Conifex Timber Inc. Announces Earnings Results for the Second Quarter and Six Months Ended June 30, 2013; Announces Production Results for the Second Quarter of 2013; Announces Management Changes
August 13, 2013 at 04:00 pm EDT
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Conifex Timber Inc. announced earnings results for the second quarter and six months ended June 30, 2013. For the quarter, the company reported EBITDA was $4.8 million compared with $0.6 million for the same period a year ago. Operating income was $3.3 million compared with operating loss of $1.6 million for the same period a year ago. Net income was $2.4 million or $0.12 per basic and diluted share compared with net loss of $2.4 million or $0.13 per basic and diluted share for the same period a year ago. 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. The company ended the second quarter with net debt of $8.6 million, and with a net debt to capitalization ratio of only 7%.
For the six months, the company reported sales of $130.7 million compared with $103.2 million for the same period a year ago. EBITDA was $14.0 million compared with LBITDA of $3.2 million for the same period a year ago. Operating income was $9.9 million compared with operating loss of $7.7 million for the same period a year ago. Net income was $8.6 million or $0.42 per basic and diluted share compared with net loss of $9.0 million or $0.49 per basic and diluted share for the same period a year ago.
Lumber production totalled 136 million board feet in the second quarter of 2013 and represents capacity operations at its two operating mills. On a corporate basis, which includes its idled mill, its 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.
The company announced the appointment of Patrick Bell to its Board of Directors. 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. The Company also announced 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.
Conifex Timber Inc. is a Canada-based forest products company, which operates fiber baskets in North America, northern British Columbia. The Company produces lumber products and renewable energy from its sawmill and bioenergy plant in Mackenzie, British Columbia. Its lumber products are sold in the United States, Canadian and Japanese markets. It also produces bioenergy at its power generation facility at Mackenzie, British Columbia. Its lumber products include J-GRADE, 2 AND BETTER, SELECT, STUDS, ECONOMY and 3. The Company operates a two-line sawmill in Mackenzie, British Columbia (the Mackenzie Mill). Its Mackenzie Mill has approximately 240 million board feet of annual lumber capacity on a two-shift basis. It operates a 36-megawatt biomass power generation plant in Mackenzie, British Columbia (the Power Plant), located at the site of its Mackenzie Mill. Its Power Plant's output capacity is in excess of 230 gigawatt hours (GWh) of electricity per year.
Conifex Timber Inc. Announces Earnings Results for the Second Quarter and Six Months Ended June 30, 2013; Announces Production Results for the Second Quarter of 2013; Announces Management Changes