Tag Archives: Western Forest Products

Western Forest Products is reporting a net income of $22.8 million in the first quarter of 2013, on sales of $233.8 million, compared to a net income of $14.3 million for the previous quarter, and a net income of $1.7 for the same quarter last year.

EBITDA is $31.9 million for the first quarter, compared to EBITDA of $14.3 million for the fourth quarter of 2012 and $9.4 million for the first quarter of 2012.

“This was the best quarter in company history as we delivered $31.9 million of operating EBITDA. Improved log and lumber markets supported by solid execution from our team led to these record results. We ended the quarter in a sound financial position: no net debt and liquidity of $207 million. With our strong balance sheet we are more capable than ever to reinvest in our business, and consider other capital allocation alternatives that will enhance long term shareholder value,” said Don Demens, Chief Executive Officer.

Mill Updates

Western Forest Products is reporting they have spent $11.3 million of the projected total cost of $38.0 million for the Saltair mill upgrade, which is expected to be approximately 60% complete in the third quarter of 2013. This capital project will make Saltair the largest, most efficient single line sawmill on the coast of British Columbia. The upgrades will increase production by approximately 15%, reduce the unit cost of production, and will increase the company’s ability to provide a greater variety of finished products to their customers.

Western’s second project is the development and subsequent installation of automated coastal species lumber grading technology. The company expects this project to be ready in the third quarter and the initial installation will be in the Alberni Pacific sawmill, which will yield benefits later in 2013. The technology will allow the company to better tailor lumber grades to their customer needs and generally improve processing efficiency. Western Forest Products believes this will be the first application of this technology, now in common use in the British Columbia interior mills, on the more challenging coastal species.

On January 28, 2013, Western Forest Products announced that they had entered into a conditional agreement for the sale of their former Woodfibre Pulp Mill site located near Squamish, British Columbia for the gross purchase price of $25.5 million. Closing is subject to certain conditions, and Western will be responsible for satisfactorily remediating the property to applicable environmental standards prior to closing the sale. After incurring the estimated required remediation costs, Western anticipates receiving net proceeds from the sale and remediation of approximately $17 million. Work is currently in progress by the company’s environmental engineers to prepare a detailed assessment of the remediation costs associated with the site. Western expect to have the results of this assessment in the third quarter of 2013.

Western Forest Products said it will continue to pursue further opportunities that may arise to sell non-core or other land assets as appropriate.

Read full release:
Western Capitalized on Strong Markets to Deliver the Highest Quarterly EBITDA in Company History

Western Forest Products Inc. has reported a net income of $14.6 million for the fourth quarter of 2012 on sales of $231.2 million.  For comparison, the company reported a net income of $3.3 million on sales of $220.7 million in the fourth quarter of 2011.

Net income was $29.1 million for the full 2012 year.

“A strong operating performance and improved lumber markets allowed Western to deliver the highest sales in company history. Log and lumber sales increased as we continued to profitably grow our business to meet market demand. We delivered $50.6 million of EBITDA and continued to make significant improvements to our balance sheet. Our net debt is now at an all-time low of $15.0 million and our liquidity improved to $185.1 million by year end, ensuring we are well positioned to continue to reinvest in our business and consider other capital allocation alternatives to enhance long term value for shareholders,” said Dominic Gammiero, Chairman of the Board.

Future Plans

Western Forest Products plans to position themselves for an improving housing market by investing $125 million of strategic capital into the company.

Projects planned include:

• Saltair sawmill – $38 million upgrade to improve the mill’s productivity by 15% and to improve their competitiveness in key markets such as Japan, the United States and China
• Alberni Pacific sawmill – installation of automated lumber grading project

The remaining strategic capital investments, which will occur over the next two to three years, will be focused on reducing costs by improving efficiencies and product flexibility in the company’s operations. These improvements will allow them to continue operating through varying market conditions. Such investments are expected to be funded from operating free cash flows.

Read more:
Western Achieves Record Sales Levels in 2012

The Board of Directors of Western Forest Products Inc. has appointed Don Demens as President and Chief Executive Officer of the company, effective immediately.

Dominic Gammiero will continue his role as Chairman of the Board.

Don Demens has clearly demonstrated the leadership qualities required to take on the additional role of Chief Executive Officer. As a leader of the organization, his hands-on approach to developing a safety culture and margin focus has delivered positive results throughout the Company.

Demens was appointed President in July 2012 and has held numerous strategic roles at Western including, Chief Operating Officer and Senior Vice President, Sales and Manufacturing. He has over 25 years of coastal forest industry experience.

“I am very pleased that Don has accepted these additional responsibilities,” said Dominic Gammiero, Chairman of the Board of Directors. “He was instrumental in helping us turn around the business and his knowledge of our industry has been critical in defining our long-term strategy at Western. The Board is confident his leadership will continue to strengthen Western’s position as a globally competitive forest products business.”

Source: Western Forest Products

Western Forest Products Inc. has entered into a conditional agreement for the sale of its former Woodfibre Pulp Mill site, located at the head of Howe Sound, southwest of Squamish, British Columbia.

The purchase price for the site, consisting of 212 acres of industrial waterfront land, is $25.5 million.

Closing of the sale is subject to certain conditions, and Western will be responsible for satisfactorily remediating the property to applicable environmental standards prior to closing the sale.

The net proceeds from the sale are expected to be approximately $17 million.

“Our non-core asset divestiture program will continue to further strengthen our balance sheet and provides additional financial flexibility to pursue our strategic capital plan,” said Dominic Gammiero, Chairman and Chief Executive Officer.

Source: Western Forest Products

Western Forest Products Inc. and Brookfield Special Situations Management Limited, a wholly-owned subsidiary of Brookfield Asset Management, announced that they have closed the previously announced bought deal secondary offering, through which Brookfield sold 62,500,000 non-voting shares of Western  at an offering price of $1.20 per share for aggregate gross proceeds to Brookfield of C$75,000,000.

The offering was conducted by a syndicate of underwriters. In connection with the offering, the underwriters were granted an over-allotment option to purchase up to an additional 9,375,000 non-voting shares from Brookfield at the offering price, under the same terms, exercisable for a period of 30 days from closing of the offering.

On closing of the offering, all offered shares were converted, on a one-for-one basis, into common shares of Western, representing approximately 33% of the issued and outstanding common shares of Western on a non-diluted basis after giving effect to the offering.

Immediately following completion of the offering, 59,612,801 of the then remaining non-voting shares held by Brookfield were converted into common shares on a one-for-one basis, resulting in Brookfield holding 122,639,345 common shares, representing approximately 49% of the current issued and outstanding common shares of Western on a non-diluted basis. This represents the same percentage of common shares that Brookfield held prior to the offering.

The post-offering conversion may be considered to be a “related party transaction” as such term is defined under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions as the company issued securities to Brookfield, a related party of the company by virtue of its beneficial ownership of more than 10% of the voting shares of the company. The post-offering conversion was, however, exempt from the valuation and minority approval requirements under MI 61-101 for related party transactions as the fair market value of the common shares issued in the post-offering conversion was less than 25% of the company’s market capitalization.

The offered shares were offered by way of a short form prospectus filed in all of the provinces of Canada pursuant to National Instrument 44-101 – Short Form Prospectus Distributions and in the United States pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction in which such offer, sale or solicitation would be unlawful. The common shares have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold in the United States absent registration or an applicable exemption from registration.

Source: Western Forest Products

The British Columbia government is recognizing the first six graduates of an innovative Western Forest Products training program aimed at supporting the growing need for workers in the province’s forest industry.

The logger training program is supported by WorkSafeBC, a government agency dedicated to promoting workplace health and safety, and focuses on worker safety, environmental awareness and the core skills necessary for entry into this demanding occupation.

The forest company developed the course based on WorkSafeBC best practices. The course provides students with handbooks. Western Forest Products’ standard operating procedures form the foundation for theory and hands-on experience in assessing and managing environmental hazards, effective communications, and safely working with specialized logging equipment and tools.

Don Demens, president of Western Forest Products, said, “The new program will help instill the culture of safety with an understanding of hazard assessment and the techniques for safe and productive execution of the task. We are building a sustainable, globally competitive forest company. This training is a part of our strategic plan that includes investing in our people and supports government’s plan to ensure that B.C. workers have the skills they need to maintain a competitive edge.”

The first group of students graduated in November and includes:

• Trevor Boscoe, Chris Nelson and Dave Tonkin, of Campbell River.
• Jordan Lambert and Tavis Menzies, of Port McNeill.
• James Kenny of Woss.

Steve Thomson, Minister of Forests, Lands and Natural Resource Operations, said, “B.C. has more than 53,000 forestry workers, but over the next decade we anticipate 25,000 job openings as workers retire and new jobs are created through economic growth. That’s why government has a comprehensive skills training plan in place – to ensure that B.C.’s forest industry is ready to meet the changing demands of the sector.”

Western Forest Products intends to run three programs per year in Logging Fundamentals in addition to other courses such as Faller Training. Next intake for the program is planned for spring 2013.

Source: Government of British Columbia

WorkBC skills training programs:
http://www.workbc.ca/Education-Training/Programs/Pages/Employment-Programs.aspx

Western Forest Products has reported a net income of $2.0 million in the third quarter of 2012.

EBITDA was $8.4 million for the third quarter, down from $15.8 million in the third quarter of 2011.

The company’s net debt is been reduced to $19.7 million, the lowest figure the company has ever reported. Western Forest Product’s liquidity is now $178.0 million.

When commenting on the results, Dominic Gammiero, Chairman and Chief Executive Officer, said:

“The US recovery is underway and housing is accelerating, Japan is showing improvement and China remains a key market. We are continuing to position Western to take full advantage of these market improvements. Our margin focus, repositioned cost structure, and flexibility allowed us to post our twelfth consecutive quarter of positive EBITDA in the third quarter.”

Gammiero continued, “Dry weather conditions impacted log supply but despite this, our sawmill productivity continued to climb and our timberlands performed well in delivering volume even with operating days being reduced significantly. The demand for our lumber products increased, our lumber order file emerged from the quarter strong, and our liquidity and debt position is still the best it has been since the Company’s inception.”

Saltair sawmill project

This project is reportedly on time and budget.  $38 million is being invested to upgrade the Saltair sawmill.  The site is being prepared for arrival of equipment and installation of the stacker over the Christmas shutdown.  The current phase of the project, worth $24 million, includes a full upgrade to the edgers, trimmer, sorter and stacker for the mill and will be complete at the end of the second quarter of 2013.

Alberni Pacific sawmill project

The automated lumber grading project being initiated at Western Forest Project’s Alberni Pacific sawmill is also expected to be complete in the second quarter of 2013.

Management personnel changes

Bruce St. John has been appointed to the position of Vice President Lumber Sales and Marketing.  Bruce has over 25 years of BC coastal lumber sales experience, and was most recently the company’s General Manager of Whitewood Sales and Marketing.

Tony Peiffer has been appointed to the position of General Manager, Log Marketing.  Tony also brings over 25 years of experience from the perspective of Coastal log marketing.

Read more:

Read the full release
Also see Western Forest Products website

Western Forest Products is reporting net income of $12.3 million in the second quarter of 2012 on sales of $253.1 million.

This can be compared to a net income reported in the second quarter of 2011 of $11.4 million and a net income reported for the first quarter of 2012 of $1.9 million.

The EBITDA for the second quarter was $20.4 million compared to EBITDA of $9.3 million for the first quarter of 2012 and $21.2 million for the second quarter of 2011.

“Operationally the second quarter was executed well. Sales volumes, production, and productivity all improved. Despite weather impacts we maximized margin available by expediting the delivery of logs to our sawmills, producing the mix of lumber products demanded by our customers. Prices in the export log, pulp log, and sawmill by-product markets were significantly lower than last year and demand from Japan was slightly weaker. Despite these challenges our focus on margin delivered our eleventh straight quarter of positive EBITDA,” said Dominic Gammiero, Chairman and Chief Executive Officer.

Financial Highlights of Q2, 2012

• Q2 sales revenue of $253.1 million; highest total since Q2 2007
• Q2 2012 EBITDA of $20.4 million; cash provided by operations was $19.2 million
• Completed $12.2 million sale of TFL 60
• Net debt reduced to $29.9 million at the end of the quarter
• Increased term debt facility to $110.0 million, extended to June 2016 at favourable rates
• Liquidity increased to $175.5 million from $112.1 million at the end of 2011
• As a result of our continued operational focus, the quarter resulted in several achievements including:
• Log production increased by 9% over last year to 1.8 million m3
• Lumber sales volume increased by 12% over Q2 2011
• Mill productivity levels increased by 6% over the second quarter of 2011 (conversion costs decreased by 3%)
• Announced a $6.7 million investment in auto grading technology for our Alberni Pacific sawmill

Read full quarterly overview from Western Forest Products

The Board of Directors of Western Forest Products Inc. has announced the appointment of Don Demens as President of the Company, effective immediately.

Originally hired in 2009, Demens was later appointed Sr. Vice President, Sales and Manufacturing and in 2011 assumed the role of Chief Operating Officer.

Demens has over 25 years of coastal forest industry experience including time spent in Japan.

“Don has been instrumental in the turnaround of Western. Under his leadership we have seen a change in business culture with a strong focus on margin. As a result, the Board has full confidence in appointing Don as President of Western. This appointment positions Western with a strong succession framework to build the future of the company,” said Dominic Gammiero, Chairman and CEO.

Source: Western Forest Products

Western Forest Products Inc.  is continuing to implement their strategic capital plan which will position the company to be more competitive in the global marketplace.

The latest investment is a $6.7 million dollar installation of automatic lumber grading technology into the Alberni Pacific Division (APD) planermill in Port Alberni, BC.

Automatic lumber grading technology has been used in the commodity lumber business around the world for over a decade. The technology has proven effective in assessing lumber grades quickly, accurately, and consistently, increasing value, recovery and efficiency.

Western, in partnership with Lucidyne Technologies, Inc., is refining the technology necessary to address the complexity of coastal species lumber grading, resulting in the first installation of autograding on the BC Coast. The equipment will deliver a significant increase in operating speeds, improve value, and increase lumber recovery. This installation will make APD a more competitive mill in the global marketplace and more resilient to market fluctuations.

“Western is proud to be leading the coastal milling industry with the first installation of autograding technology. We are continuing with our commitment to Coastal BC by investing back into our facilities-positioning them for the future and building on our globally competitive coastal forest products company,” said Dominic Gammiero, Chairman and CEO.

Source: Western Forest Products