Mercer International Inc. (Nasdaq: MERC) today reported first
quarter 2022 Operating EBITDA increased to a $154.5 million from
$82.0 million in the first quarter of 2021 and decreased from
$164.9 million in the fourth quarter of 2021.
In the first quarter of 2022, net income was
$88.9 million (or $1.35 per basic share and $1.34 per diluted
share) compared to $5.9 million (or $0.09 per share) in the first
quarter of 2021 and net income of $74.5 million (or $1.13 per basic
share and $1.12 per diluted share) in the fourth quarter of
2021.
Mr. David Gandossi, the Chief Executive Officer,
stated: “Our robust first quarter operating results were driven by
strong sales volumes, increased pulp, lumber and energy pricing and
our German mills’ sales of surplus energy into the spot market.
These positive effects were only partially offset by higher costs
for key inputs including fiber, energy and chemicals. Despite the
impact of such cost inflation, we believe that our cost control
measures will help mitigate the effect of increases going forward
and we see our surplus energy sales as a strong hedge for higher
energy prices.
Overall, our first quarter pulp results compared
to the fourth quarter of 2021, benefitted from higher pulp pricing
and the Rosenthal turbine running for most of the quarter allowing
for surplus energy sales and minimal energy purchases, which were
partially offset by higher fiber and natural gas costs. Also, our
fourth quarter 2021 results included $31.9 million of business
interruption insurance proceeds.
In the first quarter of 2022, our Friesau
sawmill’s production continued its strong performance and its
results were materially improved over the trailing fourth quarter
primarily due to improved lumber pricing in the U.S. In the first
quarter of 2022, our solid wood segment generated operating income
of $40.5 million.
Pulp prices improved in all markets during the
first quarter as low customer inventory levels and limited supply,
including as a result of global logistical slowdowns, led to higher
pricing. As of March 31, 2022, third party industry quoted NBSK
list prices were approximately $1,345 per ADMT in Europe and net
prices were approximately $985 per ADMT in China.
Global logistics challenges continue to impact
our business primarily with regards to North American rail traffic
which led to us having to slow production at our Canadian pulp
mills. We primarily managed these logistical challenges by using
additional trucking which is higher cost compared to rail. We are
seeing the railways beginning to make headway with the unwinding of
their system backlogs and we are currently optimistic that such
logistics issues will be much improved over the coming summer
months.
As we move into the second quarter, we currently
expect some continued upward pricing pressure on pulp prices as a
result of current supply-demand dynamics. While lumber prices in
the United States have declined in the last few weeks, we generally
expect them to remain at historically strong levels into the
summer. Further, we currently expect strong energy demand and
prices in Germany to continue in the second quarter of 2022.
Currently our 2022 capital expenditures are on
track to total approximately $175 to $200 million. The majority of
these investments are designed to deliver high returns, help us
achieve our ESG objectives and enhance shareholder value.
What I am most excited about is our recently
acquired cross-laminated timber facility (the "CLT Facility")
located near Spokane, Washington. It is a state-of-the-art facility
that produces cross-laminated timber ("CLT") which is a wood panel
product made from adhering layers of solid sawn timber. CLT is a
more sustainable alternative for use in construction and home
building. In the first quarter we built out our senior sales and
marketing team which interfaces directly with developers,
architects and builders to support and work with them to
incorporate our CLT products. We have also started ramping up the
business and have identified new offerings to build out and expand
the CLT Facility's product line. Over time, as we continue to ramp
up and expand its business and with some small targeted capital
expenditures to expand its product offerings, I believe the CLT
Facility will be a key foundation of our solid wood business.
While many countries globally have eased
pandemic restrictions and the global roll-out of vaccines
continues, health and infection risks from COVID-19, including from
variants, continue. Consequently, we will maintain our measures and
procedures put in place to protect our people and allow us to
operate our business safely and efficiently.
Finally, as you are likely aware, I have
announced my retirement as CEO and President of Mercer effective
May 1, 2022. The Board has appointed Juan Carlos Bueno, a globally
recognized leader in the biomaterials space, to take the Company
through the next stage of its development. Our new leadership,
combined with an excellent management team and outstanding
employees, will continue to advance our growth strategy into the
future. Although I will no longer be leading Mercer I will support
Juan Carlos’ transition and will enjoy watching Mercer’s
progress”.
____________________*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 6 of the financial tables included in
this press release for a reconciliation of net income to Operating
EBITDA.
Consolidated Financial
Results
|
Q1 |
|
|
Q4 |
|
|
Q1 |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
|
(in thousands, except per share amounts) |
Revenues |
$ |
592,741 |
|
|
$ |
518,957 |
|
|
$ |
412,720 |
|
|
Operating income |
$ |
122,351 |
|
|
$ |
129,963 |
|
|
$ |
51,029 |
|
|
Operating EBITDA |
$ |
154,467 |
|
|
$ |
164,925 |
|
|
$ |
81,996 |
|
|
Loss
on early extinguishment of debt |
$ |
— |
|
|
$ |
— |
|
|
$ |
(30,368 |
) |
(1) |
Net
income |
$ |
88,897 |
|
|
$ |
74,522 |
|
|
$ |
5,933 |
|
|
Net
income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.35 |
|
|
$ |
1.13 |
|
|
$ |
0.09 |
|
|
Diluted |
$ |
1.34 |
|
|
$ |
1.12 |
|
|
$ |
0.09 |
|
|
______________(1) Redemption of 6.50% senior
notes due 2024 and 7.375% senior notes due 2025.
Consolidated – Three Months Ended March
31, 2022 Compared to Three Months Ended March 31, 2021
Total revenues in the first quarter of 2022
increased by approximately 44% to a record $592.7 million from
$412.7 million in the same quarter of 2021 primarily due to higher
sales realizations, pulp sales volumes and energy sales.
In the first quarter of 2022, our energy and
chemical revenues increased by 76% to $46.2 million from $26.3
million in the same quarter of 2021 primarily as a result of higher
energy prices in Germany, which were more than double those in the
same quarter of 2021.
Costs and expenses in the first quarter of 2022
increased by approximately 30% to $470.4 million from $361.7
million in the first quarter of 2021 primarily due to higher per
unit fiber costs, pulp sales volumes and energy, freight and
chemical costs partially offset by lower maintenance costs.
In the first quarter of 2022, Operating EBITDA
increased by approximately 88% to $154.5 million from $82.0 million
in the same quarter of 2021 primarily due to higher sales
realizations and pulp sales volumes and lower maintenance costs
partially offset by higher per unit fiber and other production
costs.
Segment Results
Pulp
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
|
Pulp revenues |
$ |
446,911 |
|
|
$ |
317,582 |
|
|
Energy and chemical revenues |
$ |
39,020 |
|
|
$ |
22,174 |
|
|
Operating income |
$ |
86,236 |
|
|
$ |
25,296 |
|
|
In the first quarter of 2022, pulp segment
operating income increased to $86.2 million from $25.3 million in
the same quarter of 2021 as higher sales realizations and lower
maintenance costs were partially offset by higher per unit fiber
costs and other production costs.
Pulp revenues in the first quarter of 2022
increased by approximately 41% to a record $446.9 million from
$317.6 million in the same quarter of 2021 due to higher sales
realizations and sales volumes.
Energy and chemical revenues increased by
approximately 76% to a record $39.0 million in the first quarter of
2022 from $22.2 million in the same quarter of 2021 primarily due
to higher sales realizations.
In the first quarter of 2022, third party
industry quoted average list prices for NBSK pulp increased from
the same quarter of 2021 primarily as a result of low customer
inventory levels and global logistics issues restricting supply.
Average NBSK pulp sales realizations increased by approximately 22%
to $812 per ADMT in the first quarter of 2022 from approximately
$668 per ADMT in the same quarter of 2021.
Costs and expenses in the first quarter of 2022
increased by approximately 27% to $399.7 million from $314.6
million in the first quarter of 2021 primarily due to higher pulp
sales volumes, per unit fiber costs and energy, chemical and
freight costs partially offset by lower maintenance costs. In the
first quarter of 2022, we had no annual maintenance downtime
compared to maintenance downtime of 27 days (approximately 37,800
ADMTs) in the same quarter of 2021.
In the first quarter of 2022 per unit fiber
costs increased by approximately 25% from the same quarter of 2021
due to higher per unit fiber costs for all of our mills. Per unit
fiber costs for our German mills increased due to strong demand and
reduced availability of lower cost beetle damaged wood. For our
Canadian mills, per unit fiber costs increased due to strong demand
in the mills fiber baskets. We currently expect per unit fiber
costs will increase in the second quarter of 2022 due to continued
strong demand.
Wood Products
|
Three Months Ended March 31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(in thousands) |
|
|
Lumber revenues |
$ |
92,366 |
|
|
$ |
67,311 |
|
|
Energy revenues |
$ |
5,177 |
|
|
$ |
2,114 |
|
|
Wood
residual revenues |
$ |
3,490 |
|
|
$ |
1,562 |
|
|
Operating income |
$ |
40,479 |
|
|
$ |
27,977 |
|
|
In the first quarter of 2022, our
wood products segment had operating income of $40.5 million
compared to $28.0 million in the same quarter of 2021 primarily due
to higher sales realizations partially offset by higher per unit
fiber costs.
Average lumber sales realizations increased by
approximately 35% to $840 per Mfbm in the first quarter of 2022
from approximately $622 per Mfbm in the same quarter of 2021
primarily due to higher pricing in both the European and U.S.
markets. U.S. lumber pricing increased due to strong demand from
the housing and renovation markets. European lumber pricing
increased due to steady demand with limited supply.
In the comparative quarter of 2021, per unit
fiber costs were lower as a result of a large supply of beetle
damaged wood. As producers have worked through such wood, more
green wood is being harvested. In the first quarter of 2022 per
unit fiber costs increased by approximately 56% from the same
quarter of 2021 as a result of using more green wood and continued
strong demand for sawlogs. We currently expect modestly higher per
unit fiber costs in the second quarter of 2022.
Liquidity
As of March 31, 2022, we had cash and cash
equivalents of approximately $410.7 million and approximately
$281.0 million available under our revolving credit facilities
providing us with aggregate liquidity of about $691.7 million.
Quarterly Dividend
A quarterly dividend of $0.075 per share will be
paid on July 7, 2022 to all shareholders of record on June 29,
2022. Future dividends will be subject to Board approval and may be
adjusted as business and industry conditions warrant.
Earnings Release Call
In 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 April 29, 2022 at 10:00 AM
ET. Listeners can access the conference call live and archived for
30 days over the Internet at
https://edge.media-server.com/mmc/p/t6i78rsg or through a link on
the company's home page at https://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, USA and Canada with
consolidated annual production capacity of 2.3 million tonnes of
pulp, 550 million board feet of lumber and 140 thousand cubic
meters of CLT. To obtain further information on the company, please
visit its web site at https://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", "are optimistic that", "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.
APPROVED BY:
Jimmy S.H. LeeExecutive Chairman(604) 684-1099
David M. Gandossi, FCPA, FCAChief Executive Officer (604)
684-1099
-FINANCIAL TABLES FOLLOW-
Summary Financial Highlights
|
Q1 |
|
|
Q4 |
|
|
Q1 |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
|
(in thousands, except per share amounts) |
|
|
Pulp segment revenues |
$ |
485,931 |
|
|
$ |
436,345 |
|
|
$ |
339,756 |
|
|
Wood products segment revenues |
|
101,033 |
|
|
|
78,932 |
|
|
|
70,987 |
|
|
Corporate and other revenues |
|
5,777 |
|
|
|
3,680 |
|
|
|
1,977 |
|
|
Total
revenues |
$ |
592,741 |
|
|
$ |
518,957 |
|
|
$ |
412,720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulp segment operating income |
$ |
86,236 |
|
|
$ |
113,172 |
|
|
$ |
25,296 |
|
|
Wood products segment operating income |
|
40,479 |
|
|
|
19,876 |
|
|
|
27,977 |
|
|
Corporate and other operating loss |
|
(4,364 |
) |
|
|
(3,085 |
) |
|
|
(2,244 |
) |
|
Total
operating income |
$ |
122,351 |
|
|
$ |
129,963 |
|
|
$ |
51,029 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulp segment depreciation and amortization |
$ |
27,684 |
|
|
$ |
30,298 |
|
|
$ |
27,046 |
|
|
Wood products segment depreciation and amortization |
|
3,637 |
|
|
|
3,712 |
|
|
|
3,723 |
|
|
Corporate and other depreciation and amortization |
|
795 |
|
|
|
952 |
|
|
|
198 |
|
|
Total
depreciation and amortization |
$ |
32,116 |
|
|
$ |
34,962 |
|
|
$ |
30,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating EBITDA |
$ |
154,467 |
|
|
$ |
164,925 |
|
|
$ |
81,996 |
|
|
Loss
on early extinguishment of debt |
$ |
— |
|
|
$ |
— |
|
|
$ |
(30,368 |
) |
(1) |
Income tax provision |
$ |
(24,236 |
) |
|
$ |
(43,706 |
) |
|
$ |
(2,698 |
) |
|
Net
income |
$ |
88,897 |
|
|
$ |
74,522 |
|
|
$ |
5,933 |
|
|
Net
income per common share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
1.35 |
|
|
$ |
1.13 |
|
|
$ |
0.09 |
|
|
Diluted |
$ |
1.34 |
|
|
$ |
1.12 |
|
|
$ |
0.09 |
|
|
Common shares outstanding at period end |
|
66,132 |
|
|
|
66,037 |
|
|
|
65,988 |
|
|
______________(1) Redemption of 6.50% senior
notes due 2024 and 7.375% senior notes due 2025.
Summary Operating Highlights
|
Q1 |
|
|
Q4 |
|
|
Q1 |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
Pulp Segment |
|
|
|
|
|
|
|
|
|
|
|
|
Pulp production ('000 ADMTs) |
|
|
|
|
|
|
|
|
|
|
|
|
NBSK |
|
435.5 |
|
|
|
476.2 |
|
|
|
396.9 |
|
|
NBHK |
|
56.8 |
|
|
|
48.8 |
|
|
|
81.6 |
|
|
Annual maintenance downtime ('000 ADMTs) |
|
— |
|
|
|
— |
|
|
|
37.8 |
|
|
Annual maintenance downtime (days) |
|
— |
|
|
|
— |
|
|
|
27 |
|
|
Pulp sales ('000 ADMTs) |
|
|
|
|
|
|
|
|
|
|
|
|
NBSK |
|
505.1 |
|
|
|
465.6 |
|
|
|
418.6 |
|
|
NBHK |
|
49.9 |
|
|
|
50.7 |
|
|
|
69.0 |
|
|
Average NBSK pulp prices ($/ADMT)(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Europe |
|
1,330 |
|
|
|
1,302 |
|
|
|
1,037 |
|
|
China |
|
899 |
|
|
|
723 |
|
|
|
883 |
|
|
North America |
|
1,527 |
|
|
|
1,472 |
|
|
|
1,302 |
|
|
Average NBHK pulp prices ($/ADMT)(1) |
|
|
|
|
|
|
|
|
|
|
|
|
China |
|
668 |
|
|
|
562 |
|
|
|
692 |
|
|
North America |
|
1,312 |
|
|
|
1,262 |
|
|
|
1,020 |
|
|
Average pulp sales realizations ($/ADMT)(2) |
|
|
|
|
|
|
|
|
|
|
|
|
NBSK |
|
812 |
|
|
|
784 |
|
|
|
668 |
|
|
NBHK |
|
695 |
|
|
|
649 |
|
|
|
520 |
|
|
Energy production ('000 MWh)(3) |
|
531.5 |
|
|
|
480.9 |
|
|
|
519.1 |
|
|
Energy sales ('000 MWh)(3) |
|
194.7 |
|
|
|
184.2 |
|
|
|
201.1 |
|
|
Average energy sales realizations ($/MWh)(3) |
|
186 |
|
|
|
184 |
|
|
|
97 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products Segment |
|
|
|
|
|
|
|
|
|
|
|
|
Lumber production (MMfbm) |
|
115.6 |
|
|
|
111.3 |
|
|
|
117.8 |
|
|
Lumber sales (MMfbm) |
|
109.9 |
|
|
|
104.4 |
|
|
|
108.2 |
|
|
Average lumber sales realizations ($/Mfbm) |
|
840 |
|
|
689 |
|
|
622 |
|
|
Energy production and sales ('000 MWh) |
|
24.5 |
|
|
|
23.2 |
|
|
|
16.4 |
|
|
Average energy sales realizations ($/MWh) |
|
211 |
|
|
213 |
|
|
129 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Spot Currency Exchange Rates |
|
|
|
|
|
|
|
|
|
|
|
|
$ / €(4) |
|
1.1216 |
|
|
|
1.1437 |
|
|
|
1.2045 |
|
|
$ / C$(4) |
|
0.7897 |
|
|
0.7936 |
|
|
0.7902 |
|
|
______________(1) Source: RISI pricing
report. Europe and North America are list prices. China are net
prices which include discounts, allowances and rebates.(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) Does not include our 50% joint
venture interest in the Cariboo mill, which is accounted for using
the equity method.(4) Average Federal
Reserve Bank of New York Noon Buying Rates over the reporting
period.
MERCER INTERNATIONAL
INC.INTERIM CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)(In
thousands, except per share data)
|
|
Three Months Ended March 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
Revenues |
|
$ |
592,741 |
|
|
$ |
412,720 |
|
|
Costs
and expenses |
|
|
|
|
|
|
|
|
|
Cost of sales, excluding depreciation and amortization |
|
|
416,095 |
|
|
|
310,197 |
|
|
Cost of sales depreciation and amortization |
|
|
32,097 |
|
|
|
30,946 |
|
|
Selling, general and administrative expenses |
|
|
22,198 |
|
|
|
20,548 |
|
|
Operating income |
|
|
122,351 |
|
|
|
51,029 |
|
|
Other
income (expenses) |
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
(17,464 |
) |
|
|
(19,019 |
) |
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
(30,368 |
) |
|
Other income |
|
|
8,246 |
|
|
|
6,989 |
|
|
Total
other expenses, net |
|
|
(9,218 |
) |
|
|
(42,398 |
) |
|
Income
before income taxes |
|
|
113,133 |
|
|
|
8,631 |
|
|
Income
tax provision |
|
|
(24,236 |
) |
|
|
(2,698 |
) |
|
Net
income |
|
$ |
88,897 |
|
|
$ |
5,933 |
|
|
Net
income per common share |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
1.35 |
|
|
$ |
0.09 |
|
|
Diluted |
|
$ |
1.34 |
|
|
$ |
0.09 |
|
|
Dividends declared per common share |
|
$ |
0.0750 |
|
|
$ |
0.0650 |
|
|
MERCER INTERNATIONAL
INC.INTERIM CONSOLIDATED BALANCE
SHEETS(Unaudited)(In thousands,
except share and per share data)
|
|
March 31, |
|
|
December 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
410,705 |
|
|
$ |
345,610 |
|
|
Accounts receivable, net |
|
|
387,779 |
|
|
|
345,345 |
|
|
Inventories |
|
|
353,407 |
|
|
|
356,731 |
|
|
Prepaid expenses and other |
|
|
17,494 |
|
|
|
16,619 |
|
|
Total current assets |
|
|
1,169,385 |
|
|
|
1,064,305 |
|
|
Property, plant and equipment, net |
|
|
1,130,337 |
|
|
|
1,135,631 |
|
|
Investment in joint ventures |
|
|
49,574 |
|
|
|
49,651 |
|
|
Amortizable intangible assets, net |
|
|
47,237 |
|
|
|
47,902 |
|
|
Operating lease right-of-use assets |
|
|
9,172 |
|
|
|
9,712 |
|
|
Pension asset |
|
|
4,009 |
|
|
|
4,136 |
|
|
Other long-term assets |
|
|
45,887 |
|
|
|
38,718 |
|
|
Deferred income tax |
|
|
1,343 |
|
|
|
1,177 |
|
|
Total assets |
|
$ |
2,456,944 |
|
|
$ |
2,351,232 |
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
|
Accounts payable and other |
|
$ |
280,366 |
|
|
$ |
282,307 |
|
|
Pension and other post-retirement benefit obligations |
|
|
818 |
|
|
|
817 |
|
|
Total current liabilities |
|
|
281,184 |
|
|
|
283,124 |
|
|
Long-term debt |
|
|
1,264,525 |
|
|
|
1,237,545 |
|
|
Pension and other post-retirement benefit obligations |
|
|
20,884 |
|
|
|
21,252 |
|
|
Operating lease liabilities |
|
|
6,110 |
|
|
|
6,574 |
|
|
Other long-term liabilities |
|
|
13,270 |
|
|
|
13,590 |
|
|
Deferred income tax |
|
|
102,637 |
|
|
|
95,123 |
|
|
Total liabilities |
|
|
1,688,610 |
|
|
|
1,657,208 |
|
|
Shareholders’ equity |
|
|
|
|
|
|
|
|
|
Common shares $1 par value; 200,000,000 authorized; 66,132,000
issued and outstanding (2021 – 66,037,000) |
|
|
66,083 |
|
|
|
65,988 |
|
|
Additional paid-in capital |
|
|
348,756 |
|
|
|
347,902 |
|
|
Retained earnings |
|
|
454,864 |
|
|
|
370,927 |
|
|
Accumulated other comprehensive loss |
|
|
(101,369 |
) |
|
|
(90,793 |
) |
|
Total shareholders’
equity |
|
|
768,334 |
|
|
|
694,024 |
|
|
Total liabilities and
shareholders’ equity |
|
$ |
2,456,944 |
|
|
$ |
2,351,232 |
|
|
MERCER INTERNATIONAL
INC.INTERIM CONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)(In
thousands)
|
|
Three Months Ended March 31, |
|
|
|
|
2022 |
|
|
2021 |
|
|
Cash flows from (used in) operating activities |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
88,897 |
|
|
$ |
5,933 |
|
|
Adjustments to reconcile net income to cash flows from operating
activities |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
32,116 |
|
|
|
30,967 |
|
|
Deferred income tax provision |
|
|
8,383 |
|
|
|
1,204 |
|
|
Loss on early extinguishment of debt |
|
|
— |
|
|
|
30,368 |
|
|
Defined benefit pension plans and other post-retirement benefit
plan expense |
|
|
438 |
|
|
|
919 |
|
|
Stock compensation expense |
|
|
949 |
|
|
|
610 |
|
|
Foreign exchange transaction gains |
|
|
(3,828 |
) |
|
|
(8,606 |
) |
|
Other |
|
|
(801 |
) |
|
|
(616 |
) |
|
Defined benefit pension plans and other post-retirement benefit
plan contributions |
|
|
(1,194 |
) |
|
|
(923 |
) |
|
Changes in working capital |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(52,127 |
) |
|
|
(12,423 |
) |
|
Inventories |
|
|
(1,725 |
) |
|
|
(20,799 |
) |
|
Accounts payable and accrued expenses |
|
|
(567 |
) |
|
|
4,436 |
|
|
Other |
|
|
(1,731 |
) |
|
|
(782 |
) |
|
Net cash from (used in) operating activities |
|
|
68,810 |
|
|
|
30,288 |
|
|
Cash
flows from (used in) investing activities |
|
|
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
|
|
(33,293 |
) |
|
|
(25,262 |
) |
|
Insurance proceeds |
|
|
6,410 |
|
|
|
— |
|
|
Purchase of amortizable intangible assets |
|
|
(60 |
) |
|
|
(641 |
) |
|
Other |
|
|
153 |
|
|
|
(394 |
) |
|
Net cash from (used in) investing activities |
|
|
(26,790 |
) |
|
|
(26,297 |
) |
|
Cash
flows from (used in) financing activities |
|
|
|
|
|
|
|
|
|
Redemption of senior notes |
|
|
— |
|
|
|
(824,557 |
) |
|
Proceeds from issuance of senior notes |
|
|
— |
|
|
|
875,000 |
|
|
Proceeds from (repayment of) revolving credit facilities, net |
|
|
30,504 |
|
|
|
(15,070 |
) |
|
Payment of debt issuance costs |
|
|
(1,184 |
) |
|
|
(14,414 |
) |
|
Proceeds from government grants |
|
|
1,067 |
|
|
|
8,532 |
|
|
Payment of finance lease obligations |
|
|
(4,935 |
) |
|
|
(1,703 |
) |
|
Other |
|
|
(843 |
) |
|
|
3,624 |
|
|
Net cash from (used in) financing activities |
|
|
24,609 |
|
|
|
31,412 |
|
|
Effect
of exchange rate changes on cash and cash equivalents |
|
|
(1,534 |
) |
|
|
(1,418 |
) |
|
Net
increase in cash and cash equivalents |
|
|
65,095 |
|
|
|
33,985 |
|
|
Cash and
cash equivalents, beginning of period |
|
|
345,610 |
|
|
|
361,098 |
|
|
Cash and
cash equivalents, end of period |
|
$ |
410,705 |
|
|
$ |
395,083 |
|
|
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 operating income
as a measure of performance, nor as an alternative to net cash from
(used in) operating activities as a measure of liquidity. The
following tables set forth the net income to Operating EBITDA:
|
Q1 |
|
|
Q4 |
|
|
Q1 |
|
|
|
2022 |
|
|
2021 |
|
|
2021 |
|
|
Net
income |
$ |
88,897 |
|
|
$ |
74,522 |
|
|
$ |
5,933 |
|
|
Income tax provision |
|
24,236 |
|
|
|
43,706 |
|
|
|
2,698 |
|
|
Interest expense |
|
17,464 |
|
|
|
17,016 |
|
|
|
19,019 |
|
|
Loss
on early extinguishment of debt |
|
— |
|
|
|
— |
|
|
|
30,368 |
|
|
Other
income |
|
(8,246 |
) |
|
|
(5,281 |
) |
|
|
(6,989 |
) |
|
Operating income |
|
122,351 |
|
|
|
129,963 |
|
|
|
51,029 |
|
|
Add:
Depreciation and amortization |
|
32,116 |
|
|
|
34,962 |
|
|
|
30,967 |
|
|
Operating EBITDA |
$ |
154,467 |
|
|
$ |
164,925 |
|
|
$ |
81,996 |
|
|
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