The following is a press release issued via Market Wired:
Interfor reported net income after tax of $15.8 million or $0.28 per share in the second quarter of 2013 compared to $15.2 million or $0.27 per share in the first quarter and $0.1 million or $0.0 per share in the second quarter of 2012.
EBITDA, adjusted to exclude the effects of share-based compensation and other items, was $36.1 million compared with $37.1 million in the first quarter of 2013 and $16.6 million in the second quarter last year.
Lumber production in the second quarter was a record 418 million board feet, up 7% from the previous high achieved in the first quarter of 2013.
The company's results in the second quarter were impacted by a sharp decline in commodity lumber prices, offset in part by a full quarter of production from the recently-acquired operations in the US Southeast and modestly higher prices for specialty items.
In the quarter, SPF 2x4 in the US market averaged US$335, down US$56 versus the first quarter. Hem-Fir studs averaged US$373, down US$53 versus the prior quarter, while SYP 2x4 East averaged US$392, down US$60.
Export taxes on shipments to the US were 0% in the second quarter of this year versus 0% in the first quarter of this year and an average of 13% in the second quarter last year.
In the second quarter, Interfor generated $35.5 million in cash from operations before working capital changes and $39.4 million after working capital changes. Capital spending, including timber additions, amounted to $26.0 million during the quarter.
On June 26th, Interfor completed a US$50 million 10-year senior secured note financing with Prudential Capital Group at a fixed rate of 4.33%.
Net debt closed the quarter at $200.8 million or 33% of invested capital.
During the quarter Interfor completed the purchase of two timber tenures in the Kootenay Region of British Columbia, from Springer Creek Forest Products Limited Partnership. The tenures, which have a combined annual cut of 174,000 m3, will support an increase in lumber production at the Company's sawmill at Castlegar, to be phased in over the balance of the year.
Interfor also announced during the quarter that it had reached agreement to purchase the sawmill operations of Keadle Lumber Enterprises, Inc. in Thomaston, Georgia. The transaction closed on July 1, 2013, bringing the Company's lumber capacity in the US Southeast to 520 million board feet.
(1) Adjusted to exclude the effects of share-based compensation, certain foreign exchange gains (losses), other income (expense) and restructuring costs (see MD&A for definition)
The US housing market is projected to continue a gradual recovery through the balance of 2013. Lumber prices have firmed in recent weeks and are expected to increase with a recovering US housing market. Export tax rates will increase to 10% in August as lumber prices in June fell below the relevant threshold.
Building activity in Japan is expected to remain strong through the latter part of 2013. Demand and pricing in China is expected to remain stable.
Stumpage fees for Canadian operations are expected to be higher through the balance of 2013.
As always, Interfor will maintain its disciplined approach to production, cost control, inventory management and capital spending to help position the Company to deliver above average returns on invested capital as conditions improve. At the same time, Interfor will remain alert to opportunities to position the Company for long-term success.