First-quarter operating income at Ainsworth rose to C$3.4 million (US$3.4 million) behind a 19% jump in sales, but net income still plummeted to C$700,000 (US$697,000), from a C$77.7 million (US$77.4 million) income a year ago, the company announced today.
First quarter 2011 net income was bolstered by a one-time gain of C$72.5 million the company received from its acquisition of the Footner oriented strand board (OSB) mill in High Level, Alberta. That one-time gain was combined with another C$7 million in financial instruments and reductions and was offset by a C$3.2 million increase in gross profit.
Overall net income for the period ended March 31 fell way down from C$77.7 million a year ago to C$600,000 (US$597,491) this year.
Jim Lake, the Vancouver, British Columbia-based company’s president and CEO, said in a letter to shareholders that Ainsworth benefited from a stronger pricing environment in its western markets which helped bolster the results.
“A substantially improved market environment resulted in western OSB prices increasing 35% during the first quarter,” said Lake.
Adjusted EBITDA, which Ainsworth defines as net income from continuing operations before amortization, gain on disposal of property, plant and equipment, cost of curtailed operations, stock option expense (recovery), finance expense, foreign exchange (gain) loss on long-term debt, other foreign exchange loss (gain), income tax (recovery) expense and nonrecurring items, was C$10 million (US$9.9 million), a 56% increase over last year’s opening quarter.
Sales from continuing operations in the company’s United States segment was C$61.4 million (US$61.1 million), by far the largest segment as the company’s Canada unit only posted sales of C$13 million (US$12.9 million).
“On the strength of our first quarter performance and the progress we are making against our strategic plan, I am confident that we are building a solid and sustainable business that is well positioned to deliver value over the long term,” Lake said.