SOURCE: Canexus Corporation

Canexus Corporation

March 30, 2015 07:30 ET

Canexus Corporation: Business Improvement Program Update and Relaxation of Financial Covenants

CALGARY, AB--(Marketwired - March 30, 2015) - Canexus Corporation (TSX: CUS) (TSX: CUS.DB.A) (TSX: CUS.DB.B) (TSX: CUS.DB.C) (TSX: CUS.DB.D) (the "Corporation" or "Canexus") provides updates on the Business Improvement Program ("BIP"), as well as on obtaining further relaxation of financial covenants.

Canexus recently outlined a Business Improvement Program with a stated objective of increasing future cash operating profit by approximately $10 million to $15 million on an annual basis, by enhancing revenues and reducing both operating and general and administrative ("G&A") costs. The BIP is also focused on balance sheet value enhancement through working capital reductions and a highly disciplined approach to capital spending with the goal of delivering solid returns from the safe and reliable operation of Canexus' facilities. Included within the cost reduction program was a commitment to lower G&A overhead costs by approximately 13% annually.

We have initiated the organizational right-sizing that was outlined in our plan. Our Calgary head office and NATO staff have been reduced significantly. We expect savings of $5 million to $6 million per year, excluding related severance costs. Other BIP initiatives are underway and progress will be reported regularly with our quarterly reporting.

In addition, we are pleased to announce that we have entered into an amending agreement with our credit facility lenders to further relax financial covenants for the first and second quarters of 2015.

Non-GAAP Measure

Cash operating profit is a financial measure not determined in accordance with generally accepted accounting principles for publicly accountable enterprises in Canada ("GAAP"), but management believes it is useful in measuring the Corporation's performance. Readers are cautioned that this measure should not be construed as an alternative to net income or loss or other measures determined in accordance with GAAP as an indicator of the Corporation's performance or as a measure of the Corporation's liquidity and cash flow. The Corporation's method of calculating cash operating profit may differ from the methods used by other issuers and accordingly, the Corporation's cash operating profit measure is unlikely to be comparable to similarly titled measures used by other issuers. Readers should consult the Corporation's MD&A for the year ended December 31, 2014 filed on SEDAR for a complete explanation of how the Corporation calculates cash operating profit.

Forward-Looking Statements

This news release contains forward-looking statements and information relating to expected future events relating to Canexus and its subsidiaries, including with respect to: expectations for BIP to increase cash operating profit and enhance balance sheet value and the manner in which these will be accomplished; expectations for reductions in G&A and expectations for cost savings arising from organizational right-sizing. The use of the words "expects", "anticipates", "continue", "estimates", "projects", "should", "believe", "plans", "intends", "may", "will" or similar expressions are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including market and general economic conditions, future costs, treatment under governmental regulatory, tax and environmental regimes and the other risks and uncertainties detailed under "Risk Factors" in the Corporation's Annual Information Form filed on the Corporation's SEDAR profile at Management believes the expectations reflected in these forward-looking statements are currently reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Due to the potential impact of these factors, the Corporation disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. Any financial outlook information contained in this news release about prospective results of operations, financial position or cash flows is based on assumptions about future events, including economic conditions and proposed courses of action, based on Management's assessment of the relevant information currently available. Readers are cautioned that such financial outlook information contained in this news release should not be used for purposes other than those for which it is disclosed herein.

About Canexus

Canexus produces sodium chlorate and chlor-alkali products largely for the pulp and paper and water treatment industries. Our four plants in Canada and two at one site in Brazil are reliable, low-cost, strategically located facilities that capitalize on competitive electricity costs and transportation infrastructure to minimize production and delivery costs. Canexus also provides fee-for-service hydrocarbon transloading services to the oil industry from its terminal at Bruderheim, Alberta. Canexus targets opportunities to maximize shareholder returns and delivers high-quality products to its customers and is committed to Responsible Care® through safe operating practices. Canexus common shares (CUS) and debentures (Series III - CUS.DB.A; Series IV - CUS.DB.B; Series V - CUS.DB.C; Series VI - CUS.DB.D) trade on the Toronto Stock Exchange. More information about Canexus is available at

Contact Information

  • Further information:

    Richard McLellan, CA
    Senior VP, Finance & CFO 
    Canexus Corporation 
    (403) 571-7300

    Robin Greschner, MBA
    Manager Investor Relations
    Canexus Corporation
    (403) 571-7356