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Gold/Mining/Energy : Repap (RPAPF)
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To: Wizzer who wrote (250)10/21/1998 12:55:00 PM
From: The Osprey  Read Replies (3) of 485
 
Wisam,
In looking at the statements there are some very good signs here of a company that is turning the corner in the last quarter ending Sept 30,1998.

Revenues are up from 154.4 million to 172.7 million an increase of 18.3 million.Nets sales are up from 115.5 to 154.5 and increase of 39 million.Cost of sales are almost the same at 100.7 million versus 101.2 which shows they are holding the line on costs.Selling Admin and research is also way down almost 50% from 21.8 million to 11.1 million.

All of these factors resulted in a turn around in the operating margin from a loss of 7 million to to an increase of 42.2 million.With the depreciation and amortization being constant this showed an operating profit of 22.6 million versus an operating loss of 24.3 million in the same quarter last year.Interest expense is still a factor but if you look at the whole picture they have reduced the pre-tax loss and loss from operations quite well.Discounting the sale of the US operations last year they would have shown a loss of about 56 million and although there is a loss this quarter on net income of 12.2 million I would say that is excellent improvement to have reduced the losses by 43.8 million this past quarter.
If you look at Earnings before Income Taxes and depreciation allowance(EBITDA) they improved from 18.6 million to 43.4 million,an improvement of 24.8 million and their earnings per share from continuing operations improved from a loss of 11 cents per share to a loss of .02 cents per share.
The same trends are showing in the nine month statement and if not for the 46.4 million write off with the re-financing costs we would only be looking at a net 9 month loss of 14.8 million from continuing operations.I could go on and on....If there was some way to eliminate the cost of re-financing the debt at 46.4 million we would have ended up with a small profit of around 2.5 million.
Even taking all this into account the 9 month EBITDA improved from 47.3 million to 133.4 million and the earnings per share from continuing operations improved from a loss of .50cents per share to .08cents per share or including discontinued operations from a loss for the nine months of .44cents per share to .06 cents per share.

I do not claim to be an accountant but if I had considered buying repap last year why would I not this year.IMHO this company is turning the corner and if it doesn't reach profitability by year end I will be surprised.If I were and Americain company in the business looking for a modern niche company and wanted to buy it at a discount now would be the time to move as this is showing great improvement.
As the saying goes"I like it so much I am buying some more".Good luck all Repap'ers.

Osprey
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