Ainsworth Lumber Co. Ltd. recorded net income of C$10 million (US$9.98 million) in the third quarter, half its showing in the year-earlier quarter, on a 2.9% increase in sales to C$81.1 million (US$80.9 million), the specialist in engineered wood reported late Thursday.
The Vancouver-based company prefers to measure its performance in terms of adjusted EBITDA--earnings before interest, taxes, depreciation, and amortization as well as before gains on disposals of property, plants and equipment, costs of curtailed operations, stock options expenses, exchange-rate factors, and non-recurring items. By that measure, adjusted EBITDA nearly quadrupled to C$8.8 million from C$2.6 million.
The volume of goods shipped declined 5.1% to 392 million square feet (3/8-inch basis). That was offset by an 8.3% increase in the realized sales price.
Net income dropped primarily because of a C$30 million decrease in the unrealized foreign exchange gain on long-term debt, part of which was offset by a C$3.3 million drop in other foreign exchange losses and a C$2.5 million rise in income tax recoveries.
All of the gain in sales was due to business outside North America. The company sold C$27.8 million worth of product to overseas customers in the July-to-September period vs. just C$9 million a year earlier, while its sales to North American customers dropped to C$53.3 million from C$69.8 million.
"In the third quarter of 2010, Ainsworth recorded improved performance in terms of sales and adjusted EBITDA margins compared to the third quarter of 2009 despite a decline in published benchmark OSB prices," Ainsworth's president and chief executive officer, Rick Huff, said in a statement. "It was another strong quarter for the company and signals that Ainsworth has turned the corner and is creating real, sustainable value for its shareholders."