MONTREAL and VANCOUVER, May 15, 2012 /CNW Telbec/ - EACOM Timber
Corporation ("EACOM", or the "Company") announces its first quarter
results for the three-month period ended March 31, 2012. OVERVIEW
OF FINANCIAL RESULTS For the quarter ended March 31, 2012, net
income attributable to shareholders amounted to $6,347,000 or $0.01
per common share, against a net loss of $27,055,000 or $0.06 per
common share in the previous quarter and a net loss of $6,131,000
or $0.01 per common share in the corresponding quarter of 2011. The
2012 results include a gain of $14,283,000 on disposal of property,
plant and equipment destroyed by fire whereas the previous quarter
results included an impairment charge of $15,000,000. For the
quarter ended March 31, 2012, the Company recorded a negative
EBITDA of $5,309,000, against a negative EBITDA of $8,566,000 in
the previous quarter and a negative EBITDA of $3,380,000 in the
corresponding quarter of 2011. Market conditions have improved
since the fourth quarter of 2011, contributing to an improved
pricing environment and higher mill realizations. QUARTER ENDED
MARCH 31, 2012 vs. QUARTERS ENDED DECEMBER 31, 2011 AND MARCH 31,
2011 For the quarter ended March 31, 2012, the Company recorded
sales of $59,941,000, against sales of $67,445,000 in the previous
quarter and sales of $79,955,000 in the corresponding quarter of
2011. The Company's sales include both lumber and by-product sales.
During the quarter, the Company shipped 128 million board feet of
lumber (159 million board feet in the previous quarter and 170
million board feet in the corresponding quarter of 2011) and
120,000 oven-dried metric tons of by-products (129,000 oven-dried
metric tons in the previous quarter and 161,000 oven-dried metric
tons in the corresponding quarter of 2011). In the first quarter of
2012, shipments were impacted as the Timmins operations have been
interrupted since January 22, 2012 as a result of the fire at the
mill site. In the fourth quarter of 2011, shipments benefited from
a substantial reduction of inventories. Compared to the first
quarter of 2011, shipments reflect lower production volumes.
Operations in Val-d'Or and Matagami have been temporarily shut down
in the second half of 2011 due to market conditions, and the
Timmins mill closed on January 22, 2012. These closures have been
somewhat offset by the additional production at Elk Lake following
the acquisition of the remaining one-third interest in the mill in
the third quarter of 2011. Pricing has improved in the first
quarter of 2012 with benchmark lumber prices averaging US$329/Mfbm
for studs and US$360/Mfbm for random lengths delivered Great Lakes,
up 8% and 10% from US$304/Mfbm and US$326/Mfbm respectively in the
fourth quarter of 2011. Mill realizations were, however, somewhat
impacted by a strengthening Canadian dollar with the exchange rate
averaging 1.001 in the first quarter of 2012, up 2% against an
average of 0.977 in the previous quarter. Pricing for random
lengths still remains 6% below the level achieved in the first
quarter of 2011, whereas studs are trading at a similar level.
Lumber production for the quarter ended March 31, 2012 was 113
million board feet of lumber, against 111 million board feet in the
previous quarter and 166 million board feet in the corresponding
quarter of 2011. During the three-month period, the Company
operated at 46% of its capacity with two of the eight mills
acquired from Domtar idled, Ear Falls in Ontario and Ste-Marie in
Quebec (45% during the previous quarter and 65% in the
corresponding quarter of 2011 with no change to idled mills).
Compared to the previous quarter, the lost capacity at Timmins has
been partially mitigated by higher production levels at other mills
while production in the fourth quarter was negatively impacted by
the six-week closure at Gogama due to a fire at the mill site.
Compared to the first quarter of 2011, operations in Val-d'Or and
Matagami have been temporarily shut down in the second half of 2011
and the Timmins mill closed on January 22, 2012. These closures
have been somewhat offset by the additional production at Elk Lake
following the acquisition of the remaining one-third interest in
the mill in the third quarter of 2011. Unit costs improved compared
to those experienced in previous quarters as a result of the higher
cost mills taking market-related downtime. The positive impact of
lower unit costs was, however, offset by the fixed costs incurred
in respect of those mills that are either idled or shut down.
FINANCIAL POSITION At March 31, 2012, the Company had cash and cash
equivalents of $12,236,000 ($14,268,000 at December 31, 2011). An
amount of $2,000,000 was outstanding under its credit facility
against a borrowing availability of $6,187,000 ($2,000,000 and
$3,822,000 respectively at December 31, 2011). Subsequent to
quarter-end, the Company closed a $40 million senior secured
debenture financing, the net proceeds of which will be used for
general corporate purposes. As part of this financing, an aggregate
of 200 million warrants have been issued with a five-year term and
an exercise price of $0.20 per common share. About EACOM EACOM
Timber Corporation is a TSX-V listed company. The business
activities of EACOM consist of the manufacturing, marketing and
distribution of lumber, wood chips and wood-based value-added
products, and the management of forest resources. EACOM owns eight
sawmills, all located in Eastern Canada, and related tenures. The
mills are Timmins, Nairn Centre, Gogama, Elk Lake and Ear Falls in
Ontario, and Val-d'Or, Ste-Marie and Matagami in Quebec. The mills
in Ear Falls, Ontario, and Ste-Marie, Quebec, are currently idled,
and operations in Val-d'Or and Matagami have been temporarily shut
down due to market conditions. The sawmill operations in Timmins
have been interrupted due to the fire. EACOM also owns a
remanufacturing facility in Val-d'Or, Quebec, and a 50% interest in
an "I" joist plant in Sault Ste-Marie, Ontario. The TSX Venture
Exchange has neither approved nor disapproved the content of this
press release. All director and officer appointments are subject to
TSX Venture Exchange approval. Forward-Looking Statements All
statements in this news release that are not based on historical
facts are "forward-looking statements". While management has based
any forward-looking statements contained herein on its current
expectations, the information on which such expectations were based
may change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties and other factors, many of which are beyond
our control and could cause actual results to materially differ
from such statements. Such risks, uncertainties and other factors
include, but are not necessarily limited to, those set forth under
"RISKS AND UNCERTAINTIES" in the Company's current MD&A, and
under "RISK FACTORS" in the Company's Filing Statement dated
January 8, 2010. The financial information included in this release
also contains certain data that are not measures of performance
under IFRS. For example, "EBITDA" is a measure used by management
to assess the operating and financial performance of the Company.
We believe that EBITDA is a measure often used by investors to
assess a company's operating performance. EBITDA has limitations
and you should not consider this item in isolation, or as a
substitute for an analysis of our results as reported under IFRS.
Because of these limitations, EBITDA should not be used as a
substitute for net loss or cash flows from operating activities as
determined in accordance with IFRS, nor is it necessarily
indicative of whether or not cash flows will be sufficient to fund
our cash requirements. In addition, our definition of EBITDA may
differ from those of other companies. A reconciliation of EBITDA to
net loss is set forth under "OVERVIEW OF FINANCIAL RESULTS -
Supplemental Information on Non-GAAP Measures" in the Company's
current MD&A. Additional information relating to EACOM is
available at www.eacom.ca and on SEDAR at www.sedar.com. SELECTED
FINANCIAL INFORMATION AND OPERATING STATISTICS
------------------------------ The following table provides an
overview of the Company's financial results for the quarters ended
March 31, 2012, December 31, 2011 and March 31, 2011, along with
some key operating metrics. (in thousands of dollars, except where
Q1 Q4 Q1 otherwise noted) 2012 2011 2011 Sales 59,941 67,445 79,955
Operating income (loss) (7,788) (27,347) (6,551) Net income (loss)
attributable to shareholders 6,347 (27,055) (6,131) Average lumber
price in US$ - RL 2×4 #1&2(1) 360 326 383 Average lumber price
in US$ - Stud 2×4×8(1) 329 304 327 Average exchange rate (US$ per
C$1.00) 1.001 0.977 1.015 Production - SPF lumber (MMfbm) 113 111
166 Shipments - SPF lumber (MMfbm) 104 136 146 Shipments -
wholesale lumber (MMfbm) 24 23 24 Cdn. housing starts (thousands of
units) 205 200 175 U.S. housing starts (thousands of units) 687 670
582 (1) Eastern spruce/pine/fir, per
thousand board feet delivered Great Lakes (Source: Random Lengths
Publications, Inc.) The following table reconciles the Company's
net income (loss) attributable to shareholders, as reported in
accordance with IFRS, to EBITDA for the quarters ended March 31,
2012, December 31, 2011 and March 31, 2011. (in thousands of
dollars) Q1 Q4 Q1 2012 2011 2011 Net income (loss) attributable to
(6,131) shareholders 6,347 (27,055) Add (subtract): Depreciation
2,429 3,400 3,196 Financing expense 344 325 371 Income tax recovery
- - (674) Share of earnings in a joint venture (146) (236) (142)
Gain on disposal of equipment destroyed by - fire (14,283) -
Impairment charge - 15,000 - EBITDA (5,309) (8,566) (3,380)
EACOM TIMBER CORPORATION CONTACT: Investors:Marc
GirardExecutive Vice-President and Chief Financial Officer(514)
848-5133Media Relations:Frederic BerardH+K Strategies(514) 395-0375
ext. 259
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