Ainsworth Lumber Co. Ltd. Releases 2nd Quarter Results.VANCOUVER, British Columbia--(BUSINESS WIRE)--Aug. 8, 1997-- Ainsworth Lumber Co. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). , VSE See DOS/VSE. VSE - Virtual Storage Extended :ANS (ANS Communications, Inc, Purchase, NY) An ISP, Internet backbone and provider of private data network services, founded in 1990 as Advanced Network & Services, Inc., by IBM, MCI and Merit (consortium of Michigan universities). .) Ainsworth Lumber Co. Ltd. reports that sales for the three month period ended June 30, 1997 (the "1997 Second Quarter") were $79.0 million compared to $78.0 million for the three month period ended June 30, 1996 (the "1996 Second Quarter"). Sales for the six months ended June 30, 1997 were $149.5 million compared to $141.0 million for the same period in 1996. The Company reports a net loss for the three months ended June 30, 1997 of $6.8 million ($0.47 per share) compared to a loss of $2.1 million ($0.15 per share) for the 3 months ended June 30, 1996. For the six months ended June 30, 1997, the Company reports a net loss of $12.5 million ($0.86 per share) compared to a net loss of $3.0 million ($0.20 per share) for the same period in 1996. During the 1997 Second Quarter cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , before changes in non-cash working capital, was ($8.0) million compared to $5.8 million for the 1996 Second Quarter. LUMBER Sales of lumber for the 1997 Second Quarter compared to the 1996 Second Quarter increased 7 percent as a result of unit sales unit sales Sales measured in terms of physical units rather than dollars. Unit sales data are often used by financial analysts when evaluating the health of a company. volume increases due to improved production rates. Production costs for the quarter were on budget. Log costs continued to be high due to increased stumpage stump·age n. 1. Standing timber regarded as a commodity. 2. The value of standing timber. 3. The right to cut standing timber. stumpage 1. charges, harvesting and other costs associated with compliance with the Forest Practices Code. OSB OSB abbr. Order of Saint Benedict Sales of OSB for the 1997 Second Quarter compared to the 1996 Second Quarter decreased 11 percent. This decrease was in spite of a 29 percent increase in unit sales volume, which was more than offset by an average price decline of 31 percent. The increased unit volume was due to the continuing production ramp-up at the Grande Prairie Grande Prairie (Fr. gräNd prâ'rē`), city (1991 pop. 28,271), W Alta., Canada, NW of Edmonton. It is the chief business center for the Peace River valley farming area. mill which was running at approximately 90 percent of rated capacity by the end of the second quarter of 1997. Production is expected to achieve full capacity by the end of the year. Diversification of the product mix with a focus on export and industrial products is continuing. This facility, one of the largest in the world, will achieve low production costs due to significant economies of scale. Unit production costs will continue to drop as the mill approaches rated capacity. Production at the 100 Mile mill was at full capacity and on budget. Low OSB prices resulted in both mills incurring significant operating losses operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. which are included in the operating results for the quarter. The 100 Mile mill generated cash for the quarter as it is able to mitigate low domestic prices by selling higher margin export and industrial products. VENEER veneer (vənēr`), thin leaf of wood applied with glue to a panel or frame of solid wood. The art of veneer developed with early civilization. AND SPECIALTY PLYWOOD Operating results were positive during the quarter due to strong veneer prices and continuing steady prices for overlaid o·ver·laid v. Past tense and past participle of overlay1. plywood. Veneer production increased by 26 percent over 1996 due to increased operating shifts. Operating costs operating costs npl → gastos mpl operacionales were higher due to peeler log cost increases resulting from inventory shortages and increased log purchases. OUTLOOK Ongoing high log costs are expected to continue to impact earnings for the balance of the year. Housing starts have been revised upwards from earlier forecasts, resulting in improved demand and pricing for lumber. Although the general trend is still for some price erosion in lumber markets due to increased production, particularly in the fourth quarter of this year, the magnitude of the decrease should be moderated from earlier outlooks as the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. economy continues to generate ongoing strong demand for housing stock. The outlook for OSB markets is for improved prices during the third quarter due to seasonally higher demand, and lower prices during the fourth quarter due to seasonally lower demand. Further capacity attrition is required over the next 12 to 18 months before there will be a longer term, sustainable recovery in OSB prices. Despite the significant increase in OSB capacity, mills are operating at or near capacity and all of the incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. volume is being absorbed by the market. The demand for the Company's OSB products in Japan and in industrial markets continues to grow and the outlook is positive. Demand for the Company's specialty plywood products is steady. Both demand and prices are expected to improve during the last half of this year, particularly in Eastern Canada Eastern Canada (also the Eastern provinces) is the region of Canada generally considered to be east of Manitoba, consisting of the following provinces:
In currencies, this is the abbreviation for the Latvian Lats. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. production. Chip prices should continue to increase during the last half of this year as pulp and paper markets strengthen. The Company has commenced its previously announced modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, program which will consolidate the Company's three sawmills into one sawmill sawmill, installation or facility in which cut logs are sawed into standard-sized boards and timbers. The saws used in such an installation are generally of three types: the circular saw, which consists of a disk with teeth around its edge; the band saw, which of similar size to the successful larger sawmills in the Province, incorporating the latest technology to maximize both lumber recovery and manufacturing flexibility. The Company will also upgrade its veneer and plywood operations to optimize log and veneer recoveries, and to add higher margin products to its product line. Ainsworth Lumber has operated as a solid wood forests products company in British Columbia British Columbia, province (2001 pop. 3,907,738), 366,255 sq mi (948,600 sq km), including 6,976 sq mi (18,068 sq km) of water surface, W Canada. Geography for more than 45 years. In addition to its sawmill and OSB plant at 100 Mile House, the Company operates a sawmill near Clinton, a veneer plant at Lillooet, a plywood plant at Savona, a value-added plant at Abbotsford and an OSB plant at Grande Prairie, Alberta “Grande Prairie” redirects here. For the city in Texas, see Grand Prairie, Texas. Grande Prairie is the main city in the northwestern part of the province of Alberta in Western Canada. . -0-
AINSWORTH LUMBER CO. LTD.
Supplemental Information 3 months ended 6 months ended
June 30 June 30
(in thousands of dollars) 1997 1996 1997 1996
unaudited
Sales $ 78,983 $ 78,043 $ 49,526 $ 141,043
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Cost of products sold 80,071 70,069 147,087 125,788
Depreciation &
amortization 5,549 4,634 12,123 8,700
Selling, general
& administration 2,920 3,799 5,772 6,835
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88,540 78,502 164,982 141,323
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Loss from operations (9,557) (459) (15,456) (280)
Other income 1,111 579 1,520 863
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(8,446) 120 (13,936) 583
Interest and
financing expense 3,386 3,638 6,750 5,442
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Loss before
income taxes (11,832) (3,518) (20,686) (4,859)
Income tax recovery (5,017) (1,372) (8,166) (1,895)
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Net loss $ (6,815) $ (2,146) $(12,520) $ (2,964)
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Net loss
per common share
(in dollars) $ (0.47) $ (0.15) $ (0.86) $ (0.20)
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Weighted average
common shares
outstanding (000's) 14,545 14,560 14,545 14,560
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Other Information
Cash (used for) from
operations (Note 1) $ (8,036) $ 5,811 $ (8,407) $ 13,686
Additions to
capital assets $ 2,536 $ 4,324 $ 6,250 $ 21,663
Total assets $ 380,572 $396,297 $380,572 $396,297
Shareholders'
equity $ 102,105 $118,098 $102,105 $118,098
Product Sales
OSB $ 29,694 $ 33,438 $ 59,236 $ 55,215
Lumber 29,353 27,299 53,219 48,749
Plywood 13,026 11,748 25,033 22,156
Veneer 3,599 1,737 6,054 5,878
Chips 3,311 3,821 5,984 9,045
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$ 78,983 $ 78,043 $149,526 $141,043
Product Sales Volumes
OSB (msf-3/8") 187,127 145,063 371,696 238,733
Lumber (mfbm) 64,045 59,961 115,757 115,125
Plywood (msf-3/8") 21,949 19,595 42,554 37,252
Veneer (msf-3/8") 17,414 8,821 28,921 29,595
Chips (BDUs) 52,063 51,336 96,473 95,612
Note 1: before changes in non-cash operating working capital
CONTACT: Ainsworth Lumber Co. Ltd. Catherine Ainsworth, 604/661-3200 or Ainsworth Lumber Co. Ltd. Steven Blacklock, 604/661-3200 |
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