KINGSEY FALLS, QC (News release) -- Cascades Inc. (TSX: CAS) reports its unaudited financial results for the three-month period ended September 30, 2025.

Q3 2025 Highlights

• Sales of $1,238 million (compared with $1,187 million in Q2 2025 and $1,201 million in Q3 2024);
• Operating income of $73 million (compared with $36 million in Q2 2025 and $36 million in Q3 2024);
• Net earnings per common share of $0.29 (compared with a net loss per common share of ($0.03) in Q2 2025 and net earnings per common share of $0.01 in Q3 2024);
• Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA (A)¹) of $159 million (compared with $137 million in Q2 2025 and $140 million in Q3 2024);
• Adjusted net earnings per common share¹ of $0.38 (compared with $0.19 in Q2 2025 and $0.27 in Q3 2024);
• Net debt¹ of $2,023 million as of September 30, 2025 (compared with $2,104 million as of June 30, 2025). Net debt to EBITDA (A) ratio¹ of 3.6x, down from 3.8x as of June 30, 2025;
• The Company now expects to achieve $120 million from the monetization of redundant assets by mid-2026, up from $80 million previously. Including the $31 million of proceeds from the sale of its Flexible Packaging activities on October 8, 2025, a total of $57 million of this objective has been achieved. Proceeds from these sales are expected to go toward debt reduction;
• Total capital expenditures, net of disposals, of $30 million in Q3 2025, compared to $18 million in Q2 2025 and $34 million in Q3 2024. The Corporation's 2025 forecasted capital expenditures before disposals will be approximately $140 million.

Hugues Simon, President and CEO, commented: "Third quarter consolidated results exceeded our sequential forecast. This was driven by stronger volume, good operational execution, benefits from ongoing profitability initiatives, and favourable raw material and selling price trends. Our packaging business, in particular, had a stronger than expected quarter. This reflected continued positive volume momentum during the quarter, a well executed closure and redistribution of tonnage from the Niagara Falls mill, and a 24% increase in volumes produced at Bear Island, the latter of which achieved 90% of its targeted production ramp up curve in the quarter. As expected, our tissue business similarly had a strong quarter, driven by improvements in volume. At the corporate level, net debt decreased by $81 million sequentially, and leverage fell to 3.6x from 3.8x at the end of the second quarter."

Discussing near-term outlook, Mr. Simon commented, "We are expecting fourth quarter performance to be stable sequentially on a consolidated basis. Notwithstanding favourable raw material and selling price trends and a continuation of good demand levels in October, we remain cautious in packaging. To this end, we are forecasting lower sequential results for this business, driven by our current expectation that volume will decrease in seasonally softer December. For tissue, we expect the momentum of sequentially stronger results to continue in the fourth quarter, driven by lower maintenance and favourable raw material costs. Looking further ahead, we are focused on achieving our strategic objectives. Despite the ongoing uncertainty in the current economic environment, we are making good progress across many of these initiatives. We are confident that the fundamentals for our Company are strong, and are steadfast in our commitment to continue to improve the financial profile, level of operational and commercial excellence and growth momentum of our Company."

Analysis of results for the three-month period ended September 30, 2025 (compared to the same period last year)

The Corporation's third quarter sales of $1,238 million increased by $37 million compared with the same period last year. This increase was driven by consolidated net benefits of $43 million from higher selling prices and $7 million from a more favourable foreign exchange. These were partially offset by $12 million from lower volumes mainly in the Packaging Products segment.

The third quarter EBITDA (A)¹ totaled $159 million, an increase of $19 million, or 14%, from the $140 million generated in the same period last year. This increase was driven by net benefits of $43 million from higher selling prices and by lower raw material costs of $19 million, mainly in the Packaging Products segment. These were partially offset by net impacts of $38 million from higher production and energy costs and $5 million from lower volumes mainly in the Packaging Products segment.

The main specific items, before income taxes, that impacted our third quarter of 2025 operating income and/or net earnings were:

• $10 million for an additional environmental provision related to the closure of a plant in Canada in 2024 (operating income and net earnings);
• $6 million of restructuring costs related to a plant closure in the United States and corporate organizational changes (operating income and net earnings);
• $4 million unrealized gain on financial instruments (operating income and net earnings).

For the three-month period ended September 30, 2025, the Corporation posted net earnings of $29 million, or $0.29 per common share, compared to net earnings of $1 million, or $0.01 per common share, in the same period of 2024. On an adjusted basis¹, the Corporation posted net earnings of $39 million in the third quarter of 2025, or $0.38 per common share, compared to net earnings of $27 million, or $0.27 per common share, in the same period of 2024.

Dividend on common shares and normal course issuer bid

The Board of Directors of Cascades declared a quarterly dividend of $0.12 per common share to be paid on December 4, 2025 to shareholders of record at the close of business on November 20, 2025. This dividend is an "eligible dividend" as per the Income Tax Act (R.C.S. (1985), Canada). During the third quarter of 2025, Cascades purchased no common shares for cancellation.