MONTREAL,
May 23, 2013 /CNW Telbec/ - EACOM
Timber Corporation (TSXV: ETR) ("EACOM", or the "Company") is
pleased to announce its first quarter results for the three-month
period ended March 31, 2013.
HIGHLIGHTS
- EACOM recorded net earnings attributable to shareholders
of $1.6 million in the first quarter
of 2013
- EACOM recorded a negative adjusted EBITDA of $0.9 million in the first quarter of
2013
- EACOM concluded the negotiation of a global settlement
with its insurer for the fire at its Timmins mill
During the first quarter of 2013, housing starts
in the United States averaged
969,000 units, up 7% from the previous quarter and, more
significantly, 36% from the first quarter of 2012. In Canada, a different pattern emerged with
housing starts averaging 178,000 units, down 13% from both the
previous quarter and the first quarter of 2012. This improvement in
the U.S. housing activity had a positive impact on lumber
consumption and contributed to a strong pricing environment and
higher mill realizations for the Company. However, manufacturing
costs relative to sales were higher than those incurred in the
previous quarter, mostly due to additional costs still being
incurred as a result of the fire at Timmins which, since January 1, 2013, are no longer offset through
business interruption claims, and to a longer than expected ramp-up
at the Elk Lake mill where a
substantial capital upgrade was completed late in the fourth
quarter of 2012. As a result, the Company recorded a negative
adjusted EBITDA of $855,000 for the
quarter ended March 31, 2013, against
a positive adjusted EBITDA of $3,150,000 in the previous quarter and a negative
adjusted EBITDA of $5,355,000 in the
corresponding quarter of 2012.
In February 2013,
the Company concluded with its insurer the negotiation of a global
settlement in the amount of $48,250,000. Net of a $250,000 deductible and of initial advances for
an aggregate amount of $30,600,000,
the Company collected the remaining proceeds of $17,400,000, of which $8,900,000 for damage or destruction of assets
and $8,500,000 related to business
interruption. As such, there are no more receivables or anticipated
payments in connection with this claim.
QUARTER ENDED MARCH
31, 2013 vs. QUARTERS ENDED DECEMBER
31, 2012 AND MARCH 31,
2012
For the quarter ended March 31, 2013, net earnings attributable to
shareholders amounted to $1,556,000
or $0.00 per common share, against a
net loss of $622,000 or $0.00 per common share in the previous quarter
and net earnings of $6,168,000 or
$0.01 per common share in the
corresponding quarter of 2012. First quarter results include a gain
of $8,500,000 on business
interruption, partially offset by transaction costs of $1,566,000 related to the take-over bid for the
Company by ET Acquisition Corporation, a corporation indirectly
owned by funds managed by Kelso & Company. In the corresponding
quarter of 2012, the Company recorded a gain of $14,283,000 on disposal of property, plant and
equipment destroyed by fire.
The Company recorded sales of $70,960,000 for the quarter ended March 31, 2013, up 18% against sales of
$60,360,000 in the previous quarter
and sales of $59,941,000 in the
corresponding quarter of 2012. During the quarter, the Company
shipped 128 million board feet of lumber (120 million board feet in
the previous quarter and 128 million board feet in the
corresponding quarter of 2012) and 120,000 oven-dried metric tons
of by-products (110,000 oven-dried metric tons in the previous
quarter and 120,000 oven-dried metric tons in the corresponding
quarter of 2012). Compared to the previous quarter and the
corresponding quarter of 2012, shipments reflect higher production
volumes.
Pricing has improved again in the first quarter
of 2013 with benchmark lumber prices averaging US$426/Mfbm for studs and US$484/Mfbm for random lengths delivered Great
Lakes, up 14% from US$375/Mfbm and
US$426/Mfbm respectively in the
previous quarter. Mill realizations also benefited from a slightly
softer Canadian dollar with the exchange rate relative to the US$
averaging 0.991 in the first quarter, down 2% against an average of
1.009 in the previous quarter. More significantly, studs and random
lengths are trading at prices 30% and 35% above the levels achieved
in the first quarter of 2012.
Lumber production for the quarter ended
March 31, 2013 was 129 million board
feet of lumber, against 113 million board feet in the previous
quarter and 113 million board feet in the corresponding quarter of
2012. During the first quarter, the Company operated at 48% of its
capacity (46% during the previous quarter and 46% in the
corresponding quarter of 2012). Compared to the previous quarter,
the Elk Lake operations, which had
been interrupted late in the third quarter of 2012 to complete a
substantial capital upgrade, resumed in the later part of the
fourth quarter. Compared to the corresponding quarter of 2012, the
Timmins mill was closed throughout
the quarter, whereas it had been operating until a fire destroyed
the sawmill on January 22, 2012, and
mills in Val-d'Or and Matagami were operating after having been
temporarily shut down due to weak market conditions between the
second half of 2011 and the third quarter of 2012.
FINANCIAL POSITION
At March 31, 2013,
the Company had cash and cash equivalents of $12,448,000 and restricted cash of $13,248,000 ($27,028,000 and $6,664,000 respectively at December 31, 2012). Its credit facility was
undrawn against a borrowing availability of $22,220,000 (undrawn against a borrowing
availability of $10,200,000 at
December 31, 2012).
Pursuant to the terms of the $40,000,000 senior secured debentures, insurance
proceeds of $18,900,000 received in
respect of the property damage claim have been segregated and shown
as restricted cash pending the reconstruction of the Timmins mill. Payments made under the contract
with USNR Kockums Cancar Inc. for the reconstruction of the
Timmins mill have been drawn
against these proceeds.
About EACOM
EACOM Timber Corporation is a TSX-V listed
company. The business activities of EACOM consist of the
manufacturing, marketing and distribution of lumber, wood chips and
wood-based value-added products, and the management of forest
resources. EACOM owns eight sawmills, all located in Eastern Canada, and related tenures. The mills
are Timmins, Nairn Centre, Gogama, Elk
Lake and Ear Falls in
Ontario, and Val-d'Or, Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario, and Ste-Marie, Quebec, are currently idled. As a
result of improved market conditions, operations in Val-d'Or and Matagami which had been temporarily shut down
in 2011 resumed during the third quarter of 2012. The mill in
Timmins which was seriously
damaged by fire in January 2012 is
under reconstruction. EACOM also owns a lumber remanufacturing
facility in Val-d'Or, Quebec, and
a 50% interest in an "I" joist plant in Sault Ste-Marie, Ontario.
The TSX Venture Exchange has neither approved
nor disapproved the content of this press release. All director and
officer appointments are subject to TSX Venture Exchange
approval.
Forward-Looking Statements
All statements in this news release that are
not based on historical facts are "forward-looking statements".
While management has based any forward-looking statements contained
herein on its current expectations, the information on which such
expectations were based may change. These forward-looking
statements rely on a number of assumptions concerning future events
and are subject to a number of risks, uncertainties and other
factors, many of which are beyond our control and could cause
actual results to materially differ from such statements. Such
risks, uncertainties and other factors include, but are not
necessarily limited to, those set forth under "RISKS AND
UNCERTAINTIES" in the Company's current MD&A, and under "RISK
FACTORS" in the Company's Filing Statement dated January 8, 2010.
The financial information included in this
release also contains certain data that are not measures of
performance under IFRS. For example, "EBITDA" and "Adjusted EBITDA"
are measures used by management to assess the operating and
financial performance of the Company. We believe that EBITDA and
Adjusted EBITDA are measures often used by investors to assess a
company's operating performance. EBITDA and Adjusted EBITDA have
limitations and you should not consider these items in isolation,
or as substitutes for an analysis of our results as reported under
IFRS. Because of these limitations, EBITDA and Adjusted EBITDA
should not be used as substitutes for net loss or cash flows from
operating activities as determined in accordance with IFRS, nor are
they necessarily indicative of whether or not cash flows will be
sufficient to fund our cash requirements. In addition, our
definition of EBITDA and Adjusted EBITDA may differ from those of
other companies. A reconciliation of EBITDA and Adjusted EBITDA to
net loss attributable to shareholders is set forth under "OVERVIEW
OF FINANCIAL RESULTS - Supplemental Information on Non-GAAP
Measures" in the Company's current MD&A.
Additional information relating to EACOM is
available at www.eacom.ca and on SEDAR at www.sedar.com.
SELECTED FINANCIAL INFORMATION AND OPERATING
STATISTICS
The following table provides an overview of the
Company's financial results for the quarters ended March 31, 2013, December
31, 2012 and March 31, 2012,
along with some key operating metrics.
|
|
|
|
(in thousands of dollars,
except where otherwise noted)
|
Q1
2013 |
Q4
2012 |
Q1
2012 |
Sales |
70,960 |
60,360 |
59,941 |
Operating income (loss) |
(3,712) |
658 |
(7,834) |
Net earnings (loss) attributable to
shareholders |
1,556 |
(622) |
6,168 |
Average lumber price in US$ - RL 2×4
#1&2(1) |
484 |
426 |
359 |
Average lumber price in US$ - Stud
2×4×8(1) |
426 |
375 |
328 |
Average exchange rate (US$ per C$1.00) |
0.991 |
1.009 |
1.001 |
Production - SPF lumber (MMfbm) |
129 |
113 |
113 |
Shipments - SPF lumber (MMfbm) |
106 |
98 |
104 |
Shipments - wholesale lumber (MMfbm) |
22 |
22 |
24 |
Cdn. housing starts (thousands of units) |
178 |
204 |
205 |
U.S. housing starts (thousands of units) |
969 |
904 |
715 |
(1) Eastern spruce/pine/fir, per thousand
board feet delivered Great Lakes (Source: Random Lengths
Publications, Inc.)
The following table reconciles the Company's net
earnings (loss) attributable to shareholders, as reported in
accordance with IFRS, to EBITDA and adjusted EBITDA for the
quarters ended March 31, 2013,
December 31, 2012 and March 31, 2012.
|
|
|
|
(in thousands of dollars) |
Q1 |
Q4 |
Q1 |
2013 |
2012 |
2012 |
Net income (loss) attributable
to shareholders |
1,556 |
(622) |
6,168 |
Add (subtract): |
|
|
|
Depreciation |
2,749 |
2,396 |
2,429 |
Financing expense |
1,616 |
1,768 |
344 |
EBITDA |
5,921 |
3,542 |
8,941 |
Share of loss (earnings) in a
joint venture |
161 |
181 |
(146) |
Transaction-related costs |
1,566 |
- |
- |
Loss (gain) on business
interruption |
(8,500) |
350 |
133 |
Gain on disposal of property,
plant and equipment |
(3) |
(923) |
(14,283) |
EBITDA |
(855) |
3,150 |
(5,355) |
SOURCE EACOM