KP Tissue Inc.

Q2 2026 revenue was $550.9 million, up 2.8% year over year, and adjusted EBITDA was $90.6 million, up 25% year over year. Net income was $22.1 million, comparable to Q2 2025. Consumer revenue was $457.6 million, up 1.9%, and Away-From-Home revenue was $93.3 million, up 7.4%; Consumer adjusted EBITDA was $85.3 million versus $69.2 million a year ago, with margin at 18.6%, while AFH adjusted EBITDA was $8.5 million versus $9.0 million, with margin at 9.1%. Geographic revenue in Canada fell $7.7 million, or 2.6%, while U.S. revenue rose $22.5 million, or 9.5%. On the balance sheet, cash was $165.2 million at quarter-end versus $205.9 million in Q1, total debt was stable, and leverage was 2.9x. Q2 CapEx was $15.5 million, and full-year 2026 CapEx is expected to be $90 million to $110 million. Management said Q3 2026 adjusted EBITDA should be in the range of Q2 2026 results.

Dino Bianco’s tone was constructive but cautious: he emphasized strong first-half profitability, better Memphis execution, and continued U.S. growth, while warning that the Canadian consumer market remains soft. He said the company is using brand investment, pricing adjustments, and promotion to recover Canadian share in the second half, and described the tariff risk as not expected to be significant. He also said the company is still progressing toward a preferred Western U.S. TAD site, but is taking extra time because of greenfield complexity and macro uncertainty.

Michael Keays focused on the operating leverage in the quarter and the main bridge to earnings. He cited adjusted EBITDA of $90.6 million on sales of $550.9 million, margin expansion to 16.4% from 13.5% last year, and said the increase was driven by improved Memphis mill performance, higher volume and lower pulp prices, partly offset by freight and SG&A. He also noted cash fell to $165.2 million from $205.9 million due to working capital, debt was stable, leverage remained 2.9x, and CapEx was $15.5 million in Q2 with full-year CapEx expected at $90 million to $110 million.

Analysts pressed on Canadian market share erosion, and management said share losses began around March and continued into April and May, mainly in bathroom tissue and towels, but recovery started in June as pricing gaps were corrected and more promotional support was added. On Memphis, Dino said the turnaround is progressing well and that the site likely has another year before reaching maturity, with some additional maintenance spending still needed and possible future capacity expansion for ultra-premium tissue. Questions also focused on the delayed TAD project; management said the delay reflects greenfield permitting and infrastructure work, financing, and broader economic uncertainty, and Dino would not give a final decision date, only saying the company hopes to provide clarity before year-end.