Conifex Announces First Quarter 2014 Results
2014年5月12日 - 9:57AM
Marketwired Canada
Conifex Timber Inc. ("Conifex" or the "Company") (TSX VENTURE:CFF) today
reported net income of $1.6 million or $0.08 per diluted share for the first
quarter of 2014 compared to net income of $1.1 million or $0.05 per diluted
share for the previous quarter and net income of $6.2 million or $0.29 per
diluted share for the first quarter of 2013.
Summarized operating results and statistics for each of the comparison periods
are provided below.
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(millions of dollars except share and Q1 Q4 Q1
per share amounts) 2014 2013 2013
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Sales 67.2 63.7 66.2
EBITDA 6.1 4.9 9.2
Operating income 2.8 2.2 6.6
Net income 1.6 1.1 6.2
Net income per share - basic 0.08 0.05 0.30
Net income per share - diluted 0.08 0.05 0.29
Shares outstanding - weighted average
(millions) 20.8 20.8 20.7
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Statistics
Lumber shipments - Conifex product
(MMfbm) 95.9 118.6 119.8
Lumber shipments - Wholesale (MMfbm) 24.9 9.2 17.2
Lumber production (MMfbm) 128.3 116.3 124.2
Average exchange rate - US$/Cdn$ (1) 0.906 0.953 0.991
Average WSPF 2x4 #2&Btr lumber price
(US$) (2) $ 367 $ 370 $ 390
Average WSPF 2x4 #2&Btr lumber price
(Cdn$) (3) $ 405 $ 388 $ 393
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Reconciliation of EBITDA to Net Income
Net income 1.6 1.1 6.2
Add: Interest expense and accretion 1.5 1.5 1.1
Amortization 2.6 2.2 2.0
Non-cash items related to compensation 0.4 0.1 (0.1)
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EBITDA 6.1 4.9 9.2
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(1) Source: Bank of Canada website www.bankofcanada.ca
(2) Source: Random Lengths Publications Inc.
(3) Average WSPF 2x4 #2&Btr lumber price (US$) divided by average exchange
rate
The variation in consolidated net income, operating income, and EBITDA was
largely attributable to operating results in the lumber segment as fluctuations
in corporate costs, other items and bioenergy segment expenses between the
comparative quarters were modest and did not have a material effect on overall
operating results. The lumber segment recorded operating income of $4.4 million
during the first quarter of 2014 which represented an improvement of $1.1
million over the previous quarter and a decline of $4.0 million from the first
quarter of 2013. First quarter 2014 EBITDA of $6.1 million was comprised of
lumber segment EBITDA of $7.1 million offset by corporate costs and other items
of $1.0 million. Lumber segment EBITDA improved by $1.6 million over the
previous quarter and declined by $3.4 million from the first quarter of 2013.
According to data published by the U.S. Census Bureau, U.S. housing starts
averaged a seasonally adjusted annualized rate of 923,000 over the first quarter
of 2014, which represented a decline of 8% from the fourth quarter of 2013 and
4% from the first quarter 2013. Industry analysts largely attributed the subdued
level of new home construction activity during the first quarter of 2014 to the
unusually severe winter weather conditions experienced across many regions in
North America. In Western Canada, seasonal railcar shortages were heightened by
the adverse winter conditions and the shipping environment was further
exacerbated in March 2014 by a truckers' strike at the main container port in
Vancouver, British Columbia. As a result of the logistics related challenges,
shipments of Conifex produced lumber totalled 96 million board feet during the
first quarter of 2014 which represented a decline of approximately 20% from the
previous quarter and the first quarter of 2013. Production volumes, also
somewhat hampered by weather related operational challenges, totalled 128
million board feet and reflected an increase of 10% over the previous quarter
and 3% over the first quarter of 2013.
The benchmark lumber price expressed in Canadian dollars averaged $405 during
the first quarter of 2014, an increase of $17 per thousand board feet or 4% over
the previous quarter and $12 per thousand board feet or 3% over the first
quarter of 2013. The export tax rate on shipments to the U.S. was zero percent
during the first quarters of 2014 and 2013 and averaged 2% during the fourth
quarter of 2013.
Compared to the previous quarter, although gross lumber revenues from Conifex
produced lumber declined by 12%, unit gross sales realizations and unit mill net
realizations improved by 9% and compare favourably to Canadian equivalent
benchmark prices which increased by 4% quarter over quarter. The better than
trend improvement in unit mill net realizations is partly attributable to
shipments of a higher value product mix, because shipments to the U.S. increased
while shipments to China, which generally consumes lower grade lumber products,
decreased. Compared to the first quarter of 2013, gross lumber revenues from
Conifex produced lumber declined by 14% while unit gross sales realizations
increased by 8% and unit mill net realizations increased by 4%.
Compared to the fourth quarter of 2013, the main factors contributing to the
increase of $1.1 million in lumber segment operating income included a 9%
improvement in unit mill net realizations and a modest increase in revenue from
by-products which more than offset a 19% decline in shipment volume of Conifex
produced lumber, a 5% increase in unit log costs and a 4% increase in unit cash
conversion costs. Compared to the first quarter of 2013, the decline of $4.0
million in lumber segment operating income was primarily attributable to the
adverse impact of a 13% increase in unit log costs, a 21% increase in unit cash
conversion costs and a 20% decline in shipment volumes, partially offset by a 4%
improvement in unit mill net realizations and a 33% increase in by-product
revenue.
Management expects that anticipated solid demand in each of the Company's
markets in North America, China and Japan for the balance of the year will
result in average U.S. benchmark lumber prices approximating levels similar to
those of 2013, and higher year over year unit mill nets to be realized if the
Canadian currency remains at relatively weaker ranges. Management expects
improvement in unit cash conversion costs, which were higher than usual in the
current quarter due partly to seasonal and weather related factors and
non-recurring events, to result from further productivity gains and a return to
a more typical cost environment. These gains are expected to more than offset
higher log and labour costs and contribute to further growth in lumber segment
profitability.
On February 3, 2014, the Company completed the acquisition of Lignum Forest
Products LLP, a private partnership which operates a lumber marketing and
distribution business. The aggregate purchase price of approximately $4.8
million was funded from the Company's existing available cash.
In the first quarter of 2014, the Company generated cash of $7.5 million from
operations before working capital changes and used cash of $18.8 million in net
working capital increases. The Company ended the first quarter of 2014 with
consolidated net debt of $87.1 million (December 31, 2013 - $44.0 million) and
net debt to capitalization ratio of 42% (December 31, 2013 - 27%). Excluding
borrowings under the project financing facility related to the construction of
the power generation project, which is largely structured on a non-recourse
basis to the lumber segment assets and to the parent company, Conifex Timber
Inc., net debt was $48.2 million (December 31, 2013 - $21.2 million) and the net
debt to capitalization ratio was 29% (December 31, 2013 - 15%). The Company
expects this ratio to revert to a more conservative level over the next several
months concurrent with the normalization of higher than usual working capital
levels.
Outlook and Strategy
The Company is executing a strategy to grow and add value to its business.
Management has been executing against this plan since the Company's management
restructuring late in 2012. The momentum established in 2013 in terms of
increasing production volumes and expanding profit margins is expected to
continue through the balance of 2014.
Through the balance of the year, the Company expects to complete its power
generation project on budget, and to commence deliveries of electricity late in
the third quarter of 2014. The Company also expects to establish a long-term
plan for its idled Mackenzie mill following the release of information regarding
future sawlog harvest levels in the Mackenzie Timber Supply Area by the Ministry
of Forests, Lands and Natural Resources Operations.
Conference Call
There will be a conference call held by the Company on Monday, May 12, 2014 at
8:00 AM Pacific time / 11:00 AM ET to discuss the first quarter financial and
operating results. To participate in the call, please dial 416-340-8530 or toll
free 800-766-6630. The call will also be available on instant replay access
until May 26, 2014 by dialling 905-694-9451 or 800-408-3053 and entering
participant pass code 6673270.
The interim financial statements and management's discussion and analysis for
the quarter ended March 31, 2014 will be available on the Investors Relation
page of our website at www.conifex.com.
About Conifex Timber Inc.
Conifex and its subsidiaries' primary business currently includes timber
harvesting, reforestation, forest management, sawmilling logs into lumber and
wood chips, and value added lumber finishing and distribution. Conifex's lumber
products are sold in the United States, Chinese, Canadian and Japanese markets.
Upon completion of its power generation facility at Mackenzie, British Columbia,
Conifex's business sectors will be expanded to include bioenergy.
Forward-Looking Statements
Certain statements in this news release may constitute "forward-looking
statements". Forward-looking statements are statements that address or discuss
activities, events or developments that the Company expects or anticipates may
occur in the future. When used in this news release, words such as "estimates",
"expects", "plans", "anticipates", "projects", "will", "believes", "intends"
"should", "could", "may" and other similar terminology are intended to identify
such forward-looking statements. Forward-looking statements reflect the current
expectations and beliefs of the Company's management. Because forward-looking
statements involve known and unknown risks, uncertainties and other factors,
actual results, performance or achievements of the Company or industry may be
materially different from those implied by such forward-looking statements.
Examples of such forward-looking information that may be contained in this news
release include statements regarding: growth and future prospects of our
business; our perceptions of the industry and markets in which we operate and
anticipated trends in such markets and in the countries in which we do business;
benefits that may accrue to the Company as a result of certain capital
expenditure programs; U.S. benchmark lumber prices; year over year unit mill
nets; unit cash conversion costs; the Company's net debt to capitalization
ratio; that the Mackenzie mills will incorporate the expected harvest levels for
the Mackenzie Timber Supply Area; and the anticipated benefits, cost, timing and
completion dates for projects, including the power generation project at the
Company's Mackenzie facility. Assumptions underlying the Company's expectations
regarding forward-looking information contained in this news release include,
among others: that the Company will be able to effectively market its products;
that the U.S. housing market will continue to improve; that there will be no
further delays and disruptions affecting the completion of the power generation
project at the Company's Mackenzie facility and that the Company will be able to
commence timely delivery of power therefrom; that softwood lumber will
experience improved and sustained demand in the marketplace at favourable
prices; that the Company will be able to dynamically respond to shifts in demand
among its major markets; the general stability of the economic, political and
regulatory environments within the countries where the Company conducts
operations; the ability of the Company to obtain financing (if necessary) on
acceptable terms or at all; that interest and foreign exchange rates will not
vary materially from current levels; and that our mills and equipment will
operate at expected levels.
Forward-looking statements involve significant uncertainties, should not be read
as a guarantee of future performance or results, and will not necessarily be an
accurate indication of whether or not such results will be achieved. A number of
factors could cause actual results to differ materially from the results
discussed in the forward-looking statements, including, without limitation:
those relating to potential disruptions to production and delivery, including as
a result of equipment failures, labour issues, the complex integration of
processes and equipment and other factors; labour relations; failure to meet
regulatory requirements; changes in the market; potential downturns in economic
conditions; fluctuations in the price and supply of required materials,
including log costs; fluctuations in the market price for products sold; foreign
exchange fluctuations; trade restrictions or import duties imposed by foreign
governments; availability of financing (as necessary); shipping or logging
disruptions; and other risk factors described in the Company's 2013 annual
information form, available on SEDAR at www.sedar.com. These risks, as well as
others, could cause actual results and events to vary significantly.
Accordingly, readers should exercise caution in relying upon forward-looking
statements and the Company undertakes no obligation to publicly revise them to
reflect subsequent events or circumstances, except as required by law.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
FOR FURTHER INFORMATION PLEASE CONTACT:
Conifex Timber Inc.
Yuri Lewis
Chief Financial Officer
(778) 331-8687
www.conifex.com
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