Click here to close now.

SYS-CON MEDIA Authors: Lori MacVittie, Liz McMillan, Peter Silva, Greg Wind, Glenn Rossman

News Feed Item

Ainsworth Announces 2013 Fourth Quarter and Year End Results

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 03/26/14 -- Ainsworth Lumber Co. Ltd. (TSX:ANS) today announced its financial results for the fourth quarter and year ended December 31, 2013.

2013 Highlights:


--  Generated annual adjusted EBITDA of $148.9 million versus $105.5 million
    in 2012 
--  Continued strong export growth 
--  Restarted the High Level mill in September 
--  With improved liquidity, exercised optional redemption of U.S.$35
    million of our senior secured notes 
--  Pending acquisition by LP targeted to close during the second quarter of
    2014 

Ainsworth President and Chief Executive Officer, Jim Lake said, "Ainsworth benefited in 2013 from the continued North American housing market recovery, although OSB prices did moderate in the second half of the year. Notwithstanding some near-term challenges in 2014 including transportation issues and extreme weather that have impacted OSB shipments and demand, the overall outlook remains positive with the consensus forecast for U.S. housing starts calling for further recovery in 2014. I am also pleased to report that our export markets exhibited strong growth, particularly in Japan."

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, which will be carried out by way of a court-approved plan of arrangement, was approved by approximately 99.9% of the votes cast by the shareholders of the Company at a special meeting that took place on October 29, 2013, and subsequently received approval from the Supreme Court of British Columbia on October 31, 2013. 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. Subject to obtaining required regulatory approvals and the satisfaction or waiver of other conditions of the Arrangement Agreement, Ainsworth currently expects the acquisition to close during the second quarter of 2014.

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 $104.4 million in the fourth quarter of 2013 were $13.5 million lower than sales of $117.9 million for the same period in 2012. The decrease in sales was mainly due to an 18% 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 fourth quarter of 2012 combined with stronger export pricing. Notwithstanding transportation issues that restricted shipments in the fourth quarter, our sales volumes increased 2.8% due to the onset of production at High Level.

Adjusted EBITDA was $11.3 million in the fourth quarter of 2013 compared to $42.0 million in the same period of 2012, largely as a result of lower realized pricing. Net loss from continuing operations in the fourth quarter of 2013 was $10.6 million compared to net income of $6.7 million in the fourth quarter of 2012. The $17.3 million decrease was due to the reduction in gross profit and increased selling and administration expense, partially offset by a reduction in finance expense, and fluctuations in non-cash accounting gains and losses and income tax expense.

Sales of $488.0 million in 2013 were $78.9 million higher than sales of $409.1 million in 2012. This increase was mainly due to a 22% increase in realized pricing for the year. The impact of the U.S. benchmark increases on our realized pricing was enhanced by the effect of a weaker Canadian dollar in 2013 on average relative to 2012 combined with stronger export pricing. Partially offsetting the price increases, there was a 0.7% decline in sales volumes as additional production from High Level was more than offset by maintenance downtime at our various mills and transportation issues toward the end of 2013.

Adjusted EBITDA for the year was $148.9 million in 2013 compared to $105.5 million in 2012, largely as a result of higher realized pricing. Net income from continuing operations was $39.4 million in 2013 compared to $28.4 million in 2012, representing an increase of $11.0 million. The increase included an increase in gross profit and a decrease in finance expense, partially offset by increased costs of curtailed operations, increased selling and administration expense, and fluctuations in non-cash accounting gains and losses and income tax expense.

Margins

Adjusted EBITDA margin on sales for the fourth quarter of 2013 was 10.8% compared to 35.6% in the fourth quarter of 2012. For the full year, adjusted EBITDA margin on sales was 30.5% in 2013 compared to 25.8% in 2012.

Benchmark OSB pricing remained stable during the fourth quarter of 2013, although down from the previous quarter and the same period last year, with the North Central price for 7/16" OSB averaging U.S.$245 per msf (a decrease of 26% compared to the fourth quarter of 2012, and a 3% decrease compared to prior quarter). The Western Canadian price for 7/16" OSB averaged U.S.$219 per msf in the fourth quarter of 2013 (a decrease of 34% compared to the fourth quarter of 2012, and a 5% decrease 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/ans0325report.pdf.


Selected Financial Information                                              
In millions of Canadian dollars, except per share data                      
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                  Three months ended   Year ended December  
                                     December 31                31          
                                      2013       2012       2013       2012 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Sales                            $   104.4  $   117.9  $   488.0  $   409.1 
Cost of products sold                 89.4       72.1      323.5      287.6 
Net income from continuing                                                  
 operations                          (10.6)       6.7       39.4       28.4 
Net income                           (10.7)      32.5       38.8       28.2 
Adjusted EBITDA (1)                   11.3       42.0      148.9      105.5 
Adjusted EBITDA margin (2)            10.8%      35.6%      30.5%      25.8%
----------------------------------------------------------------------------
Basic and diluted earnings per share:                                       
 Net income from continuing                                                 
  operations                         (0.04)      0.06       0.16       0.28 
 Net income                          (0.04)      0.06       0.16       0.28 
 Weighted average common shares                                             
  outstanding (3)                    240.9      106.9      240.9      102.3 
----------------------------------------------------------------------------
(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)  240,906,309 common shares were outstanding on December 31, 2013.      

Liquidity

At December 31, 2013, Ainsworth's available liquidity, consisting of cash and cash equivalents, was $137.4 million, an improvement of $30.6 million since December 31, 2012 resulting from our stronger operating results, partially offset by debt repayments and capital expenditures.

Outlook

The overall long-term outlook remains positive for the U.S. housing market. Additionally, we continue to experience growth in our export markets, including Japan and China. As a result, we remain confident that the market will require additional supply in the years ahead. The restart of our High Level mill will allow us to meet the growing requirements of our existing customer base in North America and Asia as well as service new market segments.

Conference Call Information

Ainsworth will hold a conference call on Wednesday, March 26, 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 April 2, 2014.

The financial results are based on International Financial Reporting Standards. Investors, analysts and other interested parties can access Ainsworth's Financial Statements, Management's Discussion and Analysis 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.

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
As organizations shift toward IT-as-a-service models, the need for managing and protecting data residing across physical, virtual, and now cloud environments grows with it. CommVault can ensure protection &E-Discovery of your data – whether in a private cloud, a Service Provider delivered public cloud, or a hybrid cloud environment – across the heterogeneous enterprise. In his session at 16th Cloud Expo, Randy De Meno, Chief Technologist - Windows Products and Microsoft Partnerships, will disc...
It’s been proven time and time again that in tech, diversity drives greater innovation, better team productivity and greater profits and market share. So what can we do in our DevOps teams to embrace diversity and help transform the culture of development and operations into a true “DevOps” team? In her session at DevOps Summit, Stefana Muller, Director, Product Management – Continuous Delivery at CA Technologies, will answer that question citing examples, showing how to create opportunities f...
Are your applications getting in the way of your business strategy? It’s time to rethink your IT approach. In his session at 16th Cloud Expo, Madhukar Kumar, Vice President, Product Management at Liaison Technologies, will discuss a new data-centric approach to IT that allows your data, not applications, to inform business strategy. By moving away from an application-centric IT model where data integration and analysis are subservient to the constraints of applications, your organization will b...
Analytics is the foundation of smart data and now, with the ability to run Hadoop directly on smart storage systems like Cloudian HyperStore, enterprises will gain huge business advantages in terms of scalability, efficiency and cost savings as they move closer to realizing the potential of the Internet of Things. In his session at 16th Cloud Expo, Paul Turner, technology evangelist and CMO at Cloudian, Inc., will discuss the revolutionary notion that the storage world is transitioning from me...
VictorOps is making on-call suck less with the only collaborative alert management platform on the market. With easy on-call scheduling management, a real-time incident timeline that gives you contextual relevance around your alerts and powerful reporting features that make post-mortems more effective, VictorOps helps your IT/DevOps team solve problems faster.
The Software Defined Data Center (SDDC), which enables organizations to seamlessly run in a hybrid cloud model (public + private cloud), is here to stay. IDC estimates that the software-defined networking market will be valued at $3.7 billion by 2016. Security is a key component and benefit of the SDDC, and offers an opportunity to build security 'from the ground up' and weave it into the environment from day one. In his session at 16th Cloud Expo, Reuven Harrison, CTO and Co-Founder of Tufin,...
The essence of cloud computing is that all consumable IT resources are delivered as services. In his session at 15th Cloud Expo, Yung Chou, Technology Evangelist at Microsoft, will demonstrate the concepts and implementations of two important cloud computing deliveries: Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). He will discuss from business and technical viewpoints what exactly they are, why we care, how they are different and in what ways, and the strategies for IT ...
Red Hat has launched the Red Hat Cloud Innovation Practice, a new global team of experts that will assist companies with more quickly on-ramping to the cloud. They will do this by providing solutions and services such as validated designs with reference architectures and agile methodology consulting, training, and support. The Red Hat Cloud Innovation Practice is born out of the integration of technology and engineering expertise gained through the company’s 2014 acquisitions of leading Ceph s...
The free version of KEMP Technologies' LoadMaster™ application load balancer is now available for unlimited use, making it easy for IT developers and open source technology users to benefit from all the features of a full commercial-grade product at no cost. It can be downloaded at FreeLoadBalancer.com. Load balancing, security and traffic optimization are all key enablers for application performance and functionality. Without these, application services will not perform as expected or have the...
Cloud data governance was previously an avoided function when cloud deployments were relatively small. With the rapid adoption in public cloud – both rogue and sanctioned, it’s not uncommon to find regulated data dumped into public cloud and unprotected. This is why enterprises and cloud providers alike need to embrace a cloud data governance function and map policies, processes and technology controls accordingly. In her session at 15th Cloud Expo, Evelyn de Souza, Data Privacy and Compliance...
Platform-as-a-Service (PaaS) is a technology designed to make DevOps easier and allow developers to focus on application development. The PaaS takes care of provisioning, scaling, HA, and other cloud management aspects. Apache Stratos is a PaaS codebase developed in Apache and designed to create a highly productive developer environment while also supporting powerful deployment options. Integration with the Docker platform, CoreOS Linux distribution, and Kubernetes container management system ...
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, will discuss why containers should be paired with new architectural practices such as microservices ra...
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been ...
There are many considerations when moving applications from on-premise to cloud. It is critical to understand the benefits and also challenges of this migration. A successful migration will result in lower Total Cost of Ownership, yet offer the same or higher level of robustness. In his session at 15th Cloud Expo, Michael Meiner, an Engineering Director at Oracle, Corporation, will analyze a range of cloud offerings (IaaS, PaaS, SaaS) and discuss the benefits/challenges of migrating to each of...
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...