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Ainsworth Announces Significantly Improved First Quarter 2013 Results

Ainsworth Announces Significantly Improved First Quarter 2013 Results 
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 05/13/13 -- Ainsworth
Lumber Co. Ltd. (TSX:ANS)(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." 
Financial Results 
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. 
Margins 
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  
                                                        2013           2012 
----------------------------------------------------------------------------
                                                                            
Sales                                            $     141.8    $      85.1 
Cost of products sold                                   75.4           71.6 
Net income from continuing operations                   36.5            0.6 
Net income                                              36.3            0.5 
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 
  Net income                                            0.15              - 
  Weighted average common shares outstanding                                
   (3)                                                 240.8          100.8 
----------------------------------------------------------------------------
 
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.
    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.  240,836,888 common shares were outstanding on March 31, 2013. 

 
Liquidity 
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. 
Outlook 
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.
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
www.ainsworthengineered.com