VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 13, 2013) - Ainsworth Lumber Co. Ltd. (ANS.TO)(TSX:ANS.WT) today announced its financial results for the first quarter ended March 31, 2013.
First Quarter Highlights:
- Adjusted EBITDA of $62.5 million versus $9.6 million in the same quarter last year
- Achieved a strong quarter of production at 408 million square feet
- Progressing well towards restarting our High Level, Alberta mill this year
- Strengthened balance sheet will support strategic investment in the business
Ainsworth Reports Strong First Quarter Results
Ainsworth President and Chief Executive Officer, Jim Lake said, "I am pleased to report very strong first quarter results as we benefited from the early stages of the U.S. housing market recovery and significantly stronger OSB pricing. During the first three months of the year, we generated adjusted EBITDA of $62.5 million which represented an increase of $20.5 million over the previous quarter and our best quarter in seven years. Adjusted EBITDA margins improved to an impressive 44.1% on shipment volumes of 397.0 million square feet (3/8" basis) and sales of $141.8 million. First quarter production of 408.1 million square feet (3/8" basis) was slightly higher than last quarter, and one of the best quarters for combined production from our three operating mills."
Sales in the first quarter of 2013 were $141.8 million compared to $85.1 million in the first quarter of 2012. The $56.7 million increase was mainly due to a 70% increase in realized pricing that was partially offset by a 2% decrease in sales volumes. Adjusted EBITDA for the first quarter of 2013 was $62.5 million compared to adjusted EBITDA of $9.6 million in the same quarter last year. Net income from continuing operations was $36.5 million in the first quarter of 2013 compared to $0.6 million in the first quarter of 2012. This increase included a $52.9 million increase in gross profit, an $8.1 million gain on derivative financial instrument, and a $6.2 million reduction in finance expense, partially offset by fluctuations in non-cash accounting gains and losses and income tax expense.
Adjusted EBITDA margin for the first quarter of 2013 was 44.1% compared to 11.3% in the first quarter of 2012.
Pricing continued to strengthen in the first quarter of 2013, with the North Central price for the benchmark 7/16" OSB averaging U.S. $417 per msf (an increase of 105% compared to the same period in 2012 and 26% compared to prior quarter). The Western Canadian price for the benchmark 7/16" OSB averaged U.S. $419 per msf in the first quarter of 2013 (an increase of 108% compared to the same period in 2012 and 27% 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/ans513fs.pdf
|Selected Financial Information|
|In millions of Canadian dollars, except per share data|
|Three months ended March 31|
|Cost of products sold||75.4||71.6|
|Net income from continuing operations||36.5||0.6|
|Adjusted EBITDA (1)||62.5||9.6|
|Adjusted EBITDA margin (2)||44.1||%||11.3||%|
|Basic and diluted earnings per share:|
|Net income from continuing operations||0.15||0.01|
|Weighted average common shares outstanding (3)||240.8||100.8|
- 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.
- Adjusted EBITDA margin, a non-IFRS financial measure, is defined as adjusted EBITDA divided by sales.
- 240,836,888 common shares were outstanding on March 31, 2013.
At March 31, 2013, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $141.2 million, an improvement of $34.4 million since December 31, 2012 resulting from our strong operating results. Our improved financial position provides us with the flexibility to pursue our business plan and capitalize on the ongoing market recovery through strategic investment in the business. We are progressing well in our previously announced restart of High Level and look forward to growing with our customers as well as servicing new market segments in North America and Asia.
U.S. housing market indicators remain positive as we enter the peak building season. Foreclosures and existing home inventories are trending down against a backdrop of record low mortgage rates. Home prices and builder confidence continue to show signs of recovery. The seasonally adjusted annual rate of U.S. housing starts reported for March 2013 exceeded one million for the first time since 2008 - still well below what we believe to be normalized levels. Against this backdrop of optimism with respect to market demand, a number of OSB producers have announced plans to bring idle capacity back online.
Conference Call Information
Ainsworth will hold a conference call on Wednesday, May 15, 2013 at 10:00 am PDT (1:00 pm EDT) to discuss the 2013 first quarter results. The dial-in phone number is 1-800-319-4610 from inside the U.S. or Canada, and +1-604-638-5340 from outside of the U.S. and Canada, reservation 4176#. The recording of this conference call will be available until the end of day May 22, 2013.
The financial results are based on International Financial Reporting Standards. Investors, analysts and other interested parties can access Ainsworth's 2013 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.