KP Tissue Releases Second Quarter 2025 Financial Results

KP Tissue reports the Q2 2025 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 Bonterra®) and the Away-FromHome (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 12.2 percent interest in Kruger Products

Kruger Products Q2 2025 Business and Financial Highlights:

Revenue was $536.1 million in Q2 2025 compared to $509.8 million in Q2 2024, an increase of $26.3 million or 5.2 percent.

Adjusted EBITDA1 was $72.5 million in Q2 2025 compared to $65.3 million in Q2 2024, an increase of 11.0 percent.

Net income was $22.1 million in Q2 2025 compared to $10.6 million in Q2 2024, an increase of $11.5 million.

Declared a quarterly dividend of $0.18 per share to be paid on October 15, 2025.

“We are pleased with our overall performance in the second quarter of 2025 with Adjusted EBITDA improving 11 percent year-over year to $72.5 million,” stated KP Tissue’s Chief Executive Officer, Dino Bianco. “U.S. revenue growth slowed down in Q2 2025 due to front-loaded shipments made during the previous quarter to mitigate potential tariffs, along with softness in the AFH market. Nevertheless, U.S. sales have grown 12 percent after six months into 2025 and represent a key growth driver for Kruger Products.

“In early July, we announced an additional investment of approximately US$35 million at our Memphis manufacturing facility to deploy a state-of-the-art, multi-purpose converting line for bathroom tissue and paper towels. This initiative is part of a broader strategy to drive efficiency and support our growing U.S. business,” Mr. Bianco added.

Outlook for Q3 2025:

We expect a stronger performance in Q3 2025, with adjusted EBITDA1 in the range of $75 million to $80 million.

Kruger Products Q2 2025 Financial Results:

Revenue was $536.1 million in Q2 2025 compared to $509.8 million in Q2 2024, an increase of $26.3 million or 5.2 percent. The increase in revenue was primarily due to higher sales volume in the Consumer segment and favourable selling prices across both segments, partially offset by somewhat lower sales volume in the AFH segment. Revenue was also favourably impacted by foreign exchange fluctuations on U.S. dollar sales.

Cost of sales was $462.2 million in Q2 2025 compared to $431.2 million in Q2 2024, an increase of $31.0 million or 7.2 percent. The increase in cost of sales was primarily due to higher sales volume and pulp prices along with the unfavourable impact of foreign exchange fluctuations on U.S. dollar costs and unfavourable mill performance at our Memphis site, partially offset by lower manufacturing overhead costs due primarily to overhead cost absorption resulting from higher inventory levels in the quarter and costs related to the Q2 2024 labour disruption that did not recur in Q2 2025. Freight rates were higher compared to Q2 2024. As a percentage of revenue, cost of sales was 86.2 percent in Q2 2025 compared to 84.6 percent in Q2 2024.

Selling, general and administrative (SG&A) expenses were $47.2 million in Q2 2025 compared to $42.5 million in Q2 2024, an increase of $4.7 million or 11.1 percent. The increase was primarily due to additional investment in IT and foreign exchange losses on working capital compared to gains in Q2 2024, partially offset by lower operational and corporate initiatives compared to the year ago quarter. As a percentage of revenue, SG&A expenses were 8.8 percent in Q2 2025 compared to 8.3 percent in Q2 2024.

Adjusted EBITA was $72.5 million in Q2 2025 compared to $65.3 million in Q2 2024, an increase of $7.2 million or 11.0 percent. The increase was primarily due to higher sales volumes and selling prices along with lower manufacturing overhead costs as a result of overhead cost absorption, partially offset by higher pulp prices and unfavourable mill performance at our Memphis site along with higher freight rates and SG&A expenses.

Net income was $22.1 million in Q2 2025 compared to $10.6 million in Q2 2024, an increase of $11.5 million. The increase was primarily due to a foreign exchange gain and higher Adjusted EBITDA1 , partially offset by higher depreciation expense resulting from the Sherbrooke Expansion Project and a one-time expense related to reducing the useful life of certain older assets in our Memphis site and higher interest expense and other finance costs.

Kruger Products Q2 2025 Liquidity:

Total liquidity, representing cash and availability under the revolving credit agreements, was $293.1 million as of June 30, 2025.

KPT Q2 2025 Financial Results:

KPT had net income of $2.6 million in Q2 2025. Included in net income was $2.8 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.

Memphis Site Investment:

During Q2 2025, Kruger Products completed the shutdown of the remaining LDC assets at its Memphis, TN site. Subsequent to the end of the quarter, on July 9, 2025, Kruger Products also announced that its subsidiary, K.T.G. (USA) Inc., will be investing approximately USD$35 million in a new converting line for bathroom tissue and paper towels at its site in Memphis, TN. These actions together will drive efficiency in our Memphis site by shutting down older assets, focusing on premium products supported by modern equipment and on-site warehousing.

Dividends on Common Shares:

The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on October 15, 2025 to shareholders of record at the close of business on September 30, 2025.

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