Welcome!

News Feed Item

Ainsworth Announces Second Quarter 2014 Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 08/12/14 -- Ainsworth Lumber Co. Ltd. (TSX:ANS) today announced its financial results for the second quarter ended June 30, 2014.

Highlights:

--  Generated adjusted EBITDA of $13.1 million ($23.3 million year to date) 
--  Year to date shipment volumes 11% higher than prior year 
--  Continued growth in key export markets 
--  6% reduction in unit costs quarter over quarter

Ainsworth President and Chief Executive Officer, Jim Lake said, "North American OSB market conditions were relatively weak as the spring building season did not materialize as anticipated. North American benchmark OSB prices were stable relative to the prior quarter, although they were nearly 40% or U.S.$130/msf lower than the second quarter of 2013. Despite the slower pace of housing growth in the near-term, we are optimistic about the longer-term recovery and continued absorption of industry supply. The recent slower market environment in North America does highlight the strategic importance of our traditional export market in Japan as well as the progress we are making in markets such as China for new applications of OSB."

Financial Results

Sales of $117.4 million in the second quarter of 2014 were $10.1 million lower than sales of $127.5 million for the same period in 2013. The decrease in sales was mainly due to a 24% 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 second quarter of 2013 and more stable export pricing in Japan, combined with a 21% increase in sales volumes due to additional production from High Level.

In the first half of 2014, sales were $225.2 million compared to $269.3 million in the same period of 2013. The $44.1 million decrease was related to a 25% decrease in realized pricing, partially offset by an 11% increase in sales volumes and the same factors noted above. The increase in volume from High Level was partially offset by transportation issues that limited shipments during the first quarter of 2014.

Adjusted EBITDA was $13.1 million in the second quarter of 2014 compared to $50.7 million in the same period of 2013, largely as a result of lower realized pricing. Notwithstanding the significant reduction in gross profit, net income from continuing operations in the second quarter of 2014 was $9.5 million higher than the prior year. This increase was largely due to fluctuations in non-cash accounting gains and losses and income tax expense combined with decreased selling and administration expense.

Adjusted EBITDA for the first half of 2014 was $23.3 million compared to $113.2 million in 2013, due mainly to lower realized pricing. Net loss from continuing operations in the first six months of 2014 was $2.2 million, compared to net income of $39.3 million for the same period in 2013, representing a decrease of $41.5 million. The decrease reflected lower gross profit, partially offset by fluctuations in non-cash accounting gains and losses and income tax expense.

Margins

Adjusted EBITDA margin on sales for the second quarter of 2014 was 11.2% compared to 39.8% in the same period of 2013 (10.3% in the first half of 2014 compared to 42.0% in the same period of 2013). The decreases were largely related to lower realized pricing in North America.

Benchmark OSB pricing remained stable during the second quarter of 2014, although down significantly from the same periods last year, with North Central and Western Canadian pricing for 7/16" OSB averaging U.S.$219 and U.S. $206 per msf, respectively, representing a decrease of 37% versus the second quarter of 2013. Sequentially, the North Central benchmark price remained flat, while the Western Canadian benchmark price decreased 6% versus the prior quarter.

Liquidity

At June 30, 2014, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $103.2 million, a reduction of $34.2 million since December 31, 2013 resulting from our seasonal log inventory build, semi-annual interest payment and capital expenditures, combined with the timing of accounts receivable and accounts payable.

Outlook

While the pace of improvement has been slower than previously expected, we remain optimistic about the medium to long-term outlook as U.S. housing starts recover to more historical levels. 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 new 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/Ainsworth_Q2_2014_FS.pdf.

Selected Financial Information                                              
                                           Q2-14    Q2-13 YTD 2014 YTD 2013 
----------------------------------------------------------------------------
(in millions of Canadian dollars, except                                    
 per share data)                                                            
Sales                                    $ 117.4  $ 127.5  $ 225.2  $ 269.3 
Cost of products sold                      100.5     72.7    194.3    148.1 
Net (loss) income from continuing                                           
 operations                                 12.3      2.8     (2.2)    39.3 
Net (loss) income                           12.8      2.6     (2.5)    38.9 
Adjusted EBITDA (1)                         13.1     50.7     23.3    113.2 
Adjusted EBITDA margin (2)                  11.2%    39.8%    10.3%    42.0%
----------------------------------------------------------------------------
Basic and diluted earnings per share:                                       
 Net (loss) income from continuing                                          
  operations                                0.05     0.01    (0.01)    0.16 
 Net (loss) income                          0.05     0.01    (0.01)    0.16 
 Weighted average common shares                                             
  outstanding (3)                          240.9    240.8    240.9    240.8 
----------------------------------------------------------------------------
 (1) Adjusted EBITDA, a non-IFRS financial measure, is defined as net income
     (loss) from continuing operations before amortization, (gain) loss on  
     disposal of property, plant and equipment, cost of curtailed           
     operations, share-based compensation expense, finance expense, foreign 
     exchange (gain) loss on long-term debt, other foreign exchange (gain)  
     loss, 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 June 30, 2014.           
                                                                            
Reconciliation of Net Income to Adjusted EBITDA                             
                                           Q2-14    Q2-13 YTD 2014 YTD 2013 
----------------------------------------------------------------------------
(in millions of Canadian dollars)                                           
Net (loss) income from continuing                                           
 operations                              $  12.3  $   2.8  $  (2.2) $  39.3 
Add (deduct):                                                               
 Amortization of property, plant and                                        
  equipment                                  7.5      6.2     14.8     12.6 
 Finance expense                             6.7      7.4     13.4     14.3 
 Loss (Gain) on derivative financial                                        
  instrument                                 0.6      7.5     (3.4)    (0.6)
 Foreign exchange (gain) loss on long-                                      
  term debt                                (12.5)    13.1      1.1     20.7 
 Income tax (recovery) expense              (0.6)     6.6     (1.0)    20.1 
 Stock-based compensation (recovery)                                        
  expense                                   (0.4)     1.0     (0.4)     1.1 
 Other                                      (0.3)    (1.2)    (1.5)    (3.2)
 (Recovery) Costs related to LP                                             
  acquisition                               (0.2)       -      2.2        - 
 Loss on disposal of property, plant and                                    
  equipment                                    -        -      0.3        - 
 Write-down of property, plant and                                          
  equipment                                    -      3.8        -      3.8 
 Cost of curtailed operations                  -      3.5        -      5.1 
----------------------------------------------------------------------------
Adjusted EBITDA                          $  13.1  $  50.7  $  23.3  $ 113.2 
----------------------------------------------------------------------------

Conference Call Information

Ainsworth will hold a conference call on Tuesday, August 12, 2014 at 8:30 a.m. PT (11:30 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 August 19, 2014.

The financial results are based on International Financial Reporting Standards. Investors, analysts and other interested parties can access Ainsworth's 2014 Second 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.
Suite 3194, Bentall 4, P.O. Box 49307
1055 Dunsmuir Street, Vancouver, B.C. V7X 1L3
604-661-3200
604-661-3201 (FAX)

Ainsworth Lumber Co. Ltd.
Rick Eng
Vice President, Finance and Chief Financial Officer
[email protected]

Ainsworth Lumber Co. Ltd.
Rob Feustel
Treasurer
[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
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...
A strange thing is happening along the way to the Internet of Things, namely far too many devices to work with and manage. It has become clear that we'll need much higher efficiency user experiences that can allow us to more easily and scalably work with the thousands of devices that will soon be in each of our lives. Enter the conversational interface revolution, combining bots we can literally talk with, gesture to, and even direct with our thoughts, with embedded artificial intelligence, whic...
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
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...
"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...
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...
It is of utmost importance for the future success of WebRTC to ensure that interoperability is operational between web browsers and any WebRTC-compliant client. To be guaranteed as operational and effective, interoperability must be tested extensively by establishing WebRTC data and media connections between different web browsers running on different devices and operating systems. In his session at WebRTC Summit at @ThingsExpo, Dr. Alex Gouaillard, CEO and Founder of CoSMo Software, presented ...
In his session at 21st Cloud Expo, James Henry, Co-CEO/CTO of Calgary Scientific Inc., introduced you to the challenges, solutions and benefits of training AI systems to solve visual problems with an emphasis on improving AIs with continuous training in the field. He explored applications in several industries and discussed technologies that allow the deployment of advanced visualization solutions to the cloud.
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...
"NetApp is known as a data management leader but we do a lot more than just data management on-prem with the data centers of our customers. We're also big in the hybrid cloud," explained Wes Talbert, Principal Architect at NetApp, 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.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"We work around really protecting the confidentiality of information, and by doing so we've developed implementations of encryption through a patented process that is known as superencipherment," explained Richard Blech, CEO of Secure Channels Inc., 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...
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...
"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...