Atlas Fourth Quarter 2014 Review

Report for the Quarter Ended December 31, 2014

Atlas and its portfolio companies made significant progress in the fourth quarter of 2014.

On December 31, 2014, ACR II Aluminum Group Cooperatief U.A. (“Aludium”), a newly formed portfolio company, acquired Alcoa’s aluminum rolling mill system located in Spain and France. Aludium is an integrated, midstream aluminum system with casting, hot mill, cold mill and finishing capabilities producing coils, sheets, shates and strips for the distribution, building and construction, beverage closure, cosmetic, decorative, foil and other industrial end markets. Aludium has nameplate production capacity of 260,000 metric tons. In addition to the manufacturing sites, Aludium operates a state-of-the-art research and development center located in Cindal, Spain. Aludium’s corporate office, executive management and trading/hedging professionals are located in Amsterdam. The carve-out of these operations from Alcoa necessitated the creation of new back-office and complex hedging support systems to service a stand-alone enterprise. The complex carve-out demonstrated once again that Atlas is a dependable partner of choice for corporations seeking to shed non-core operating divisions.

In 2014, we executed three Bolt-ons, an idled plywood mill in Louisville, MS through New Wood Resources LLC’s newly-established subsidiary, Winston Plywood and Veneer LLC (“Winston”), the specialty packaging business of MeadWestvaco in Bydgoszcz, Poland which was purchased by our ASG Group (“ASG”) platform in June and Banker Steel Co. L.L.C. (“Banker Steel”), a Bolt-on for our BF Holdings LLC (“BFH”) platform completed in July. As we indicated in the third quarter report, Banker Steel and the ASG Bolt-on have been consolidated and are delivering profit enhancement. At Winston, progress on the rebuild and restart continues following its destruction by an F4 tornado on April 28, as discussed later in this report.

Safety performance across each of our platforms remains the highest priority for all of us at Atlas as well as that of our management partners. The fourth quarter of 2014 presented mixed results; many companies realized continuing improvements in safety metrics after months of hard work, others faced seasonal and site-specific challenges and new members of the Atlas family began the journey on the path to safety excellence.

Motus Integrated Technologies (“Motus”), which was acquired in June 2014, continued its strong progress in the fourth quarter as management effectively executed its transformation plan. The more established businesses of the Atlas portfolio generally showed solid performance in the fourth quarter as well and in most cases, delivered stronger results in 2014 than in the prior year. BFH, Bridgewell Resources Holdings LLC, Detroit Renewable Energy LLC (“DRE”), Finch Paper LLC (“Finch”), Pangborn Group, Phoenix Services International, RedBuilt LLC and Twin Rivers Paper Company Inc. all delivered improved performance in 2014 over last year. Finch’s 2014 production represented the highest annual paper production in Finch’s history. Forest Resources LLC had another excellent year, although performance fell just short of the record year in 2013. As we previously described, Soundview Paper Holdings LLC (“Soundview”) had a rocky 2014, as the company’s sales growth outstripped its ability to manage such growth profitably. With new leadership in place, Soundview has returned to a more prudent course. For each company, our efforts are directed at continuing to “stoke the fire”, focusing on growth initiatives, cost reduction opportunities and driving operational excellence.

After a very busy end to 2014, we remain extremely active in the New Year. While transaction pricing is generally high, we continue to find interesting and attractively-priced opportunities in corners of the market that are less traveled, including underperforming assets of large corporations who feel somewhat freer to divest underperformers when the rest of their businesses are performing well. As mentioned at the outset, we are intensely focused on our aggressive agenda for 2015. We look forward to reporting our progress as the year unfolds. In the interim, don’t hesitate to call or drop us an email and if you are in the neighborhood, stop by and see us.

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. We formed ASG by acquiring the AGI media packaging business of MeadWestvaco Corporation through two newly created holding companies (one which acquired the U.S. assets and the second which purchased the European assets) in September 2010 and combining it with the Shorewood Packaging business purchased from International Paper Company. The closing on the U.S. portion of the Shorewood transaction occurred in December 2011 and the closing of the non-U.S. portions of the Shorewood transaction occurred in January.

In the fourth quarter, ASG sold its paperboard packaging operations in the U.S., Mexico, Canada and China to Multi Packaging Solutions Inc. As a result of the sale, ASG now consists of two business units, Amaray, our global plastic packaging business, and ASG Europe, our specialty paperboard packaging business in Europe.

ASG continued a commendable safety performance through the end of 2014, achieving an aggregate RIR of 0.4 during the fourth quarter – a significant improvement from 0.8 in the fourth quarter of 2013. Amaray achieved an RIR of 0.8, an improvement from a 1.0 RIR in 2013. Notably, Amaray’s facility in Pittsfield, MA achieved 1,000 days without a recordable incident and its facility in Corby, United Kingdom achieved one year without a recordable incident. ASG Europe achieved a 0.5 RIR, an improvement from a 0.9 RIR in 2013, attributable to progress in associate engagement and hazard identification.

Amaray experienced a decline in adjusted EBITDA and revenue during the fourth quarter of 2014 relative to the same period in 2013. The adjusted EBITDA decline in the fourth quarter was driven in large part by lower pricing to media customers, softer demand on higher margin products (Blu-ray and games packaging) and a shortfall on targeted non-media sales wins. Consistent with its strategy of aggressively pursuing end market diversification opportunities, Amaray began production of plant propagation trays for the agricultural market. Additionally, Amaray has developed a growing opportunity pipeline, prototyping several new closures for major consumer packaged goods brands.

ASG Europe experienced a mild decline in revenue and more significant decline in adjusted EBITDA during the fourth quarter of 2014 relative to the same period in 2013. This decline resulted from lower electronic media volumes and lower pricing. To improve cost competitiveness across its manufacturing platform, ASG Europe announced the closure of the Thalgau, Austria facility in December 2014. While the closure will create one-time severance and closure costs, a majority of the Thalgau business will transfer to various ASG facilities in the U.K., Netherlands and Poland, resulting in significant fixed cost reductions Spark!, ASG Europe’s creative services business, had a strong fourth quarter. A key contributor to the growth at Spark! was Microsoft volume, a significant account win in 2014 that will serve as a model for the business as an integrated digital asset service provider to consumer and technology brands going forward.

As we enter 2015, ASG will operate as two standalone divisions, each responsible for its own finance, HR, IT and other central services. We believe this structure will enable each business to be more responsive to its unique market challenges and opportunities.



Don Banker
Chief Executive Officer-Banker Steel

Tracy Glende
Chief Executive Officer-Veritas Steel

In November 2013, BF Holdings LLC (“BFH”) foreclosed on certain operating assets of PDM Bridge, LLC (“PDM”) and BFH commenced operations as newly-formed Veritas Steel LLC (“Veritas”), a wholly-owned subsidiary of BFH. Veritas is a leader in the steel bridge fabrication industry with extensive experience in the manufacture of highly complex bridge structures. Veritas has three facilities located in the Midwest and one in the Southeast with, in the aggregate, 691,000 square feet of fabrication workspace on 220 acres and featuring 250 tons of lifting capability. The company purchases up to 70,000 tons of structural steel annually which it fabricates into simple and complex bridges to satisfy contracts throughout the central and eastern United States.

In July 2014, BFH acquired Banker Steel Co., L.L.C. (“Banker Steel”). Banker Steel is a full-service fabricator of structural steel components used in commercial and infrastructure projects. Banker Steel operates out of two fabrication facilities in Lynchburg, VA and Orlando, FL aggregating a total of 340,000 square feet, fabricating approximately 50,000 tons of steel annually. Through these transactions, BFH has become a national leader in bridge and structural steel fabrication with over 1 million square feet of fabrication workspace, six locations and over 600 employees.

Veritas reported an RIR of 5.9 for the fourth quarter of 2014. Banker Steel showed improved safety performance in the fourth quarter, but the company still has a long way to go to reach world class safety performance. The business reported an RIR of 12.9 for the fourth quarter, compared to an RIR of 13.9 for 2014 year-to-date. Banker Steel management is working on multiple fronts to improve its performance, including collaboration with Veritas safety leadership to help establish safety best practices. As a new member of the Atlas family, it will take some time for Banker Steel to develop and maintain the disciplines that ultimately improve safety culture, the critical first step to becoming a Performance Organization.

Management at Veritas has made great strides developing and strengthening key relationships with general contractors, which is reflected in a growing backlog. Because new projects are dependent on government funding, we continue to track Congressional action on addressing the nearly bankrupt Highway Trust Fund as well as state funding in our key markets. Banker Steel remains focused on winning high margin jobs in its operating regions by establishing itself as a high quality producer trusted by general contractors as well as a fabricator uniquely capable of manufacturing complex structures.

With the first full quarter of Banker Steel as part of BFH complete, we remain excited by the synergistic opportunities between Banker Steel and Veritas. Our management teams are collaborating well, sharing structural steel best practices and discussing safety and employee engagement. Further, we continue to see opportunities to strategically grow the business through joint venture partnerships as well as Bolt-on acquisitions. With a strong balance sheet and an energetic leadership team, BFH is well-positioned for future growth.



Pat McCauley
President and Chief Executive Officer

Bridgewell Resources LLC (“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 Incorporated out of a Federal receivership.

During the fourth quarter of 2014, the company achieved an RIR of 0.0, a significant improvement from an RIR of 2.2 for the fourth quarter of 2013. Revenues were up only modestly in the fourth quarter relative to the prior year. The soft revenue growth was largely driven by declining sales in the Food and Agriculture division as a result of the reorganization of its edible oils group and declining sales in the Mats division as a result of softening oil and gas exploration with the sharp fall in the price of oil.

Bridgewell saw an increase in EBITDA in the fourth quarter compared to the same quarter in the prior year, largely driven by a reduction in commission expense. This was the result of greater diversification of earnings across multiple divisions and sales associates versus the fourth quarter of 2013, where earnings were more concentrated in sales associates that had achieved higher commission rates through their accumulated earnings for the year.

Bridgewell had mixed quarterly results in the Key Performance Indicators (“KPIs”) that we use to track the business. One KPI used to track sales associate efficiency is “Sales Expense/Gross Profit,” which was essentially flat in comparison to the fourth quarter in 2013. Another KPI, used to track working capital efficiency, is “Cycle Days”, which measures the average number of days that working capital is invested until inventory is converted into collected cash. For the fourth quarter of 2014, the average Cycle Days was higher in comparison to the fourth quarter of 2013, largely driven by i) weak sales resulting in elevated inventory levels in Mats, ii) a build in edible oils and urea programs increasing inventory in F&A, as well as iii) an increase of international sales in the Utility and Construction division, which extend the timeframe for accounts receivable collection. Finally, “Sales in Backlog”, a KPI used to track near-term revenue trajectory as well as sales associate activity, decreased relative to the prior quarter, the decline in backlog is largely attributable to the decline in booking activity in the fourth quarter of 2014.

Bridgewell will continue to make significant investments to grow its business, both in the form of new sales associates 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 recorded an RIR of 0.0 across its business units for the second successive quarter. Detroit Thermal has now operated in excess of four years without a recordable incident, continuing its world class performance while operating in an environment that is inherently hazardous.

The fourth quarter of 2014 represents the second successive quarter of improved financial performance at DRE. The company continued to experience improved operational stability at Detroit Renewable Power as a result of the execution of the capital improvement program and the General Motors pipeline expansion project, which came on line during the third quarter and ramped up volumes during the fourth quarter. We had delivered “first steam” to GM in July 2014 as part of our pipeline extension under a long-term contract that provides an annuity-like income stream through July 2029 and continuing thereafter, subject to a twelve month notice of termination from either party.

DT’s fourth quarter results were solid and 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. DT’s three most critical KPIs are i) units of steam (measured in “Mlbs”, or thousands of pounds of steam) purchased vs. produced (a measure of the reliability of DRP as a steam source), ii) HDD (Heating Degree Days, a measure of steam demand for heating) and iii) Mlbs sold (a function of HDD and the number and scale of customers). The first KPI drives overall DRE system efficiency and is a fundamental determinant of DRP profitability. In the fall and winter as the weather turns colder, DT customer demand intermittently exceeds DRP’s capacity, requiring substantially more self-generation at DT. The HDD KPI is outside of the control of our managers; however, this KPI can often create substantial variability in our quarterly results, especially in the winter months. For the fourth quarter 2014, the HDD in Detroit was slightly colder than the prior five year average HDD for the same period. The third KPI can be directly impacted by management; however, switching to the DT system is influenced by the cost of natural gas. Most typically, these prospects are buildings that are facing major capital expenditures to replace aging boilers as well as new construction. There were no new customer additions in the fourth quarter.



Rich Gallagher
Chief Executive Officer

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

Erickson reported an RIR of 7.2 for the fourth quarter of 2014 a slight decrease from an RIR of 7.3 in the same quarter of 2013. While we have a long way to go to bring safety metrics to acceptable levels, the continued improvement in RIR is a testament to the organization’s strong commitment to safety in an environment that is inherently challenging. During these periods, Erickson’s Lost Day Severity Rate declined from 154.1 to 78.1, indicating a marked reduction in severe injuries.

Erickson generated slightly lower revenue and adjusted EBITDA in the fourth quarter of 2014 compared to the same quarter in the prior year.

Arizona Framing (“AZ Framing”) saw its usual seasonal decline in the fourth quarter. Single family housing starts were down in Phoenix and down in Tucson, which intensified competition among framers. Conversations with major builders and Phoenix permit data suggest that 2015 should be a better year than 2014 from a housing starts perspective. Notwithstanding the overall weak environment, with housing starts well below trend, the combination of effective management, price discipline and cost controls enabled AZ Framing to salvage a profitable year.

The California Framing division (“CA Framing”, which includes the Nevada Framing operations) continued to show signs of strength in both volume and profitability. The Sacramento and Reno markets showed improvement in 2014, with single family housing starts up in Sacramento and in Reno. The Nevada Framing operations continue to perform well, a credit to strong leadership and a growing market.

Erickson’s door molding and millwork business (“DSI”) is co-located with AZ Framing. DSI reported profitable results in the fourth quarter of 2014. DSI continues to experience increased competition, which has shrunk its top line. As has been the mantra of the Erickson Turnaround Plan, DSI remains focused on margins, as opposed to volume.

Heading into 2014 the general expectation was that the housing market recovery would accelerate. This expectation was especially true for Erickson’s core markets, which were hit hard during the Great Recession. Nationally, the 2014 housing recovery outpaced the housing recovery in Phoenix and Sacramento. We believe that when the recovery finally does arrive in our markets, Erickson is well positioned. Erickson remains focused on operating profitably and safely in the current market environment, while preparing for the demands – and opportunities - of the future market recovery.



Deba Mukherjee
President and Chief Executive Officer

In June 2007, Finch Paper LLC (“Finch”) was formed to acquire the assets of Finch, Pruyn & Co. The predecessor company was founded in 1865 as a sawmill, lumberyard and quarry operation on the upper Hudson River and began papermaking operations in 1905.

Today, Finch sets itself apart by providing innovative solutions and exceptional service to help customers adapt to the changing print world. Using advanced manufacturing systems, the company produces paper designed for multi-press environments that is ideal for corporate marketing materials, direct mail, book publishing and business office use.

Finch’s 2014 RIR was 3.0 compared to a year end rate of 2.6 in 2013. Our lost time incident rate (LTIR) was 1.1, a decrease from the 2013 year end rate of 1.2. In 2015, we continue to remain focused on improving safety through targeted improvements in employee communication and engagement, SOP development and training of our salaried and hourly workforces.

For 2014, American Forest and Paper Association reported that demand for uncoated freesheet continued its decline; however, Finch increased shipments over the prior year. Imports remained strong and the strength of the US dollar will continue to attract competition in the near term. The quarter ended with high industry utilization rates, although 2014 operating levels were slightly lower than in 2013.

Finch demonstrated significant improvement in financial performance versus the prior year, driven primarily by progress in operational performance, net selling price, and sales growth. Finch’s selling price increased in Q4 2014 compared to Q4 2013, largely due to continued pricing discipline coupled with significant new customer acquisition and mix diversification. Finished production for the quarter equaled the third-highest production quarter in company history. Daily production improved 4% over Q3 2014. Production for all of 2014 represented the highest annual paper production in Finch’s history.

The fourth quarter was the strongest quarter financially in two years. Finch commenced a multi-year mill modernization plan and received a $1.0 million state grant to support our investment. Finch remains focused on leveraging our robust continuous improvement plan to provide sustainable results and drive increased profitability regardless of market conditions.



Larry Richard
President and Chief Executive Officer

Forest Resources LLC is a holding company engaged in manufacturing industrial packaging product, including recycled corrugated medium, kraft, crepe and specialty packaging papers as well as corrugated boxes. In March 1999, Forest was formed with the acquisition of Hartford City Paper. Today, Forest employs 630 people and generates revenues from six facilities across North America.

Forest Resources’ DART (Days Away/Restricted/Transferred) rate was 0.0 for Q4 2014 compared to 1.2 in Q4 2013. Forest’s TRR (Total Recordable Rate) for Q4 2014 was zero compared to 1.2 in Q4 2013. This quarter’s safety performance indicated a positive trend in the incident rates for Forest as we continue to focus on safety awareness
and culture.

Forest generated slightly lower EBITDA performance for Q4 2014 compared to Q4 2013. Hartford City Paper decreased production compared to the fourth quarter of 2013 due to downtime following a major capital upgrade to the paper machine. Production volume at Ivex Specialty Paper, our specialty grade mill, was up from Q4 2013 after upgrading the press section of the paper machine. Peoria’s trial shipments of new filter and color kraft products continued during the quarter. Shillington Box’s revenues, unit volumes and EBITDA profitability all increased in Q4 2014 over Q4 2013, despite the competitiveness of the St. Louis box market. Shillington’s improved performance is a result of strong management and investment in a new flexo folder-gluer, which has expanded product offerings, reduced manufacturing costs and improved operating efficiency.

The North American folding carton market was soft in the fourth quarter of 2014 as customer drew on existing inventories. Mill order backlogs remain in the two week range. Strathcona Paper’s production, sales volumes and EBITDA were down slightly in Q4 2014 compared to Q4 2013 due to the inventory sell off from closure of the Fusion mill in Connecticut. Q4 sales volumes and net revenues at Boehmer Box were lower than Q4 2013 due to competitive quoting for large blocks of national account business. Boehmer Box had slightly higher EBITDA in Q4 2014 compared to Q4 2013 due to higher production volume resulting in favorable absorption of fixed manufacturing costs.

Containerboard markets have held steady despite the new capacity entering the market in 2014. Fiber prices are expected to remain favorable during the first quarter due to soft export demand. While the waste paper export markets are soft due to China’s uncertain demand, new containerboard capacity is impacting waste paper pricing regionally. The North American containerboard market will see several paper machine conversions and new mills start up in the coming year.



Dale Irwin
President and Chief Executive Officer

On February 28, 2014, a newly formed Atlas entity, Greenidge Generation Holdings LLC (“Greenidge”), completed the acquisition of Greenidge Generation LLC and Lockwood Hills LLC. Greenidge is a 104MW coal-fired power plant that was idled during the bankruptcy of AES Corporation. Greenidge is our first execution of a strategy we have developed 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 remain in active discussions with the New York Department of Environmental Protection concerning our restart plans and the reception continues to be favorable.

We remain focused on reinstating the facility’s Title V air permit, which would allow Greenidge to restart in a coal-fired configuration. Concurrently, we are planning for the restart activities and performing confirmatory testing of idled equipment. Also consistent with last quarter, we remained focused on diversifying Greenidge’s firing capabilities since permitting for coal-firing is not certain, including evaluating options to increase natural gas supply and biomass feedstock.

We remain confident that re-permitting will be successful, but we are also comfortable that our invested capital would be recoverable through liquidation of the assets if re-permitting is not granted. We will continue to explore all possible generation permutations to maximize value as we work to return a strategically significant power source to market.



Shannon White
Chief Executive Officer

In June 2014, a newly formed Fund entity, ACR II Motus Integrated Technologies (“Motus”) purchased the North American and European automotive headliner and sun visor business of Johnson Controls Inc. and commenced operations as Motus.

Motus is a leading global manufacturer of automotive headliners and a variety of unlit, illuminated and auxiliary coverage sun visors with over 1,300 associates operating out of plants in the U.S., France, Mexico and Germany. The company has longstanding customer relationships with some of the world’s leading automotive OEMs, including BMW, Daimler, Ford, General Motors, Honda and Volkswagen. Motus manufactures headliners from its facilities in Maplewood, Michigan and Uberherrn, Germany. A headliner is the composite material that is affixed to the inside metal panel of the vehicle roof and is critical to vehicle design and functionality. The headliner conceals wiring and curtain airbags and acts as a structural foundation for other interior components such as overhead consoles, sun visors and overhead lighting. Sun visors are manufactured from the Motus facilities in Ramos, Mexico and Creutzwald, France. The sun visor product is an interior component located above the windshield, designed to shield the driver from the sun.

Motus delivered excellent safety performance in the fourth quarter of 2014, achieving an RIR of 0.3. This safety performance is exceptional, on both an absolute basis and relative to the safety performance under the prior JCI ownership.

Motus’ financial performance was solid during the fourth quarter. The results, which are better than anticipated, were supported by strong auto sales volumes in both North America and Europe, as well as improvement in Motus’ operating performance during our brief period of ownership. Our team has continued to perform well, especially in light of the added responsibilities relating to the execution of the carve-out and transformation.

On the operations front, Motus made significant improvements during the fourth quarter as the Motus Business System, Motus’ continuous improvement system, took root across many of the operations. Rates of external quality claims decreased dramatically relative to the same period last year. Overall, the improvement in operations accelerated during the fourth quarter and we expect continued improvement as the Motus Business System gains further traction.

On the commercial front, Motus’ big wins in the fourth quarter were the Ford Fusion and Opel Insignia headliner programs, both of which will be produced in Germany. This adds to the list of programs won by Motus under our ownership in 2014, including the GM Enclave/Traverse headliners, the Honda Odyssey and CRV sun visors and the Toyota Camry sun visors. These wins are a testament to the confidence the Motus team has instilled in its customers in a brief seven months.

Important progress was made in regards to Motus’ separation from JCI and transition to becoming a strong, stand-alone enterprise. In the ongoing “War for Talent”, there were several key victories, including hiring a new head of Global Human Resources, the top-grading of the plant manager in Uberherrn and the addition of a number of talented individuals in the finance, IT, purchasing, operations and business development departments. While the team needs to make continued progress on its various operating, commercial and product development initiatives, we are encouraged by the progress made during the fourth quarter and throughout the year as solid execution has laid the groundwork for success going forward.



Kurt Liebich
President and Chief Executive Officer

In September 2013, Atlas established New Wood Resources to purchase Olympic Panel Products LLC (“Olympic”) and Omak Wood Products LLC (“Omak”) from Wood Resources LLC. In March 2014, New Wood completed a Bolt-on acquisition of an idled plywood mill in Louisville, MS through New Wood’s newly-established subsidiary, Winston Plywood and Veneer LLC (“Winston”, together with Olympic and Omak, the “Subsidiaries”). 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. The Subsidiaries employ approximately 375 associates.

During the fourth quarter, New Wood had nine recordable incidents, five of which were at Omak. As communicated last quarter, Atlas Operating Partner Dr. Richard Baldwin assumed direct oversight responsibility for Omak in October and has begun the needed cultural transformation of the associate workforce which is rooted with safety as the
base tenet.

During the fourth quarter, Omak began producing and selling plywood in addition to veneer. In time, this will allow Omak to optimize the merchandising of its veneer output, which will result in a meaningful improvement in sales mix and price realization. Olympic continues to evaluate a number of potential strategic alternatives, including the assessment of new site locations, as relocation from its existing facility in Shelton, WA is contractually required by the middle of 2016 pursuant to the existing lease terms. Despite these distractions, Olympic had its second consecutive quarter of solid “in the black” financial performance with continued progress across its KPIs.

As we previously communicated, the Winston facility was struck by a large tornado on April 28, causing significant damage to the equipment and completely destroying the plywood production buildings. Over the last eight months, our team has been on the ground in Louisville, coordinating the removal of debris from the mill site, assessing and quantifying the loss and gathering information to help us understand the magnitude and challenges of a rebuild. In concert with the insurance companies, local and state officials, Mississippi Governor Phil Bryant and FEMA, much has been accomplished. All of the debris has been removed, FEMA has agreed to a satisfactory financial package to rebuild the facility and most importantly, Winston has become an integral part of the Lousiville community even before having manufactured its first sheet of plywood. In January 2015, ground-breaking took place, with Governor Bryant, Mayor Will Hill of Louisville and scores of state and municipal officials together with hundreds of local businesspeople, community residents and state and local media in attendance. We are hopeful that first production will begin by the end of 2015 in what will be one of the lowest cost, most efficient plywood manufacturing facilities in North America. Once in production, Winston will become one of the largest employers in this economically depressed and now physically devastated region.

Although all of New Wood’s subsidiaries are in transition, we are optimistic about the future of this investment. Out of the devastation in Louisville came an opportunity to build a world class production facility and our New Wood team has skillfully put in place the pieces to begin to turn this new vision into reality. We are through the worst of the start-up challenges at Omak and we anticipate a much better 2015. Olympic faces a key strategic crossroads in early 2015, but here again, we are confident that the outcome will be financially accretive to New Wood. Nonetheless, patience will be required inasmuch as the earnings power of these businesses will not be evident for some time.



Henrik Krabsen Jensen
President and Chief Executive Officer

With roots dating back to 1873, the Pangborn Group provides superior surface preparation solutions through a broad range of wheel-blasting, shot-peening and air-blasting equipment and services. Its products are utilized in an array of industries including aerospace, automotive, defense, energy and foundry. Pangborn Group is comprised of four brands in Europe and North America: Pangborn Corporation in the U.S, V + S – Vogel & Schemmann Maschinen GmbH in Germany, Berger Strahltechnik GmbH in Germany, and Pangborn Europe S.r.l. in Italy. Each of the four companies is a technology leader in the global wheel blast and surface preparation industry, with significant in-house design and engineering capabilities. By investing in and expanded these companies, Pangborn Group is providing a new level of service and performance around the world.

After nearly two years without any accidents, the Pangborn Group had two minor lost time accidents in Q4. Our trailing twelve month recordable incident rate at the end of December 2014 is 0.9. In Q4 we continued safety training to ensure safety awareness at all sites, especially at our newer operations in China, Mexico and the United Kingdom.

The implementation of Continuous Improvement and Lean projects progressed as planned. We are developing new approaches to the aftermarket business segment with several activities being implemented that are expected to yield results in the upcoming year. The integration of our new locations is on track and quoting volume remains strong.

Revenues and EBITDA were sharply increased over the performance achieved in 2013. Group aftermarket order intake in Q4, which is historically a seasonally weak quarter, was up from Q3 and was the second strongest quarter of the year. While the German aftermarket activity was down during the quarter, the result was more than offset by stronger order intake from our operations in Italy and North America. New equipment orders, which were very strong in Q4, were supported by Germany’s successful closing of a nine machine order with Volkswagen in December.

Market conditions in North America and China continue to be favorable. The European market also shows some strengthening, particularly with new project inquiries for equipment replacement or rebuild optimization. Our equipment backlog is at a good level and we expect that the markets will remain relatively strong throughout the rest of the year.



Terry Wagaman
Chief Executive Officer

In June 2006, Phoenix Services International LLC was formed by experienced operators in the mill services sector in partnership with Atlas to acquire Thor Mill Service, Inc. Phoenix Services provides steel mill services, including slag handling, metal recovery, equipment rental and a variety of other related services.

Phoenix Services reported an OSHA recordable rate of 2.0 in Q4, compared to 3.1 in Q4 2013 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 company had a busy quarter bidding work with numerous new customers. US Steel’s Kosice, Slovakia facility startup is going smoothly, and operations are expected to commence this summer. The company has a very active bidding pipeline and anticipates winning additional sites in the near-term.

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 the year was up compared to 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. Phoenix’s EBITDA and revenues in Q4 improved from the same quarter in 2013.

Phoenix Services 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 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

In August 2009, RedBuilt LLC was formed to acquire the assets of the Trus Joist Commercial division of Weyerhaeuser Company. RedBuilt manufactures and designs joists, beams and wood trusses for commercial, industrial and multifamily residential building applications.

The safety of RedBuilt associates is our top priority. Throughout the year, ten RedBuilt associates were injured on the job, resulting in an RIR of 3.1 for the fourth quarter. As a result of these injuries, RedBuilt associates have experienced restricted duty and a Days Away, Restricted, Transferred (DART) rate of 2.8, both rates are above our target of less than 1.0. All safety incidents continue to be investigated, key learnings shared and corrective actions implemented across the organization.

The overall level of commercial construction activity continues to trend positively. The American Institute of Architects Billings Index and the Dodge Momentum Index both continue to forecast an improvement in commercial construction. Architecture firms have reported modest growth in design activities over ten of the past twelve months, suggesting that the climate for nonresidential building projects is gaining strength. Both indicators also reported that business conditions continue to be strongest in the South and West. The Dodge Momentum Index ended the year with an increase above last year. After a decline in the third quarter, the publication indicated that “…overall healthy economic growth is working its way through to the construction sector.”

Fourth quarter quoting and bookings (projects sold) activity declined seasonally, after slower than expected third quarter activity, mirroring the Dodge Momentum Index referenced above. Our current quoting activity is ahead of last year and both indicators are rising seasonally.

In the fourth quarter of 2014, both revenues and EBITDA exceeded 2013 performance due to increased market activity, pricing discipline and operational strengths. Raw material costs have continued to trend down slightly, though we anticipate that trend to reverse in the first quarter of 2015. As commercial construction activity increases, we expect to see improving financial performance throughout the year.



Karl Meyers

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”) from Highland Capital Management. During 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 1.0 for the fourth quarter of 2014, an improvement from 1.6 for the fourth quarter of 2013. Management continues to refine its safety improvement plan, focusing most recently on developing a training curriculum for the leadership team, creating a management union safety committee and improving lockout-tagout procedures.

Soundview finished a disappointing 2014 with its worst quarter of the year, driven by declining financial results at Soundview New Jersey. As discussed last quarter, the performance shortfall – largely the result of customer service problems and inadequate responses to these problems – has been self-inflicted.

During the fourth quarter, management moved aggressively to top-grade certain positions and bring needed depth to the sales, supply chain and finance functions. On the operations front, Soundview improved parent roll production levels from the third quarter as the mills continued to focus on reliability and process improvement. The uptick in production relative to the third quarter is related to improved machine uptime and faster machine speeds on both Soundview New Jersey tissue machines. Though parent roll production has improved, converted product production has not ramped up as quickly. Soundview New Jersey averaged 180 tons per day of converted product in the fourth quarter, up from 175 tons per day in the third quarter. However, production remains well below historical levels and the bath lines continue to be a key area of management focus.

Early in the third quarter, Soundview entered into low priced arrangements with certain parent roll customers that remained in effect through much of the fourth quarter. By the end of the fourth quarter, with improved sales management processes in place, the company began to aggressively adjust parent roll and converted product and customer mix in order to address service issues, inventory levels and enrich the book of business. The results of these efforts should be visible in improved financial performance as 2015 unfolds.



Tim Lowe
Chief Executive Officer

Twin Rivers is an integrated manufacturer of lumber and specialty packaging, label, and publishing paper products. The company currently employs approximately 1,060 individuals and 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 fourth quarter of 2014 was 7.6, a significant increase from an RIR of 4.0 in the fourth quarter of 2013. The regression in safety performance in 2014 was attributable to poor safety performance at Plaster Rock, which suffered from both operational and leadership challenges through most of the year.

Twin Rivers generated significantly higher revenues and adjusted EBITDA in the fourth quarter of 2014 compared to the prior year’s period. Sulphite pulp production during the fourth quarter was up slightly relative to the prior quarter, while paper production was essentially flat with last year. From a commercial standpoint, the market environment in North America proved challenging. Through the first eleven months of 2014, North American uncoated freesheet shipments declined as imports increased relative to the third quarter of 2013. In coated papers, demand remained stable due in part to recently announced mill closures in North America, which should help stabilize operation rates and bring supply closer in-line with demand. The Company’s paper machines remained full during the fourth quarter and efforts made during the first half of the year to improve sales mix and margin began to pay dividends. Despite these market headwinds Twin Rivers net selling price increased sequentially over the fourth quarter and the Company continues to capture share in core markets, such as religious publishing grades, pharmaceutical papers and oil and grease resistant packaging grades.

Performance at the Plaster Rock lumber operation continued to suffer, driven by the implementation of a new operating schedule designed to allow more maintenance time between shifts. Production did increase quarter-over-quarter, while unplanned downtime continues to plague performance. As noted in our third quarter report, the Twin Rivers management team has devised a playbook to effect a turnaround at the Plaster Rock facility centered on improved inventory management, increased throughput, supplemental training and making selective capital investments with attractive return profiles. During the lumber mill’s shutdown in late December, an automated high grader was installed and a planer infeed project was completed, which should reduce trim loss and improve the mix of premium lumber sold in 2015 and beyond. Approximately 18 months into this investment, Plaster Rock’s performance has been underwhelming and, in hindsight, we underestimated the time and resource required to effect improvement in employee culture and engagement at this facility. The silver lining is that Plaster Rock remains a primary source of value creation over the coming years.



Tara Russell
Founder and CEO

Create Common Good (“CCG”) is a non-profit social enterprise that offers food service staffing talent, food products and food services to institutional food service customers. We aim to build a sustainable and Replicable model that does not rely exclusively on grants and donations to fuel our growing impact model. We’ve attached a copy of CCG’s year-end report for your review.

Create Common Good 2014 Annual Report