Atlas First Quarter 2014 Review

Report for the Quarter Ended March 31, 2014

Atlas Holdings had a good start to 2014, establishing a new platform business and revving up the “Bolt-on” acquisition engine in existing platforms to accelerate growth and value creation in our portfolio companies that have reached stability. While operating metrics in our companies were generally strong, exceptionally severe and prolonged winter weather dampened financial performance, particularly in those businesses most acutely sensitive to energy costs and logistics. Finally, we continue to make progress in the War for Talent, as we welcome Tracy Glende and Jim Sykes to the Atlas family. Tracy joins us as the newly appointed President and CEO of Veritas Steel and Jim has been named President and CEO of ASG Amaray, the global plastic packaging company within the ASG Group.

During the quarter, our newly formed Greenidge Generation Holdings completed the acquisition of Greenidge Generation. Greenidge is a 104MW coal-fired power plant that was idled during the bankruptcy of its parent corporation. Greenidge is our first execution of a strategy we have been developing for investing in the rapidly transforming power generation industry and represents the kind of asymmetric return profile we seek in our acquisitions. The Greenidge power plant remains idled, but we have been in active discussions with the New York Department of Environmental Protection concerning our re-start plans and the reception has been favorable. In the quarter, we also completed the Bolt-on acquisition of a currently idled veneer and plywood mill located in Louisville, Mississippi through New Wood Resources and reached agreement on another Bolt-on: the purchase of a specialty packaging business in Bydgoszcz, Poland through ASG.

Workplace safety is the foundation of our business activities, and we are pleased, but not satisfied, with the progress evidenced in the first quarter. Many of the businesses we acquire demonstrate poor safety metrics as an adjunct of (or perhaps, as a significant cause of) poor operating and financial performance. As a result, the trend of aggregated safety KPI performance across the Atlas portfolio can be deceiving as we add new businesses. Instead, we focus on safety performance at the individual company level, recognizing that the challenge of sustaining world-class safety performance in our more mature businesses requires a different tool-kit and management approach than the urgent challenge of addressing the myriad unsafe practices and behaviors in some of our more recent acquisitions. For example, a safety “star” of the first quarter of 2014 was Erickson Framing, which delivered a Recordable Incident Rate of 3.9 (down from pre-acquisition RIR of 8.1 in the first quarter of 2013), a performance that is tremendously encouraging for this business but would be unacceptable and quite troubling if delivered by a mature portfolio company with a strong safety culture. We congratulate the team at Erickson who is making workplace safety a key priority. We report on safety performance at each of our companies in the body of this report.

In general, it has been a challenging start to what we still anticipate will be a solid 2014. Soundview Paper Holdings LLC delivered the most impressive financial performance gains among our companies, while quarter-over-quarter performance at Bridgewell Resources, Detroit Renewable Energy, Finch Paper, Forest Resources and Erickson was limited by weather-related effects. Phoenix Services added another chapter to its remarkable growth story with an excellent quarter, while the Pangborn Group and RedBuilt continued their solid performance.

We hoped that the weather’s impact on our portfolio companies had subsided by quarter’s end. Unfortunately, just as this report was being completed, our New Wood plywood mill in Louisville, Mississippi was seriously damaged by a massive tornado. At this time, the status of the plant and equipment is unclear. Fortunately, none of our associates or contractors were injured. We are committing people and resources through New Wood, other Atlas portfolio companies and the Atlas Foundation, to provide assistance to the devastated community of Louisville and we will report to you about our plans for the Louisville plant once we are able to complete our site assessment.

The U.S. economy was disrupted by the same extended harsh winter weather that impacted many of our businesses in the first quarter. While most pundits (including yours truly) continue to believe that 2014 should be a solid year for the U.S., the triple whammy of high energy costs, logistics challenges and dampened consumer purchasing as many Americans in the Midwest and Northeast remained bundled in their homes led to a surprisingly soft three months across many sectors. As the Spring thaw began late in quarter one, signs of a rapid snap-back began to appear. Europe appears to be stabilizing and we believe many of the distressed market sectors and geographies we have been tracking on the Continent are becoming investable. China remains challenging for export-driven enterprises, but the domestic economy continues to show robust growth and is where we are most attentive.

With the intense grip of winter now released, we are feeling optimistic about our portfolio and its performance in quarters ahead. We look forward to sharing results and discussing our progress with you. As a final note, should you have an interest in joining us to provide support to Louisville, please send us an email. We are hopeful that we can play a meaningful role in addressing the immediate, substantial needs of this Atlas community.

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

Timothy Fazio
Managing Partner
To contact Tim by e-mail, please click here



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 of MeadWestvaco Corporation and combining it with the Shorewood Packaging business purchased from International Paper Company.

On the safety front, ASG achieved an aggregate RIR of 0.6 in the first quarter of 2014, which is identical to the level achieved during the first quarter of 2013. ASG’s North America division (“ASG NA”) had three recordable incidents and one lost work day incident during the quarter, ASG’s Europe division (“ASG Europe”) had one recordable incident and one lost work day incident and ASG’s Asia division (“ASG Asia”) unfortunately ended its long perfect safety record with one recordable incident at its Kunshan facility. ASG’s Mexico division (“ASG Mexico”) had zero recordable incidents in the first quarter, extending its streak of zero recordable incidents to 11 consecutive months.

ASG experienced a tough first quarter in 2014, reflecting a year over year softening in performance across all business segments except for ASG Asia, which exhibited modest growth relative to first quarter of 2013.

ASG NA’s revenue and profitability declined in the first quarter of 2014 relative to the first quarter of 2013. This decline in profitability was experienced in both the print and plastics divisions and was driven primarily by reduced sales of media related products. In the print division, ASG executed a number of significant actions to position the business for improved profitability in the face of declining media sales. Gains were made in non-media consumer sales, with significant wins of non-media business achieved during the quarter. In the plastics division, the decline in revenue experienced during the quarter was primarily attributable to weak pull through of plastic packaging out of customers’ inventories during the fourth quarter of 2013.

ASG Mexico experienced a modest decline in in the first quarter of 2014 compared to the same period in 2013. This was driven by decreased sales to most customers, as well as margin erosion on confectionary and cosmetic accounts. Additionally, management was occupied with the move of production equipment as part of the consolidation and reorganization of the Mexico facilities following the sale and removal of the gravure assets. Despite the disappointing first quarter results, a strong sales pipeline in combination with the completion of the reorganization activities bodes well for performance in the balance of the year.

ASG Asia continued its strong growth trajectory, generating higher profitability and revenue during the first quarter of 2014 compared to the first quarter of 2013. The good results were driven in large part by growth in sales of packaging for consumer products in the Chinese domestic market which more than compensated for sales declines with customers in the weakening export sector. Labor cost increases were offset by productivity gains enabled by improved KPI tracking. These strong results were achieved while executing a restructuring resulting from the wind-down of the gravure manufacturing supply agreement and the dismantling, packaging and shipping of the gravure assets that were sold.

ASG Europe experienced a slight decline in revenue in the first quarter of 2014 relative to the same period last year. The decline in revenue occurred on the print side of the business and was primarily attributable to reduced media sales. In the plastics division, both revenue and profitability improved modestly over the same period in 2013. The top line was bolstered by strong demand for multi-disc products during the quarter.

There were two significant developments at ASG that occurred shortly after the end of the first quarter. On April 8, ASG signed a binding agreement to acquire a beauty and personal care packaging business in Bydgoszcz, Poland. This is a transformative acquisition for ASG Europe with many benefits including: (i) the addition of a significant book of non-media business to ASG Europe and a strong foothold with non-media customers, (ii) significant expansion of ASG Europe’s presence in Poland, a strategically important production location given its lower cost structure relative to other European countries and (iii) a modern, well-capitalized plant with well-maintained equipment. The addition of the Bydgoszcz facility will create substantial synergies and enable the realization of significant cost savings.

The second significant development was an important victory in the War for Talent - the hiring of Jim Sykes as President and CEO of ASG Amaray, ASG’s plastics division in both North America and Europe. Jim is a recognized leader in the plastics molding industry, bringing more than 25 years of experience to Amaray. Jim will be focused exclusively on Amaray and its growth into new product categories and markets. To date, ASG Amaray has been managed as part of ASG NA and ASG Europe. Given the potential for these businesses, ASG Amaray will now be managed as a separate business unit, and we believe Jim is the ideal leader.



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 first quarter of 2014, the company achieved an RIR of 0.0, compared to 0.0 RIR for the first quarter of 2013 and an RIR of 0.5 for all of 2013.

While revenues were down in the first quarter relative to the prior year, gross profit increased, largely a result of increased margins. The majority of the sales decline in the quarter relative to the prior year occurred in the Contractor Direct division (“CD”), where severe winter weather dampened construction activity. The level of new bookings activity throughout the first quarter suggests that future quarter comparisons should be more favorable.

Bridgewell saw mixed results in the Key Performance Indicators (“KPIs”) that we use to track the business. One KPI used to track trader efficiency is “Sales Expense/Gross Profit”. In the first quarter, the Sales Expense/Gross Profit increased in comparison to the same period in 2013, largely reflective of the concentration of gross profit in a smaller number of traders than the normal distribution, which resulted in an elevated commission rate for the month. Another KPI, used to track working capital efficiency, is “Cycle Days”. For the first quarter of 2014, the average Cycle Days for the first quarter was higher, in comparison to the same quarter in 2013, largely driven by elevated Days Receivables Outstanding in January and February from delayed collections in CD. This KPI improved over the course of the quarter, with March Cycle Days in line with anticipated performance.

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.

DRE had four recordable incidents across its business units which resulted in an RIR of 7.1 during the first quarter of 2014, although for the last twelve months, the RIR of 1.7 is still well within the industry standard. Harsh weather conditions contributed to the first quarter’s unsatisfactory safety record and management’s focus has not wavered in pursuit of achieving consistent first quartile safety results.

For the first quarter, DRE generated higher revenue but lower profitability compared to the same quarter in 2013. Financial and operating results in the first quarter were negatively impacted by the brutally cold and snowy winter experienced in the Detroit area. While the extreme cold enabled DT to sell the most steam to its customers volumetrically since 2007 and DRP experienced much improved boiler reliability, heavy snow through much of quarter severely limited the availability of municipal solid waste (“MSW”). As a result, DRP’s boilers, while available, were forced offline or ran at significantly reduced loads. The financial impact of diminished MSW availability was severe, as tipping fees, metal and electricity revenues were reduced and DT had to burn expensive natural gas (in lieu of DRP steam) to satisfy increased customer demand.

Although DRE’s financial performance for Q1 2014 was a disappointment, we are encouraged by the improvement in what had been the primary reason for disappointing financial results at DRE since the inception of the investment - boiler operating reliability at DRP. We are hopeful that first quarter plant operating performance at DRP is evidence of improving boiler reliability resulting from the company’s capital expenditure program.



Robert Quinonez
Chief Executive 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 3.9 for Q1 2014. This represents a significant improvement over pre-acquisition performance and Q1 2013 performance of 8.1. Three of four Erickson divisions are showing year-over-year improvement in safety, with all three reporting an incident-free Q1 2014. Erickson’s RIR was well over 20.0 before the Atlas acquisition. We are extremely proud of the safety progress at Erickson and expect this trend to continue as a world class safety culture is embedded at the company.

Erickson’s first quarter revenue was down slightly compared to the previous quarter, but profitability improved. The decrease in revenue is reflective of a stubbornly slow housing recovery in both Arizona and California markets.

Arizona Framing (“AZ Framing”) continues to focus on margins rather than volume. This strategy is challenging to sustain during the seasonally slow first quarter; however, contribution margins suggest that management has done a good job preserving adequate pricing. As a result, we believe that AZ Framing is well positioned to generate substantially improved profitability as the seasonal pickup gets underway. Erickson’s door molding and millwork business (“DSI”) is co‐located with AZ Framing. DSI reported strong results in Q1 2014. DSI experiences a different seasonal cycle than the other divisions and serves as a nice stabilizer to the business during the Q4/Q1 slowdown in the framing divisions.

The California Framing division (“CA Framing”, which includes the Nevada Framing operations) represented a tale of two cities in Q1 2014. In California, volumes declined precipitously and the division reported decreased revenue while in Nevada, performance was excellent and substantially above prior year results California’s direct margins remain the highest across Erickson and management is evaluating whether its pricing strategy is impacting its ability to win business, particularly in light of a disappointingly soft marketplace.

An important management change was announced at the end of Q1 2014. CEO Bob Quinonez, affectionately known as BQ, indicated that he will be retiring at yearend. BQ will move into the role of Chairman of the Board of Erickson. Stepping into the CEO role will be current CFO Rich Gallagher, who joined the company in July of 2013. Rich has been a key member of the senior leadership team during Erickson’s turnaround and he has demonstrated the ability to effectively lead the organization. We look forward to working with Rich as he prepares to take over the leadership reins.



Deba Mukherjee
President and Chief Executive Officer

After an extended period of significant excess supply in the uncoated freesheet market, the capacity closures announced in the second half of 2013 were finally completed by the end of Q1 2014. Finch continues to use the recent changes in the market as an opportunity to diversify its product portfolio and increase its exposure to new markets.

In safety, our RIR for Q1 2014 was 3.6 as compared to a year-end rate of 2.6 in 2013. Our lost time incident rate (LTIR) for Q1 2014 was 1.8 versus a year-end rate of 1.2. The first quarter of 2014 has presented Finch with the continued challenge to shift our safety culture from compliance to commitment based. Our current efforts continue the focus on reinvigorating our joint safety committees while emphasizing behavior-based safety and elevation of the awareness of risk. The paper mill organization is rolling out behavior-based safety training across all crews in April. We expect the increased employee engagement in our safety work processes to pay out in identifying and addressing risks before they lead to injuries.

Record cold temperatures this winter resulted in 66 days of natural gas curtailment, compared to 22 days of curtailment for the same period last year. As a result, energy costs were significantly higher in Q1 2014 compared to Q1 2013. Fortunately, strong operational performance, coupled with diverse product mix and pricing discipline, helped mitigate the energy costs. From a production standpoint, paper machine and pulp mill production were both robust.

As supply is now more appropriately balanced with demand, Finch is well positioned to take advantage of the recently completed capacity reductions by some of our larger competitors. In addition, we continue to make 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 Q1 2014 was 0.6 compared to the 1.8 industry average. Forest’s TRR (Total Recordable Rate) for Q1 2014 was 1.2 compared to the 3.2 industry average. This quarter’s safety performance indicates a continuing positive trend in the incident rates for Forest as we increase focus on safety awareness and culture.

Financial performance at Forest was impacted negatively by extreme winter weather and higher fiber costs. Hartford City Paper’s production level during the first quarter was up from its level in the first quarter of 2013. Orders and pricing held firm for most of the quarter after some year-end softness. Production volume at Ivex Specialty Paper (“Peoria”), our specialty grade mill, was down slightly compared to the same period in the prior year. Peoria’s primary product, crepe paper for the sewn bag industry, saw a marginal rise in sales, while most other grades saw reduced sales volumes. Shillington Box sales revenue and volumes increased in Q1 2014 over Q1 2013 while selling prices remain under pressure in the competitive St. Louis area box market. Shillington’s improved competitiveness is a direct result of the new Isowa flexo folder-gluer installed in 2012, reducing manufacturing costs and improving operating efficiency.

The North American folding carton market softened somewhat in the first quarter of 2014, evident in reduced mill order backlogs. Strathcona Paper’s production and sales volumes were down in Q1 2014 compared to Q1 2013 due to operational problems, some weather related, and major scheduled downtime to install the first phase of the paper machine drive upgrade. Q1 sales volumes and net revenues at Boehmer Box are up year-over-year. The first quarter has seen very competitive quoting for large blocks of business. Overall, higher sales volumes with slightly lower margins allowed Boehmer Box to deliver increased year over year profitability.

Containerboard markets remain in balance despite some of the anticipated new capacity already in the market. Fiber prices are expected to seasonally rise during the second quarter. While the waste paper export market remains soft due to China’s uncertain demand, new containerboard capacity is impacting waste paper pricing regionally.



Richard Yarbrough

Kurt Liebich
President and Chief Executive Officer

In September 2013, Atlas purchase Olympic Panel Products (“Olympic”) and Omak Wood Products (“Omak”) from Wood Resources LLC. 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.

New Wood had 11 recordable incidents, 10 of which were at Omak, resulting in a company-wide RIR of 11.1 during the first quarter of 2014 and, after considering pre-acquisition periods, an overall RIR of 5.8 for the LTM period. One of the operational challenges in restarts such as that underway at Omak is managing safety in an inexperienced workforce facing constant upset conditions. We are disappointed in the safety performance notwithstanding the restart, and management is committed to accelerating the development of a safety culture at Omak.

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. Management had anticipated a measured ramp-up of production in the first half of 2014 and by the end of the first quarter, Omak had achieved its target of adding a second production shift.

During the quarter, demand for Olympic’s core products continued to improve and Olympic began the implementation of targeted price increases across the majority of its mix. Olympic continues to evaluate a number of potential alternatives in its search for a new location and is currently negotiating relocation incentives provided by local municipalities and development authorities.

In the quarter, we completed the Bolt-on acquisition of an idled veneer and plywood mill in Louisville, MS through New Wood’s newly-established subsidiary, Winston Plywood and Veneer LLC (“Winston”). The Louisville mill, once a top performing plywood mill, was idled in September 2009. Like Omak, the mill needed significant upgrades and refurbishment, including new boilers and new environmental control equipment. However, the building and mill site as well as other key pieces of production equipment remained in excellent condition. As a result, the opportunity existed for New Wood to assist in restarting and then running the mill.

As mentioned earlier in this letter, the Winston facility was struck by a large tornado on April 28. While the facility and equipment were insured, it is unclear at this point how the event will impact our ability to complete rehabilitation and restart. We expect that it will take some time to fully assess the loss, to understand how much additional challenge to our execution plan has been created by this extremely unfortunate event and to discuss with local, state and Federal officials what resources might be made available to support our activities. Undoubtedly, the 400 new jobs that will be created by the Louisville restart will be needed more than ever in this devastated community and we are hopeful that we can catalyze support for the continuation and completion of this important investment.



Henrik Krabsen Jensen
President and Chief Executive Officer

In regards to safety, the Pangborn Group had no lost time accidents in Q1 2014. Our trailing twelve month RIR at the end of March 2014 remains at zero. Our main focus in Q1 was to ensure safety training and emphasis at our new operations in China and the UK.

The implementation of our Continuous Improvement / Lean projects continued in Q1. Our parts delivery performance and lead times have been improved, which are competitive factors in our market segment. Our focus during the upcoming months is to accelerate implementation in our German facilities and to introduce Continuous Improvement / Lean in our new entities in China and the UK.

The integration of the new entities is on track and the quoting volume has increased nicely. During Q1, we delivered our first machines manufactured in China and project volume for locally made China machines is growing. In Mexico, we have established a local sales office and local inventory warehouse to better serve this market.

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. Our equipment backlog is at a good level and we expect that the markets will remain relatively strong throughout the rest of the year.



R. Douglas Lane
President and Chief Executive Officer

Phoenix Services International LLC (“Phoenix Services” or the “Company”) reported an OSHA recordable rate of 1.7 for the quarter ended March 31, 2014, which compares to the quarter ended March 31, 2013 rate of 2.4 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. March 2014 represented the Company’s single most profitable month in its history. In Romania, the scrapyard operation is running smoothly and customer satisfaction remains high. Management believes the scrap yard is the most modern in the world, which enables Phoenix Services to provide just-in-time sorting, blending and delivery to its mill customer. This success recently earned Phoenix Services another long-term slag processing contract at its Romanian operation. Phoenix Services’ new contract at a site in France began in Q1. Phoenix has improved plant throughput and scrap recovery, both key metrics for steel clients. Phoenix will continue to bid additional services at this site.

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 Q1 2014 was up 1.6% relative to Q1 2013. 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.

The Company continues to focus on operational excellence and attractive growth opportunities, and has the capitalization needed to execute its plans. Phoenix continues to evaluate new opportunities and is specifically considering multiple opportunities in Latin America, South Africa and the United States. 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. Year to date, one RedBuilt Associate has been injured on the job, resulting in an RIR of 1.3, near our target of less than 1.0. All safety incidents are investigated, key learnings are shared and corrective actions implemented across the organization.

The overall level of commercial construction activity continues to trend in positive territory, particularly in the western U.S. The AIA’s Architecture Billings Index (“ABI”) and the Dodge Momentum Index continue to forecast an improvement in commercial construction. Architecture firms have reported modest growth the past four months, suggesting that the climate for nonresidential building projects is gaining strength. Year-to-date core commercial quoting activity is flat with last year, though last year’s quoting activity was unseasonably high, and trended down in the second quarter. In 2014, quoting activity has been trending upward the past six weeks. Bookings (projects sold) have increased year-over-year. Our current order file is strong going into the second quarter, at a level that is above the same time last year.

Our optimism for the second quarter of 2014 remains high. Raw materials are rising as expected within our current pricing structure. Our orderfile is strong and trending seasonally upward. 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 New Jersey”). In December 2012, the company acquired an additional facility located in Putney, Vermont (“Soundview Vermont”, and together with Soundview New Jersey, “Soundview”).

Soundview reported an RIR of 2.7 for the first quarter of 2014, an improvement from 2.8 for the first quarter of 2013. Soundview New Jersey showed a slight decline in safety performance with a first quarter RIR of 2.0, up from 1.4 for the same period in 2013. Soundview Vermont’s first quarter RIR was 5.8 relative to a 2013 first quarter RIR of 8.8. Nonetheless, safety results at Soundview Vermont still have significant room for improvement. Management is committed to achieving world class safety performance and continues to develop safety leadership in order to drive employee accountability and safe work practices.

In the first quarter of 2014, Soundview generated higher revenue and profitability compared to the same quarter in 2013. The first quarter’s increased profitability relative to the prior year is primarily due to an improved sales mix, featuring significantly increased converted product sales. Despite improving mix, the financial results in the quarter were held back by higher energy costs and costly operational inefficiencies.

On the operations front, Soundview had a difficult first quarter. Natural gas curtailments led to a deterioration in production rates at both facilities. Furthermore, the abnormally cold winter led to higher than expected energy costs. Both natural gas consumption and pricing were significantly higher than expected and the increased consumption resulted in the New Jersey mill running with lower levels of natural gas inventory, limiting operational flexibility.

The converted products revenue engine continues to perform well. Gross converted sales were up for the quarter relative to the prior year, led by the continued ramp-up in activity from new accounts won in the second half of 2013. In At Home products, new activity during the first quarter resulted in a year-over-year increase with our largest retail customer. Private Label continued to perform well. The Away From Home business had a slow first quarter due in large part to the severe winter.

Management continues to wage the War for Talent, focusing in the first quarter on sales and marketing. Though the first quarter of 2014 brought operational difficulties, we remain excited about the continued growth taking place at Soundview as well as the longterm 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, acquired a controlling interest in the company in June 2013.

Twin Rivers’ RIR during the quarter was an unsatisfactory 4.1, up sequentially from 3.1 during the fourth quarter of 2013. Management led an extensive campaign to reduce winter slips and falls and laid plans to implement SafeStart Phase 1 training, beginning in the third quarter of 2014. Daily safety talks were instituted for all crews at the Plaster Rock facility during the quarter.

Twin Rivers performed robustly in the first quarter, indicative of reduced cost and improved operating processes at the company, both of which should lead to materially improved results in quarters ahead. Pulp and paper production experienced a few issues in the first quarter, but encouraging gains were made in speed and efficiency.

From a commercial standpoint, the broader paper market experienced its normal seasonal weakness. The highlight of the quarter was the progress made on the company’s long-term commercial and operating strategy. A cross-functional team was assembled to define and execute a roadmap that solidifies Twin Rivers as a nimble, high quality manufacturer focused on consistent application of segment and machine specific strategies. The team, working under the guidance of Twin Rivers’ senior leadership team and Advisory Board, has developed a comprehensive plan designed to protect the company’s core while exploring highly targeted opportunities that will drive value creation throughout the remainder of 2014 and subsequent years. With a reorganized and expanded commercial team in place, significant headway was made during the quarter on merchant reengagement and national account development. As a more concrete example of the progress, Twin Rivers was recently honored by one of its top customers as its “Supplier of the Year” for 2013 – a designation acknowledging superior product quality, delivery performance and service excellence.

First quarter performance at the Plaster Rock saw mill was characterized by lower uptime due to unplanned maintenance as well as shipping and logistics issues resulting from limited truck and railcar availability. Despite roughly breakeven segment level financial performance during the quarter, progress was made on several initiatives that will facilitate immediate expansion of Twin Rivers’ lumber products business. On March 27, 2014, the company held a joint press conference with the Province of New Brunswick announcing a new Crown Land allocation of 200,000 m3 and the company’s $2.5 million dry kiln capital investment – both critical milestones necessary for the implementation of a third shift at the sawmill, which is scheduled to begin in early May. These developments will drive an increase in production capacity over time. As a result, Twin Rivers stands to benefit from continued market improvement as U.S. housing starts are projected to continue to increase.



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.

Veritas reported an RIR of 4.2 for the first quarter of 2014. While we continue to work towards an RIR of zero, management has already made significant progress. Veritas changed its safety program to a reward based program for all employees, with plant managers implementing a variety of awards at the three plant locations. A safety mentor training program began in Eau Claire, WI in January 2014 and Palatka, FL and Wausau, WI are planning to roll out similar programs in the coming months. Finally, management has increased safety committee involvement across the organization and is heightening accountability and awareness.

First quarter 2014 results were as anticipated, indicative of low margin legacy jobs that are being worked off, as well as low sales volumes due to an inability to win large bridge projects while operating in a state of financial distress throughout 2013. We expect financial performance to improve as the company begins to work on newer, post-transaction jobs and to benefit from improvements to work processes currently being implemented.

Veritas is off to a quick start in its War for Talent. The company announced the hiring of a new President and CEO, Tracy Glende, at the end of the first quarter. Mr. Glende brings over 20 years of global management experience, commercial and operational expertise and a highly successful track record to Veritas. He has served in a variety of senior management roles, including as Vice President and General Manager for Gerdau Ameristeel and as President of the Aerospace and Energy Division of Bodycote PLC. We are excited to partner with Tracy as we drive improved operational and financial performance at Veritas.

Operationally, management has identified opportunities for improvement in every key function and implementation of improved processes that will ultimately drive enhanced competitiveness, higher quality and better financial performance is underway. In sales and marketing, early signs have been positive. The company booked significant new business during the first quarter. In addition, the number of pending bids is encouraging and the pipeline for future opportunities remains robust.

We are excited by Veritas’ potential 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.



Mark Young
CI/Lean Director

Many of our Atlas platform companies have engaged in a Continuous Improvement Journey of some nature, including Lean, Six Sigma or other systems which deliver CI results. The level of progress which our companies have attained varies from novice to World Class Lean, but the important thing to note is each company is finding value in the journey.

Many of our leaders who have started the CI journey have said that people are our most important form of capital. When we make our Associates part of the solution and communicate how the company is performing and how they are contributing to that performance, our people become engaged and empowered. Our people have the solutions; it is up to us as managers to listen and support them. This is key to building trust and working towards a common goal.

Continuous Improvement will always be the goal; the success of that Continuous Improvement will always be our people.




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.

We are thrilled to welcome Don Berry, former VP of Manufacturing at Trus Joist, as President & COO of the CCG team. Don brings a wealth of production and manufacturing experience, tremendous coaching talent, and great financial expertise and leadership capacity. Don’s role is critical to our growth and development, as we have worked to further our operational discipline, continuous improvement processes, and internal controls to take on larger volume customers and charge towards financial sustainability. Additionally, we hired a Production Supervisor, Tami Reyes, who brings a wealth of food service management experience, in order to better separate R&D activities from daily production operations.

Tara and Don have various strategic operational goals for 2014, but the goals can all be categorized into one of the following three key priorities – feed better (through greater operational discipline), drive revenue (through additional repeatable volume business), and train more people (in Boise and beyond). As our internal operations continue to grow and improve, so do our opportunities for success beyond Boise as we look to potential demand in new markets and replicated CCG sites and operations.

CCG’s first quarter brought the scope and design of two large-volume production programs to feed new grab-and-go products to a billion dollar gas station customer located in 208 sites throughout the Pacific Northwest. Additionally, CCG has designed a childcare feeding solution to meet the needs of 22 Treasure Valley YMCA childcare locations. Both programs are currently in pilot mode and early indications are promising as we work towards feasible pricing scenarios.

CCG celebrated significant financial gifts from the Atlas Foundation and other Atlas affiliates, the Carnival Corporation Foundation, and Capstone Partners early this year, further building our partnership and sincere appreciation for the Atlas Network and positive ripple effect. CCG was chosen as the only beneficiary with FUNDSY, a historic charitable giving organization based in Boise, and celebrated our first ever GALA on Saturday, May 3rd, 2014 in Boise.

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