Interfor Posts Improved Results in Q4''15
Q4'15 Adjusted EBITDA of $35.8 Million Reflects Higher Prices and Progress on Key Business Initiatives; Thomas V. Milroy Appointed to Board of Directors
(firmenpresse) - VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 02/11/16 -- INTERFOR CORPORATION ("Interfor" or the "Company") (TSX: IFP) recorded Adjusted EBITDA of $35.8 million in Q4''15 versus $11.5 million in Q3''15 and $37.4 million in Q4''14. The Company''s results in Q4''15 reflect the benefits of higher prices and progress on a number of key business initiatives. Highlights for the quarter include:
In Q4''15, Interfor recorded sales of $411.4 million and a net loss of $3.5 million, or $0.05 per share, compared with net losses of $6.1 million and $5.2 million in Q3''15 and Q4''14, respectively. Adjusted net earnings in the fourth quarter were $5.5 million, or $0.08 per share, compared with an adjusted net loss of $15.4 million and adjusted net earnings of $10.2 million in Q3''15 and Q4''14, respectively.
Markets and Pricing
Each of the key benchmark prices for SYP East 2x4, Western SPF 2x4, and HF Stud 9'' 2x4 rebounded from 2015 low points in September to post successive monthly gains through the end of 2015.
Market related production curtailments and severe weather events in the U.S. South impacted supply to the benefit of Southern Yellow Pine prices during the fourth quarter. The SYP East 2x4 benchmark rebounded from US$317 per mfbm in September, increasing significantly throughout Q4''15 to US$413 per mfbm in December. The average benchmark price for Q4''15 was US$400 per mfbm, or $69 per mfbm higher than Q3''15.
The HF Stud 9'' 2x4 benchmark increased from US$274 per mfbm in September and gained throughout the fourth quarter to end the year at US$302 per mfbm in December. The average benchmark price for Q4''15 was US$294 per mfbm, or US$9 per mfbm lower than Q3''15.
The Western SPF 2x4 benchmark rebounded from US$245 per mfbm in September to US$269 per mfbm in December, with modest monthly gains throughout the fourth quarter. The average benchmark price for Q4''15 was US$263 per mfbm, or US$6 per mfbm lower than Q3''15.
Production
Lumber production of 568 million board feet in Q4''15 was 50 million board feet lower than the preceding quarter and 10 million board feet lower than Q4''14.
Production from the Company''s nine U.S. South sawmills totaled 243 million board feet in Q4''15, down 44 million board feet compared to Q3''15. The lower production level in Q4''15 reflects temporary market-related adjustments to operating schedules across the U.S. South platform and severe weather events which impacted the Georgetown sawmill most significantly.
Canadian production totaled 186 million board feet in Q4''15, up 5 million board feet as compared to Q3''15. The increase in Canadian production primarily reflects the start-up of the Castlegar sawmill in the quarter partially offset by reduced operating hours at the other Interfor mills in the region. In Q4''15, Interfor shipped approximately 90 million board feet of lumber to U.S. markets from its B.C. sawmills, which represents approximately 15% of Interfor''s total current quarterly production. Export duties applied pursuant to the Softwood Lumber Agreement ("SLA") expired on October 12, 2015. The SLA includes a standstill provision which precludes the U.S. from bringing trade action against Canadian softwood lumber producers for a 12 month period following expiry of the agreement. Export taxes on lumber shipments from Canada into the U.S. were negligible in Q4''15.
Production from the Company''s U.S. Northwest operations totaled 139 million board feet in Q4''15, representing a decline of 11 million board feet from the prior quarter. This decline was due to fewer operating hours at each of the Company''s four mills in the region.
Outlook
Interfor expects demand for lumber to continue to grow over the mid-term as the U.S. housing market recovers and market promotion efforts in North America and offshore take full effect. In addition, the Company is focused on a series of targeted initiatives related to margin improvement opportunities across its operations in both the U.S. and Canada that should contribute to Interfor''s financial results.
Interfor''s strategy of maintaining a diversified portfolio of lumber operations allows the Company to both reduce risk and maximize returns on invested capital over the business cycle. Interfor will continue its disciplined approach to production, cost control, inventory management and capital spending. At the same time, Interfor will remain alert to growth opportunities to position the Company for long term success.
Other
At its meeting today, the Interfor Board appointed Thomas V. Milroy of Toronto, Ontario as a director of the Company.
Mr. Milroy, who is 60, retired from the BMO Financial Group ("BMO") in January 2015. Over 21 years with BMO, Mr. Milroy held progressively senior positions with that firm''s investment banking group, serving from March 2008 to December 2014 as CEO of BMO Capital Markets where he was responsible for all of BMO''s business involving corporate, institutional and government clients globally.
Mr. Milroy''s appointment brings the number of directors from nine to ten and was made in line with the Company''s Board Succession Plan.
Mr. Milroy will stand for election as a director at the Company''s Annual General Meeting in April.
Balance Sheet
Net debt at December 31, 2015 was $452.3 million, or 38.4% of invested capital, representing an increase of $249.8 million over the level of debt at December 31, 2014. Revaluation of U.S. Dollar denominated debt into Canadian Dollars resulted in an increase of $65.4 million in 2015 over 2014 due to a 19.3% decline in the Canadian Dollar against the U.S. Dollar. In Q4''15, the 3.3% decline in the Canadian Dollar against the U.S. Dollar resulted in an increase of $14.6 million in net debt, despite a decline of US$7.3 million in U.S. Dollar denominated borrowings.
As at December 31, 2015, the Company had net working capital of $168.9 million and available liquidity of $112.1 million, including cash and borrowing capacity on operating and term facilities.
On February 9, 2016, the Company extended the maturity of its Operating Line and Revolving Term Line from February 27, 2017 to May 19, 2019. Certain other terms were also changed, resulting in an increase in the maximum borrowing available under the financing agreement. Based on the revised terms, available liquidity would have been $147.0 million as at December 31, 2015.
These resources, in addition to cash generated from operations, will be used to support working capital requirements, debt servicing commitments and capital expenditures. We believe that Interfor will have sufficient liquidity to fund operating and capital requirements for the foreseeable future.
Capital Resources
The following table summarizes Interfor''s credit facilities and availability as of December 31, 2015:
As at December 31, 2015, maximum borrowings available under the Company''s Operating Line and Revolving Term Line were restricted by a financial covenant in the underlying credit agreement. In the table above, this limitation has been applied to the Operating Line and Revolving Term Line limits.
As stated above, based on the revised terms, available liquidity would have been $147.0 million as at December 31, 2015.
As of December 31, 2015, the Company had commitments for capital expenditures totaling $7.8 million, related to both maintenance and discretionary capital projects.
Non-GAAP Measures
This release makes reference to the following non-GAAP measures: Adjusted net earnings (loss), Adjusted net earnings (loss) per share, EBITDA, Adjusted EBITDA, Pre-tax return on total assets and Net debt to invested capital, which are used by the Company and certain investors to evaluate operating performance and financial position. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. The following table provides a reconciliation of these non-GAAP measures to figures as reported in the Company''s audited consolidated financial statements (unaudited for interim periods) prepared in accordance with IFRS:
FORWARD-LOOKING STATEMENTS
This release contains information and statements that are forward-looking in nature, including, but not limited to, statements containing the words "will", "should", "expected", "annualized" and similar expressions. Such statements involve known and unknown risks and uncertainties that may cause Interfor''s actual results to be materially different from those expressed or implied by those forward- looking statements. Such risks and uncertainties include, among others: price volatility, competition, availability and cost of log supply, natural or man-made disasters, currency exchange sensitivity, regulatory changes, allowable annual cut reductions, Aboriginal title and rights claims, potential countervailing and anti-dumping duties, stumpage fee variables and changes, environmental impact and performance, labour disruptions, and other factors referenced herein and in Interfor''s Annual Report available on and . The forward-looking information and statements contained in this release are based on Interfor''s current expectations and beliefs. Readers are cautioned not to place undue reliance on forward-looking information or statements. Interfor undertakes no obligation to update such forward-looking information or statements, except where required by law.
ABOUT INTERFOR
Interfor is a growth-oriented lumber company with operations in Canada and the United States. The Company has annual production capacity of approximately 3 billion board feet and offers one of the most diverse lines of lumber products to customers around the world. For more information about Interfor, visit our website at .
The Company''s 2015 audited consolidated financial statements and Management''s Discussion & Analysis are available at and .
There will be a conference call on Friday, February 12, 2016 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company''s release of its fourth quarter and fiscal 2015 financial results.
The dial-in number is 1-866-233-4795. The conference call will also be recorded for those unable to join in for the live discussion, and will be available until February 26, 2016. The number to call is 1-866-245-6755, Passcode 434627.
Contacts:
Interfor Corporation
John A. Horning
Executive Vice President and Chief Financial Officer
(604) 689-6829
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Datum: 11.02.2016 - 17:04 Uhr
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