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KP NEWS RELEASE For immediate release KP Tissue Releases First Quarter 2021 Financial Results Inventory de - stocking impacts sales , strong start for TAD Sherbrooke Mississauga ( ON ) , May 7 , 2021 - KP Tissue Inc. ( KPT ) ( TSX : KPT ) reports the Q1 2021 financial and operational results of KPT and Kruger Products L.P. ( KPLP ) . Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market ( Cashmere , Purex , Sponge Towels , Scotties , and White Swan ) and the Away - From - Home 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 14.6 % interest in KPLP . KPLP Q1 2021 Business and Financial Highlights • • • Revenue decreased by $ 64.7 million or 17.3 % to $ 310.4 million in Q1 2021 compared to $ 375.1 million in Q1 2020 . Adjusted EBITDA was $ 37.5 million in Q1 2021 compared to $ 51.0 million in Q1 2020 , a decrease of 26.5 % , and compared to $ 36.2 million in Q4 2020 , an increase of 3.5 % . TAD Sherbrooke start - up was successful in Q1 and is running above the ramp - up curve . Declared a quarterly dividend of $ 0.18 per share to be paid on July 15 , 2021 . " Last year , we reported exceptional first quarter results driven by unprecedented consumer demand related to COVID - 19 . During the first quarter of this year , we observed a reversal of the situation with retailers and consumers de - stocking as supply concerns subsided . The AFH segment continued to face strong headwinds from government restrictions . In these circumstances , revenues and Adjusted EBITDA for the quarter declined by 17.3 % and 26.5 % , respectively , " stated KP Tissue Chief Executive Officer , Dino Bianco . " To counter the exceptional and rapid rise in pulp prices , at the beginning of April we announced a price increase for consumer- branded and private - label products sold in Canada to be effective in early July . We continue to be very pleased with the successful ramp - up of TAD Sherbrooke where one of the first products commercialized is the new Sponge Towels Ultra Pro ™ premium paper towel . " At this stage , we anticipate consumer demand to start stabilizing in the second quarter with a return to more normal buying patterns . While U.S. market conditions for the AFH segment are gradually improving , the Canadian AFH market will remain challenging with ongoing restrictions . More favourable market conditions combined with pricing actions should translate into a stronger performance in the second half of 2021 , " concluded Mr. Bianco . Outlook Considering the continued risk and uncertainties associated with the COVID - 19 recovery and the impacts it could have on sales volumes , along with significantly higher pulp prices , Q2 2021 Adjusted EBITDA is expected to be in the same range as Q1 2021 . KPLP Q1 2021 Financial Results Revenue was $ 310.4 million in Q1 2021 compared to $ 375.1 million in Q1 2020 , a decrease of $ 64.7 million or 17.3 % . The decrease in revenue was primarily due to significant sales volume decreases in both Canada and the U.S. resulting from high COVID - 19 buying activity in the year ago quarter across all business segments ; the de - stocking of tissue inventories by both retailers and consumers in Q1 2021 ; and the unfavourable impact of COVID - 19 related restrictions on the AFH segment in Q1 2021. Revenue was also unfavourably impacted by foreign exchange fluctuations on U.S. dollar sales . Cost of sales was $ 263.3 million in Q1 2021 compared to $ 314.5 million in Q1 2020 , a decrease of $ 51.2 million or 16.3 % . Manufacturing costs decreased primarily due to significantly lower sales volumes , the favourable impact of foreign exchange fluctuations on U.S. dollar costs and the higher absorption of overhead costs into inventory in Q1 2021 resulting from increased inventory levels , partially offset by unfavourable pulp costs and higher outsourcing costs . Freight costs decreased due to lower volume , partially offset by higher rates and warehousing costs increased compared to Q1 2020. As a percentage of revenue , cost of sales was 84.8 % in Q1 2021 compared to 83.8 % in Q1 2020 .