Ainsworth improves performance in Q1

By:
on Jun 4, 2012
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In a quarterly report released on May 10, Ainsworth Lumber Co. Ltd. announced its financial results for the first quarter of 2012 ended March 31. A net income of $0.6 million is amongst the achievements, which define the first three months of 2012 as a success for the company. Other highlights of the first quarter are: achieved positive adjusted EBITDA of $10 million, improved production efficiency and inventory management and $2.4 million in gains as a result of margin improvement measures.

It appears that 2012 has been good so far for Ainsworth Lumber Co. Ltd. The company’s results for the first quarter were applauded by the management and the main highlights for the first quarter were particularly pleasing.
“I am pleased to report that Ainsworth’s performance improved in the first quarter of 2012,” said Jim Lake, President and Chief Operating Officer of Ainsworth. He was very keen on mentioning the positive EBITDA of $10 million that the company recorded in this quarter – a $7.3 million increase on the previous quarter and $3.6 million higher than the same quarter in 2011. Mr. Lake explained that the improvement is due to “a stronger pricing environment and better operating results at all three mills.”

Net income from continuing operations was $0.7 million compared to $77.7 million in the first quarter of 2011. The difference is mainly due to a $73 million gain, recorded in the first quarter of 2011, on the acquisition of the remaining 50% interest in our mill in High Level, Alberta.
Sales accounted for $85 million, which is a significant increase of 13.6 million from Q1, 2011, caused by an increase in volume and in OSB pricing, mainly in Western Canada.!m[](/uploads/story/43/thumbs/lumber_diagram2_inline.png)

Ainsworth reported that there is also noticeable improvement in production efficiency and conversion costs at all three mills in Q1, 2012, compared to the same quarter of last year and that their margin improvement program has produced positive results, saving $2.4 million for the company. Also, an important safety milestone has been achieved with the Barwick, Ontario mill not having a single accident for one full year of operation.

The company’s operations on the Japanese market were also mentioned in the report. The reports were for softer sales as customers have continued to work through their post-tsunami inventories. Being a leading OSB supplier to Japan, Ainsworth continues to pursue the growth potential of the Japanese market and shows its commitment to support Japanese customers waiting for the start of the “rebuilding” phase.

The first 3 months also saw an important management change at the company. Ainsworth Chief Financial Officer Chris Davies has tendered his resignation effective June 4, 2012. The reason for the resignation is Davies’ intention to pursue a career in a different industry, which became apparent after he accepted a position with a privately-held company, outside the forest products industry. Mr. Lake expressed his and the company’s gratitude for Davies’ contribution work and dedication to Ainsworth and wished him well in his future endeavors. The company is now searching for a new CFO to replace Mr. Davies.

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