|By Marketwired .||
|May 1, 2014 06:45 PM EDT||
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/01/14 -- Ainsworth Lumber Co. Ltd. (TSX: ANS) today announced its financial results for the first quarter ended March 31, 2014.
First Quarter Highlights:
-- Generated adjusted EBITDA of $10.2 million notwithstanding logistical issues and weaker North American markets -- 60% improvement in safety results quarter over quarter -- Ongoing ramp up of High Level mill to meet customer needs -- Continued strong performance in key export markets
Ainsworth President and Chief Executive Officer, Jim Lake said, "Ainsworth had a challenging quarter as transportation issues and extreme weather impacted OSB shipments and demand. North American OSB prices were nearly 50% or U.S.$200/msf lower than the first quarter of 2013. Despite the recent weaker pricing, we believe that the outlook remains positive with further anticipated recovery of the U.S. housing market in 2014 as we move past the worst of the weather issues. We continue to see steady growth in our well-established export market of Japan as well as other markets such as China. From an operational perspective, I am pleased to report a significant improvement in our safety performance this quarter."
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 remains subject to obtaining regulatory approvals and the satisfaction or waiver of other conditions pursuant to the Arrangement Agreement. On April 18, 2014, the outside date for completion of the transaction was extended to June 2, 2014. The Arrangement Agreement permits either party to further extend the outside date for an additional 45 day period if required to obtain certain regulatory approvals. 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.
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.
Sales of $107.8 million in the first quarter of 2014 were $34.0 million lower than sales of $141.8 million for the same period in 2013. The decrease in sales was mainly due to a 25.3% 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 first quarter of 2013 and stable export pricing, combined with a 1.8% increase in sales volumes due to additional production from High Level. The increase in volume from High Level was partially offset by transportation issues during the first quarter of 2014.
Adjusted EBITDA was $10.2 million in the first quarter of 2014 compared to $62.5 million in the same period of 2013, largely as a result of lower realized pricing. Net loss from continuing operations in the first quarter of 2014 was $14.5 million compared to net income of $36.5 million in the first quarter of 2013. The $51.0 million decrease was due to a reduction in gross profit and increased selling and administration expense, combined with fluctuations in non-cash accounting gains and losses and income tax expense.
Adjusted EBITDA margin on sales was 9.5% compared to 44.1% in the same period of 2013. The decrease was largely related to the decrease in gross profit.
Benchmark OSB pricing was down significantly from the same period last year, with North Central and Western Canadian pricing for 7/16" OSB both averaging U.S.$219 per msf (a decrease of 47% and 48%, respectively). Sequentially, the North Central benchmark price decreased 11% versus the prior quarter, while the Western Canadian benchmark price was flat.
At March 31, 2014, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $115.5 million, a reduction of $21.9 million since December 31, 2013 resulting from our seasonal log inventory build and capital expenditures.
Despite a weaker quarter for OSB pricing, we are optimistic about the outlook as U.S. housing indicators continue to show overall improvement. Additionally, we continue to experience growth and stable pricing in our traditional export market of Japan. We are also continuing to advance our opportunities in export markets such as China for industrial applications of OSB. The restart of our High Level mill will allow us to meet the growing requirements of our existing North American and export customers as well as service new market segments over the longer term.
Selected financial information is presented in the tables below. The full financial report is available to be viewed at the following link: http://media3.marketwire.com/docs/943220-fs.pdf
Selected Financial Information
---------------------------------------------------------------------------- Three months ended March 31 2014 2013 ---------------------------------------------------------------------------- (in millions of Canadian dollars, except per share data) Sales $ 107.8 $ 141.8 Cost of products sold 93.8 75.4 Net (loss) income from continuing operations (14.5) 36.5 Net (loss) income (15.3) 36.3 Adjusted EBITDA (1) 10.2 62.5 Adjusted EBITDA margin (2) 9.5% 44.1% ---------------------------------------------------------------------------- Basic and diluted earnings per share: Net (loss) income from continuing operations (0.06) 0.15 Net (loss) income (0.06) 0.15 Weighted average common shares outstanding (3) 240.9 240.8 ---------------------------------------------------------------------------- (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. (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 March 31, 2014.
Reconciliation of Net Income to Adjusted EBITDA
Q1-14 Q1-13 ---------------------------------------------------------------------------- (in millions of Canadian dollars) Net (loss) income from continuing operations $ (14.5) $ 36.5 Add (deduct): Foreign exchange loss on long-term debt 13.6 7.6 Amortization of property, plant and equipment 7.3 6.4 Finance expense 6.7 6.9 Costs related to LP acquisition 2.4 - Loss on disposal of property, plant and equipment 0.2 - Income tax expense (0.4) 13.5 Other (1.1) (2.0) Gain on derivative financial instrument (4.0) (8.1) Stock-based compensation expense - 0.1 Cost of curtailed operations - 1.6 ---------------------------------------------------------------------------- Adjusted EBITDA $ 10.2 $ 62.5 ----------------------------------------------------------------------------
Conference Call Information
Ainsworth will hold a conference call on Friday, May 2, 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 May 9, 2014.
The financial results are based on International Financial Reporting Standards. Investors, analysts and other interested parties can access Ainsworth's 2014 First Quarter Results 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 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.
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.
As the world moves towards more DevOps and microservices, application deployment to the cloud ought to become a lot simpler. The microservices architecture, which is the basis of many new age distributed systems such as OpenStack, NetFlix and so on, is at the heart of Cloud Foundry - a complete developer-oriented Platform as a Service (PaaS) that is IaaS agnostic and supports vCloud, OpenStack and AWS. In his session at 17th Cloud Expo, Raghavan "Rags" Srinivas, an Architect/Developer Evangeli...
Oct. 13, 2015 09:00 AM EDT Reads: 289
As-a-service models offer huge opportunities, but also complicate security. It may seem that the easiest way to migrate to a new architectural model is to let others, experts in their field, do the work. This has given rise to many as-a-service models throughout the industry and across the entire technology stack, from software to infrastructure. While this has unlocked huge opportunities to accelerate the deployment of new capabilities or increase economic efficiencies within an organization, i...
Oct. 13, 2015 09:00 AM EDT Reads: 353
As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ability. Many are unable to effectively engage and inspire, creating forward momentum in the direction of desired change. Renowned for its approach to leadership and emphasis on their people, organizations increasingly look to our military for insight into these challenges.
Oct. 13, 2015 09:00 AM EDT Reads: 284
SYS-CON Events announced today that DataClear Inc. will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The DataClear ‘BlackBox’ is the only solution that moves your PC, browsing and data out of the United States and away from prying (and spying) eyes. Its solution automatically builds you a clean, on-demand, virus free, new virtual cloud based PC outside of the United States, and wipes it clean...
Oct. 13, 2015 09:00 AM EDT Reads: 656
SYS-CON Events announced today that Machkey International Company will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Machkey provides advanced connectivity solutions for just about everyone. Businesses or individuals, Machkey is dedicated to provide high-quality and cost-effective products to meet all your needs.
Oct. 13, 2015 09:00 AM EDT Reads: 456
The modern software development landscape consists of best practices and tools that allow teams to deliver software in a near-continuous manner. By adopting a culture of automation, measurement and sharing, the time to ship code has been greatly reduced, allowing for shorter release cycles and quicker feedback from customers and users. Still, with all of these tools and methods, how can teams stay on top of what is taking place across their infrastructure and codebase? Hopping between services a...
Oct. 13, 2015 09:00 AM EDT Reads: 555
As operational failure becomes more acceptable to discuss within the software industry, the necessity for holding constructive, actionable postmortems increases. But most of what we know about postmortems from "pop culture" isn't actually relevant for the software systems we work on and within. In his session at DevOps Summit, J. Paul Reed will look at postmortem pitfalls, techniques, and tools you'll be able to take back to your own environment so they will be able to lay the foundations for h...
Oct. 13, 2015 08:45 AM EDT Reads: 189
Containers are all the rage among developers and web companies, but they also represent two very substantial benefits to larger organizations. First, they have the potential to dramatically accelerate the application lifecycle from software builds and testing to deployment and upgrades. Second they represent the first truly hybrid-approach to consuming infrastructure, allowing organizations to run the same workloads on any cloud, virtual machine or physical server. Together, they represent a ver...
Oct. 13, 2015 08:45 AM EDT Reads: 213
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
Oct. 13, 2015 08:15 AM EDT Reads: 164
As more intelligent IoT applications shift into gear, they’re merging into the ever-increasing traffic flow of the Internet. It won’t be long before we experience bottlenecks, as IoT traffic peaks during rush hours. Organizations that are unprepared will find themselves by the side of the road unable to cross back into the fast lane. As billions of new devices begin to communicate and exchange data – will your infrastructure be scalable enough to handle this new interconnected world?
Oct. 13, 2015 08:00 AM EDT
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Oct. 13, 2015 07:00 AM EDT Reads: 6,010
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in high-performance, high-efficiency server, storage technology and green computing, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology is a premier provider of advanced server Building Block Solutions® for Data ...
Oct. 13, 2015 05:15 AM EDT Reads: 199
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...
Oct. 13, 2015 05:00 AM EDT Reads: 1,093
Nowadays, a large number of sensors and devices are connected to the network. Leading-edge IoT technologies integrate various types of sensor data to create a new value for several business decision scenarios. The transparent cloud is a model of a new IoT emergence service platform. Many service providers store and access various types of sensor data in order to create and find out new business values by integrating such data.
Oct. 13, 2015 04:00 AM EDT Reads: 681
There are so many tools and techniques for data analytics that even for a data scientist the choices, possible systems, and even the types of data can be daunting. In his session at @ThingsExpo, Chris Harrold, Global CTO for Big Data Solutions for EMC Corporation, will show how to perform a simple, but meaningful analysis of social sentiment data using freely available tools that take only minutes to download and install. Participants will get the download information, scripts, and complete en...
Oct. 13, 2015 03:00 AM EDT Reads: 406