Ainsworth Lumber Co. Ltd. Releases 3rd Quarter Results.VANCOUVER, BRITISH COLUMBIA--(BUSINESS WIRE)--Nov. 17, 1997-- AINSWORTH (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :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). .) (VSE See DOS/VSE. VSE - Virtual Storage Extended :ANS.) Ainsworth Lumber Co. Ltd. reports sales of $76.8 million for the three month period ended September 30, 1997 (the "1997 Third Quarter") compared to $85.1 million for the three month period ended September 30, 1996 (the "1996 Third Quarter"). Sales for the nine months ended September 30, 1997 were $226.3 million compared to $226.2 million for the same period in 1996. The Company reports a net loss for the three months ended September 30, 1997 of $11.6 million ($0.80 per share) compared to a loss of $0.8 million ($0.06 per share) for the 3 months ended September 30, 1996. For the nine months ended September 30, 1997, the Company reports a net loss of $24.1 million ($1.66 per share) compared to a net loss of $3.8 million ($0.26 per share) for the same period in 1996. 1997 Third Quarter earnings were negatively impacted by a one time charge of $3.0 million for deferred financing costs and foreign exchange relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc retiring previous outstanding debt as well as the additional interest of the new debt without the completion of the new facilities to assist in carrying it. During the 1997 Third 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 ($12.9) million compared to $8.9 million for the 1996 Third Quarter. Lumber Sales of lumber for the Third Quarter of 1997 decreased 18 percent compared to the Third Quarter of 1996. This was 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 decreases of 11 percent and lower selling prices. The decreased volume reflects the curtailment of the Lillooet 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 operations. Production costs for the quarter were on budget however log costs continued at high levels 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 Third Quarter 1997 decreased 12 percent compared to the Third Quarter of 1996. This decrease was in spite of a 20 percent increase in unit sales volume, which was more than offset by an average price decline of 26 percent. The increased unit volume was due to higher production at 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. as mill ramp up Ramp Up To increase a company's operations in anticipation of increased demand. Notes: A company might 'ramp up' operations if they just signed a contract creating substantially more demand for their product. See also: Demand, Economies of Scale continued. Low commodity OSB prices resulted in the Grande Prairie mill 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 had a small operating loss for the quarter as it was able to mitigate low commodity OSB prices because of its industrial and export sales. Production costs and log costs were on budget. Log costs at 100 Mile House are significantly higher than in Grande Prairie due to higher transportation costs associated with purchase wood. Alternative sources of Crown wood in B.C. are also at higher costs than in Alberta due to higher costs associated with compliance with the Forest Practices Code. 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 Sales of veneer and specialty plywood for the Third Quarter of 1997 increased 9 percent compared to the Third Quarter of 1996. Plywood sales volume increased 14 percent while external veneer sales decreased by 18 percent. Despite lower veneer prices during the period, operating results were positive due to continuing steady demand and prices for overlaid o·ver·laid v. Past tense and past participle of overlay1. plywood. Log costs were higher due to increased log purchases as a result of inventory shortages associated with compliance with the Forest Practices Code and other Land Use Planning
Land use planning is the term used for a branch of public policy which encompasses various disciplines which seek to order and regulate the use of land in an efficient and ethical way. issues which resulted in a lack of approved cutting permits. Outlook Ongoing high log costs which negatively affect all B.C. divisions are expected to continue to impact earnings for the balance of the year. The Company continues to pursue a number of proposals with the BC government to address specific inequities and is hopeful that a timely, positive resolution to these issues will be achieved. The Company is experiencing lower lumber prices in Canadian markets due to the Canada/US Softwood softwood Timber obtained from coniferous trees (mainly of the pine and fir families). With the exception of bald cypress, tamarack, and larch, softwood trees are evergreens. Lumber Agreement. The Agreement is limiting sales to the US market and creating an over supply in the Canadian market. Changes in product mix currently underway with the Company's 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 are expected to reduce the volume of lumber available for sale to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. which would be subject to the Agreement. OSB prices strengthened in the third quarter (due to seasonally higher demand) and this trend has continued into the fourth quarter. However, OSB prices are expected to fall in the first quarter of 1998 due to weaker seasonal demand. The demand for the Company's OSB products in Japan and in industrial markets continues to grow and the outlook is positive, despite a current lull in the Japanese market. Demand for the Company's specialty plywood products is steady. Both demand and prices are expected to improve during the last quarter 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. prices. Chip prices improved in the third quarter and they are expected to increase further during the last quarter of this year as pulp and paper markets strengthen. The Company has commenced its previously announced modernization program which will consolidate the Company's three sawmills into one sawmill 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 is also upgrading its veneer and plywood operations to optimize log and veneer recoveries, and to add higher margin products to its product line. The modernization project is on schedule and on budget and completion is expected during the first half of 1998. These measures, combined with an expected recovery of OSB prices during 1998, will improve the Company's operating results next year. 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 9 months ended
September 30 September 30
(in thousands of dollars) 1997 1996 1997 1996
Sales $76,769 $85,134 $226,295 $226,177
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Cost of products sold 74,666 74,422 221,753 200,210
Depreciation and
amortization 6,595 6,013 18,718 14,713
Selling, general
and administration 2,915 3,158 8,687 9,993
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84,176 83,593 249,158 224,916
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Loss from operations (7,407) 1,541 (22,863) 1,261
Other income 1,214 451 2,734 1,314
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(6,193) 1,992 (20,129) 2,575
Interest and
financing expense 12,940 3,322 19,690 8,764
-----------------------------------
Loss before
income taxes (19,133) (1,330) (39,819) (6,189)
Income tax recovery (7,505) (519) (15,671) (2,414)
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Net loss (11,628) (811) (24,148) (3,775)
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Net loss per common share
(in dollars) $(0.80) $(0.06) $(1.66) $(0.26)
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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} $(12,898) $8,872 $(21,287) $22,577
Additions to capital
assets $24,029 $10,235 $30,297 $31,917
Total assets $485,229 $399,237 $485,229 $399,237
Shareholders' equity $90,477 $117,308 $90,477 $117,308
Product Sales
OSB $30,788 $35,009 $90,024 $90,224
Lumber 26,091 31,648 79,310 80,397
Plywood 13,661 11,588 38,694 33,744
Veneer 2,758 3,497 8,812 9,375
Chips 3,471 3,392 9,455 12,437
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$76,769 $85,134 $226,295 $226,177
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Product Sales Volumes
OSB (msf-3/8") 183,292 153,205 554,988 391,938
Lumber (mfbm) 57,031 64,349 172,788 179,474
Plywood (msf-3/8") 22,454 19,652 65,008 56,904
Veneer (msf-3/8") 13,891 17,019 42,812 46,614
Chips (BDUs) 52,140 53,124 148,613 148,736
Note 1: before changes in non-cash operating working capital
CONTACT: Ainsworth Lumber Co. Ltd. Catherine Ainsworth or Steven Blacklock, 604/661-3200 |
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