Mercer International Inc. (Nasdaq:MERC) (TSX:MERC.U) today reported
strong results for the first quarter ended March 31, 2017.
Operating EBITDA* in the first quarter of 2017 increased by
approximately 33% to $60.2 million from $45.3 million in the same
quarter of 2016 and from $57.8 million in the prior quarter.
For the first quarter of 2017, net income increased
to $9.7 million, or $0.15 per basic and diluted share, after giving
effect to a loss of $10.7 million ($0.17 per basic and $0.16 per
diluted share) on the redemption of our outstanding 7.0% senior
notes due 2019 (the "2019 Senior Notes"). In the comparative
quarter of 2016, net income was $8.8 million, or $0.14 per basic
and diluted share.
Summary Financial
Highlights
|
Q1 |
|
Q4 |
|
Q1 |
|
2017 |
|
2016 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, except per share
amounts) |
Pulp revenues |
$ |
220.8 |
|
|
$ |
202.8 |
|
|
$ |
230.6 |
|
Energy and chemical
revenues |
$ |
22.0 |
|
|
$ |
18.9 |
|
|
$ |
23.2 |
|
Operating income |
$ |
41.0 |
|
|
$ |
39.0 |
|
|
$ |
28.1 |
|
Operating EBITDA* |
$ |
60.2 |
|
|
$ |
57.8 |
|
|
$ |
45.3 |
|
Foreign exchange gain
(loss) on intercompany debt |
$ |
‑ |
|
|
$ |
(1.4 |
) |
|
$ |
0.6 |
|
Loss on settlement of
debt(1) |
$ |
10.7 |
|
|
$ |
‑ |
|
|
$ |
0.5 |
|
Income tax
provision |
$ |
(7.5 |
) |
|
$ |
(5.3 |
) |
|
$ |
(6.2 |
) |
Net income |
$ |
9.7 |
|
|
$ |
18.5 |
|
|
$ |
8.8 |
|
Net income per common
share |
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.29 |
|
|
$ |
0.14 |
|
Diluted |
$ |
0.15 |
|
|
$ |
0.28 |
|
|
$ |
0.14 |
|
Common shares
outstanding at period end |
|
65.0 |
|
|
|
64.7 |
|
|
|
64.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
_________________________ |
|
(1)
Redemption of 7.0% Senior Notes due 2019. |
|
Summary Operating Highlights
|
Q1 |
|
Q4 |
|
Q1 |
|
2017 |
|
2016 |
|
2016 |
Pulp production ('000
ADMTs) |
373.8 |
|
350.3 |
|
378.0 |
Annual maintenance
downtime ('000 ADMTs) |
‑ |
|
21.6 |
|
‑ |
Annual maintenance
downtime (days) |
‑ |
|
12 |
|
‑ |
Pulp sales ('000
ADMTs) |
375.1 |
|
345.1 |
|
393.5 |
Average NBSK pulp list
prices in Europe ($/ADMT)(1) |
822 |
|
810 |
|
792 |
Average NBSK pulp list
prices in China ($/ADMT)(1) |
645 |
|
595 |
|
590 |
Average NBSK pulp list
prices in North America ($/ADMT)(1) |
1,033 |
|
992 |
|
943 |
Average pulp sales
realizations ($/ADMT)(2) |
584 |
|
580 |
|
580 |
Energy production ('000
MWh) |
472.2 |
|
431.8 |
|
475.5 |
Energy sales ('000
MWh) |
202.7 |
|
179.9 |
|
207.4 |
Average energy sales
realizations ($/MWh) |
91 |
|
93 |
|
93 |
Average Spot Currency
Exchange Rates: |
|
|
|
|
|
$ /
€(3) |
1.0661 |
|
1.0780 |
|
1.1035 |
$ /
C$(3) |
0.7555 |
|
0.7496 |
|
0.7301 |
_________________________ |
(1)
Source: RISI pricing report. |
(2)
Sales realizations after customer discounts, rebates and other
selling concessions. Incorporates the effect of pulp price
variations occurring between the order and shipment dates. |
(3)
Average Federal Reserve Bank of New York Noon Buying Rates over the
reporting period. |
_________________________ |
* Operating
EBITDA is not a measure of financial performance under accounting
principles generally accepted in the United States ("GAAP") and
should not be considered in isolation or as a substitute for
analysis of our results as reported under GAAP. See page 4 of the
financial tables included in this press release for a
reconciliation of net income to Operating EBITDA. |
President's Comments
Mr. David M. Gandossi, the Chief Executive Officer,
stated: "We are very pleased with our performance and results for
the first quarter of 2017 as:
- our mills generally performed well and we had no scheduled
maintenance in either the current or comparative quarter;
- our strong operating performance generated $60.2 million in
Operating EBITDA, compared to $45.3 million in the comparative
quarter of 2016;
- in the current quarter, we benefited from higher list pulp
prices, lower fiber prices in Germany and the strength of the
dollar versus the euro, compared to the same quarter of 2016;
- we issued, in two tranches, an aggregate $250.0 million of 6.5%
senior notes due 2024 (the "2024 Senior Notes") and utilized the
proceeds primarily to redeem $227.0 million of our 2019 Senior
Notes at a cost, including premium, of $234.9 million. This both
extended our debt maturity and lowered ongoing interest costs over
the term of the 2024 Senior Notes; and
- after giving effect to a loss of $10.7 million on the
redemption of the 2019 Senior Notes, we reported net income of $9.7
million, compared to $8.8 million in the same quarter of
2016."
Mr. Gandossi continued: "In April 2017, our
wholly-owned subsidiary, Mercer Timber Products GmbH ("MTP"),
acquired a sawmill and bio-mass power plant located near Friesau,
Germany (the "Friesau Facility") and, in conjunction therewith, we
replaced our Rosenthal mill's existing €25.0 million revolving
working capital facility with a joint €70.0 million revolving
working capital facility for both Rosenthal and MTP, with MTP's
borrowing not to exceed €45.0 million."
Mr. Gandossi added: "The Friesau Facility is one of
Germany's largest sawmills with an annual production capacity of
550 million board feet ("Mfbm") of lumber, 13 MW of electricity and
49.5 MW of thermal energy. It is a flexible production facility
that produces over 200 products with multiple package sizes to meet
customer requirements. Over the last three years, the facility sold
approximately 40% of its production in Germany, 30% in the rest of
Europe and the balance in Asia and the Middle-East. Historically,
the facility sold a significant portion of its production into the
U.S. market.
Prior to our acquisition, the facility had been
operated on a restricted basis, well below its capacity. We are in
the process of ramping up lumber production at the facility.
However, as major sawlog contracts in the facility's fiber region
are generally awarded on a yearly basis, we expect log purchases
and deliveries will take two to three quarters to fully ramp up and
reach our targeted levels in the fall of this year. We currently
expect to ramp up production to approximately 90% of our annual
planned production by the end of the third quarter of 2017. As a
result of the initial integration and ramp-up period for the
facility, we do not expect it to contribute to earnings for one or
two quarters."
Mr. Gandossi said: "Lumber markets are currently
strong with prices on an upward trend. The Random Lengths Lumber
Composite averaged $385 per Mfbm during the recent quarter,
compared to $354 per Mfbm in the fourth quarter of 2016. The
Composite is currently over $400 per Mfbm."
Mr. Gandossi continued: "We are pleased with
this acquisition and look forward to realizing upon our forecasted
synergies relating to the sharing of wood and bio-mass resources
and the optimization of services and staffing. Also ramping up
production should materially reduce per unit processing costs. As a
result of the timing of ramping up production mid-year, we
anticipate higher sawlog costs in the short term. However, we
believe when new sawlog contracts are let for 2018 that, because of
our market presence and purchasing scale, long-term relationships
with vendors and logistics capabilities, we will be able to achieve
competitive pricing for sawlogs at least in line with our
competitors."
Mr. Gandossi continued: "We also see several
opportunities to reduce costs and improve realizations at the
Friesau Facility through targeted upgrades. With respect to sales,
we currently intend to re-enter into the U.S. market with a short-
to mid-term goal to have about 25% of the facility's production
sold there."
Mr. Gandossi concluded: "Currently, the NBSK market
fundamentals are generally positive and we currently expect demand
to remain steady in the second quarter of 2017. At the end of the
current quarter, world producer inventories of NBSK pulp were
generally balanced at about 29 days' supply. List prices in Europe,
China and North America increased to approximately $822, $645 and
$1,033 per ADMT, respectively, during the current quarter."
Quarterly DividendA quarterly
dividend of $0.115 per common share will be paid on July 6, 2017 to
all shareholders of record on June 27, 2017. Future dividends will
be subject to Board approval and may be adjusted as business and
industry conditions warrant.
Three Months Ended March 31, 2017 Compared
to Three Months Ended March 31, 2016Total revenues for the
three months ended March 31, 2017 decreased by approximately 4% to
$242.8 million from $253.8 million in the same quarter of 2016,
primarily as a result of lower pulp revenues.
Pulp revenues in the first quarter of 2017
decreased by approximately 4% to $220.8 million from $230.6 million
in the same quarter of 2016, due to lower sales volumes only
partially offset by higher sales realizations.
Energy and chemical revenues in the first quarter
of 2017 decreased by approximately 5% to $22.0 million from $23.2
million in the same quarter of 2016, primarily due to the impact of
a stronger dollar versus the euro.
Pulp production declined marginally to 373,765
ADMTs in the current quarter from 377,992 ADMTs in the same quarter
of 2016. We did not have any scheduled maintenance downtime
in either the first quarter of 2017 or 2016.
Pulp sales volumes decreased by approximately 5% to
375,104 ADMTs in the current quarter from 393,461 ADMTs in the same
quarter of 2016, primarily due to shipments delayed into the second
quarter of 2017 and marginally lower production.
In the current quarter of 2017, list prices for
NBSK pulp in Europe and China increased from the same quarter of
2016, largely as a result of overall steady demand. Average list
prices for NBSK pulp in Europe were approximately $822 per ADMT in
the first quarter of 2017, compared to approximately $792 per ADMT
in the same quarter of 2016. Average list prices for NBSK pulp in
China and North America were approximately $645 per ADMT and $1,033
per ADMT, respectively, in the first quarter of 2017, compared to
approximately $590 per ADMT and $943 per ADMT, respectively, in the
same quarter of 2016.
Average pulp sales realizations increased
marginally to $584 per ADMT in the first quarter of 2017 from
approximately $580 per ADMT in the same quarter last year,
primarily due to higher list prices in China.
In the current quarter of 2017, the dollar was
approximately 3% stronger versus the euro compared to the same
quarter of 2016, which benefited our costs incurred in euros. This
was only partially offset by a 4% decline of the dollar versus the
Canadian dollar in the current quarter compared to the same quarter
of 2016.
In the first quarter of 2017, the impact of a
stronger dollar versus the euro provided a positive benefit of
approximately $7.2 million on our euro-denominated costs
compared to the same quarter of 2016.
Costs and expenses in the current quarter decreased
by approximately 11% to $201.8 million from $225.7 million in the
first quarter of 2016, primarily due to lower sales volume, lower
fiber prices and the positive impact of a stronger dollar versus
the euro.
In the first quarter of 2017, operating
depreciation and amortization was $19.1 million, compared to $17.0
million in the same quarter of 2016.
Selling, general and administrative expenses
decreased to $9.7 million in the first quarter of 2017 from $11.8
million in the same quarter of 2016 primarily due to lower stock
compensation expense.
Transportation costs decreased by approximately 5%
to $17.4 million in the current quarter from $18.3 million in the
same quarter of 2016, primarily due to lower sales volume.
On average, in the current quarter, overall per
unit fiber costs decreased by approximately 9% from the same
quarter of 2016, primarily as a result of a balanced wood market,
strong sawmilling activity and the strength of the dollar versus
the euro. In the current quarter, per unit fiber costs in Germany
were approximately 12% lower and for our Celgar mill were
marginally higher than the comparative quarter of 2016.
In the first quarter of 2017, our operating income
increased to $41.0 million from $28.1 million in the same quarter
of 2016, primarily as a result of lower fiber prices and the impact
of a stronger dollar versus the euro.
In the current quarter, we issued, in two tranches,
an aggregate $250.0 million of 6.5% 2024 Senior Notes. We utilized
the proceeds primarily to redeem $227.0 million of our 7.0% 2019
Senior Notes at a cost, including premium, of $234.9 million and
recorded a loss on such redemption of $10.7 million (being $0.17
per basic and $0.16 per diluted share).
Interest expense in the current quarter increased
to $13.9 million from $13.2 million in the same quarter of 2016
since, during the requisite notice period for redemption of the
2019 Senior Notes, we also had $225.0 million of the 2024 Senior
Notes outstanding.
During the first quarter of 2017, income tax
expense increased to $7.5 million from $6.2 million in the same
quarter of 2016.
For the first quarter of 2017, we had net income of
$9.7 million, or $0.15 per basic and diluted share, after giving
effect to the $10.7 million ($0.17 per basic share) loss on the
redemption of the 2019 Senior Notes. In the same quarter of 2016,
we had net income of $8.8 million, or $0.14 per basic and diluted
share.
In the first quarter of 2017, Operating EBITDA
increased by approximately 33% to $60.2 million from $45.3 million
in the same quarter of 2016, primarily due to lower fiber prices
and the benefit of a stronger dollar versus the euro.
Liquidity and Capital ResourcesThe
following table is a summary of our cash flows for the periods
indicated:
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
(in thousands) |
Net cash from operating activities |
$ |
53,385 |
|
|
$ |
63,466 |
|
Net cash used in investing activities |
|
(8,404 |
) |
|
|
(7,558 |
) |
Net cash from (used in) financing activities |
|
1,570 |
|
|
|
(30,983 |
) |
Effect of exchange rate changes on cash, cash
equivalents and restricted cash |
|
518 |
|
|
|
5,767 |
|
Net increase in cash, cash equivalents and restricted
cash |
$ |
47,069 |
|
|
$ |
30,692 |
|
The following table is a summary of selected
financial information as at the dates indicated:
|
March 31, |
|
December 31, |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
(in thousands) |
Financial Position |
|
|
|
|
|
Cash
and cash equivalents |
$ |
183,579 |
|
$ |
136,569 |
Total
current assets |
$ |
452,978 |
|
$ |
401,851 |
Total
current liabilities |
$ |
98,792 |
|
$ |
93,170 |
Working capital |
$ |
354,186 |
|
$ |
308,681 |
|
|
|
Total
assets |
$ |
1,201,990 |
|
$ |
1,158,708 |
Debt |
$ |
638,731 |
|
$ |
617,545 |
Total
liabilities |
$ |
806,854 |
|
$ |
779,580 |
Total
equity |
$ |
395,136 |
|
$ |
379,128 |
|
|
|
|
|
|
As at March 31, 2017, we had approximately $133.8
million available under our revolving credit facilities.
As a result of the weakening of the dollar versus
the euro and Canadian dollar as at March 31, 2017 compared to
December 31, 2016, we recorded a non-cash increase in the carrying
value of our net assets, consisting primarily of our fixed assets,
denominated in euros and Canadian dollars. This non-cash increase
of approximately $11.2 million does not affect our net income,
Operating EBITDA or cash flows but is reflected in our other
comprehensive income and as an increase to our total equity.
Earnings Release CallIn
conjunction with this release, Mercer International Inc. will host
a conference call, which will be simultaneously broadcast live over
the Internet. Management will host the call, which is scheduled for
Friday, April 28, 2017 at 10:00 AM (Eastern Daylight Time).
Listeners can access the conference call live and archived for
thirty days over the Internet at
http://edge.media-server.com/m/p/pq5swco6 through a link on
the company's home page at http://www.mercerint.com. Please allow
15 minutes prior to the call to visit the site and download and
install any necessary audio software.
Mercer International Inc. is a global forest
products company with operations in Germany and Canada with
consolidated annual production capacity of 1.5 million tonnes of
NBSK pulp and 550 million board feet of lumber. To obtain further
information on the company, please visit its web site at
http://www.mercerint.com.
The preceding includes forward looking statements
which involve known and unknown risks and uncertainties which may
cause our actual results in future periods to differ materially
from forecasted results. Words such as "expects", "anticipates",
"projects", "intends", "designed", "will", "believes", "estimates",
"may", "could" and variations of such words and similar expressions
are intended to identify such forward-looking statements. Among
those factors which could cause actual results to differ materially
are the following: the highly cyclical nature of our business, raw
material costs, our level of indebtedness, competition, foreign
exchange and interest rate fluctuations, our use of derivatives,
expenditures for capital projects, environmental regulation and
compliance, disruptions to our production, market conditions and
other risk factors listed from time to time in our SEC reports.
-FINANCIAL TABLES FOLLOW-
MERCER INTERNATIONAL INC. |
INTERIM CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
(In thousands, except per share
data) |
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
Revenues |
|
|
|
Pulp |
$ |
220,812 |
|
|
$ |
230,629 |
|
Energy
and chemicals |
21,972 |
|
|
23,214 |
|
|
242,784 |
|
|
253,843 |
|
Costs and expenses |
|
|
|
Operating
costs, excluding depreciation and amortization |
172,956 |
|
|
196,942 |
|
Operating
depreciation and amortization |
19,116 |
|
|
17,032 |
|
Selling,
general and administrative expenses |
9,726 |
|
|
11,769 |
|
Operating income |
40,986 |
|
|
28,100 |
|
|
|
|
|
Other income
(expenses) |
|
|
|
Interest
expense |
(13,879 |
) |
|
(13,191 |
) |
Loss on
settlement of debt |
(10,696 |
) |
|
(454 |
) |
Foreign
exchange gain on intercompany debt |
14 |
|
|
555 |
|
Other
income (expenses) |
782 |
|
|
(42 |
) |
Total other
expenses |
(23,779 |
) |
|
(13,132 |
) |
Income before provision
for income taxes |
17,207 |
|
|
14,968 |
|
|
|
|
|
Current
income tax provision |
(3,272 |
) |
|
(1,753 |
) |
Deferred
income tax provision |
(4,209 |
) |
|
(4,446 |
) |
Net income |
$ |
9,726 |
|
|
$ |
8,769 |
|
|
|
|
|
Net income
per common share |
Basic and
diluted |
$ |
0.15 |
|
|
$ |
0.14 |
|
|
|
|
|
Dividends declared per
common share |
$ |
0.115 |
|
|
$ |
0.115 |
|
MERCER INTERNATIONAL INC. |
INTERIM CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
(In thousands, except share and per share
data) |
|
|
March 31, |
|
December 31, |
|
2017 |
|
2016 |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and
cash equivalents |
$ |
183,579 |
|
|
$ |
136,569 |
|
Restricted cash |
4,386 |
|
|
4,327 |
|
Accounts
receivable |
134,743 |
|
|
123,892 |
|
Inventories |
125,492 |
|
|
133,451 |
|
Prepaid
expenses and other |
4,778 |
|
|
3,612 |
|
Total current
assets |
452,978 |
|
|
401,851 |
|
|
|
|
|
Property,
plant and equipment, net |
734,587 |
|
|
738,276 |
|
Intangible and other assets |
7,063 |
|
|
7,591 |
|
Deferred
income tax |
7,362 |
|
|
10,990 |
|
Total assets |
$ |
1,201,990 |
|
|
$ |
1,158,708 |
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
Current
liabilities |
|
|
|
Accounts
payable and other |
$ |
97,747 |
|
|
$ |
92,133 |
|
Pension
and other post-retirement benefit obligations |
1,045 |
|
|
1,037 |
|
Total current
liabilities |
98,792 |
|
|
93,170 |
|
|
|
|
|
Debt |
638,731 |
|
|
617,545 |
|
Pension
and other post-retirement benefit obligations |
24,989 |
|
|
25,084 |
|
Capital
leases and other |
26,345 |
|
|
26,467 |
|
Deferred
income tax |
17,997 |
|
|
17,314 |
|
Total liabilities |
806,854 |
|
|
779,580 |
|
|
|
|
|
Shareholders’
equity |
|
|
|
Common
shares $1 par value; 200,000,000 authorized; 64,974,000 issued
and outstanding (2016 – 64,694,000) |
64,936 |
|
|
64,656 |
|
Additional paid-in capital |
335,683 |
|
|
333,673 |
|
Retained
earnings |
168,322 |
|
|
166,068 |
|
Accumulated other comprehensive loss |
(173,805 |
) |
|
(185,269 |
) |
Total shareholders’
equity |
395,136 |
|
|
379,128 |
|
Total liabilities and
shareholders’ equity |
$ |
1,201,990 |
|
|
$ |
1,158,708 |
|
MERCER INTERNATIONAL INC. |
INTERIM CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
(In thousands) |
|
|
Three Months Ended March 31, |
|
2017 |
|
2016 |
Cash flows from (used
in) operating activities |
|
|
|
Net
income |
$ |
9,726 |
|
|
$ |
8,769 |
|
Adjustments to reconcile net income to cash flows from
operating activities |
Depreciation and amortization |
19,221 |
|
|
17,219 |
|
Deferred
income tax provision |
4,209 |
|
|
4,446 |
|
Loss on
settlement of debt |
10,696 |
|
|
454 |
|
Foreign
exchange gain on intercompany debt |
(14 |
) |
|
(555 |
) |
Defined
benefit pension plan and other post-retirement benefit plan
expense |
526 |
|
|
476 |
|
Stock
compensation expense |
(161 |
) |
|
891 |
|
Other |
692 |
|
|
772 |
|
Defined
benefit pension plan and other post-retirement benefit plan
contributions |
(532 |
) |
|
(426 |
) |
Changes
in working capital |
|
|
|
Accounts
receivable |
(6,288 |
) |
|
3,953 |
|
Inventories |
9,425 |
|
|
14,636 |
|
Accounts
payable and accrued expenses |
6,881 |
|
|
13,210 |
|
Other |
(996 |
) |
|
(379 |
) |
Net cash
from (used in) operating activities |
53,385 |
|
|
63,466 |
|
|
|
|
|
Cash flows from (used
in) investing activities |
|
|
|
Purchase
of property, plant and equipment |
(8,164 |
) |
|
(6,936 |
) |
Purchase
of intangible assets |
(240 |
) |
|
(520 |
) |
Other |
— |
|
|
(102 |
) |
Net cash
from (used in) investing activities |
(8,404 |
) |
|
(7,558 |
) |
|
|
|
|
Cash flows from (used
in) financing activities |
|
|
|
Repurchase of notes |
(234,945 |
) |
|
(23,079 |
) |
Proceeds
from issuance of notes |
250,000 |
|
|
— |
|
Dividend
payments |
(7,440 |
) |
|
(7,418 |
) |
Payment
of debt issuance costs |
(5,124 |
) |
|
— |
|
Other |
(921 |
) |
|
(486 |
) |
Net cash
from (used in) financing activities |
1,570 |
|
|
(30,983 |
) |
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash |
518 |
|
|
5,767 |
|
|
|
|
|
Net increase in cash,
cash equivalents and restricted cash |
47,069 |
|
|
30,692 |
|
Cash, cash equivalents
and restricted cash, beginning of period |
140,896 |
|
|
108,859 |
|
Cash, cash equivalents
and restricted cash, end of period |
$ |
187,965 |
|
|
$ |
139,551 |
|
|
|
|
|
Supplemental cash flow
disclosure |
|
|
|
Cash paid
for interest |
$ |
4,456 |
|
|
$ |
599 |
|
Cash paid
for income taxes |
$ |
2,527 |
|
|
$ |
4,630 |
|
MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING
EBITDA(Unaudited)(In
thousands)
Operating EBITDA is defined as operating income
plus depreciation and amortization and non-recurring capital asset
impairment charges. Management uses Operating EBITDA as a benchmark
measurement of its own operating results, and as a benchmark
relative to its competitors. Management considers it to be a
meaningful supplement to operating income as a performance measure
primarily because depreciation expense and non-recurring capital
asset impairment charges are not an actual cash cost, and
depreciation expense varies widely from company to company in a
manner that management considers largely independent of the
underlying cost efficiency of our operating facilities. In
addition, we believe Operating EBITDA is commonly used by
securities analysts, investors and other interested parties to
evaluate our financial performance.
Operating EBITDA does not reflect the impact of a
number of items that affect our net income, including financing
costs and the effect of derivative instruments. Operating EBITDA is
not a measure of financial performance under GAAP, and should not
be considered as an alternative to net income or income from
operations as a measure of performance, nor as an alternative to
net cash from operating activities as a measure of
liquidity. The following tables set forth the net income to
Operating EBITDA:
|
Three Months Ended |
|
March 31, |
|
December 31, |
|
2017 |
|
2016 |
|
2016 |
Net income |
$ |
9,726 |
|
|
$ |
8,769 |
|
|
$ |
18,489 |
Income tax
provision |
|
7,481 |
|
|
|
6,199 |
|
|
|
5,340 |
Interest expense |
|
13,879 |
|
|
|
13,191 |
|
|
|
12,857 |
Loss on settlement of
debt |
|
10,696 |
|
|
|
454 |
|
|
|
‑ |
Foreign exchange (gain)
loss on intercompany debt |
|
(14 |
) |
|
|
(555 |
) |
|
|
1,444 |
Other (income)
expenses |
|
(782 |
) |
|
|
42 |
|
|
|
915 |
Operating income |
|
40,986 |
|
|
|
28,100 |
|
|
|
39,045 |
Add: Depreciation and
amortization |
|
19,221 |
|
|
|
17,219 |
|
|
|
18,772 |
Operating EBITDA |
$ |
60,207 |
|
|
$ |
45,319 |
|
|
$ |
57,817 |
|
|
|
|
|
|
|
|
|
|
|
APPROVED BY:
Jimmy S.H. Lee
Executive Chairman
(604) 684-1099
David M. Gandossi
Chief Executive Officer
(604) 684-1099
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