Conifex Announces Second Quarter 2013 Results and Appointments of Director and Senior VP Marketing
August 13 2013 - 4:00PM
Marketwired Canada
Conifex Timber Inc. ("Conifex" or the "Company") (TSX VENTURE:CFF) today
reported a net income of $2.4 million or $0.12 per diluted share for the second
quarter of 2013 compared to net income of $6.2 million or $0.29 per diluted
share for the previous quarter and a net loss of $2.4 million or $0.13 per share
for the second quarter of 2012. Net income for the first six months of 2013 was
$8.6 million or $0.42 per diluted share compared to a net loss of $9.0 million
or $0.49 per share over the same period last year.
Summarized operating results for each of the comparison periods are provided below.
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Q2 Q1 YTD Q2 YTD
(millions of dollars except share and per
share amounts) 2013 2013 2013 2012 2012
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Sales 64.4 66.2 130.7 55.8 103.2
EBITDA (1) 4.8 9.2 14.0 0.6 (3.2)
Operating income (loss) 3.3 6.6 9.9 (1.6) (7.7)
Net income (loss) 2.4 6.2 8.6 (2.4) (9.0)
Net income (loss) per share - basic 0.12 0.30 0.42 (0.13) (0.49)
Net income (loss) per share - diluted 0.12 0.29 0.42 (0.13) (0.49)
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Reconciliation of EBITDA to net income
(loss)
Net income (loss) 2.4 6.2 8.6 (2.4) (9.0)
Add: Interest expense 0.4 0.9 1.3 0.5 1.1
Depreciation and amortization 2.1 1.9 4.0 1.8 3.7
Deferred union payroll liability (0.3) (0.3) (0.6) - -
Share based compensation (0.1) 0.2 0.1 0.2 0.3
Accretion of convertible debentures 0.3 0.3 0.6 0.3 0.5
Loss of disposal of assets - - - 0.2 0.2
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EBITDA (1) 4.8 9.2 14.0 0.6 (3.2)
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(1) In this news release, reference is made to "EBITDA". EBITDA represents
earnings before interest, taxes, depreciation and amortization, as well
as before deductions for non-cash charges related to employee
compensation and changes in the balance sheet carrying value of
convertible debentures and other investments. The Company discloses
EBITDA as it is a measure used by analysts and by Conifex's management
to evaluate the Company's performance. As EBITDA is a non-GAAP measure,
it may not be comparable to EBITDA calculated by others. In addition, as
EBITDA is not a substitute for net earnings, readers should consider net
earnings in evaluating the Company's performance.
Revenues totalled $64.4 million in the second quarter of 2013 compared to $66.2
million in the previous quarter and $55.8 million in the second quarter of 2012.
Lumber shipments totalled approximately 132 million board feet during the second
quarter of 2013 and included wholesale lumber shipments of approximately 12
million board feet. Shipments of Conifex produced lumber was largely flat
compared to the previous quarter, which lagged current quarter production
volumes by 12% as the Company built finished goods transit inventory late in the
quarter in anticipation of increased export order files in the subsequent
period. A decline in shipments of wholesale lumber of 28% or approximately 5
million board feet from the previous quarter was largely attributable to the
decline in demand from the Chinese market.
Benchmark lumber prices (expressed in Canadian dollars) declined by 13% over the
previous quarter and increased by 14% over the second quarter of 2012. During
the second quarter of 2013, a decrease of 5% in overall average unit mill net
realizations compared to the previous quarter was comprised of an increase of
15% from shipments to the Japanese market offset by declines of 6% to 9% from
other markets. The Japanese market accounted for 10% of total shipment volumes
and contributed to 14% of total overall mill net revenues during the second
quarter of 2013.
Lumber production totalled 136 million board feet in the second quarter of 2013
and represents capacity operations at our two operating mills. On a corporate
basis, which includes our idled mill, our operating rate on an annualized basis
was approximately 73% versus 55% for the second quarter of 2012. The 9% increase
in production volumes over the previous quarter and 33% over the second quarter
of 2012 resulted in improvements in unit cash conversion costs of 2% and 13%
respectively. Average hourly production over the first six months of 2013
increased by 18% compared to the same period last year. The more consistent
production contributed to an improvement in the Company's safety performance as
safety related incidents are often correlated with adverse operating conditions.
Overall unit log costs increased by 6% compared to the previous quarter and 14%
over the second quarter of 2012 with improvements in lumber recovery of 4% and
11% respectively more than offset by an increase in the unit cost of delivered
logs. The increase in delivered log costs is generally attributable to costs
associated with increased stumpage rates, contractor rates and purchased log
costs.
Second quarter 2013 net income of $2.4 million was comprised of lumber segment
net income of $4.7 million offset by bioenergy segment net loss of $0.2 million
and corporate costs and other items of $2.1 million. Second quarter lumber
segment EBITDA of $6.7 million was offset by negative bioenergy segment EBITDA
of $0.2 million and corporate costs and other items of $1.7 million.
Compared to the first quarter of 2013, lumber segment net income declined by
$4.0 million as the effects of lower mill net realizations and higher log costs
were only partially offset by the benefits of increased revenue from residuals
and a modest improvement in unit cash conversion costs. Compared to the second
quarter of 2012, lumber segment net income increased by $5.4 million as the
benefits of a significant improvement in mill nets realization from higher
lumber prices and a zero percent export tax rate, and reduction in unit cash
conversion costs more than offset higher log costs.
Appointment of Patrick Bell as Director
The Company is pleased to announce the appointment of Patrick Bell to its Board
of Directors. During his political career, Mr. Bell served three terms in the BC
Legislature and held a number of high profile positions with the Provincial
Government, including Minister of Jobs, Tourism and Skills Training, Minister of
Forests and Range, and Minister of Agriculture. Mr. Bell's entrepreneurial
career involved interests in a variety of businesses, including a logging
company and a trucking company. Earlier in his career, Mr. Bell worked in the
hospitality industry at a corporate level and remains involved with the
organization as a franchisee.
Appointment of Hans Thur as Senior Vice President, Marketing
The Company is pleased to announce the appointment of Hans Thur as Senior Vice
President, Marketing, and President of its wholly-owned subsidiary Conifex Fibre
Marketing Inc. effective in September 2013. Mr. Thur's background includes
extensive marketing, sales and global supply chain management experience with a
leading North American lumber manufacturer. Mr. Thur is familiar with the
softwood lumber wholesale and distribution business through direct experience
gained earlier in his career.
Earnings Release Call
There will be a conference call held by the Company on Wednesday, August 14,
2013 at 8:00 AM Pacific time / 11:00 AM ET to discuss the second quarter
financial and operating results. To participate in the call, please dial
416-340-2216 or toll free 866-226-1792. The call will also be available on
instant replay access until August 28, 2013 by dialling 905-694-9451 or
800-408-3053 and entering participant pass code 6257898.
About Conifex Timber Inc.
Conifex and its subsidiaries' primary business currently includes timber
harvesting, reforestation, forest management, and the manufacture, sale and
distribution of dimension lumber. Conifex's lumber products are sold in the
United States, Chinese, Canadian and Japanese markets. Upon completion of its
bioenergy 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" including anticipated export orders and the timing and completion of
the bioenergy facility in Mackenzie, British Columbia. 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.
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 the additional matters
described in the Company's most recent Annual Information Form, available on
SEDAR at www.sedar.com. 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:
Yuri Lewis
Chief Financial Officer
(778) 331-8687
Conifex Timber (TSXV:CFF)
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