KP Tissue Releases First Quarter 2026 Financial Results

KP Tissue reports the Q1 2026 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 AwayFrom-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 12.0 percent interest in Kruger Products.

Kruger Products Q1 2026 Business and Financial Highlights:

• Revenue was $544.6 million in Q1 2026 compared to $546.1 million in Q1 2025, a decrease of $1.5 million or 0.3 percent.
• Adjusted EBITDA1 was $86.9 million in Q1 2026 compared to $75.8 million in Q1 2025, an increase of 14.6 percent.
• Net income was $19.8 million in Q1 2026 compared to $15.4 million in Q1 2025, an increase of $4.4 million.
• Increased quarterly dividend to $0.21 per share due to the change in tax designation, to be paid on July 15, 2026.

“We generated strong profitability to open fiscal 2026 despite a volatile economic environment,” stated Kruger Products’ and KP Tissue’s Chief Executive Officer, Dino Bianco. “Adjusted EBITDA of $86.9 million, representing a margin of 16.0 percent, exceeded expectations in the first quarter mainly driven by lower pulp prices and warehousing costs year-over-year. Our topline declined less than 1 percent, reflecting an unfavourable foreign exchange impact on U.S. dollar sales, and a more challenging year-over-year comparison against a prior-year quarter that delivered double-digit revenue growth. Overall, we are pleased with our financial performance in the opening quarter.”

“Looking ahead to the remainder of 2026, market demand for our leading tissue products remains healthy. Production rates across our paper machines and converting lines are exceeding targets at all sites, supporting continued momentum. In early April, we began ramping up a state-of-the-art converting line at our Memphis facility, which is expected to add capacity to our U.S. network. We will continue to focus on delivering margins in light of escalating input costs, including higher fuel and freight expenses,” Mr. Bianco added.

Outlook for Q2 2026

For the second quarter of 2026, we expect Adjusted EBITDA1 to be in the range of Q1 2026.

Kruger Products Q1 2026 Financial Results

Revenue was $544.6 million in Q1 2026 compared to $546.1 million in Q1 2025, a decrease of $1.5 million or 0.3 percent. The decrease in revenue was primarily due to the unfavourable impact of foreign exchange fluctuations on U.S. dollar sales. In addition, higher sales volumes in the Consumer U.S. and AFH businesses along with favourable pricing in the Consumer Canada business was only partially offset by lower sales volumes in the Consumer Canada business and unfavourable pricing in the Consumer U.S. business. Cost of sales was $436.9 million in Q1 2026 compared to $451.0 million in Q1 2025, a decrease of $14.1 million or 3.1 percent. The decrease in cost of sales was primarily due to lower pulp costs, the favourable impact of foreign exchange fluctuations on U.S. dollar costs and improved mill performance at our Memphis site compared to the year ago quarter, partially offset by higher manufacturing overhead cost absorption resulting from higher inventory levels at the end of the quarter. As a percentage of revenue, cost of sales was 80.2 percent in Q1 2026, compared to 82.6 percent in Q1 2025.

Selling, general and administrative (SG&A) expenses were $51.2 million in both Q1 2026 and Q1 2025. Additional investment in our brands and IT was essentially offset by lower compensation related costs and foreign exchange gains in Q1 2026 compared to losses in Q1 2025. As a percentage of revenue, SG&A expenses were 9.4 percent in Q1 2026 compared to 9.4 percent in Q1 2025.

Adjusted EBITDA1 was $86.9 million in Q1 2026 compared to $75.8 million in Q1 2025, an increase of $11.1 million or 14.6 percent. The increase was primarily due to lower pulp prices and warehousing costs, partially offset by unfavourable manufacturing overhead cost absorption.

Net income was $19.8 million in Q1 2026 compared to $15.4 million in Q1 2025, an increase of $4.4 million. The increase was primarily due to higher Adjusted EBITDA1 , lower depreciation, lower interest expense and other finance costs and lower income from non-controlling interest, partially offset by a foreign exchange gain difference and higher income tax expense.

Kruger Products Q1 2026 Liquidity
Total liquidity, representing cash and availability under the revolving credit agreements, was $461.9 million as of March 31, 2026.
KPT Q1 2026 Financial Results

KPT had net income of $2.2 million in Q1 2026. Included in net income was $2.4 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.

Dividends on Common Shares

The Board of Directors of KPT increased the quarterly dividend to $0.21 per share due to the change in designation from an “eligible dividend” to a “non-eligible dividend” for purposes of the Income Tax Act (Canada) and any similar provincial or territorial legislation. The dividend will be paid on July 15, 2026 to shareholders of record at the close of business on June 30, 2026.