Ainsworth Lumber Co. Ltd. recorded net income of C$10 million (US$9.98 million) in the third quarter, half its showing in the year-earlier quarter, on a 2.9% increase in sales to C$81.1 million (US$80.9 million), the specialist in engineered wood reported late Thursday.
The Vancouver-based company prefers to measure its performance in terms of adjusted EBITDA–earnings before interest, taxes, depreciation, and amortization as well as before gains on disposals of property, plants and equipment, costs of curtailed operations, stock options expenses, exchange-rate factors, and non-recurring items. By that measure, adjusted EBITDA nearly quadrupled to C$8.8 million from C$2.6 million.
The volume of goods shipped declined 5.1% to 392 million square feet (3/8-inch basis). That was offset by an 8.3% increase in the realized sales price.
Net income dropped primarily because of a C$30 million decrease in the unrealized foreign exchange gain on long-term debt, part of which was offset by a C$3.3 million drop in other foreign exchange losses and a C$2.5 million rise in income tax recoveries.
All of the gain in sales was due to business outside North America. The company sold C$27.8 million worth of product to overseas customers in the July-to-September period vs. just C$9 million a year earlier, while its sales to North American customers dropped to C$53.3 million from C$69.8 million.
“In the third quarter of 2010, Ainsworth recorded improved performance in terms of sales and adjusted EBITDA margins compared to the third quarter of 2009 despite a decline in published benchmark OSB prices,” Ainsworth’s president and chief executive officer, Rick Huff, said in a statement. “It was another strong quarter for the company and signals that Ainsworth has turned the corner and is creating real, sustainable value for its shareholders.”
