Including changes in non-cash working capital items, cash generated by operations was $9.4 million for the first quarter of 2013, compared to cash used by operations of $3.3 million for the first quarter of 2012.
On February 27, 2013, the Company extended its existing Operating Line and Revolving Term Line. The terms and conditions of both lines remained unchanged except for an extension in the maturity date to February 27, 2017, a reduction in pricing and an increase in credit available under the Revolving Term Line from $200 million to $250 million.
On March 1, 2013, the Company concluded the acquisition of Rayonier Inc.'s Wood Products Business in Georgia, U.S., consisting of manufacturing facilities plus working capital, for $86.6 million, of which $3.9 million for working capital settlements remained unpaid at March 31, 2013.
Capital expenditures for the first quarter of 2013 totalled $8.0 million (Quarter 1, 2012 - $10.9 million) with $3.8 million spent on the capital upgrades for the Grand Forks and Castlegar sawmills, $0.2 million on other high-return discretionary projects, $1.3 million on business maintenance expenditures and $2.7 million on road construction and timber tenures.
As at March 31, 2013, the Operating Line of $65.0 million was drawn by US$2.0 million (revalued at the quarter-end exchange rate to $2.0 million) and outstanding letters of credit totalled $7.3 million, leaving an unused available line of $57.6 million. The Revolving Term Line of $250.0 million was drawn by US$100.2 million (revalued at the quarter-end exchange rate to $101.8 million) and $110.0 million for total drawings of $211.8 million, leaving an unused available line of $38.2 million. Including cash of $11.0 million, the Company had available resources of $106.8 million as at March 31, 2013.
These resources, together with cash generated from operations, will be used to support our working capital requirements, capital expenditures and debt servicing commitments.
The Company ended the first quarter, 2013 with net debt of $202.8 million or 34% of invested capital as compared to 23% as at March 31, 2012 and 24% as at December 31, 2012.
Interfor continues to maintain its disciplined focus on monitoring discretionary capital expenditures, optimizing inventory levels and matching production with offshore and domestic demand. Based on current pricing and cash flow projections and existing credit lines the Company believes it has sufficient liquidity to meet all of its financial obligations.
Selected Quarterly Financial Information(1)
Quarterly Earnings Summary 2013 2012 2011 -------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 -------------------------------------------------------- (millions of dollars except share and per share amounts) --------------------------------------------------------Sales - Lumber 191.4 173.3 161.9 162.4 133.6 133.6 139.6 133.7 - Logs 26.1 24.5 26.8 35.6 27.0 22.9 36.0 28.6 - Wood chips and other residual products 16.6 15.9 17.5 17.8 18.2 17.5 17.6 16.8 - Other 8.4 8.7 8.5 9.6 7.9 14.6 9.9 8.7 --------------------------------------------------------Total Sales 242.5 222.4 214.7 225.4 186.7 188.7 203.1 187.9 --------------------------------------------------------Operating earnings (loss) before restructuring costs and asset impairments(2) 17.3 (2.1) 2.4 2.8 (5.6) (6.4) 3.8 (2.4)Operating earnings (loss)(2) 17.2 (2.4) 2.3 2.6 (5.6) (6.3) 4.1 (2.5)Net earnings (loss)(2) 15.2 (3.8) 0.9 0.1 (6.7) (6.6) (0.1) (5.4)Net earnings (loss) per share - basic and diluted(2) 0.27 (0.07) 0.02 0.00 (0.12) (0.12) 0.00 (0.10)Net earnings (loss), adjusted for certain one-time and other items (2,3) 17.8 3.5 2.7 1.0 (4.1) (2.9) 1.3 (6.4)Net earnings (loss), adjusted for certain one-time and other items - per share (2) 0.32 0.06 0.05 0.02 (0.07) (0.05) 0.02 (0.12)EBITDA(7) 30.6 13.0 15.0 16.4 5.8 6.5 17.5 11.2Adjusted EBITDA(2,7) 37.1 19.3 17.1 16.6 7.0 7.5 16.2 8.1Cash flow from operations per share(4) 0.59 0.24 0.20 0.24 0.15 0.08 0.26 0.22Shares outstanding - end of period (millions)(5) 55.9 55.9 55.9 55.9 55.9 55.9 55.9 55.9 - weighted average (millions) 55.9 55.9 55.9 55.9 55.9 55.9 55.9 55.2Average foreign exchange rate per US$1.00(6) 1.0080 0.9914 0.9954 1.0104 1.0010 1.0230 0.9808 0.9680Closing foreign exchange rate per US$1.00(6) 1.0160 0.9949 0.9832 1.0181 0.9975 1.0170 1.0482 0.96451. Tables may not add due to rounding.2. Effective January 1, 2013, IAS 19, Employee Benefits, was revised (see "Accounting Policy Changes"). Previously, the impact of defined benefit plans on Net earnings included an interest cost on the obligation using the discount rate (based on current bond yields), and a credit on the plan assets using the expected rate of return (based on long term expected bond and equity returns). Under the new standard, the credit on plan assets no longer recognized the equity risk premium and is based on the discount rate only. The resulting impact of the changes in the standard is an increase to Production expense and Finance costs in the Statement of earnings, which is fully offset by an increase (decrease) in Defined benefit plan actuarial gains (losses) in the Statement of comprehensive income. The policy has been applied on a retrospective basis and comparative information has been restated.3. Adjusted net earnings (loss) represents net earnings (loss) adjusted for certain one-time and other items represents the net loss before long term incentive compensation expense (recovery), certain foreign exchange gains and losses, other income (expense), restructuring costs and the effect of unrecognized tax assets. Adjusted net earnings (loss) is not a defined term under IFRS, and may not be comparable to adjusted net earnings (loss) calculated by others. Adjusted net earnings (loss) may be calculated as follows: 2013 2012 2011 -------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 -------------------------------------------------------- (millions of dollars) --------------------------------------------------------Net earnings (loss) 15.2 (3.8) 0.9 0.1 (6.7) (6.6) (0.1) (5.4)Add (deduct): Long-term incentive compensation expense (recovery) 6.6 6.2 2.3 0.2 1.3 0.9 (0.9) (3.1) Other foreign exchange (gains) losses 0.7 (0.2) (0.1) 0.5 (0.4) (1.1) 2.5 (0.2) Other (income) expense (0.1) 0.0 (0.2) (0.0) (0.1) 0.0 (0.4) 0.0 Restructuring costs, asset write-downs and other (recovery) 0.1 0.3 0.1 0.1 0.0 (0.1) (0.3) 0.1 Income tax on adjustments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Deferred tax assets not recognized (recognized) (4.7) 1.0 (0.3) 0.0 1.9 4.0 0.6 2.2 --------------------------------------------------------Net earnings (loss) adjusted for certain one-time and other items 17.8 3.5 2.7 1.0 (4.1) (2.9) 1.3 (6.4) --------------------------------------------------------4. Cash generated from operations before taking account of changes in operating working capital.5. As at May 10, 2013, the numbers of shares outstanding by class are: Class A Subordinate Voting shares - 54,847,176 Class B Common shares - 1,015,779, Total - 55,862,955.6. Rates are based on Bank of Canada closing foreign exchange rates per US$1.00.7. The Company discloses EBITDA as it is a measure used by analysts and Interfor's management to evaluate the Company's performance. As EBITDA is a non-GAAP measure, it may not be comparable to EBITDA calculated by others. In addition, as EBITDA is not a substitute for net earnings, readers should consider net earnings in evaluating the Company's performance. Adjusted EBITDA represents EBITDA adjusted for long-term incentive compensation expense (recovery) and other income (expense). EBITDA and Adjusted EBITDA can be calculated from the statements of operations as follows: 2013 2012 2011 -------------------------------------------------------- Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 -------------------------------------------------------- (millions of dollars)Net earnings (loss) 15.2 (3.8) 0.9 0.1 (6.7) (6.6) (0.1) (5.4)Add: Income taxes (recovery) (0.4) 0.0 0.0 0.3 - 0.2 0.5 1.2 Finance costs 1.8 1.5 1.6 1.7 1.6 1.3 1.7 1.9 Depreciation, depletion and amortization 13.2 15.1 12.4 13.6 11.3 13.0 13.3 13.6 Other foreign exchange (gains) losses 0.7 (0.2) (0.1) 0.5 (0.4) (1.1) 2.5 (0.2) Restructuring costs, asset write-downs and other (recovery) 0.1 0.3 0.1 0.1 0.0 (0.1) (0.3) 0.1 --------------------------------------------------------EBITDA 30.6 13.0 15.0 16.4 5.8 6.5 17.5 11.2Add (deduct): Long-term incentive compensation expense (recovery) 6.6 6.2 2.3 0.2 1.3 0.9 (0.9) (3.1) Other income (expense) (0.1) 0.0 (0.2) 0.0 (0.1) 0.0 (0.4) 0.0 --------------------------------------------------------Adjusted EBITDA 37.1 19.3 17.1 16.6 7.0 7.5 16.2 8.1 --------------------------------------------------------Volume and Price Statistics 2013 2012 2011 -------------------------------------------- Q1 Q4 Q3 Q2 Q1 Q4 Q3 Q2 --------------------------------------------Lumber sales (million fbm) 383 384 366 363 320 318 336 334Lumber production (million fbm) 390 347 350 333 323 294 313 325Log sales(1) (thousand cubic metres) 283 267 345 379 361 310 430 314Log (thousand cubic production(1) metres) 902 748 817 840 892 795 1,002 796Average selling price - lumber(2) ($/thousand fbm) $500 $452 $442 $448 $418 $420 $415 $400Average selling price - logs(1)($/cubic metre) $76 $76 $75 $75 $64 $69 $74 $82Average selling price - pulp chips ($/thousand fbm) $36 $39 $43 $46 $48 $51 $48 $441. B.C. operations2. Gross sales before export taxes
