Western Announces Fourth Quarter and Fiscal 2018 Results
Press Release
February 12, 2019 – Vancouver, British Columbia – Western Forest Products Inc. (TSX: WEF) (“Western” or the “Company”) reported adjusted EBITDA of $18.0 million in the fourth quarter of 2018. Higher specialty lumber prices and increased lumber shipments in the fourth quarter of 2018 were offset by an incremental $10.0 million of US export lumber duty expense, an added $5.9 million of stumpage costs and the impacts of significantly lower commodity lumber prices.
Fourth Quarter Highlights
- Increased lumber production and shipments by 9% over the fourth quarter of last year
- Reached an agreement to sell a 7% interest in the Port Alberni Forest Operation to the Huu-ay-aht First Nations for $7.2 million, subject to closing conditions
- Announced the acquisition of the assets of Columbia Vista Corporation in Vancouver, Washington
- Accelerated capital invested to $31.0 million, adding $4.5 million to the Arlington, Washington facility
- Completed $9.1 million of share repurchases, cancelling 4.9 million common shares
- Returned $8.7 million to shareholders via regular, quarterly dividend
Western’s adjusted EBITDA result in the fourth quarter of 2018 compared to adjusted EBITDA of $38.9 million in the fourth quarter of 2017, and $32.3 million reported in the third quarter of 2018. Operating income prior to restructuring and other income was $7.7 million in the fourth quarter of 2018, compared to $30.3 million in fourth quarter of 2017, and $23.4 million reported in the third quarter of 2018.
Net income of $5.3 million ($0.02 per diluted share) was reported for the fourth quarter of 2018, as compared to $19.0 million ($0.05 per diluted share) for the fourth quarter of 2017 and $15.1 million ($0.04 per diluted share) in the third quarter of 2018. Western recorded net income of $69.2 million ($0.18 per diluted share) for the year ended December 31, 2018, as compared to $74.4 million ($0.19 per diluted share) in 2017.
| Q4 | Q4 | Q3 | YTD | YTD | |||||||||||
| (millions of dollars except per share amounts and where otherwise noted) | 2018 | 2017 | 2018 | 2018 | 2017 | ||||||||||
| Total revenue | $ | 284.8 | $ | 283.1 | $ | 292.5 | $ | 1,196.7 | $ | 1,143.4 | |||||
| Export tax | $ | 10.1 | $ | 0.1 | $ | 11.5 | $ | 43.0 | $ | 15.8 | |||||
| Stumpage | $ | 13.8 | $ | 7.9 | $ | 10.9 | $ | 52.7 | $ | 22.1 | |||||
| Adjusted EBITDA | $ | 18.0 | $ | 38.9 | $ | 32.3 | $ | 143.5 | $ | 152.6 | |||||
| Adjusted EBITDA margin | 6.3% | 13.7% | 11.0% | 12.0% | 13.3% | ||||||||||
| Operating income prior to restructuring items and other income (expense) | $ | 7.7 | $ | 30.3 | $ | 23.4 | $ | 103.4 | $ | 117.0 | |||||
| Net income for the period | 5.3 | 19.0 | 15.1 | 69.2 | 74.4 | ||||||||||
| Basic and diluted earnings per share (in dollars) | $ | 0.02 | $ | 0.05 | $ | 0.04 | $ | 0.18 | $ | 0.19 | |||||
| Net debt (cash) – end of period | $ | (2.4) | $ | (35.3) | $ | (42.8) | |||||||||
| Total liquidity – end of period | 250.4 | 269.3 | 291.8 | ||||||||||||
“Our refined marketing strategy delivered higher price realizations to overcome the impacts of operating headwinds in 2018 that included a difficult coastal fire season, US export duties, higher stumpage, and volatile commodity markets,” said Don Demens, President and Chief Executive Officer. “We’ve made significant progress in advancing our strategy over the last year, from upgrading our foundational systems, to a mutually beneficial partnership with Huu-ay-aht First Nations, and the acquisition of two US assets. We plan on carrying this momentum forward as we actively pursue growth opportunities with our specialty products-focused business.”
Contacts:
For further information, please contact:
Stephen Williams
Executive Vice President & Chief Financial Officer
(604) 648-4500
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