Ainsworth Lumber Co., the Canadian producer of engineered wood products, reported Thursday a dramatic decline in net loss for the fourth quarter to C$12.4 million (US$11.8 million) vs. a net loss of C$156.7 million (US$149 mllion) in the year-earlier quarter. The improvement came despite a 12.6% drop in sales to C$67.1 mlliion (US$63.8 million) from a year-earlier C$79.1 million (US$75.2 million).
(All conversions measure a Canadian dollar as being worth 95.1 U.S. cents.)
Currency exhange rates helped Vancouver, British Columbia-based Ainsworth with regard to the cost of its long-term debt. Ainsworth booked a C$10.6 million (US$10.1 million) gain on foreign-exchange in the fourth quarter of this year and a C$79.1 million (US$75.2 million) loss in the same category in the October-December period of 2008. Adjusted EBITDA swung to a profit of C$2.4 million (US$2.3 million) from a loss of C$700,000 (US$665.700) a year earlier. Ainsworth prefers to measure its business in terms of adjusted EBITDA, a non-standard metric that it defines as net (loss) income before amortization, (gain) loss on disposal of property, plant and equipment, costs of curtailed operations, stock option expense, finance expense, realized currency translation adjustments, foreign exchange (gain) loss on long-term debt, other foreign exchange (gain) loss, income tax recovery and other non-recurring items.
For all 2009, the company reported a net loss of C$21.6 million (US$20.5 million). That's a vast improvement from 2008, when its net loss hit C$321.8 million (US$306 million), even though sales dipped just 1.7% to C$285.9 million (US$271.9 million) from C$290.7 million (US$276.5 million). Adjusted EBITDA swung to a C$5.2 million (US$4.9 million) profit from a C$100,000 (US$95,100) loss in 2008.
"2009 saw us take decisive action to streamline the business, strengthen our foundation and ensure we emerge from this period stronger and well positioned for growth," Ainsworth president and CEO Rick Huff said in a statement. "In all, we ended the year with positive adjusted EBITDA for the first time since 2006, despite North American housing starts falling by 33% in 2009."
Huff said the company is "well positioned to anticipate an increase in the demand " for oriented strand board (OSB), its major product. The company's OSB shipments rose 3.8% in 2009 to 1.55 million square feet.
"Until North American market conditions improve we have minimized all discretionary capital expenditures," Huff added. "In the meantime, we continue to focus on maintaining sufficient working capital to fund any shortfall from operations, interest payments, debt repayments and essential capital expenditures."