Archive for the ‘Fortress Paper Press Releases’ Category

Fortress Paper to Release Fourth Quarter 2011 Earnings

Posted: Thursday, February 16th, 2012

Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) (TSX:FTP) announced today that it intends to release its fourth quarter financial results for the period ended December 31st, 2011 after the close of the market on Monday, March 5th, 2012. In connection with the release of its results, Fortress Paper Ltd. will host a conference call Tuesday, March 6th, 2012 at 9:30 a.m. (PST) to discuss the financial results and the Corporation’s operations. Mr. Chadwick Wasilenkoff, Chief Executive Officer, Alfonso Ciotola, President, Kurt Loewen, Chief Financial Officer and Peter Vinall, President and Chief Executive Officer of Fortress Specialty Cellulose Inc. will host the call.

To participate in the conference call, please dial one of the following numbers:

Dial In Numbers: 604-681-8564 Vancouver
403-532-5601 Calgary or International
780-429-5820 Edmonton
416-623-0333 Toronto
613-212-0171 Ottawa
514-687-4017 Montreal
Toll Free Dial In Number: 1-855-353-9183 from Canada and USA
Participant Pass Code: 15086#
Conference Reference Number: 765945
A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-855-201-2300 from Canada & the USA. The conference reference number is 765945 # and the participant pass code to access the replay is 15086 #.

SOURCES:

Fortress Paper Ltd., and Marketwire

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Fortress Paper Updates Status of Dissolving Pulp Production

Posted: Tuesday, January 17th, 2012

Fortress Paper Ltd.  (“Fortress Paper” or the “Company”) (TSX:FTP)  is pleased to announce that it has ramped up production of dissolving pulp at its Fortress Specialty Cellulose Mill to approximately 60% of final targeted capacity since it announced production of dissolving pulp had commenced on December 5, 2011. The ramp up of production continues substantially as planned and we expect meaningful improvements in the short term followed by smaller productivity gains as we approach our targeted production capacity. Our dissolving pulp is meeting customer specifications and after aggregating inventory, customer shipments commenced in the final week of December.

Chad Wasilenkoff, Chief Executive Officer of Fortress Paper, commented: “We are extremely pleased with the speed at which the ramp up of dissolving production is proceeding at our Fortress Specialty Cellulose Mill and are focused on achieving our planned production capacity as soon as possible. With the shipment of our first orders, we have demonstrated our ability to successfully produce dissolving pulp that meets the stringent specifications of our customers.”

SOURCES: Fortress Paper Ltd., and Marketwire

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Fortress Paper Announces Increase in Previously Announced Public Offering of Convertible Debentures to $35 Million

Posted: Thursday, December 8th, 2011

Fortress Paper Ltd. (TSX:FTP) (“Fortress Paper” or the “Company”) is pleased to announce that, in response to strong investor demand, it has increased its previously announced bought deal public offering from $30 million to $35 million principal amount of convertible unsecured subordinated debentures (the “Debentures”) on the same terms as the previously announced offering. A syndicate led by Raymond James Ltd. and including Canaccord Genuity Corp., Dundee Securities Ltd., RBC Capital Markets, Scotia Capital Inc., TD Securities Inc., Cormark Securities Inc. and Acumen Capital Finance Partners Ltd. (collectively, the “Underwriters”) have agreed to purchase the Debentures at a price of $1,000 per Debenture. Fortress Paper has also granted the underwriters an over-allotment option to purchase up to an additional $5.25 million aggregate principal amount of debentures for a period of 30 days following closing to cover over-allotments.

The net proceeds of the financing will be used for repayment of debt, the funding of capital expenditures relating to the Fortress Specialty Cellulose Mill, working capital and general corporate purposes.

The offering is scheduled to close on or about December 22, 2011 and is subject to certain conditions including, but not limited to, the receipt of all necessary approvals including the approval of the Toronto Stock Exchange.

A preliminary short-form prospectus will be filed with securities regulatory authorities in all provinces of Canada.

Please refer to the press release issued by the Company on December 7, 2011 for further details with respect to the offering.

This news release shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities offered will not be and have not been registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered or sold in the United States except pursuant to exemptions from the registration requirements of the U.S. Securities Act and applicable state securities laws.

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business includes dissolving pulp produced at the Fortress Specialty Cellulose Mill.

SOURCES: Fortress Paper Ltd., and Marketwire

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Fortress Paper Commences Dissolving Pulp Production and Provides Corporate Update

Posted: Monday, December 5th, 2011

Fortress Paper Ltd. (“Fortress Paper” or the “Company”) (TSX:FTP) announced today that it has commenced dissolving pulp production at its Fortress Specialty Cellulose Mill in Thurso, Quebec. The centerpiece of the project, a new state of the art pre-hydrolized kraft cooking plant, came on line successfully on Sunday. The commencement of dissolving pulp production signifies the successful completion of the conversion of the Fortress Specialty Cellulose Mill into a dissolving pulp operation.

Chad Wasilenkoff, Chairman and Chief Executive Officer of Fortress Paper, commented: “This is a momentous day in the history of Fortress Paper and a culmination of our work at the Fortress Specialty Cellulose Mill since acquiring the mill in April 2010. We are very proud to join the limited group of dissolving pulp producers in the world and look forward to completing our first shipments. We would like to thank all those involved in helping bring this project on line.”

Dresden Mill

The Dresden Mill continues to lead the non-woven wallpaper base market globally. The order book remains strong and its recent upgrades to improve speed and capacity have been successfully implemented. During the past few months, Fortress Paper in its normal course has been reviewing each of its business divisions and assessing all options as part of its strategy to enhance shareholder value. As part of this ongoing evaluation, management identified a potential divestiture opportunity relating to its non-woven wallpaper base division. Given the financial uncertainties and lack of financial confidence in the Euro zone, Fortress Paper management decided not to pursue any divestiture option for the Dresden Mill. With the support of its management team in Germany, Fortress Paper intends to continue to grow this business division organically and potentially through strategic acquisitions.

Landqart Mill

The Landqart Mill has continued to experience challenges throughout the fourth quarter as a result of a strong Swiss franc, high raw material costs, and less than optimal production efficiency on its paper machines. The company expects that these issues will continue to materially impact results of operations in the fourth quarter. The Company anticipates that it will overcome many of these challenges with the new banknote paper orders that have recently been placed at the mill and which represent a significant portion of the mill’s 2012 banknote capacity.

 

SOURCE: Fortress Paper Ltd., and Marketwire.

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Fortress Paper Announces Acquisition of Optical Security Assets From the Bank of Canada

Posted: Wednesday, December 8th, 2010

VANCOUVER, BRITISH COLUMBIA — (Marketwire – Dec. 8, 2010)

Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) (TSX:FTP) announces the signing of an asset purchase agreement (the “APA”), by its wholly-owned subsidiary Fortress Optical Features Ltd., to acquire the assets of the Bank of Canada’s Optical Security Material (OSM) division (the “OSM Assets”), which produces the optically variable security material for the security threads contained in Canadian banknotes. The Corporation will be paying a purchase price of $750,000 for the OSM Assets and will be granting the Bank of Canada a royalty-free license to use the intellectual property sold to the Corporation for Canadian banknote applications.

Chad Wasilenkoff, CEO of Fortress Paper, commented, “We are very pleased to announce this new acquisition which will supplement our existing paper-based high security feature offerings and which we intend to market as a security feature to other banknote producers around the world. The OSM features will complement and enhance our Landqart Mill which is a leading producer of banknote paper and other paper-based high security solutions.”

The OSM Assets being acquired by Fortress Paper include certain patent applications and intellectual property rights to optical security features, unique security applications and substantially all of the production equipment and machinery currently used at the OSM division. In connection with this acquisition, Fortress has also secured the services of certain key members of the OSM team to maintain operational continuity and production quality following the purchase of the OSM Assets.

The closing of the APA, which is expected to be in early January, 2011, is subject to customary conditions. Following closing of the acquisition of the OSM Assets, the Corporation intends to relocate the OSM Assets to a new multi-million dollar high security production and research and development facility which the Corporation will be building adjacent to its Thurso Mill in Quebec (the “New OSM Facility”).

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business includes NBHK produced at the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Fortress Paper with respect to its performance, business and future events, including statements relating to the Corporation’s completion of the APA, its ability to retain key members of the OSM team, its intention to relocate the OSM Assets to the New OSM Facility, the construction of the New OSM Facility and the expected effects of the acquisition on the business of the Corporation. Forward looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Corporation operates, including assumptions that the Corporation will successfully complete the APA, retain key members of the OSM team, complete construction of the New OSM Facility and successfully relocate and integrate the OSM Assets thereat, and that the OSM Assets will enhance the Corporation’s security paper business. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, those relating to changes in the market, potential downturns in economic conditions, foreign exchange fluctuations, regulatory requirements, competition, risks associated with the completion of the APA, the building of the New OSM Facility, that the Corporation will be able to implement its business plan in respect of the OSM Assets as planned or at all, that the acquisition will not have the expected effect on the Corporation’s business, and other risk factors listed from time to time in the Corporation’s public filings. These risks, as well as others, could cause actual results and events to vary significantly. Fortress Paper does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

For further information please contact:

Fortress Paper Ltd.
Chadwick Wasilenkoff
604-904-2328
info@fortresspaper.com
www.fortresspaper.com

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

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Fortress Paper Announces $40,866,500 Bought Deal Offering

Posted: Tuesday, June 8th, 2010

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 8, 2010)

Fortress Paper Ltd. (“Fortress Paper” or the “Company”) (TSX:FTP), announces that it has entered into a financing agreement with a syndicate of underwriters led by Dundee Securities Corporation and including Jennings Capital Inc., Raymond James Ltd., and TD Securities Inc. (the “Underwriters”). Pursuant to the agreement, the Underwriters have agreed to purchase, on a bought deal basis, 1,739,000 common shares (“Shares”) of the Company priced at $23.50 per Share (the “Offering Price”), for total gross proceeds of $40,866,500 (the “Offering”).

The Company has agreed to grant the Underwriters an over-allotment option to purchase up to an additional 260,850 common shares of the Company at the Offering Price, exercisable in whole or in part, at any time on or prior to the date that is 30 days following the closing of the Offering. If the over-allotment option is exercised in full, the aggregate gross proceeds of the Offering will be $46,996,475.

Fortress Paper intends to use the net proceeds of the offering to finance certain capital expenditures relating to its Fortress Specialty Cellulose Mill in Thurso, Quebec and its rebuild of papermachine number 1 at its Landqart Mill, and for working capital and general corporate purposes.

The Offering is expected to close on or about July 9, 2010 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary regulatory and stock exchange approvals, including the approval of the Toronto Stock Exchange and the applicable securities regulatory authorities. The offering will be made in Canada by way of a short form prospectus and may be made in jurisdictions outside of Canada on a private placement basis pursuant to prospectus and registration exemptions in accordance with applicable laws. The Company intends to file a preliminary short form prospectus relating to the offering with the applicable securities regulatory authorities in Canada in due course.

The securities being offered have not been, nor will they be, registered under the United StatesSecurities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to, or for the account or benefit of, U.S. persons absent registration or an applicable exemption from registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities in the United States.

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Fortress Paper Announces Equipment Purchase For Its Thurso Mill

Posted: Monday, June 7th, 2010

VANCOUVER, British Columbia, June 7, 2010 – Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) announces the signing of a purchase agreement by its wholly owned subsidiary, Fortress Specialty Cellulose Ltd. (“Fortress Specialty”) with Stora Enso Oyi Cellulose Inc. to acquire digesters, specialized process equipment and other ancillary equipment to be used in the conversion of its Thurso mill to produce dissolving pulp.

The agreement provides for a purchase price of Euro 3 Million (CAD $3.8Million) and includes the purchase and delivery of a complete displacement cooking plant consisting of 3 batch digesters, liquor accumulators and various associated specialty process equipment and piping.

Chad Wasilenkoff Chief Executive Officer of Fortress Paper, commented: “After spending a considerable amount of time assessing and evaluating the equipment, we are very pleased to be able to secure this equipment. This equipment has operated for only 12 years and we are confident of its quality and performance, which should result in a material reduction in our overall capital investment requirements for the conversion to dissolving pulp. We also believe that by acquiring almost an entire batch cooking system, we reduce the process risk for this transformation. At this time it is still too early to determine the impact this new equipment will have on the completion date.”

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

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Fortress Paper Appoints Key Dissolving Pulp Managers for the Conversion of its Thurso Mill

Posted: Thursday, June 3rd, 2010

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 3, 2010) – Fortress Paper Ltd. (TSX:FTP) (“Fortress Paper” or the “Corporation”) announces the following appointments at its wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty”): Peter Vinall as President and Chief Executive Officer, Vincent Byrne as Vice President, Technical Development and Donald Deer as Projects Leader. In addition, Fortress Specialty has added Pierre Monahan to its Board of Directors.

In announcing the appointments, Chad Wasilenkoff, CEO of Fortress Paper commented: “We are very pleased to have someone of Peter Vinall’s extensive experience and track record joining our team. His appointment brings a wealth of experience in running some of the largest dissolving pulp mills in the world and he has a talent for building strong teams and leading business transformations. With Vince Byrne, Donald Deer, Marco Veilleux and Pierre Monahan, we will have an experienced team in place to implement our business plan at the Fortress Specialty Cellulose Mill.”

Peter Vinall commented: “Having recently relocated back to Canada, I am excited to now join the Fortress team and lead the conversion of the Fortress Specialty Cellulose Mill into a high quality specialty cellulose mill. The Mill has good access to fibre supply and a reputation for high quality NBHK production which will continue with the restart which is underway. Our aim is to leverage these strengths and transform the asset base with extensive technological upgrades and a state of the art cogeneration facility with the goal of becoming a low cost producer and industry leader in the specialty cellulose sector.”

Mr. Vinall has approximately 30 years of experience in the pulp and paper industry and was the former President of Sateri International Pulp Group, a global leader in the specialty cellulose business. Prior to joining Fortress Specialty, Mr. Vinall held the position of President and Chief Executive Officer of AV Group where he led the conversion of an NBHK pulp mill to produce dissolving pulp. Mr. Vinall obtained an MBA from Tulane University, New Orleans, and a B.E in Mechanical and Electrical Engineering from Monash University, Melbourne, Australia.

Vincent Byrne has over 30 years of engineering, operations and process optimization experience focused on commodity and specialty pulping processes. Most recently he acted as VP Technical and Engineering at AV Group where he led the development of the conversion of one of their New Brunswick mills into a dissolving pulp operation. Mr. Byrne obtained a B.Sc. in Chemistry from Massey University, New Zealand.

Donald Deer has approximately 40 years of engineering and construction experience in Canada and has managed in excess of $1 billion in capital spending for several major corporations including Tembec Inc. Most recently, Mr. Deer was responsible for construction and completion of the conversion of one of AV Group’s NBHK mills into a dissolving pulp operation. Mr. Deer also has recent experience designing cogeneration and energy optimization projects. Donald Deer has a B.E in Electrical Engineering from Queens University, Ontario and is a member of Professional Engineers Ontario.

Pierre Monahan is a highly experienced senior board member and executive director. Mr. Monahan was formerly the CEO of Alliance Forest Products Inc. and Executive Vice President of Bowater Canada Inc. during which time he oversaw its integration with Alliance Forest Products Inc., an acquisition valued at approximately $1 billion.

In addition Fortress announces that the former Operations Director of Fraser Paper’s Thurso Mill, Marco Veilleux, has been appointed Chief Operating Officer of Fortress Specialty Cellulose. Mr. Veilleux has led the Thurso operation since 2007 having developed his career in a series of operational and technical leadership roles in the pulp and paper sector in Eastern Canada. He was instrumental in initiating the cogeneration project and ensuring the Thurso assets are well positioned for the transformation. Mr. Veilleux has a B.Sc. in Chemistry from the University of Sherbrooke.

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Fortress Paper with respect to its performance, business and future events, including statements relating to its plans to re-start, convert and build a biomass based cogeneration plant at the Fortress Specialty Cellulose Mill. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Corporation operates, including assumptions relating to the Corporation’s ability to successfully implement its business plan in respect of the Fortress Specialty Cellulose Mill; that the Corporation will be able to receive all required approvals and complete construction of the cogeneration facility; and the expected effects of the cogeneration facility on the business of the Corporation. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, that the Corporation will be unable to implement its business plan in respect of the Fortress Specialty Cellulose Mill as planned or at all; that the Corporation will be unable to receive all necessary approvals to begin construction of the cogeneration facility; and those risks relating to changes in the market, potential downturns in economic conditions, fluctuations in the price and supply of raw materials, foreign exchange fluctuations, labour relations, regulatory requirements, reputation, competition, dependence on major customers, and other risk factors listed from time to time in the Corporation’s public filings. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Fortress Paper does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

SOURCE:
Fortress Paper Ltd.

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NBHK Pulp Production Begins at Fortress Paper’s Thurso Mill

Posted: Tuesday, June 1st, 2010

VANCOUVER, BRITISH COLUMBIA–(Marketwire – June 1, 2010) – Fortress Paper Ltd. (“Fortress Paper” or the “Corporation”) (TSX:FTP) announces that its wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty”), commenced production and sale of NBHK pulp on May 28th. The mill reopened May 1st after being shut down by the former owner in early 2009.
Chad Wasilenkoff, CEO of Fortress Paper Ltd. commented: “The commencement of production at the Fortress Specialty Cellulose Mill marks the achievement of an important milestone at Thurso. We are pleased that production has commenced ahead of schedule and this will enable us to take advantage of the current strong NBHK pulp prices.”

Fortress Specialty’s Thurso Mill is expected to produce approximately 250,000 air dried metric tonnes per annum of high grade northern bleached hardwood kraft pulp. Fortress Specialty intends to produce NBHK pulp while undergoing transformation to become a dissolving pulp producer in mid 2011.

About Fortress Paper

Fortress Paper is a leading international producer of security and other specialty papers and products. Fortress Paper operates three mills, the Landqart Mill located in Switzerland, the Dresden Mill located in Germany and the Fortress Specialty Cellulose Mill located in Quebec, Canada. Fortress Paper’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. Fortress Paper’s pulp business will include NBHK with the re-start of the Fortress Specialty Cellulose Mill with plans to convert this capacity into dissolving pulp production along with the construction of a biomass based cogeneration plant.

This news release contains certain forward-looking statements that reflect the current views and/or expectations of Fortress Paper with respect to its performance, business and future events, including statements relating to its plans to re-start, convert and build a biomass based cogeneration plant at the Fortress Specialty Cellulose Mill. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the industry and markets in which the Corporation operates, including assumptions relating to the Corporation’s ability to successfully implement its business plan in respect of the Fortress Specialty Cellulose Mill; that the Corporation will be able to receive all required approvals and complete construction of the cogeneration facility; and the expected effects of the cogeneration facility on the business of the Corporation. Forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions which are difficult to predict. Investors are cautioned that all forward-looking statements involve risks and uncertainties including, without limitation, that the Corporation will be unable to implement its business plan in respect of the Fortress Specialty Cellulose Mill as planned or at all; that the Corporation will be unable to receive all necessary approvals to begin construction of the cogeneration facility; and those risks relating to changes in the market, potential downturns in economic conditions, fluctuations in the price and supply of raw materials, foreign exchange fluctuations, labour relations, regulatory requirements, reputation, competition, dependence on major customers, and other risk factors listed from time to time in the Corporation’s public filings. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information, which are qualified in their entirety by this cautionary statement. Fortress Paper does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

SOURCE:
Fortress Paper Ltd.

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Fortress Paper Announces First Quarter 2010 Results

Posted: Tuesday, May 11th, 2010

VANCOUVER, British Columbia, May 11 2010 – Fortress Paper Ltd. (“Fortress Paper” or the “Company”) (TSX:FTP) reported adjusted net income of $3.0 million for the first quarter of 2010 on sales of $50.3 million or adjusted earnings per share of $0.30. In the first quarter of 2009 the Company reported adjusted net income of $2.5 million on sales of $46.6 million or adjusted earnings per share of $0.25. For the fourth quarter of 2009 the Company reported adjusted net income of $4.8 million on sales of $51.0 million or adjusted earnings per share of $0.47.

Analysis of Specific Items Affecting Comparability of Net Income

(thousands of dollars, except per share figures, unaudited) Q1 2010 Q4 2009 Q1 2009
Net income as reported 179 3,720 3,584
Foreign exchange loss (gain) 2,380 1,073 (1,055)
Deferred expenses written off 476 - -
Adjusted net income 3,035 4,793 2,529
Net income per share (EPS), as reported 0.02 0.35 0.35
Impact of above item per share 0.28 0.12 (0.10)
Adjusted net income per share 0.30 0.47 0.25

EBITDA was $5.8 million or 11.5% of sales for the three months ended March 31, 2010. For the three months ended March 31, 2009 EBITDA was $5.0 million or 10.8% of sales. EBITDA was $7.9 million or 15.4% of sales for the three months ended December 31, 2009.

In the first quarter of 2010 the Dresden mill continued to experience strong sales and earnings throughout the quarter. The Landqart mill results reflected the product mix during the quarter. The banknote paper machine remains full and the conversion of paper machine one from a specialty paper machine to a banknote paper machine is on track. The increase in EBITDA relative to the prior year comparative period was partially due to the global financial and economic crisis which impacted sales early in 2009.

EBITDA is defined as net income before interest, income taxes, depreciation, amortization, non-operating income and expenses and stock based compensation which the Company considers to be a key performance indicator. EBITDA is not a generally accepted earnings measure and should not be considered as an alternative to earnings or cash flows as determined in accordance with Canadian generally accepted accounting principles. As there is no standardized method of calculating EBITDA, the Company’s use for the term may not be comparable with similarly titled measures used by other companies.

Chadwick Wasilenkoff, chief executive officer of Fortress Paper, states: “This is an exciting time for the Company. The recently announced acquisition of the Thurso mill will diversify our specialty product mix and we believe will provide a significant financial contribution to Fortress’s growth aspirations. We plan to ramp up operations at the Thurso mill while we immediately begin the conversion into a dissolving pulp operation. The Dresden mill continues to perform extremely well, while the Landqart mill is experiencing results which are reflective of the current product mix of banknotes which offer lower margins.”

Selected Financial Information

The selected financial information presented herein is qualified in its entirety by, and should be read in conjunction with, our audited consolidated financial statements as at and for the year ended December 31, 2009 and the related notes thereon and our Management’s Discussion and Analysis filed on SEDAR.

Three Months Ended March 31, 2010
Selected Financial Information and Statistics

(thousands of dollars, except per unit amounts and shipments, unaudited) Q1 2010 Q4 2009 Q1 2009
Sales 50,304 51,049 46,623
EBITDA 5,808 7,885 5,032
Operating income 4,202 6,292 3,765
Net income 179 3,720 3,584
Basic EPS $0.02 $0.36 $0.35
Weighted average shares outstanding basic (thousands) 10,234 10,234 10,234
Diluted EPS $0.02 $0.35 $0.35
Weighted average shares outstanding diluted (thousands) 10,713 10,487 10,234
Shipments (tonnes
Landqart mill 4,287 3,673 3,721
Dresden mill 12,099 11,618 9,002
Total 16,386 15,291 12,723

Operational Results

Landqart produces various security and specialty papers. Security paper production includes banknote paper which results in varying degrees of EBITDA margin depending on the complexity of the features included. During 2008 Landqart also started producing non-woven wallpaper base. Included in Landqart’s sales number for the quarter ended March 31, 2010 is approximately 1,581 tonnes of non-woven wallpaper base. At the Landqart mill the order log for security papers remains stable.

At the Dresden mill, the wallpaper base market experienced continued strength throughout the quarter. Sales tonnage has increased relative to the prior year comparative periods and profitability remains solid.

Subsequent Events

On April 30, 2010 the Company completed the purchase of a northern bleached hardwood kraft pulp mill located in Thurso, Quebec from Fraser Papers Inc. through a wholly-owned subsidiary, Fortress Specialty Cellulose Inc. (“Fortress Specialty Cellulose”), for the net proceeds of approximately $1.2 million. The Company has announced the intention of converting this mill into a specialty cellulose (dissolving pulp) operation and to build a biomass-based cogeneration plant. The valuation of this acquisition for accounting purposes and the effect on the financial statements of the Company are still being determined.

Concurrent with this acquisition the Company finalized $102.4 million in project financing with a term of 10 years secured by the assets of Fortress Specialty Cellulose. Interest will be calculated at a fixed rate of 5.0% per annum for the first five years, followed by a rate of up to 5.5% for the remaining 5 years.

Also concurrent with this acquisition Fortress Paper issued a $15 million convertible debenture to a financial institution. The convertible debt matures in five years with an interest rate of 7% per annum. The debenture is convertible, in whole or in part, at the option of the holder into common shares of Fortress Paper at any time at a conversion price equal to $20.00 per share. Fortress Paper can redeem the debenture, in whole or in part, at any point after two years at a conversion price of not less than $25.00 per share.

The Company

Fortress Paper is a leading international producer of security and other specialty papers. The Company operates two paper mills, the Landqart mill located in Switzerland and the Dresden mill located in Germany. The Company’s security papers include banknote, passport and visa papers and its specialty papers include non-woven wallpaper base products, and graphic and technical papers. As an extension of its security papers business, the Landqart mill has been actively developing and marketing innovative paper-based security products.

Conference Call

A conference call to discuss the financial results for the first quarter 2010 will be held on May 12, 2010 at 8:00 a.m. (PST). To attend the conference call, please dial one of the following numbers:

North America: 1-877-353-9586

International: 1-403-532-8075

Participant pass code: 90198#

A replay of the conference call will be available for 7 days. To access the replay, listeners may dial 1-877-245-4531 from North America or 403-205-4531 International. The pass code to access the replay is 347381#.

For more information, please contact

Fortress Paper Ltd.
Mr. Chadwick Wasilenkoff
Chief Executive Officer
604-904-2328

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