 2023			December 31, 2022
		$			$
Assets
Current assets
	Cash and cash equivalents	88,245			71,261
	Restricted cash	9,702			7,145
	Trade and other receivables	118,777			119,681
	Receivables from related parties	245			223
	Inventories	262,509			286,566
	Income tax recoverable	4,119			1,306
	Prepaid expenses	14,301			5,640
		497,898			491,822
Non-current assets
	Property, plant and equipment	1,321,358			1,294,838
	Right-of-use assets	78,066			81,715
	Other long-term assets	13,843			27,554
	Pensions	80,264			83,080
	Goodwill	152,021			152,021
	Intangible assets	28,374			30,027
	Deferred income taxes	29,375			95,711
Total assets		2,201,199			2,256,768
Liabilities
Current liabilities
	Trade and other payables	277,667			279,425
	Payables to related parties	9,633			11,363
	Dividends payable	13,261			-
	Distributions payable	-			12,866
	Current portion of long-term debt	34,134			34,411
	Current portion of lease liabilities	28,313			28,349
	Current portion of long-term payable to related party	5,800			5,800
	Current portion of provisions	2,737			3,252
		371,545			375,466
Non-current liabilities
	Long-term debt	1,077,746			1,077,297
	Long-term lease liabilities	65,253			70,579
	Long-term payable to related party	34,460			39,042
	Long-term provisions	2,863			3,076
	Pensions	20,555			20,847
	Post-retirement benefits	46,244			43,739
	Liabilities to non-equityholders	1,618,666			1,630,046
	Long-term portion of Partnership units liability	-			133,551
	Total Partnership units liability	-			133,551
Total liabilities		1,618,666			1,763,597
Equity
	Share capital	650,469			-
	Partnership units	-			494,459
	Deficit	(158,661	)		(87,835	)
	Accumulated other comprehensive income	81,295			86,547
	Equity attributable to Kruger Products	573,103			493,171
	Non-controlling interest	9,430			-
Total equity		582,533			493,171
Total equity and liabilities		2,201,199			2,256,768

Kruger Products Inc.
Unaudited Condensed Consolidated Statements of Income (Loss)
(thousands of Canadian dollars)
	3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
	$			$			$			$
Revenue	466,302			397,499			917,294			796,238
Expenses
Cost of sales	395,712			372,489			784,736			736,344
Selling, general and administrative expenses	40,640			35,111			76,901			63,966
Loss on sale of non-financial assets	13			5			16			10
Restructuring costs, net	84			352			1,223			868
Operating income (loss)	29,853			(10,458	)		54,418			(4,950	)
Interest expense and other finance costs	18,539			17,369			35,063			34,903
Other (income) expense	(8,849	)		12,599			(9,265	)		8,284
Income (loss) before income taxes	20,163			(40,426	)		28,620			(48,137	)
Income tax expense (recovery)	5,162			(4,913	)		63,735			(14,061	)
Net income (loss) including non-controlling interest	15,001			(35,513	)		(35,115	)		(34,076	)
Net income (loss) attributable to non-controlling interest	517			-			(338	)		-
Net income (loss) attributable to Kruger Products	14,484			(35,513	)		(34,777	)		(34,076	)

Kruger Products Inc.
Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)
(thousands of Canadian dollars)
	3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
	$			$			$			$
Net income (loss) including non-controlling interest	15,001			(35,513	)		(35,115	)		(34,076	)
Other comprehensive income (loss)
Items that will not be reclassified to net income     (loss):
Remeasurements of pensions	(4,037	)		89,304			(19,881	)		194,925
Remeasurements of post-retirement benefits	(452	)		6,190			10,190			14,051
Items that may be subsequently reclassified to     net income (loss):
Cumulative translation adjustment	(5,040	)		8,422			(5,252	)		4,385
Other comprehensive income (loss)	(9,529	)		103,916			(14,943	)		213,361
Total comprehensive income (loss) including     non-controlling interest	5,472			68,403			(50,058	)		179,285
Total comprehensive income (loss) attributable to     non-controlling interest	517			-			(338	)		-
Total comprehensive income (loss) attriutable to     Kruger Products	4,955			68,403			(49,720	)		179,285

Kruger Products Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(thousands of Canadian dollars)
	3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
	$			$			$			$
Cash flows from (used in) operating activities
Net income (loss) including non-controlling interest	15,001			(35,513	)		(35,115	)		(34,076	)
Items not affecting cash
Depreciation	22,889			20,778			46,078			42,760
Amortization	1,096			1,125			2,161			2,169
Loss on sale of property, plant and equipment	1,114			18			1,109			18
Gain on disposal of leased assets	-			-			(488	)		-
Foreign exchange (gain) loss	(8,849	)		12,599			(9,265	)		8,284
Interest expense and other finance costs	18,539			17,369			35,063			34,903
Pension and post-retirement benefits	2,224			3,576			4,112			7,270
Provisions	508			733			1,939			494
Income tax expense (recovery)	5,162			(4,913	)		63,735			(14,061	)
Loss on sale of non-financial assets	13			5			16			10
Total items not affecting cash	42,696			51,290			144,460			81,847
Net change in non-cash working capital	68,307			(20,031	)		16,858			(66,521	)
Contributions to pension and post-retirement benefit plans	(2,680	)		(4,157	)		(5,198	)		(8,340	)
Provisions paid	(2,585	)		(3,733	)		(3,274	)		(3,915	)
Income tax payments, net	(1,621	)		(1,168	)		(1,458	)		(1,488	)
Net cash from (used in) operating activities	119,118			(13,312	)		116,273			(32,493	)
Cash flows from (used in) investing activities
Purchases of property, plant and equipment	(4,669	)		(18,431	)		(8,680	)		(18,930	)
Purchases of property, plant and equipment and software     related to the TAD Sherbrooke Project	(743	)		(5,598	)		(743	)		(10,929	)
Purchases of property, plant and equipment related to the     Sherbrooke Expansion Project	(36,798	)		(14,704	)		(68,460	)		(20,748	)
Interest paid on credit facilities related to the Sherbrooke     Expansion Project	(119	)		(306	)		(216	)		(306	)
Government assistance received	-			-			1,250			-
Purchases of software	(437	)		(304	)		(508	)		(4,759	)
Proceeds on sale of property, plant and equipment	2,443			1			2,448			1
Net cash used in investing activities	(40,323	)		(39,342	)		(74,909	)		(55,671	)
Cash flows from (used in) financing activities
Proceeds from long-term debt	21,281			75,550			56,782			217,506
Repayment of long-term debt	(14,874	)		(6,907	)		(23,569	)		(125,446	)
Payment of deferred financing fees	(134	)		823			(380	)		(1,312	)
Payment of lease liabilities	(7,046	)		(7,426	)		(13,796	)		(14,411	)
Change in Restricted cash	(1,332	)		(1,166	)		(2,557	)		(2,312	)
Interest paid on long-term debt	(17,641	)		(16,094	)		(31,360	)		(24,987	)
Payment to related party	(5,700	)		-			(5,700	)		-
Dividends paid, net	(1,761	)		-			(3,504	)		-
Distributions and advances paid, net	-			(7,046	)		-			(14,021	)
Net cash from (used in) financing activities	(27,207	)		37,734			(24,084	)		35,017
Effect of exchange rate changes on cash and cash
equivalents held in foreign currency	(259	)		426			(296	)		160
Increase (decrease) in cash and cash equivalents     during the period	51,329			(14,494	)		16,984			(52,987	)
Cash and cash equivalents - Beginning of period	36,916			110,026			71,261			148,519
Cash and cash equivalents - End of period	88,245			95,532			88,245			95,532

Kruger Products Inc.
Segment and Geographic Results
(thousands of Canadian dollars)
		3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
		$			$			$			$
Segment Information
Segment Revenue
Consumer		383,477			326,333			759,997			669,175
AFH		82,825			71,166			157,297			127,063
Total segment revenue		466,302			397,499			917,294			796,238
Adjusted EBITDA
Consumer		53,308			14,298			104,642			49,681
AFH		5,834			(451	)		6,718			(3,672	)
Corporate and other costs		(4,093	)		(2,027	)		(6,355	)		(5,134	)
Total Adjusted EBITDA		55,049			11,820			105,005			40,875
Reconciliation to net income (loss):
Depreciation and amortization		23,985			21,903			48,239			44,929
Interest expense and other finance costs		18,539			17,369			35,063			34,903
Loss on sale of property, plant and equipment		1,114			18			1,109			18
Loss on sale of non-financial assets		13			5			16			10
Restructuring costs, net		84			352			1,223			868
Foreign exchange (gain) loss		(8,849	)		12,599			(9,265	)		8,284
Income (loss) before income taxes		20,163			(40,426	)		28,620			(48,137	)
Income tax recovery		5,162			(4,913	)		63,735			(14,061	)
Net income (loss)		15,001			(35,513	)		(35,115	)		(34,076	)
Geographic Revenue
Canada		265,165			239,286			525,945			482,206
US		201,137			158,213			391,349			314,032
Total revenue		466,302			397,499			917,294			796,238

KP Tissue Inc.
Unaudited Condensed Statements of Financial Position
(thousands of Canadian dollars)
	June 30, 2023			December 31, 2022
	$			$
Assets
Current assets
Dividends receivable	1,791			-
Distributions receivable	-			1,790
Income tax recoverable	580			580
	2,371			2,370
Non-current assets
Investment in associate	68,785			79,338
Total assets	71,156			81,708
Liabilities
Current liabilities
Dividend payable	1,791			1,790
Payable to investee	170			-
Payable to Partnership	-			170
	1,961			1,960
Non-current liabilities
Deferred income taxes	-			5,718
Total liabilities	1,961			7,678
Equity
Common shares	22,458			22,379
Contributed surplus	144,819			144,819
Deficit	(114,188	)		(108,008	)
Accumulated other comprehensive income	16,106			14,840
Total equity	69,195			74,030
Total liabilities and equity	71,156			81,708

KP Tissue Inc.
Unaudited Condensed Statements of Income (Loss) and Comprehensive Income (Loss)
(thousands of Canadian dollars, except share and per share amounts)
	3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
	$			$			$			$
Equity income (loss)	1,761			(6,423	)		(5,298	)		(7,531	)
Dilution gain	252			127			525			200
Income (loss) before income taxes	2,013			(6,296	)		(4,773	)		(7,331	)
Income tax expense (recovery)	-			(2,348	)		3,892			(4,361	)
Net income (loss)	2,013			(3,948	)		(8,665	)		(2,970	)
Other comprehensive income     (loss)
net of tax expense     (recovery)
Items that will not be reclassified     to net income (loss):
Remeasurements of pensions	(514	)		7,884			4,209			18,132
Remeasurements of post-retirement benefits	(82	)		729			1,859			1,399
Items that may be subsequently reclassified     to net income (loss):
Cumulative translation adjustment	(817	)		1,186			1,266			591
Other comprehensive income (loss)	(1,413	)		9,799			7,334			20,122
Total comprehensive income (loss)	600			5,851			(1,331	)		17,152
Basic earnings (loss) per share	0.20			(0.40	)		(0.87	)		(0.30	)
Weighted average number of shares outstanding	9,953,131			9,935,108			9,951,513			9,930,492

KP Tissue Inc.
Unaudited Condensed Statements of Cash Flows
(thousands of Canadian dollars)
	3-month period ended June 30, 2023			3-month period ended June 30, 2022			6-month period ended June 30, 2023			6-month period ended June 30, 2022
	$			$			$			$
Cash flows from (used in) operating activities
Net income (loss)	2,013			(3,948	)		(8,665	)		(2,970	)
Items not affecting cash
Equity loss (income)	(1,761	)		6,423			5,298			7,531
Dilution gain	(252	)		(127	)		(525	)		(200	)
Income tax expense (recovery)	-			(2,348	)		3,892			(4,361	)
Total items not affecting cash	(2,013	)		3,948			8,665			2,970
Net change in non-cash working capital	-			(169	)		-			(169	)
Tax payments, net	-			169			-			131
Tax Distribution received, net	-			-			-			38
Net cash from (used in) operating activities	-			-			-			-
Cash flows from investing activities
Dividends received	1,761			-			3,503			-
Partnership unit distributions received	-			1,741			-			3,144
Net cash from investing activities	1,761			1,741			3,503			3,144
Cash flows used in financing activities
Dividends paid, net	(1,761	)		(1,741	)		(3,503	)		(3,144	)
Net cash used in financing activities	(1,761	)		(1,741	)		(3,503	)		(3,144	)
Increase (decrease) in cash and cash equivalents     during the period	-			-			-			-
Cash and cash equivalents - Beginning of period	-			-			-			-
Cash and cash equivalents - End of period	-			-			-			-