Welcome!

News Feed Item

Ainsworth Announces 2013 Fourth Quarter and Year End Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/26/14 -- Ainsworth Lumber Co. Ltd. (TSX:ANS) today announced its financial results for the fourth quarter and year ended December 31, 2013.

2013 Highlights:

--  Generated annual adjusted EBITDA of $148.9 million versus $105.5 million
    in 2012 
--  Continued strong export growth 
--  Restarted the High Level mill in September 
--  With improved liquidity, exercised optional redemption of U.S.$35
    million of our senior secured notes 
--  Pending acquisition by LP targeted to close during the second quarter of
    2014 

Ainsworth President and Chief Executive Officer, Jim Lake said, "Ainsworth benefited in 2013 from the continued North American housing market recovery, although OSB prices did moderate in the second half of the year. Notwithstanding some near-term challenges in 2014 including transportation issues and extreme weather that have impacted OSB shipments and demand, the overall outlook remains positive with the consensus forecast for U.S. housing starts calling for further recovery in 2014. I am also pleased to report that our export markets exhibited strong growth, particularly in Japan."

LP Acquisition of Ainsworth

On September 4, 2013, we entered into an agreement (the "Arrangement Agreement") with Louisiana-Pacific Corporation ("LP") under which LP will acquire all of the outstanding common shares of Ainsworth for $1.94 in cash plus 0.114 LP common shares per each Ainsworth common share, on a fully pro-rated basis.

The transaction, which will be carried out by way of a court-approved plan of arrangement, was approved by approximately 99.9% of the votes cast by the shareholders of the Company at a special meeting that took place on October 29, 2013, and subsequently received approval from the Supreme Court of British Columbia on October 31, 2013. Both Ainsworth and LP continue to work with the Canadian Competition Bureau and the U.S. Department of Justice as they conduct their regulatory reviews of the transaction. Subject to obtaining required regulatory approvals and the satisfaction or waiver of other conditions of the Arrangement Agreement, Ainsworth currently expects the acquisition to close during the second quarter of 2014.

Further information about the Arrangement Agreement is set out in Ainsworth's management proxy circular dated September 24, 2013, which is available under Ainsworth's profile on www.sedar.com.

Financial Results

Sales of $104.4 million in the fourth quarter of 2013 were $13.5 million lower than sales of $117.9 million for the same period in 2012. The decrease in sales was mainly due to an 18% decrease in realized pricing. The impact of the U.S. benchmark declines on our realized pricing was moderated by the effect of a weaker Canadian dollar relative to the fourth quarter of 2012 combined with stronger export pricing. Notwithstanding transportation issues that restricted shipments in the fourth quarter, our sales volumes increased 2.8% due to the onset of production at High Level.

Adjusted EBITDA was $11.3 million in the fourth quarter of 2013 compared to $42.0 million in the same period of 2012, largely as a result of lower realized pricing. Net loss from continuing operations in the fourth quarter of 2013 was $10.6 million compared to net income of $6.7 million in the fourth quarter of 2012. The $17.3 million decrease was due to the reduction in gross profit and increased selling and administration expense, partially offset by a reduction in finance expense, and fluctuations in non-cash accounting gains and losses and income tax expense.

Sales of $488.0 million in 2013 were $78.9 million higher than sales of $409.1 million in 2012. This increase was mainly due to a 22% increase in realized pricing for the year. The impact of the U.S. benchmark increases on our realized pricing was enhanced by the effect of a weaker Canadian dollar in 2013 on average relative to 2012 combined with stronger export pricing. Partially offsetting the price increases, there was a 0.7% decline in sales volumes as additional production from High Level was more than offset by maintenance downtime at our various mills and transportation issues toward the end of 2013.

Adjusted EBITDA for the year was $148.9 million in 2013 compared to $105.5 million in 2012, largely as a result of higher realized pricing. Net income from continuing operations was $39.4 million in 2013 compared to $28.4 million in 2012, representing an increase of $11.0 million. The increase included an increase in gross profit and a decrease in finance expense, partially offset by increased costs of curtailed operations, increased selling and administration expense, and fluctuations in non-cash accounting gains and losses and income tax expense.

Margins

Adjusted EBITDA margin on sales for the fourth quarter of 2013 was 10.8% compared to 35.6% in the fourth quarter of 2012. For the full year, adjusted EBITDA margin on sales was 30.5% in 2013 compared to 25.8% in 2012.

Benchmark OSB pricing remained stable during the fourth quarter of 2013, although down from the previous quarter and the same period last year, with the North Central price for 7/16" OSB averaging U.S.$245 per msf (a decrease of 26% compared to the fourth quarter of 2012, and a 3% decrease compared to prior quarter). The Western Canadian price for 7/16" OSB averaged U.S.$219 per msf in the fourth quarter of 2013 (a decrease of 34% compared to the fourth quarter of 2012, and a 5% decrease compared to prior quarter).

Selected financial information is presented in the table below. The full financial report is available to be viewed at the following link: http://media3.marketwire.com/docs/ans0325report.pdf.

Selected Financial Information                                              
In millions of Canadian dollars, except per share data                      
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                  Three months ended   Year ended December  
                                     December 31                31          
                                      2013       2012       2013       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Sales                            $   104.4  $   117.9  $   488.0  $   409.1 
Cost of products sold                 89.4       72.1      323.5      287.6 
Net income from continuing                                                  
 operations                          (10.6)       6.7       39.4       28.4 
Net income                           (10.7)      32.5       38.8       28.2 
Adjusted EBITDA (1)                   11.3       42.0      148.9      105.5 
Adjusted EBITDA margin (2)            10.8%      35.6%      30.5%      25.8%
----------------------------------------------------------------------------
Basic and diluted earnings per share:                                       
 Net income from continuing                                                 
  operations                         (0.04)      0.06       0.16       0.28 
 Net income                          (0.04)      0.06       0.16       0.28 
 Weighted average common shares                                             
  outstanding (3)                    240.9      106.9      240.9      102.3 
----------------------------------------------------------------------------
(1) Adjusted EBITDA, a non-IFRS financial measure, is defined as net income 
 (loss) from continuing operations before amortization, gain on disposal of 
 property, plant and equipment, cost of curtailed operations, stock option  
 expense, finance expense, foreign exchange (gain) loss on long-term debt,  
 other foreign exchange loss (gain), interest income earned on investments, 
 income tax expense (recovery), and non-recurring items. Adjusted EBITDA for
 2012 has been restated to reflect an increase in pension expense related to
 the adoption of the amended IAS 19 - Employee Benefits, and to exclude     
 interest income earned on investments.                                     
(2) Adjusted EBITDA margin, a non-IFRS financial measure, is defined as     
 adjusted EBITDA divided by sales.                                          
 (3)  240,906,309 common shares were outstanding on December 31, 2013.      

Liquidity

At December 31, 2013, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $137.4 million, an improvement of $30.6 million since December 31, 2012 resulting from our stronger operating results, partially offset by debt repayments and capital expenditures.

Outlook

The overall long-term outlook remains positive for the U.S. housing market. Additionally, we continue to experience growth in our export markets, including Japan and China. As a result, we remain confident that the market will require additional supply in the years ahead. The restart of our High Level mill will allow us to meet the growing requirements of our existing customer base in North America and Asia as well as service new market segments.

Conference Call Information

Ainsworth will hold a conference call on Wednesday, March 26, 2014 at 10:00 a.m. PT (1:00 p.m. ET). The dial-in phone number is 1-800-319-4610 from inside the USA or Canada, and +1-604-638-5340 from outside of the USA and Canada. To access the replay line, dial 1-800-319-6413, or +1-604-638-9010, Reservation 4176#. This recording will be available until the end of the day on April 2, 2014.

The financial results are based on International Financial Reporting Standards. Investors, analysts and other interested parties can access Ainsworth's Financial Statements, Management's Discussion and Analysis as well as the Shareholders' Letter and Supplemental Information on Ainsworth's website under the Investors / Financial Reports section at www.ainsworthengineered.com.

Forward-Looking Statements

Forward-looking information provided in this news release relating to the Company's expectations regarding OSB demand and pricing and the Company's future prospects and financial position are forward-looking information pursuant to National Instrument 51-102 promulgated by the Canadian Securities Administrators. The Company believes that expectations reflected in such information are reasonable, but no assurance is given that such expectations will be correct. Forward-looking information is based on the Company's beliefs and assumptions based on information available at the time the assumption was made and on management's experience and perception of historical trends, current conditions and expected further developments as well as other factors deemed appropriate in the circumstances. Investors are cautioned that there are risks and uncertainties related to such forward-looking information and actual results may vary. Important factors that could cause actual results to differ materially from those expressed or implied by such forward looking information include, without limitation, factors detailed from time to time in the Company's periodic reports filed with the Canadian Securities Administrators and other regulatory authorities. The forward-looking information is made as of the date of this news release and the Company assumes no obligation to update or revise them to reflect new events or circumstances, except as explicitly required by securities laws.

About Ainsworth

Ainsworth Lumber Co. Ltd. is a leading manufacturer and marketer of oriented strand board ("OSB") with a focus on value-added specialty products for markets in North America and Asia. Ainsworth's four OSB manufacturing mills, located in Alberta, British Columbia and Ontario, have a combined annual capacity of 2.5 billion square feet (3/8-inch basis). Ainsworth is a publicly traded company listed on the Toronto Stock Exchange under the symbol ANS.

Contacts:
Ainsworth Lumber Co. Ltd.
Rick Eng
Vice President, Finance and Chief Financial Officer
604-661-3200
604-661-3201 (FAX)
[email protected]

Ainsworth Lumber Co. Ltd.
Rob Feustel
Treasurer
604-661-3200
604-661-3201 (FAX)
[email protected]
www.ainsworthengineered.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
"Codigm is based on the cloud and we are here to explore marketing opportunities in America. Our mission is to make an ecosystem of the SW environment that anyone can understand, learn, teach, and develop the SW on the cloud," explained Sung Tae Ryu, CEO of Codigm, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
High-velocity engineering teams are applying not only continuous delivery processes, but also lessons in experimentation from established leaders like Amazon, Netflix, and Facebook. These companies have made experimentation a foundation for their release processes, allowing them to try out major feature releases and redesigns within smaller groups before making them broadly available. In his session at 21st Cloud Expo, Brian Lucas, Senior Staff Engineer at Optimizely, discussed how by using ne...
"CA has been doing a lot of things in the area of DevOps. Now we have a complete set of tool sets in order to enable customers to go all the way from planning to development to testing down to release into the operations," explained Aruna Ravichandran, Vice President of Global Marketing and Strategy at CA Technologies, in this SYS-CON.tv interview at DevOps Summit at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"ZeroStack is a startup in Silicon Valley. We're solving a very interesting problem around bringing public cloud convenience with private cloud control for enterprises and mid-size companies," explained Kamesh Pemmaraju, VP of Product Management at ZeroStack, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
Enterprises are moving to the cloud faster than most of us in security expected. CIOs are going from 0 to 100 in cloud adoption and leaving security teams in the dust. Once cloud is part of an enterprise stack, it’s unclear who has responsibility for the protection of applications, services, and data. When cloud breaches occur, whether active compromise or a publicly accessible database, the blame must fall on both service providers and users. In his session at 21st Cloud Expo, Ben Johnson, C...
Data scientists must access high-performance computing resources across a wide-area network. To achieve cloud-based HPC visualization, researchers must transfer datasets and visualization results efficiently. HPC clusters now compute GPU-accelerated visualization in the cloud cluster. To efficiently display results remotely, a high-performance, low-latency protocol transfers the display from the cluster to a remote desktop. Further, tools to easily mount remote datasets and efficiently transfer...
"Infoblox does DNS, DHCP and IP address management for not only enterprise networks but cloud networks as well. Customers are looking for a single platform that can extend not only in their private enterprise environment but private cloud, public cloud, tracking all the IP space and everything that is going on in that environment," explained Steve Salo, Principal Systems Engineer at Infoblox, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventio...
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Agile has finally jumped the technology shark, expanding outside the software world. Enterprises are now increasingly adopting Agile practices across their organizations in order to successfully navigate the disruptive waters that threaten to drown them. In our quest for establishing change as a core competency in our organizations, this business-centric notion of Agile is an essential component of Agile Digital Transformation. In the years since the publication of the Agile Manifesto, the conn...