Welcome!

News Feed Item

Ainsworth Announces 2013 Fourth Quarter and Year End Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/25/14 -- 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
As Cybric's Chief Technology Officer, Mike D. Kail is responsible for the strategic vision and technical direction of the platform. Prior to founding Cybric, Mike was Yahoo's CIO and SVP of Infrastructure, where he led the IT and Data Center functions for the company. He has more than 24 years of IT Operations experience with a focus on highly-scalable architectures.
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
Enterprises have taken advantage of IoT to achieve important revenue and cost advantages. What is less apparent is how incumbent enterprises operating at scale have, following success with IoT, built analytic, operations management and software development capabilities - ranging from autonomous vehicles to manageable robotics installations. They have embraced these capabilities as if they were Silicon Valley startups.
"MobiDev is a Ukraine-based software development company. We do mobile development, and we're specialists in that. But we do full stack software development for entrepreneurs, for emerging companies, and for enterprise ventures," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
While some developers care passionately about how data centers and clouds are architected, for most, it is only the end result that matters. To the majority of companies, technology exists to solve a business problem, and only delivers value when it is solving that problem. 2017 brings the mainstream adoption of containers for production workloads. In his session at 21st Cloud Expo, Ben McCormack, VP of Operations at Evernote, discussed how data centers of the future will be managed, how the p...
When applications are hosted on servers, they produce immense quantities of logging data. Quality engineers should verify that apps are producing log data that is existent, correct, consumable, and complete. Otherwise, apps in production are not easily monitored, have issues that are difficult to detect, and cannot be corrected quickly. Tom Chavez presents the four steps that quality engineers should include in every test plan for apps that produce log output or other machine data. Learn the ste...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
Is it possible to migrate 100% of your data ecosystem to the cloud? Join Joe Caserta as he takes you on a complete journey to digital transformation mapping out on-prem data footprint and walking it to the cloud. Joe will also explain how the modern ecosystem supports Artificial Intelligence and will include business use cases to back each of his insights.
Your job is mostly boring. Many of the IT operations tasks you perform on a day-to-day basis are repetitive and dull. Utilizing automation can improve your work life, automating away the drudgery and embracing the passion for technology that got you started in the first place. In this presentation, I'll talk about what automation is, and how to approach implementing it in the context of IT Operations. Ned will discuss keys to success in the long term and include practical real-world examples. Ge...
Recently, REAN Cloud built a digital concierge for a North Carolina hospital that had observed that most patient call button questions were repetitive. In addition, the paper-based process used to measure patient health metrics was laborious, not in real-time and sometimes error-prone. In their session at 21st Cloud Expo, Sean Finnerty, Executive Director, Practice Lead, Health Care & Life Science at REAN Cloud, and Dr. S.P.T. Krishnan, Principal Architect at REAN Cloud, discussed how they built...
When talking IoT we often focus on the devices, the sensors, the hardware itself. The new smart appliances, the new smart or self-driving cars (which are amalgamations of many ‘things'). When we are looking at the world of IoT, we should take a step back, look at the big picture. What value are these devices providing. IoT is not about the devices, its about the data consumed and generated. The devices are tools, mechanisms, conduits. This paper discusses the considerations when dealing with the...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
Business professionals no longer wonder if they'll migrate to the cloud; it's now a matter of when. The cloud environment has proved to be a major force in transitioning to an agile business model that enables quick decisions and fast implementation that solidify customer relationships. And when the cloud is combined with the power of cognitive computing, it drives innovation and transformation that achieves astounding competitive advantage.
Sanjeev Sharma Joins November 11-13, 2018 @DevOpsSummit at @CloudEXPO New York Faculty. Sanjeev Sharma is an internationally known DevOps and Cloud Transformation thought leader, technology executive, and author. Sanjeev's industry experience includes tenures as CTO, Technical Sales leader, and Cloud Architect leader. As an IBM Distinguished Engineer, Sanjeev is recognized at the highest levels of IBM's core of technical leaders.
When building large, cloud-based applications that operate at a high scale, it's important to maintain a high availability and resilience to failures. In order to do that, you must be tolerant of failures, even in light of failures in other areas of your application. "Fly two mistakes high" is an old adage in the radio control airplane hobby. It means, fly high enough so that if you make a mistake, you can continue flying with room to still make mistakes. In his session at 18th Cloud Expo, Le...