Mississauga, Ontario--(Newsfile Corp. - August 13, 2026) - KP Tissue Inc. (TSX: KPT) (KPT) reports the Q2 2026 financial and operational results of KPT and Kruger Products Inc. (Kruger Products). Kruger Products is Canada's leading manufacturer of quality tissue products for the Consumer market (Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and Bonterra®) and the Away-From-Home (AFH) 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 12.0% interest in Kruger Products.

Kruger Products Q2 2026 Business and Financial Highlights

• Revenue was $550.9 million in Q2 2026 compared to $536.1 million in Q2 2025, an increase of $14.8 million or 2.8%.
• Adjusted EBITDA¹ was $90.6 million in Q2 2026 compared to $72.5 million in Q2 2025, an increase of 25.0%.
• Net income was unchanged at $22.1 million in Q2 2026 compared to $22.1 million in Q2 2025.
• Declared a quarterly dividend of $0.21 per share to be paid on October 15, 2026.

"We maintained strong momentum in the second quarter of 2026, highlighted by 25% year-over-year growth in Adjusted EBITDA¹ to $90.6 million," stated Kruger Products' and KP Tissue's Chief Executive Officer, Dino Bianco. "This double-digit growth, achieved against an uncertain economic environment, was mainly driven by higher sales volume in the U.S. and lower pulp prices. Revenue grew nearly 3% in the second quarter, reflecting heightened operational efficiency from Kruger PRO, our Away-From-Home business."

“Looking ahead to the second half of 2026, we anticipate ongoing market softness in Canada with some consumers trading down to private label products to contend with inflationary pressure. We have put in place a share recovery plan for the second half of 2026 which should deliver improving shares as we move through the year. For the longer term, we are making progress towards securing a location for a new TAD facility in the western United States,” Mr. Bianco added.

Outlook for Q3 2026
For the third quarter of 2026, we expect Adjusted EBITDA¹ to be in the range of Q2 2026.

Kruger Products Q2 2026 Financial Results
Revenue was $550.9 million in Q2 2026 compared to $536.1 million in Q2 2025, an increase of $14.8 million or 2.8%. The increase in revenue was primarily due to higher sales volume in the Consumer U.S. and AFH businesses, partially offset by lower sales volumes in the Consumer Canada business.

Cost of sales was $440.1 million in Q2 2026 compared to $462.2 million in Q2 2025, a decrease of $22.1 million or 4.8%. The decrease in cost of sales was primarily due to lower pulp costs, improved mill performance at our Memphis site compared to the year ago quarter and higher manufacturing overhead cost absorption resulting from higher inventory levels at the end of the quarter, partially offset by higher sales volume and increased manufacturing overhead spend. As a percentage of revenue, cost of sales was 79.9% in Q2 2026 compared to 86.2% in Q2 2025.

Selling, general and administrative (SG&A) expenses were $51.1 million in Q2 2026 compared to $47.2 million in Q2 2025, an increase of $3.9 million or 8.3%. The increase was primarily due to additional investment in our brands and increased consulting costs to support operational and corporate initiatives, along with increased compensation costs. This was offset by lower foreign exchange losses compared to the year ago quarter. As a percentage of revenue, SG&A expenses were 9.3% in Q2 2026 compared to 8.8% in Q2 2025.

Adjusted EBITDA¹ was $90.6 million in Q2 2026 compared to $72.5 million in Q2 2025, an increase of $18.1 million or 25.0%. The increase was primarily due to improved mill performance at our Memphis site, higher sales volumes and favourable pulp costs, partially offset by increased freight rates and SG&A expenses.

Net income was unchanged at $22.1 million in Q2 2026 compared to $22.1 million in Q2 2025. This was primarily due to higher Adjusted EBITDA¹, lower depreciation and amortization, lower restructuring costs, lower income from non-controlling interest, and lower interest expense, offset by a foreign exchange difference and higher income tax expense.

Kruger Products Q2 2026 Liquidity
Total liquidity, representing cash and availability under the revolving credit agreements, was $422.6 million as of June 30, 2026.

KPT Q2 2026 Financial Results
KPT had net income of $2.5 million in Q2 2026. Included in net income was $2.7 million representing KPT's share of Kruger Products' net income, a dilution gain of $0.1 million and depreciation expense of $0.3 million related to adjustments to carrying amounts on acquisition.

Dividends on Common Shares
The Board of Directors of KPT declared a quarterly dividend of $0.21 per share to be paid on October 15, 2026 to shareholders of record at the close of business on September 30, 2026.

Additional Information
For additional information please refer to Management's Discussion and Analysis (MD&A) of KPT and Kruger Products for the second quarter ended June 30, 2026 available on SEDAR+ at www.sedarplus.ca or our website at www.kptissueinc.com.

Second Quarter Results Conference Call Information
KPT will hold its second quarter conference call on Thursday, August 13, 2026 at 8:30 a.m. Eastern Time.
Via telephone: 1-888-699-1199 or 416-945-7677
Via the internet at: www.kptissueinc.com

Presentation material referenced during the conference call will be available at www.kptissueinc.com.

A rebroadcast of the conference call will be available until midnight, August 20, 2026, by dialing 1-888-660-6345 or 
289-819-1450 and entering passcode 47527.

The replay of the webcast will remain available on the website until midnight, August 20, 2026.

About KP Tissue Inc.
KPT was created to acquire, and its business is limited to holding, a limited equity interest in Kruger Products, which is accounted for as an investment on the equity basis. KPT currently holds a 12.0% interest in Kruger Products. For more information visit www.kptissueinc.com.

About Kruger Products Inc.
Kruger Products is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. Kruger Products serves the Canadian consumer market with such well-known brands as Cashmere®, Purex®, SpongeTowels®, Scotties®, White Swan® and Bonterra®. In the U.S., Kruger Products manufactures the White Cloud® brand, as well as many private label products. The Away-From-Home division manufactures and distributes high-quality, cost-effective product solutions to a wide range of commercial and public entities. Kruger Products has approximately 3,000 employees and operates ten FSC® COC-certified (FSC® C-104904) production facilities in North America. For more information visit www.krugerproducts.ca.

Non-GAAP Financial Measures
This press release uses certain non-GAAP financial measures which Kruger Products believes provide useful information to management of Kruger Products and the readers of the financial information in measuring the financial performance and financial condition of Kruger Products. These measures do not have a standardized meaning prescribed by GAAP and therefore may not be comparable to similarly titled measures presented by other companies. An example of such a measure is Adjusted EBITDA. Adjusted EBITDA is not a measurement of operating performance computed in accordance with GAAP and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with GAAP. "Adjusted EBITDA" is calculated by Kruger Products as net income (loss) before (i) interest expense and other finance costs, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) loss on sale of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) foreign exchange loss (gain) and (viii) costs related to restructuring activities. A reconciliation of Adjusted EBITDA to the relevant reported results can be found in the Segment and Geographic Results table of this press release.

Forward-Looking Statements
Certain statements in this press release about KPT's and Kruger Products' current and future plans, expectations and intentions, results, levels of activity, performance, goals or achievements or any other future events or developments constitute forward-looking statements. Forward-looking statements in this press release include, but are not limited to, items such as plans to build a new TAD tissue plant and its expected annual production capacity, expected date for starting production, the expected financing structure of the project and certain anticipated benefits of the project. The words "may", "will", "would", "should", "could", "expects", "plans", "intends", "trends", "indications", "anticipates", "believes", "estimates", "predicts", "likely" or "potential" or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements. The forward-looking statements are based on certain key expectations and assumptions made by KPT or Kruger Products, in respect of the plans to build a new TAD tissue plant, and obtaining financing on acceptable terms for the project. Although KPT and Kruger Products believe that the expectations and assumptions on which such forward-looking information is based are reasonable, undue reliance should not be placed on the forward-looking statements since no assurance can be given that such expectations and assumptions will prove to be correct.

The outlook provided in respect of Adjusted EBITDA¹ for Q3 2026 is forward-looking information and is based on the assumptions and subject to the risk and uncertainties referred to below. The purpose of the outlook is to provide the reader with an indication of management's expectations, at the date of this press release, regarding Kruger Products' future financial performance. Readers are cautioned that this information may not be appropriate for other purposes.

Many factors could cause Kruger Products' actual results, level of activity, performance or achievements or future events or developments (which could in turn affect the economic benefits derived from KPT's economic interest in Kruger Products) to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the following factors, which are discussed in greater detail in the "Risk Factors - Risks Related to Kruger Products' Business" section of the KPT Annual Information Form dated February 18, 2026 available on SEDAR+ at www.sedarplus.ca (the Annual Information Form): Kruger Inc.'s influence over Kruger Products; Kruger Products' reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the ownership of the TAD Sherbrooke Project; risks associated with the operation of the TAD Sherbrooke Project; operational risks; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; Kruger Products' inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of Kruger Products or Kruger Products' brands; Kruger Products' sales being less than anticipated; Kruger Products' failure to implement its business and operating strategies; Kruger Products' obligation to make regular capital expenditures; Kruger Products entering into unsuccessful acquisitions; Kruger Products' dependence on key personnel; Kruger Products' inability to retain its existing customers or obtain new customers; Kruger Products' loss of key suppliers; Kruger Products' failure to adequately protect its intellectual property rights; Kruger Products' reliance on third party intellectual property licenses; adverse litigation and other claims affecting Kruger Products; material expenditures due to comprehensive environmental regulation affecting Kruger Products' cash flow; Kruger Products' pension obligations are significant and can be materially higher than predicted if Kruger Products Management's underlying assumptions are incorrect; labour disputes adversely affecting Kruger Products' cost structure and Kruger Products' ability to run its plants; exchange rate and U.S. competitors; Kruger Products' inability to service all of its indebtedness; exposure to potential consumer product liability; covenant compliance; interest rate and refinancing risk; information technology; cyber-security; insurance; internal controls; trade related and tax.

Readers should not place undue reliance on forward-looking statements made herein. The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of press release and KPT undertakes no obligation to publicly update such forward-looking information to reflect new information, subsequent or otherwise, unless required by applicable securities laws.

¹ Adjusted EBITDA is a non-GAAP financial measure. Refer to the Non-GAAP Financial Measures section of this press release for more information on these measures.

Kruger Products Inc.
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Kruger Products Inc.
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Kruger Products Inc.
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Kruger Products Inc.
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KP Tissue Inc.
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KP Tissue Inc.
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KP Tissue Inc.
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