Atlas Fourth Quarter 2013 Review

Report for the Quarter and Year Ended December 31, 2013

Atlas Holdings enjoyed a solid 2013, establishing three new platform businesses, concluding several important financings, returning a significant amount of capital to our partners and gearing up the “Bolt-on” acquisition engine to enable us to accelerate growth and value creation in our portfolio companies that have reached stability. We also experienced meaningful progress in the critical transformation activities that are intended to convert struggling businesses that we acquire into Performance Organizations and we saw generally good operating performance in most of our companies. Finally, we have demonstrated that we are winning the War for Talent, adding excellent managers and associates throughout the Atlas family.

At year end, we were operating thirteen platform companies, including New Wood Resources LLC, which was formed on September 30, and Veritas Steel LLC, which we formed through a foreclosure purchase on November 5. In both cases, transition to Atlas ownership has proceeded smoothly and we believe that New Wood and Veritas are well-positioned for progress toward stability in 2014.

We were pleased with both our progress on many key objectives in 2013 as well as the outcomes that were achieved. Workplace safety will always be the foundation of our business activities, and we showed continued progress across our platforms as these businesses continue their march to world-class safety. While aggregated safety metrics show a slight uptick in incident rates, this is primarily the result of adding new businesses in 2013 that had inadequate safety programs and unsatisfactory safety performance. We are certain that these companies will join their peers in driving much improved safety performance in quarters ahead as a result of developing and implementing their own 5-year Safety Plans. We also are confident that progress in this domain will generate improved operating performance and ultimately, enhanced financial results as well.

Operationally, ASG Group, Bridgewell Resources Holdings LLC, Erickson Framing Holdings LLC, Forest Resources LLC, Phoenix Services International LLC, RedBuilt LLC and Soundview Paper Holdings LLC all delivered significantly improved financial performance in 2013. These companies are executing well-defined plans to grow  shareholder value in years ahead. Pangborn Group had a busy 2013, launching a joint-venture operation in China and integrating the newly acquired Pangborn SES. Phoenix Services and Forest Resources both had exceptional years, hitting new highs in financial performance in 2013. Wood Resources wound down its activities with the sale of its southeastern operations to Boise Cascade Company and the acquisition of its remaining Pacific Northwest operations by New Wood Resources.

As previously announced, we began fundraising for Atlas Capital Resources II LP in September 2013 and we closed ACR II less than three months later at our hard cap of $900 million of commitments. While we are extremely pleased that a number of new LPs will be joining us in ACR II, we are most gratified by the very strong support we received from our current partners in the Fund. We look forward to working with both our new and existing partners to achieve our objectives of value creation and building Performance Organizations.

The economy ended 2013 in a better place than where it began. In the U.S., sustained improvement in employment, corporate profits, construction spending and GDP growth sets the stage for what we believe will be a strong 2014. Even Washington cooperated a bit, declaring enough of a truce to pass a budget and to holster the debt ceiling duel, at least for now. Capital is broadly available and domestic monetary policy, while less expansionary, remains attentive to the possibilities of economic slowdown as well as inflation. Europe has stopped declining and its relative economic stability (absent an infection from the emerging markets growing trauma) may serve as a driver of global economic improvement, in large measure due to its negative impact on the world economy throughout most of 2013.

We look forward to sharing our progress as 2014 unfolds and wish you all the best in the new year.

Andrew Bursky
Managing Partner
To contact Andy by e-mail, please click here

Timothy Fazio
Managing Partner
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Mike Jackson

ASG is a leading global creative services and packaging provider to the consumer products and electronic media industries. Atlas formed ASG by acquiring the AGI media packaging business (“AGI”) of MeadWestvaco Corporation and combining it with the Shorewood Packaging business (“Shorewood”) purchased from International Paper Company.

ASG continued its good safety performance through the end of 2013, achieving an aggregate RIR of 0.3 for the quarter and 0.7 for the year. This level of sustained, world-class performance represents a significant improvement relative to 2012, when the aggregate RIR was 1.3 for the fourth quarter and 1.2 for the year. ASG’s North America division (“ASG NA”) had one recordable incident but no lost work day incidents during the fourth quarter and ASG’s Europe division (“ASG Europe”) had one recordable incident and one lost day work day incident. ASG’s Mexico division (“ASG Mexico”) had zero recordable incidents in the fourth quarter, extending their zero RIR streak to eight consecutive months and bringing the full year RIR to 0.6. ASG’s Asia division (“ASG Asia”) also had zero recordable incidents in the fourth quarter, finishing the year with a perfect safety record and a full year RIR of 0.0.

ASG NA experienced a decline in profitability and revenue during the fourth quarter of 2013 relative to the same period in 2012. At the end of the fourth quarter, ASG NA announced the closure of its Indianapolis facility and the transfer of its book of business to other ASG NA facilities. This closure is expected to be complete in the first quarter of 2014. Despite the disappointing quarter, ASG NA generated increased profitability for  the full year 2013 relative to 2012 on a lower revenue base, as it began to benefit from the leaner cost structure and improved operating efficiencies the management team has worked hard to implement.

ASG Mexico generated slightly less profitability and revenue in the fourth quarter  relative to last year. The weaker fourth quarter performance was primarily attributable to operational issues. The problems have since largely been resolved but served as an unfortunate break in the momentum generated by ASG Mexico’s strong operational performance through the third quarter. ASG Mexico finished 2013 with strong year over year revenue growth and a significant increase in profitability.

ASG Asia once again delivered higher profitability and revenue compared to the prior year for both the fourth quarter and the year as a whole. Operations were excellent at both the Guangzhou and Kunshan plants in China, driven by better than anticipated sales with top customers. Year-over-year, ASG Asia increased sales by several multiples of market growth rates, profitability margins were strong, and the division managed a perfect safety performance of 0.0 RIR. Overall, 2013 was an outstanding year for ASG Asia.

ASG Europe experienced a decline in profitability and revenue in the fourth quarter relative to last year. On a full year basis, ASG Europe’s financial performance declined in 2013 compared to 2012 as it fought continued headwinds in declining home entertainment product demand. However, full year results at the low-cost and well-run Polish operations were very strong and the Netherlands executed a dramatic improvement as it was transitioned into a specialty packaging facility.

In January 2014, the Board of Directors of ASG announced the realignment of company management and reporting structure into three affiliated business units, ASG Americas, ASG Europe and ASG Asia, in order to provide increased regional focus and responsiveness to its customers. The new structure is consistent with ASG’s continuing efforts to simplify process, tighten its lean business model and increase focus on customer needs.



Pat McCauley
President and Chief Executive Officer

Bridgewell supplies a variety of construction products, utility supplies, wood products, food ingredients and crop inputs, together with logistics services, to suppliers and customers globally. Bridgewell commenced operations in March 2010, when it acquired certain assets of the Trading Division of North Pacific Group Inc. out of a Federal receivership.

During the fourth quarter of 2013, the company achieved a Recordable Incident Rate (“RIR”) of 2.2, as a result of one recordable incident related to a repetitive motion injury, compared to 0.0 RIR for the fourth quarter of 2012. While the company achieved world class safety performance for 2013 with an RIR of 0.5, compared to 0.0 RIR for 2012, Bridgewell has instituted a wellness campaign in an effort to continuously improve Bridgewell’s safety performance.

While revenues were down in the fourth quarter relative to the prior year, profitability  increased, largely the result of higher gross margins. The reduced sales in the quarter relative to the prior year are largely attributable to the impact of Hurricane Sandy in 2012, which resulted in significant utility pole sales in the Utility and Construction division. The expanded gross margins in the fourth quarter of 2013 are primarily the result of i) the elimination of slow moving inventory in the International Wood Products division that compressed margins in 2012 and ii) the success of the Contractor Direct division’s strategy for managing the volatility of raw material prices, implemented in the first quarter of 2013.

Bridgewell continues to make strides in several Key Performance Indicators (“KPIs”)  that we use to track the business. “Sales Expense/Gross Profit”, a percentage measurement of the total selling expense relative to the gross profit generated in the business was significantly lower in 2013 compared to 2012, indicating improved sales efficiency. Another KPI, “Cycle Days”, showed a reduction in the fourth quarter of 2013 in comparison to the same quarter in 2012, indicating greater working capital efficiency. Finally, “Sales in Backlog”, a KPI used to track near-term revenue trajectory as well as trader activity, increased relative to the prior quarter.

Bridgewell will continue to make significant investments to grow its business, both in the form of new traders and expansion into new geographic and product markets. We are also exploring strategic Bolt-ons as a means of leveraging the company’s infrastructure and capabilities, accelerating growth and further diversifying Bridgewell’s end markets. We remain excited by the potential of Bridgewell and believe the company is well-positioned to take advantage of the growth prospects available to it in both domestic and international markets.



Steve White
Chairman and Chief Executive Officer

Detroit Renewable Energy (“DRE”) owns a group of infrastructure assets providing the  City of Detroit and surrounding municipalities with safe, reliable and cost-effective solutions for clean energy and waste disposal.

During the quarter, we are pleased to report that DRE had no recordable incidents in any of its business units. Accordingly, DRE had an RIR of 0.0 during the fourth quarter of 2013 and ended 2013 with an overall RIR of 0.3 for the year, as compared to the fourth quarter and full year ended 2012 of 2.6 and 1.4, respectively. This significant achievement in safety performance at DRE in 2013 is a tribute to the excellent leadership provided by the management team as well as the dedication and commitment of the company’s 270 associates.

Financial and operating results in the fourth quarter of 2013 were negatively impacted by a major late autumn storm. Our facility at DRP was struck by lightning, resulting in severe damage to the plant’s electrical infrastructure and nearly a month of intermittent downtime. DRE’s financial performance in 2013 was disappointing, but this  unsatisfactory result was primarily linked to a single causal factor – disappointing boiler reliability at DRP, for which an aggressive recovery plan was established earlier this year and is now well underway. In 2013, the combination of unsatisfactory levels of boiler reliability together with the major overhaul of DRP’s turbine generator in the first quarter, led to substandard operating and financial results.

The fourth quarter marked the beginning of the execution phase of the modified boiler reliability capital plan at DRP which was enabled by the completion of the bond financing during the prior quarter through the Michigan Strategic Fund. Once these items are completed, the boiler system at DRP should be in the necessary condition to achieve the level of consistent operational performance that delivers acceptable profitability.

DT’s fourth quarter results were in line with expectations, as the first and fourth quarters typically demonstrate the strongest financial performance due to the highly seasonal nature of this business. As a result of colder weather conditions and customer additions over the past three years under DRE’s ownership, steam sold during both the fourth quarter and the full year was at the highest volume achieved in five years. During the quarter, there were two new customer additions.

In other growth initiatives, HES added a new location in the quarter, providing power block and wastewater treatment outsourcing services that will begin in early 2014. In addition, we previously announced that DRE had signed a long-term contract with General Motors to replace the aging, coal-fired boilers at its Hamtramck, Michigan plant with environmentally sound and lower cost steam through a significant expansion of DT’s pipeline, while leveraging much of the infrastructure of DRE. We remain on target to provide “first steam” in 2014.



Robert Quinonez
Chief Operating Officer

Erickson is a leading construction services and prefabricated building products company that provides turn‐key framing services, framing packages, trusses and other products to builders and developers. Erickson’s primary geographic markets include Arizona, Northern California and the greater Reno, NV area. Atlas formed Erickson by acquiring Erickson’s core assets in October 2012.

Erickson reported an RIR of 8.6 for the fourth quarter of 2013, a slight improvement from 9.0 for the fourth quarter of 2012. For all of 2013, Erickson reported an RIR of 10.0. While these results are well below our expectations, they represent a significant improvement over pre-acquisition performance and full year 2012 RIR of 14.4. All Erickson divisions are showing year-over-year improvement in safety, with Erickson’s largest division, Arizona Framing (“AZ Framing”), demonstrating the greatest improvement. In 2013, management revamped Erickson’s hiring and new employee training program and implemented changes to safety staffing and field auditing practices.

The fourth quarter of 2013 marked Erickson’s second consecutive quarter of profitability. For the full year of 2013, Erickson’s performance outpaced our investment thesis, representing a sizeable improvement over predecessor performance. As Erickson completes its seasonal winter slowdown, we remain focused on cost control and avoiding negative contribution work that is typically available during the slow winter months.

Erickson’s core housing markets in Arizona, California and Nevada continued to show signs of improvement, although to date, the pricing recovery has substantially outpaced volumetric recovery (i.e. housing starts). Median home prices in Erickson’s markets have returned to pre-boom levels while single family housing starts in these same markets are at approximately 30% of pre-boom levels. Because Erickson’s business is driven by housing starts, we remain quite optimistic that Erickson is in the early stages of recovery.

In spite of a slow market recovery, Erickson’s first full year with Atlas was filled with accomplishments. After five years of consecutive monthly losses, Erickson achieved its first positive month of profitability in July of 2013, well ahead of the schedule we had anticipated in our investment thesis. As an encore, Erickson reported positive monthly profitability for the remainder of 2013. Enabled by this strong financial performance, Erickson completed a refinancing in 2013. With the turnaround moving faster than anticipated, Erickson was able to return capital while maintaining ample liquidity to fund future capital requirements.

One of the highlights of the year was a visit from President Barack Obama. The President spent about an hour on-site at AZ Framing on August 6, 2013, touring the facility, meeting a handful of Erickson’s employees and gaining an understanding of Erickson’s business.

Our decision to partner with Erickson’s prior leadership to complete the acquisition and then continually upgrade management has proven effective. The successes in 2013 are a testament to management’s commitment to take Erickson “back to the future”, returning to the operating approach that delivered success in previous decades. While 2013 performance is indicative of solid progress, we believe the fundamental principles established in the Erickson Turnaround Plan - operating safely, focusing on profitable work instead of market share, and driving operational efficiency through training and incentives - will enable continued progress in quarters ahead. We look forward to continued improvement at Erickson.



Deba Mukherjee
President and Chief Executive Officer

At Finch, we remain focused on managing safety. Our 2013 year end recordable incident rate (RIR) was 2.5 compared to a year end 2012 rate of 1.8 and a Q3 2013 rate of 1.9. Lost Time Days Away rate (LTDA) was 1.1 vs. a year end 2012 rate of 0.5 and a Q3 2013 rate of 1.0. Staffing reductions in 2013 resulted in placing employees in unfamiliar positions which negatively impacted our safety performance. In 2014, we are focused on getting “back to basics” through increased communication, SOP development, and training of our salaried and hourly workforces.

Q4 2013 showed significant improvement in financial performance versus Q3 2013, driven primarily by dramatic progress in operational performance. Average finished production for the quarter marked the third-highest quarterly production in company history. This performance demonstrated a marked improvement compared to Q3 2013, and Q4 2012.

For 2013, AF&PA reported that demand for uncoated free sheet continued its decline, shrinking by 2%. Significant capacity closures announced late in Q3 are expected to correct the industry supply-demand imbalance by eliminating a significant percentage of North American uncoated free sheet capacity. Finch’s selling price increased in Q4 vs. Q3 2013, largely due to continued pricing discipline ahead of the capacity closures that will be finalized in February 2014.

While 2013 was a year of transition for both Finch and the uncoated free sheet industry, we look forward to taking advantage of these recently announced capacity reductions. In addition, we are making significant progress on the execution of our transformation plan that will position the organization to perform regardless of industry conditions.



Larry Richard
President and Chief Executive Officer

Forest Resources’ safety metric, DART (Days Away/Restricted/Transferred) rate for Q4 2013 was 1.2 compared to the 1.8 industry average. Forest’s TRR (Total Recordable Rate) for Q4 2013 was 1.2 compared to the 3.2 industry average. This quarter’s safety performance indicated a positive trend in the incident rates for Forest as we increased focus on safety awareness and culture at our mills, where most of the recent incidents occurred.

2013 was a an excellent year for Forest, as profitability reached a record high, while Q4 2013 performance improved relative to Q4 2012. Financial improvement at Forest in Q4 2013, as compared to Q4 2012, is largely attributable to selling price increases, offset partially by higher fiber input cost prices. At Hartford City Paper, higher machine efficiency increased production levels compared to the fourth quarter of 2012. Orders and pricing both remain firm in HCP’s end markets, although there appears to be early signs of increased competition in the market. Production at Ivex Specialty Paper (“Peoria”), our specialty grade mill, was higher on a tons per day basis for Q4 2013 compared to Q4 2012. Peoria’s primary product, crepe paper for the sewn bag industry, saw marginally decreased sales over Q4 2012 due to market pressure from product substitution. Peoria remains focused on new product development based on the capabilities of the recently installed calendar stack. Shillington Box sales volume and profitability increased in Q4 2013 over Q4 2012 with higher margins. Reduced manufacturing costs, driven by the use of lighter weight purchased corrugated sheets, and improved operating efficiencies were the principal components of Shillington’s increased profitability.

The North American folding carton market remained firm in the fourth quarter over a very soft 2012. Strathcona Paper’s production and sales volumes were down in Q4 2013 compared to Q4 2012 due to unscheduled mechanical downtime and a lower Canadian dollar. Price increases for coated recycled board implemented during the prior quarter helped offset lower Strathcona production and sales. Boehmer Box Q4 order volumes, revenues, and profitability were all up significantly year-over-year. The fourth quarter saw higher levels of order bookings, which should continue these trends into the new year.

Containerboard markets are in balance, but with slightly lower levels of inventory than in recent quarters. Fiber prices are expected to seasonally rise above current levels during the first quarter. Recently depressed waste paper export markets have only strengthened modestly. Further, new containerboard capacity coming into the market is starting to impact waste paper pricing in Strathcona Paper’s northeast market. Both the containerboard and folding carton/CRB markets are expected to show year over year volume growth, and face selling price pressures in an increasingly competitive market during the first quarter.



Richard Yarbrough

Kurt Liebich
President and Chief Executive Officer

In September 2013, Atlas established New Wood to purchase Olympic Panel Products (“Olympic”) and Omak Wood Products (“Omak” and together with Olympic, the “Subsidiaries”) from Wood Resources LLC (“Wood Resources”). Olympic, based in Shelton, WA, is a leading manufacturer of overlay plywood. Omak, based in Omak, WA, produces veneer and began its production restart in October of 2013. Omak was previously known as the Colville Indian Plywood & Veneer mill. The Confederated Colville Tribes operated the mill from 2002 until 2009, when the harshest decline in the construction industry in 50 years forced its closure.

During the fourth quarter, New Wood had three recordable incidents, two of which were at Omak, resulting in a company-wide RIR of 3.3 during the fourth quarter of 2013 and, after considering pre-acquisition periods, an overall RIR of 3.8 for the year ended 2013 as compared to the fourth quarter and full year ended 2012 of 3.0 and 3.6, respectively. In the quarter, Olympic had its best safety performance in the last twelve quarters and considering that Omak’s employee base was newly hired and undergoing startup activities, its performance was also encouraging. Although there remains much room for improvement, the results at Olympic and Omak are a credit to well-executed safety plans and communication in the organization by both managers and associates.

Omak began start-up activities after nearly a year of engineering, facilities and equipment assessments, recruiting of a leadership team, re-engaging the foresters in the region and establishing a staffing plan in concert with local community employment organizations. Omak commenced peeling logs and producing veneer in October and improved its production metrics each month during the fourth quarter. Management anticipates a measured ramp-up of production through the first half of 2014. Omak’s production of veneer will eliminate the need for Olympic to run its green end (log peeling), simplifying the cost and complexity of the planned facility move as Olympic has until June 30, 2016 to relocate its operations from its current site in Shelton, WA. Olympic has made substantial progress on the identification and assessment of a number of potential alternatives for its new location, many of which include attractive incentives provided by local municipalities and development authorities.

As the Atlas principals have worked actively with New Wood Resources management and key Operating Partners over the last decade, we anticipate exploring strategic Bolt-ons as a means of leveraging the company’s infrastructure and management capabilities, accelerating growth and further diversifying geography and end markets. We are optimistic about the potential of New Wood and believe the company will be well-positioned to take advantage of a recovery in commercial and industrial spending.



Henrik Krabsen Jensen
President and Chief Executive Officer

The Pangborn Group had no lost time accidents in 2013. Our trailing twelve month recordable incident rate at the end of December 2013 is zero, down from 1.1 in 2012 and 2.3 in 2011.

The implementation of our Continuous Improvement / Lean projects continued in Q4. Our focus for the next six months is to accelerate implementation in our German facilities and to introduce Continuous Improvement / Lean in our new entities, Pangborn China and Pangborn SES.

During Q4, we began to integrate the newly acquired company, SES. We consolidated our legacy UK facility into the SES facility and we now have a fully functional manufacturing and sales company serving the European and Middle Eastern markets. The market response has been very positive and we received several new equipment orders for delivery in 2014. As a next step at Pangborn SES, we will start to build the aftermarket business and implement a number of operational improvements. Overall, Q4 2013 developed as we had expected with the delivery of several large equipment orders. As a result, revenues and profitability for the quarter were up compared to Q4 2012. Full-year 2013 profitability was impacted by changes in the sales mix in a price competitive environment resulting in lower gross margins and profitability.

Market conditions in North America and China continue to be favorable. We also see the European market beginning to strengthen with increased parts and equipment orders. We started the manufacturing activities in our newly established China facility and we are progressing according to plan. Our 2013 year-end equipment backlog is at a good level and we expect the markets will remain relatively strong in 2014.



R. Douglas Lane
President and Chief Executive Officer

Phoenix Services International LLC (“Phoenix Services” or the “Company”) reported an OSHA recordable rate of 3.6 for the quarter ended December 31, 2013, which compares to the quarter ended December 31, 2012 rate of 1.9 and the national slag industry standard of 5.0.

Phoenix Services continues to increase its business under contract and is now operating at over 40 sites globally. The Galati scrap yard started up successfully, with scrap moving smoothly throughout the mill complex. The North American Stainless startup is going smoothly, with full start-up expected for March 2014. Polish ferrochrome operations are running smoothly, and importantly, the product has been well received in the market. Domestically, the weather has not assisted Phoenix, as mill clients have run at lower utilization rates due to cold weather.

Phoenix Services’ sites are running well and continue to benefit from positive macro-economic trends in the steel sector. According to the World Steel Association, global steel production for 2013 was up 2.4% relative to 2012. While it is worth noting that the Company’s results are not strictly correlated to the results of the steel industry, these statistics are consistent with the Company’s experience.

Phoenix revenue and profitability in Q4 2013 were up significantly compared to Q4 2012. Phoenix’s 2013 revenue and profitability were also up significantly year-over-year. The Company continues to focus on operational excellence and attractive growth opportunities and has the capitalization needed to execute its plans. The Company continues to evaluate new opportunities and is specifically considering multiple opportunities in Latin America. We remain extremely optimistic about the prospective performance and growth at Phoenix Services.



Kurt Liebich
President and Chief Executive Officer

The safety of RedBuilt associates continues to be our top priority; however, our recordable incident rate for the 2013 has been disappointing. Year to date, ten RedBuilt associates have been injured on the job, resulting in a recordable incident rate of 3.17, significantly higher than our target of less than 1.0 and our rolling average of 1.75. The good news is that we have only had one lost time accident and none of our incidents have been severe. Our focus has been on limiting the number of events that can lead to safety incidents; we have begun to see some encouraging results due to that focus.

The level of commercial activity continues to trend in positive territory, particularly in the Western US. The AIA’s Architecture Billings Index (“ABI”) continues to forecast an improvement in commercial construction. The ABI is a leading economic indicator that provides an approximately nine to twelve month glimpse into the future of nonresidential construction spending activity. Architecture firms have reported growth through most of 2013, with the greatest improvement coming in multi-family residential projects and  commercial activity in the Western US. Year-to-date core commercial quoting activity has increased over last year and bookings have increased significantly year-over-year. The majority of this improvement comes as a result of price increases implemented in the first quarter of 2013. Our current order file is strong going into 2014, at a level that is far above the same time last year.

From a financial perspective, net sales for the quarter increased over the same period in 2012. The return of raw material pricing to normalized levels, combined with achieving higher net realizations, resulted in RedBuilt’s gross margins increasing relative to the fourth quarter of 2012. As a result, profitability in the quarter was significantly higher than in the fourth quarter of 2012. On an annual basis, 2013 sales and profitability greatly increased compared to 2012.

Our optimism for the first quarter of 2014 remains high. Our orderfile remains strong,   and though raw materials are rising, our pricing structure is expected to keep pace with those higher input costs. As overall business activity, and commercial construction activity in particular increases, we expect to see improved financial performance throughout the year.



George Wurtz
President and Chief Executive Officer

Soundview, headquartered in Elmwood Park, New Jersey, manufactures and distributes bath tissue, towel, napkin and facial products made from recycled and virgin fiber to retailers such as grocery stores, drug stores, office supply and dollar store chains, as well as to wholesale distributors, food service and janitorial supply companies. Soundview commenced operations in April 2012 when it acquired the equity and debt of Marcal Paper Mills, LLC.

Soundview reported an RIR of 1.6 for the fourth quarter of 2013, a very significant improvement from 5.8 for the fourth quarter of 2012, pro forma for the Putney acquisition. For the full year 2013, the company experienced an RIR of 2.7, down relative to an RIR of 3.7 in 2012, pro forma for the Putney acquisition. Soundview New Jersey showed an improvement in safety performance with a year to date RIR of 1.7, down from 1.8 during 2012. Soundview Vermont’s year to date safety performance exhibited significant improvement, with an RIR of 7.4 relative to a 2012 RIR of 12.7. Nonetheless, safety results in Vermont remain unacceptable, with ten recordable incidents in 2013. Management is committed to achieving world class safety performance and safety leadership will be improved to drive employee accountability and safe work practices.

In the fourth quarter of 2013, Soundview generated higher revenues as compared to the same quarter in 2012. Soundview’s fourth quarter 2013 profitability was impacted by higher energy costs and a slowdown in parent roll sales out of the New Jersey location.

On the operations front, Soundview continued its trend of increased tissue production rates and efficiency. In the fourth quarter, the company averaged higher parent roll tons per day of production than the next highest quarterly average during 2013. The improvement was consistent across the locations as both New Jersey and Vermont beat their previous quarterly highs. As part of management’s ongoing “War for Talent”, the team hired Ben Wenberg as Director of Converting. Ben, an industry veteran with more than 20 years of experience at Kimberly-Clark, brings much needed converting experience to the New Jersey location.

Soundview’s revenue continued its upward trend with the fourth quarter marking the  highest average converted cases per week sold under Atlas ownership. In the Private Label segment, we began shipping product to two major customers, which we expect to continue ramping up in the coming months. The company also began shipping to a recently-won customer in the Away from Home segment. In the At Home segment, the company redesigned the packaging graphics on most Marcal branded products, receiving positive reviews in consumer testing.

We remain excited about the continued growth and operational improvements taking place at Soundview as well as the long-term prospects for the company. With our team of experienced management partners leading a group of motivated employees, Soundview is well-positioned to take further advantage of its strengthening market position and physical proximity to one of the most densely populated markets in North America.



Tim Lowe
Chief Executive Officer

Twin Rivers is an integrated manufacturer of lumber and specialty packaging, label and  publishing paper products. The company operates a paper mill located in Madawaska, Maine, a pulp mill and cogeneration plant located in Edmundston, New Brunswick and a lumber mill located in Plaster Rock, New Brunswick. Atlas, in partnership with Blue Wolf Capital (“Blue Wolf”), acquired a controlling interest in the company in June 2013.

Twin Rivers’ RIR during the quarter was 3.1, down sequentially from 4.1 in the third quarter of 2013. One-on-one safety reviews were conducted across the company’s facilities during the fourth quarter, and management has plans to roll out a behavioral safety training program over the course of 2014 that will focus on risk identification.

Pulp and paper results were mixed during the fourth quarter. Sulphite pulp production neared targeted daily production. However, an induced draft fan failure during December at the cogeneration plant negatively impacted production which resulted in increased energy costs during the quarter. Paper production and paper volume sold was up modestly over the prior year period while pricing and mix were characterized by strength in publishing papers and weakness in label. We continued our War for Talent during the quarter, welcoming Tony Rigelman as Vice President of Sales in December. Tony has over 19 years of industry experience and most recently served as Director of Sales for Technical and Specialty Papers at Domtar.

On a sequential quarterly basis, the Plaster Rock sawmill’s fourth quarter was characterized by improved pricing, expanded conversion margin and seasonally sluggish volumes. During the quarter, management made significant headway on the installation of a new dry kiln in preparation for a third shift that will be added in May 2014.

Financial performance across all operations benefited from the weakening Canadian dollar, as a significant portion of the company’s products are produced in Canada and sold into the United States.



Henrik Krabsen Jensen

In November 2013, Atlas commenced operating the newly-formed Veritas Steel LLC (“Veritas”). Veritas is a leader in the steel bridge fabrication industry with extensive experience in the manufacture of highly complex bridge structures. Veritas produces a complete line of bridge structures ranging from simple plate girder bridges commonly found in highway overpasses and interchanges to complex bridges such as arch, bascule (drawbridge), cable-stayed, lift, railroad, suspension and truss designs. Veritas has three facilities located in the Midwest and Southeast.

As part of the transaction, Veritas added significant expertise and leadership with the addition of Richard Phillips and Henrik Jensen to the executive team and Board of Directors of Veritas. Mr. Phillips most recently served as CFO of Hirschfeld Industries, one of the country’s largest bridge fabricators. Mr. Jensen, who serves as the Chairman of the Board of Veritas, is currently the CEO of Atlas portfolio company, Pangborn Group.

For the two months of Atlas ownership ended December 31, 2013, Veritas reported an RIR of 5.0. During due diligence, we and our Operating Partners recognized an absence of a strong safety culture. Since the acquisition, management has worked to establish a renewed safety vision, updating company safety principles and revising safety processes. The team also installed a dedicated safety professional in the Eau Claire, Wisconsin facility and is working with additional Atlas Operating Partners to continuously improve the safety culture of the organization.

As is typical of Atlas investments, the immediate focus is to stabilize the company, build the analytics to provide focus around the KPIs, right-size the cost structure and refocus marketing efforts to capitalize on the company’s capabilities and accelerate high-margin volume growth. Management immediately began meeting with important current and former customers to present the Veritas story, including its strong balance sheet, and to discuss future bridge fabrication opportunities. The early results from these efforts have significantly outpaced our expectations. New customer commitments in additional backlog have been won by Veritas in our short time of ownership and with the Tappan Zee Bridge project in New York State continuing to consume a significant amount of industry capacity, management anticipates continued growth in backlog in 2014. In addition, renewed access to bonding resulting from our acquisition and the establishment of a solid balance sheet has been a major selling point that has resonated with customers. Management has also begun to implement a new “Operational System” to review and improve all areas of the business while eliminating duplication of efforts. The team is also revamping estimating processes to better understand anticipated costs and margins before bidding.

We are excited by Veritas’ potential to return to the excellent financial performance and strong market position historically achieved and we believe the company is well-positioned to take advantage of significant growth opportunities, capitalizing on increased access to bonding to secure new jobs, a more flexible capital structure and favorable long term market dynamics.




Tara Russell
Founder and CEO

Create Common Good (“CCG”) uses food to change lives and build healthy communities. We broadly impact communities through our training and feeding programs. We provide job training and employment to a broad base of populations with barriers to employment, youth development programs, and a wide variety of healthy food access programs. CCG is a non-profit social enterprise that offers food service staffing talent, food products and food services to institutional food service customers.

After just six months in our new facility, CCG’s fourth quarter of 2013 brought consistency and improvement in the overall financial sustainability of our social enterprise model. In the last quarter, CCG’s earned revenues as a percentage of overall revenues increased significantly compared to FY 2012. We’re aggressively moving into greater organizational health each quarter.

CCG now has an extensive waiting list for job-training clientele and is exploring ways to add additional job training courses and build greater capacity within our new space. We finished the year strongly with an overall job placement rate of 95% and are working with new partners in Seattle and exploring other geographic locations as sites for potential replication.

Our pipeline for new regular volume food production clients is healthy and growing; the greatest short-term opportunities include taking on the daily snack and lunch feeding for the YMCA’s 22 childcare centers (pilot begins in March 2014) and additional potential food products for Jackson’s Food Stores throughout the Pacific Northwest.

We successfully closed out 2014 with our “$50K in 30 days” campaign, exceeding our goal. We look forward to 2014 bringing tremendous additional progress with significant new global corporate partnerships on the horizon.