First quarter revenue at KP Tissue was up more than 28% as the company continues to expand its presence in the U.S. with its private label and national branded products.
For the three month period ended March 31, revenue was $398.1 million, an increase of 28.5% from revenue of $310.4 million in the first quarter of 2021. Net income was $1.4 million, down from net income of $6.8 million in the comparable quarter the prior year. Adjusted EBITDA was $29.1 million in the quarter, compared to $37.5 million in Q1 2021.
Company CEO Dino Bianco said KP Tissue’s revenue growth was driven by ongoing market recovery and price increases mainly impacting its Canadian operations. Top-line growth was tempered by escalating inflation impacting pulp, freight, natural gas, packaging and labor.
“To counter inflationary pressure, we have adopted a multi-faceted strategy based on further price increases across all segments, cash management through reductions in working capital and discretionary capital spending, as well as incremental productivity programs,” he said. “We believe price increases, combined with the aforementioned cost-saving initiatives, should begin catching up with inflation in the second half of the year.”
Looking ahead, the company anticipates continued momentum in the second quarter. However, cost inflation and supply chain issues are expected to continue to impact the business. As a result Q2 adjusted EBITDA is expected to be below the first quarter until selling price increases can restore margins in the second half of the year