Welcome!

News Feed Item

Ainsworth Announces First Quarter 2014 Results

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.

Financial Results

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.

Margins

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.

Liquidity

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.

Outlook

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 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)
Rick.Eng@ainsworth.ca

Ainsworth Lumber Co. Ltd.
Rob Feustel
Treasurer
604-661-3200
604-661-3201 (FAX)
Rob.Feustel@ainsworth.ca
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
WebRTC is about the data channel as much as about video and audio conferencing. However, basically all commercial WebRTC applications have been built with a focus on audio and video. The handling of “data” has been limited to text chat and file download – all other data sharing seems to end with screensharing. What is holding back a more intensive use of peer-to-peer data? In her session at @ThingsExpo, Dr Silvia Pfeiffer, WebRTC Applications Team Lead at National ICT Australia, looked at differ...
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place June 6-8, 2017, at the Javits Center in New York City, New York, is co-located with 20th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry p...
IoT offers a value of almost $4 trillion to the manufacturing industry through platforms that can improve margins, optimize operations & drive high performance work teams. By using IoT technologies as a foundation, manufacturing customers are integrating worker safety with manufacturing systems, driving deep collaboration and utilizing analytics to exponentially increased per-unit margins. However, as Benoit Lheureux, the VP for Research at Gartner points out, “IoT project implementers often un...
SYS-CON Events announced today that Technologic Systems Inc., an embedded systems solutions company, will exhibit at SYS-CON's @ThingsExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Technologic Systems is an embedded systems company with headquarters in Fountain Hills, Arizona. They have been in business for 32 years, helping more than 8,000 OEM customers and building over a hundred COTS products that have never been discontinued. Technologic Systems’ pr...
SYS-CON Events announced today that IoT Now has been named “Media Sponsor” of SYS-CON's 20th International Cloud Expo, which will take place on June 6–8, 2017, at the Javits Center in New York City, NY. IoT Now explores the evolving opportunities and challenges facing CSPs, and it passes on some lessons learned from those who have taken the first steps in next-gen IoT services.
SYS-CON Events announced today that WineSOFT will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Based in Seoul and Irvine, WineSOFT is an innovative software house focusing on internet infrastructure solutions. The venture started as a bootstrap start-up in 2010 by focusing on making the internet faster and more powerful. WineSOFT’s knowledge is based on the expertise of TCP/IP, VPN, SSL, peer-to-peer, mob...
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and containers together help companies achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of Dev...
SYS-CON Events announced today that delaPlex will exhibit at SYS-CON's @CloudExpo, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. delaPlex pioneered Software Development as a Service (SDaaS), which provides scalable resources to build, test, and deploy software. It’s a fast and more reliable way to develop a new product or expand your in-house team.
The security needs of IoT environments require a strong, proven approach to maintain security, trust and privacy in their ecosystem. Assurance and protection of device identity, secure data encryption and authentication are the key security challenges organizations are trying to address when integrating IoT devices. This holds true for IoT applications in a wide range of industries, for example, healthcare, consumer devices, and manufacturing. In his session at @ThingsExpo, Lancen LaChance, vic...
With billions of sensors deployed worldwide, the amount of machine-generated data will soon exceed what our networks can handle. But consumers and businesses will expect seamless experiences and real-time responsiveness. What does this mean for IoT devices and the infrastructure that supports them? More of the data will need to be handled at - or closer to - the devices themselves.
You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
SYS-CON Events announced today that Dataloop.IO, an innovator in cloud IT-monitoring whose products help organizations save time and money, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Dataloop.IO is an emerging software company on the cutting edge of major IT-infrastructure trends including cloud computing and microservices. The company, founded in the UK but now based in San Fran...
Building a cross-cloud operational model can be a daunting task. Per-cloud silos are not the answer, but neither is a fully generic abstraction plane that strips out capabilities unique to a particular provider. In his session at 20th Cloud Expo, Chris Wolf, VP & Chief Technology Officer, Global Field & Industry at VMware, will discuss how successful organizations approach cloud operations and management, with insights into where operations should be centralized and when it’s best to decentraliz...
In the first article of this three-part series on hybrid cloud security, we discussed the Shared Responsibility Model and examined how the most common attack strategies persist, are amplified, or are mitigated as assets move from data centers to the cloud. Today, we’ll look at some of the unique security challenges that are introduced by public cloud environments. While cloud computing delivers many operational, cost-saving and security benefits, it takes place in a public, shared and on-demand ...