Editor’s Note: Ainsworth did not provide an average currency exchange rate for either quarterly or yearly results, therefore all conversions are based on today’s exchange rate.
Fourth-quarter net income at Ainsworth remained even with the same period a year ago at C$2.8 million (US$2.8 million), despite a 26% jump in sales to C$69.5 million (US$68.8 million), the company announced today.
Adjusted EBITDA, which it defines as net income from continuing operations before amortization, gain on disposal of property, plant and equipment, cost of curtailed operations, stock option (recovery) expense, finance expense, foreign exchange loss (or gain) on long-term debt, other foreign exchange (or gain) loss, income tax (recovery) expense and nonrecurring items, rose into the black with earnings C$2.7 million (US$2.7 million) after posting a C$1.8 million (US$1.8 million) loss a year ago.
Net income from continuing operations fell, however, fell 65% to C$1.7 million (US$1.7 million) for the quarter. The Vancouver, British Columbia-based manufacturer also revealed an operating loss of C$3.3 million (US$3.3 million), cutting last year’s loss by more than half.
Shipment volumes for the quarter grew 31% to 374 million square feet (mmsf) for 3/8-inch oriented strand board (OSB), while production volume also rose 31% to 368.3 mmsf.
For the year, net income fell 30% to C$8.3 million (US$8.2 million), while adjusted EBITDA plunged almost 80% to C$12.5 million (US$12.4 million). Sales declined 11% to C$293.3 million (US$290.4 million), while the company fell into the red with a C$12.8 million (US$12.7 million) operating loss, compared to a C$27.6 million (US$27.3 million) operating income a year ago.
In a letter to shareholders, company president and CEO Jim Lake said flat U.S. orders, low North American OSB prices, and demand/capacity imbalances in western North America had a large effect on the year-end numbers.
“The pricing disparity in the western market, combined with an unfavorable foreign exchange rate, had a significant impact on our 2011 operating results as a large portion of our North American volume is sold in the West,” said Lake.
He also said the company focused on how it did business in 2011 and implemented a new inventory management system, brought in corporate overhead to better match operating volume, and introduced a new safety system at its mills.
“I am optimistic about our company’s future,” said Lake. “While the journey ahead will not be without its challenges, I am confident that Ainsworth has the right leadership, the right strategic roadmap, the right assets and the right people to operate with excellence and to create shareholder value for many years to come.”