KP Tissue (KPT) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 revenue exceeding $2 billion, with strong adjusted EBITDA in all quarters and stable profitability despite market volatility and rising input costs.

• Q4 2024 revenue grew 11.9% year-over-year to $539.6 million, driven by higher U.S. sales, favorable Canadian pricing, and positive FX impact.

• Full-year 2024 adjusted EBITDA rose 11% year-over-year to $264.8 million, marking eight consecutive quarters of strong results.

• Q4 2024 net loss was $13.7 million, compared to net income of $16.5 million in Q4 2023, mainly due to higher FX loss, increased depreciation, and higher interest expenses.

• Full-year 2024 net income improved to $23.8 million from a net loss of $5.3 million in 2023.

Financial highlights

• Q4 2024 revenue: $539.6 million; adjusted EBITDA: $66.8 million (up 9.2% YoY); net loss: $13.7 million.

• Full-year 2024 revenue: $2,049.9 million, up 9.4% year-over-year; adjusted EBITDA: $264.8 million, up 11% YoY.

• Q4 2024 cost of sales increased 14.7% YoY, with cost of sales as a percentage of revenue rising to 85.1%.

• Q4 2024 SG&A expenses decreased 10.4% YoY, representing 8.4% of revenue.

• Q4 2024 CAPEX was $48.1 million, with $16.1 million for the Sherbrooke Expansion Project; total 2024 CAPEX reached $185.5 million.

Outlook and guidance

• Expecting continued strong U.S. sales growth and ongoing production increases in 2025, with readiness to pass on cost increases.

• No profit guidance for Q1 2025 due to market uncertainty from proposed U.S. tariffs; will resume guidance when conditions stabilize.

• CapEx outlook for 2025: $40–60 million (base), plus $30–40 million for Sherbrooke completion.

• Evaluating construction of a new tissue plant with advanced TAD machine to support growth; project cost likely $600 million+.

• Contingency measures in place to mitigate potential tariff impacts.