KP Tissue Releases Second Quarter 2020 Financial Results
KP Tissue Inc. (KPT) (TSX:KPT.TO) reports the Q2 2020 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, SpongeTowels, 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(R) brand and premium private label products. KPT currently holds a 14.8% interest in KPLP.
KPLP Q2 2020 Business and Financial Highlights
-- Revenue increased by $21.1 million or 5.8% to $386.8 million in Q2 2020 compared to $365.7 million in Q2 2019. Excluding the divested Mexico business, Q2 2020 revenue increased by $46.5 million or 13.7%.
-- Adjusted EBITDA was $64.4 million in Q2 2020 compared to $31.5 million in Q2 2019, an increase of 104.6%.
-- TAD Sherbrooke site progressing on time and on budget despite the temporary shutdown in Q1 2020 due to the implementation of strict COVID-19 protocols.
-- Declared a quarterly dividend of $0.18 per share to be paid on October 15, 2020.
"Our robust second quarter results were driven by a consistent increased demand in our Consumer segment and strong operational performance. We continued to benefit from the trust in our brands, leading to market share gains that began at the end of last year. We also gained new listings and new customers, and saw good growth and increased distribution in our U.S. White Cloud brand. As expected, the Away-from-Home segment faced challenging market conditions during the quarter and the road to recovery in this market will depend on the evolving COVID-19 situation," stated KP Tissue Chief Executive Officer, Dino Bianco.
"Adjusted EBITDA performance was exceptional with growth of over 100% to $64.4 million. The increase reflects higher Consumer volume and a favourable cost environment as well as the sustainable benefits of our OpEx program across all operations.
"Despite a temporary halt to construction as we implemented COVID-19 procedures, we are pleased to report that TAD Sherbrooke remains on time and on budget. As planned, the first converting-line started in July and the ramp-up is progressing well. With paper production expected to begin in early 2021, the new facility is central to our long-term North American growth strategy in the ultra-premium tissue segment. Furthermore, we have a fully committed sales pipeline in support of our largest investment in Kruger Products' history.
"In addition to robust quarterly performance, we continue to reinvest in our brands and business in order to build an even stronger future. Lastly, I would like to thank the entire Kruger Products team for working safe while driving strong performance during COVID-19," concluded Mr. Bianco.
Demand for our products is expected to remain strong but at a diminishing growth rate in the Consumer segment and weaker in the Away-From-Home segment, with input costs expected to remain unchanged. As COVID-19 continues to evolve, there are many opportunities and uncertainties in the market. Given this, we are providing a wide range for Q3 2020 Adjusted EBITDA that is above Q3 2019 and below Q2 2020.
KPLP Q2 2020 Financial Results
Revenue was $386.8 million in Q2 2020 compared to $365.7 million in Q2 2019, an increase of $21.1 million or 5.8%. The increase in revenue was primarily due to significant volume increases in the Consumer business segment, resulting primarily from COVID-19 buying activity and the favourable impact of foreign exchange fluctuations, partially offset by lower volume in the AFH business segment resulting from the ongoing impacts from COVID-19, Consumer selling prices moderating lower in response to lower pulp prices, and no volume from Mexico as a result of the share sale at the end of Q3 2019. Mexico revenue was $25.4 million in Q2 2019. Excluding the Mexico business, revenue increased by $46.5 million or 13.7%
Cost of sales was $310.0 million in Q2 2020 compared to $325.8 million in Q2 2019, a decrease of $15.8 million or 4.8%. Manufacturing costs decreased primarily due to favourable pulp costs, the impact of operational transformation initiatives (OpEx) and the COVID-19 reduced sku production environment. The decreases were partially offset by the unfavourable impact of foreign exchange fluctuations, inflation and additional costs due to precautions taken in our manufacturing facilities as a result of COVID-19. Freight costs decreased compared to Q2 2019 while warehousing costs increased. As a percentage of revenue, cost of sales was 80.2% in Q2 2020 compared to 89.1% in Q2 2019.
Selling, general and administrative (SG&A) expenses were $30.5 million in Q2 2020 compared to $25.4 million in Q2 2019, an increase of $5.1 million or 20.2%. The increase was primarily due to higher compensation and personnel related costs compared to Q2 2019 and higher selling expenses due to increased volume. As a percentage of revenue, SG&A expenses were 7.9% in Q2 2020 compared to 6.9% in Q2 2019.
Adjusted EBITDA was $64.4 million in Q2 2020 compared to $31.5 million in Q2 2019, an increase of $32.9 million or 104.6%. The increase was primarily due to higher sales volume, the favourable impact of lower pulp prices and lower manufacturing costs compared to Q2 2019 as described above and favourable freight costs. The increases were partially offset by higher maintenance, warehousing and SG&A costs.
Net income was $28.9 million in Q2 2020 compared to $0.9 million in Q2 2019, an increase of $28.0 million. The increase was primarily due to higher Adjusted EBITDA of $32.9 million as discussed, partially offset by higher income tax expense and an increase in depreciation expense.
KPLP Q2 2020 Financing Activity
Total liquidity, representing cash and availability under the Senior Credit Facility within covenant limitations, was $271.7 million as of June 30, 2020. In addition, $37.8 million of cash was held by KPSI and committed to the TAD Sherbrooke Project.
KPT Q2 2020 Financial Results
KPT had a net loss of $0.1 million in Q2 2020. Included in net loss was $4.3 million representing KPT's share of KPLP's net income, depreciation expense of $1.4 million related to adjustments to carrying amounts on acquisition and income tax expense of $3.3 million.
Dividends on Common Shares
The Board of Directors of KPT declared a quarterly dividend of $0.18 per share to be paid on October 15, 2020 to shareholders of record at the close of business on September 30, 2020.
For additional information please refer to Management's Discussion and Analysis (MD&A) of KPT and KPLP for the second quarter ended June 30, 2020 available on SEDAR at www.sedar.com or our website at www.kptissueinc.com.
Second Quarter Results Conference Call Information
KPT will hold its second quarter conference call on Thursday, August 6, 2020 at 8:30 a.m. Eastern Time.
Via telephone: 1-877-223-4471 or 647-788-4922
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 13, 2020 by dialing 1-800-585-8367 or 416-621-4642 and entering passcode 1935229.
The replay of the webcast will remain available on the website until midnight, August 13, 2020.
About KP Tissue Inc. (KPT)
KPT was created to acquire, and its business is limited to holding, a limited partnership interest in KPLP, which is accounted for as an investment on the equity basis. KPT currently holds a 14.8% interest in KPLP. For more information visit www.kptissueinc.com.
About Kruger Products L.P. (KPLP)
KPLP is Canada's leading manufacturer of quality tissue products for household, industrial and commercial use. KPLP serves the Canadian consumer market with such well-known brands as Cashmere(R), Purex(R), SpongeTowels(R), Scotties(R) and White Swan(R). In the U.S., KPLP manufactures the White Cloud(R) 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. KPLP has approximately 2,500 employees and operates eight FSC(R) COC-certified (FSC(R) C-104904) production facilities in North America. For more information visit www.krugerproducts.ca.
This press release uses certain non-IFRS financial measures which KPLP believes provide useful information to management of KPLP and the readers of the financial information in measuring the financial performance and financial condition of KPLP. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other companies. An example of such a measure is Adjusted EBITDA. Beginning with Q4 2015 in accordance with Canadian Securities Administrators Staff Notice 52-306 (Revised), we have referenced Adjusted EBITDA as a non-IFRS financial measure. This term replaces the previously referenced non-IFRS financial measure EBITDA. Adjusted EBITDA is not a measurement of operating performance computed in accordance with IFRS and should not be considered as a substitute for operating income, net income or cash flows from operating activities computed in accordance with IFRS. "Adjusted EBITDA" is calculated by KPLP as net income (loss) before (i) interest expense, (ii) income taxes, (iii) depreciation, (iv) amortization, (v) impairment (gain on sale) of non-financial assets, (vi) loss (gain) on disposal of property, plant and equipment, (vii) foreign exchange loss (gain), (viii) costs related to restructuring activities, (ix) changes in amortized cost of Partnership units liability, (x) change in fair value of derivatives, (xi) consulting costs related to operational transformation initiatives, (xii) corporate development related costs and (xiii) loss (gain) on sale of shares. A reconciliation of Adjusted EBITDA to the relevant reported results can be found in the MD&A of KPT and KPLP for the year ended December 31, 2019 available on SEDAR at www.sedar.com.
In March 2020, the World Health Organization characterized the outbreak of the novel strain of coronavirus, specifically identified as "COVID-19", as a global pandemic. This has resulted in local governments enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses in the United States of America and Canada resulting in an economic slowdown. Equity markets have experienced significant volatility and weakness and the local governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. There is significant uncertainty as to the likely effects of this outbreak. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments to quantify the impact this pandemic may have on the financial results and condition of KPLP in future periods.
Certain statements in this press release about KPT's and KPLP's 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, statements regarding the projected capacity of the TAD Sherbrooke Project, the anticipated benefits of the TAD Sherbrooke Project and the expected dates for commencement of construction and production of the TAD Sherbrooke 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 KPLP. Although KPT and KPLP 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 EBITDA for Q3 2020 is forward-looking information and is 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 KPLP's future financial performance. Readers are cautioned that this information may not be appropriate for other purposes.
Many factors could cause KPLP's 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 KPLP), 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 KPLP's Business" section of the KPT Annual Information Form dated March 30, 2020 available on SEDAR at www.sedar.com: Kruger Inc.'s influence over KPLP; KPLP's reliance on Kruger Inc.; consequences of an event of insolvency relating to Kruger Inc.; risks associated with the TAD Sherbrooke Project; operational risks; significant increases in input costs; reduction in supply of fibre; increased pricing pressure and intense competition; KPLP's inability to innovate effectively; adverse economic conditions; dependence on key retail trade customers; damage to the reputation of KPLP or KPLP's brands; KPLP's sales being less than anticipated; KPLP's failure to implement its business and operating strategies; KPLP's obligation to make regular capital expenditures; KPLP's entering into unsuccessful acquisitions; KPLP's dependence on key personnel; KPLP's inability to retain its existing customers or obtain new customers; KPLP's loss of key suppliers; KPLP's failure to adequately protect its intellectual property rights; KPLP's reliance on third party intellectual property licenses; adverse litigation and other claims affecting KPLP; material expenditures due to comprehensive environmental regulation affecting KPLP's cash flow; KPLP's pension obligations are significant and can be materially higher than predicted if KPLP Management's underlying assumptions are incorrect; labour disputes adversely affecting KPLP's cost structure and KPLP's ability to run its plants; exchange rate and U.S. competitors; KPLP's inability to service all of its indebtedness; exposure to potential consumer product liability; covenant compliance; interest rate and refinancing risk; risks relating to information technology; cyber-security; insurance; internal controls; trade; and risks related to COVID-19.
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.
General Counsel and Corporate Secretary
KP Tissue Inc.
Director of Investor Relations
KP Tissue Inc.
Kruger Products L.P. Unaudited Condensed Consolidated Statement of Financial Position (thousands of Canadian dollars) June 30, 2020 December 31, 2019 $ $ Assets Current assets Cash and cash equivalents 144,188 93,141 Trade and other receivables 89,431 89,236 Receivables from related parties 16 59 Current portion of advances to partners 2,323 80 Inventories 193,214 190,686 Income tax recoverable - 466 Prepaid expenses 15,273 8,341 444,445 382,009 Non-current assets Property, plant and equipment 1,063,825 935,010 Right-of-use assets 92,402 97,582 Other long-term assets 10 1,766 Goodwill 160,939 160,939 Intangible assets 16,137 15,317 Deferred income taxes 24,750 30,988 Total assets 1,802,508 1,623,611 Liabilities Current liabilities Trade and other payables 254,773 242,357 Payables to related parties 10,178 6,809 Income tax payable 1,242 325 Distributions payable 11,760 11,393 Current portion of provisions 3,509 759 Current portion of long-term debt 4,937 11,937 Current portion of lease liabilities 19,796 18,080 306,195 291,660 Non-current liabilities Long-term debt 700,388 579,125 Lease liabilities 93,987 100,682 Provisions 5,196 6,148 Pensions 179,153 140,674 Post-retirement benefits 61,021 57,005 Liabilities to non-unitholders 1,345,940 1,175,294 Current portion of Partnership units liability 12,599 5,103 Long-term portion of Partnership units liability 130,853 138,412 Total Partnership units liability 143,452 143,515 Total liabilities 1,489,392 1,318,809 Equity Partnership units 428,936 408,978 Deficit (209,059 ) (183,188 ) Accumulated other comprehensive income 93,239 79,012 Total equity 313,116 304,802 Total equity and liabilities 1,802,508 1,623,611
Kruger Products L.P. Unaudited Condensed Consolidated Statement of Comprehensive Income (Loss) (thousands of Canadian dollars) 3-month 3-month 6-month 6-month period ended period ended period ended period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 $ $ $ $ Revenue 386,763 365,674 761,909 716,651 Expenses Cost of sales 310,009 325,723 624,522 645,831 Selling, general and administrative expenses 30,492 25,370 60,126 47,426 Loss on sale of non-financial assets - 6 1 6 Restructuring costs, net 483 232 1,221 297 Operating income 45,779 14,343 76,039 23,091 Interest expense 11,333 11,433 21,913 22,730 Other (income) expense (3,269 ) 864 8,152 1,713 Income (loss) before income taxes 37,715 2,046 45,974 (1,352 ) Income taxes 8,811 1,114 8,682 928 Net income (loss) for the period 28,904 932 37,292 (2,280 ) Other comprehensive income (loss) Items that will not be reclassified to net income (loss): Remeasurements of pensions (103,032 ) (52,439 ) (36,655 ) (50,412 ) Remeasurements of post-retirement benefits (9,896 ) (4,201 ) (3,388 ) (6,331 ) Items that may be subsequently reclassified to net income (loss): Cumulative translation adjustment (12,480 ) (6,123 ) 14,227 (12,513 ) Total other comprehensive loss for the period (125,408 ) (62,763 ) (25,816 ) (69,256 ) Comprehensive income (loss) for the period (96,504 ) (61,831 ) 11,476 (71,536 )
Kruger Products L.P. Unaudited Condensed Consolidated Statement of Cash Flows (thousands of Canadian dollars) 3-month 3-month 6-month 6-month period ended period ended period ended period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 $ $ $ $ Cash flows from (used in) operating activities Net income (loss) for the period 28,904 932 37,292 (2,280 ) Items not affecting cash Depreciation 16,515 14,516 32,960 28,896 Amortization 399 370 773 732 (Gain) loss on sale of property, plant and equipment 49 - 49 (5 ) Change in amortized cost of Partnership units liability 2,520 1,547 5,040 3,094 Foreign exchange (gain) loss (5,789 ) (960 ) 3,472 (1,658 ) Change in fair value of derivatives - 277 (360 ) 277 Interest expense 11,333 11,433 21,913 22,730 Pension and post-retirement benefits 3,694 2,756 7,474 5,201 Provisions 1,844 503 3,599 673 Income taxes 8,811 1,114 8,682 928 Loss on sale of non-financial assets - 6 1 6 Total items not affecting cash 39,376 31,562 83,603 60,874 Net change in non-cash working capital 47,540 7,819 26,035 (44,806 ) Contributions to pension and post-retirement benefit plans (3,853 ) (4,041 ) (7,938 ) (7,153 ) Provisions paid (1,663 ) (407 ) (1,871 ) (472 ) Income tax payments (13 ) (1,338 ) (13 ) (1,597 ) Net cash from operating activities 110,291 34,527 137,108 4,566 Cash flows from (used in) investing activities Purchases of property, plant and equipment (3,405 ) (6,759 ) (7,451 ) (12,280 ) Purchases of property, plant and equipment related to the TAD Sherbrooke Project (67,320 ) (31,092 ) (132,013 ) (42,208 ) Interest paid on credit facilities related to the TAD Sherbrooke Project (2,054 ) (769 ) (4,204 ) (1,453 ) Purchases of software (548 ) (116 ) (1,593 ) (1,334 ) Proceeds on sale of shares - - 992 - Proceeds on sale of property, plant and equipment - - - 5 Net cash used in investing activities (73,327 ) (38,736 ) (144,269 ) (57,270 ) Cash flows from (used in) financing activities Proceeds from long-term debt 26,754 10,411 132,327 35,188 Repayment of long-term debt (32,434 ) (6,032 ) (33,701 ) (7,286 ) Payment of deferred financing fees (488 ) (67 ) (493 ) (353 ) Payment of lease liabilities (5,426 ) (4,041 ) (9,917 ) (8,266 ) Interest paid on long-term debt (19,702 ) (11,359 ) (21,622 ) (13,947 ) Distributions and advances paid, net (3,724 ) (3,574 ) (10,221 ) (5,544 ) Net cash from (used in) financing activities (35,020 ) (14,662 ) 56,373 (208 ) Effect of exchange rate changes on cash and cash equivalents held in foreign currency (2,395 ) (699 ) 1,835 (1,537 ) Increase (decrease) in cash and cash equivalents during the period (451 ) (19,570 ) 51,047 (54,449 ) Cash and cash equivalents - Beginning of period 144,639 135,005 93,141 169,884 Cash and cash equivalents - End of period 144,188 115,435 144,188 115,435
Kruger Products L.P. Segment and Geographic Results (thousands of Canadian dollars) 3-month 3-month 6-month 6-month period ended period ended period ended period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 $ $ $ $ Segment Information Segment Revenue Consumer 338,242 299,663 651,531 595,848 AFH 48,521 66,011 110,378 120,803 Total segment revenue 386,763 365,674 761,909 716,651 Adjusted EBITDA Consumer 69,580 35,354 123,929 65,446 AFH (2,145 ) (3,045 ) (3,166 ) (9,629 ) Corporate and other costs (3,012 ) (820 ) (5,389 ) (778 ) Total Adjusted EBITDA 64,423 31,489 115,374 55,039 Reconciliation to Net Income (Loss): Depreciation and amortization 16,914 14,886 33,733 29,628 Interest expense 11,333 11,433 21,913 22,730 Change in amortized cost of Partnership units liability 2,520 1,547 5,040 3,094 Change in fair value of derivatives - 277 (360 ) 277 (Gain) loss on sale of property, plant and equipment 49 - 49 (5 ) Loss on sale of non-financial assets - 6 1 6 Restructuring costs, net 483 232 1,221 297 Foreign exchange (gain) loss (5,789 ) (960 ) 3,472 (1,658 ) Consulting costs related to operational transformation initiatives 1,198 1,283 4,331 1,283 Corporate development related costs - 739 - 739 Income (loss) before income taxes 37,715 2,046 45,974 (1,352 ) Income taxes 8,811 1,114 8,682 928 Net income (loss) 28,904 932 37,292 (2,280 ) Geographic Revenue Canada 218,438 208,163 448,533 405,579 US 168,325 132,063 313,376 259,576 Mexico - 25,448 - 51,496 Total revenue 386,763 365,674 761,909 716,651
KP Tissue Inc. Unaudited Condensed Statement of Financial Position (thousands of Canadian dollars) June 30, 2020 December 31, 2019 $ $ Assets Current assets Distributions receivable 1,745 1,733 Receivable from Partnership 73 247 1,818 1,980 Non-current assets Investment in associate 77,176 81,052 Total Assets 78,994 83,032 Liabilities Current liabilities Dividend payable 1,745 1,733 Current portion of advances from Partnership 360 80 Income tax payable 1,281 944 3,386 2,757 Non-current liabilities Deferred income taxes 1,551 3,158 Total liabilities 4,937 5,915 Equity Common shares 19,669 18,997 Contributed surplus 144,819 144,819 Deficit (106,559 ) (100,696 ) Accumulated other comprehensive income 16,128 13,997 Total equity 74,057 77,117 Total liabilities and equity 78,994 83,032
KP Tissue Inc. Unaudited Condensed Statement of Comprehensive Loss (thousands of Canadian dollars, except share and per share amounts) 3-month 3-month 6-month 6-month period ended period ended period ended period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 $ $ $ $ Equity income (loss) 2,925 (1,288 ) 2,800 (3,237 ) Dilution gain 231 142 451 231 Income (loss) before income taxes 3,156 (1,146 ) 3,251 (3,006 ) Income taxes 3,279 1,437 1,673 1,529 Net income (loss) for the period (123 ) (2,583 ) 1,578 (4,535 ) Other comprehensive income (loss) net of tax expense (recovery) Items that will not be reclassified to net income (loss): Remeasurements of pensions (12,347 ) (6,827 ) (3,655 ) (6,550 ) Remeasurements of post-retirement benefits (906 ) (390 ) (309 ) (586 ) Items that may be subsequently reclassified to net income (loss): Cumulative translation adjustment (1,950 ) (1,012 ) 2,131 (2,112 ) Total other comprehensive loss for the period (15,203 ) (8,229 ) (1,833 ) (9,248 ) Comprehensive loss for the period (15,326 ) (10,812 ) (255 ) (13,783 ) Basic earnings (loss) per share (0.01 ) (0.27 ) 0.16 (0.48 ) Weighted average number of shares outstanding 9,689,578 9,515,910 9,672,481 9,490,276
KP Tissue Inc. Unaudited Condensed Statement of Cash Flows (thousands of Canadian dollars) 3-month 3-month 6-month 6-month period ended period ended period ended period ended June 30, 2020 June 30, 2019 June 30, 2020 June 30, 2019 $ $ $ $ Cash flows from (used in) operating activities Net income (loss) for the period (123 ) (2,583 ) 1,578 (4,535 ) Items not affecting cash Equity (income) loss (2,925 ) 1,288 (2,800 ) 3,237 Dilution gain (231 ) (142 ) (451 ) (231 ) Income taxes 3,279 1,437 1,673 1,529 Total items not affecting cash 123 2,583 (1,578 ) 4,535 Net change in non-cash working capital 1 - 94 - Tax payments (361 ) - (1,235 ) - Tax Distribution - - 781 - Advances received 360 - 360 - Net cash from (used in) operating activities - - - - Cash flows from investing activites Partnership unit distributions received 1,400 1,279 2,793 2,427 Net cash from investing activities 1,400 1,279 2,793 2,427 Cash flows used in financing activities Dividends paid (1,400 ) (1,279 ) (2,793 ) (2,427 ) Net cash used in financing activities (1,400 ) (1,279 ) (2,793 ) (2,427 ) Increase (decrease) in cash and cash equivalents during the period - - - - Cash and cash equivalents - Beginning of period - - - - Cash and cash equivalents - End of period - - - -