Ainsworth Lumber Co. Ltd.

Ainsworth Lumber Co. Ltd.

February 28, 2005 22:48 ET

Ainsworth Releases Fourth Quarter and Year End 2004 Earnings


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: AINSWORTH LUMBER CO. LTD.

TSX SYMBOL: ANS

FEBRUARY 28, 2005 - 22:48 ET

Ainsworth Releases Fourth Quarter and Year End 2004
Earnings

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Feb. 28, 2005) - Ainsworth
Lumber Co. Ltd. (TSX:ANS)



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($ millions, except Three months ended Twelve months ended
per share data) December 31 December 31
2004 2003 2004 2003
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Sales 253.0 173.6 909.9 543.0
Operating earnings 27.5 67.4 326.0 155.3
Unrealized foreign
exchange gain on
long term debt 46.1 12.8 73.8 76.9
Net Income 53.1 41.0 165.4 123.7
Earnings per share 3.64 2.82 11.32 8.49
EBITDA (1) 56.4 89.2 365.6 201.5
Cash flow from
operations (2) 59.0 77.8 352.7 133.6
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(1) EBITDA, a non-GAAP financial measure, is defined as operating
earnings before amortization and write-down of capital assets,
plus interest and other income.
(2) Cash provided by operations after changes in non-cash working
capital.


Ainsworth Lumber Co. Ltd. today reported its financial results for the
fourth quarter and year ended December 31, 2004.

The company generated net income of $53.1 million or $3.64 per share for
the fourth quarter of 2004 compared to $40.9 million or $2.82 per share
in same period of 2003.

During the quarter, operating earnings declined to $27.5 million on
sales of $253.0 million compared to $67.4 million on sales of $173.6
million in the same period of 2003. This decrease was principally driven
by lower average OSB prices, higher raw material prices and higher
selling and administration expenses. The 45.7% increase in sales is
attributed to significantly higher OSB shipments arising from the
company's acquisition of an additional four OSB manufacturing facilities
during the second and third quarters of 2004. EBITDA, defined as
operating earnings before amortization and write-down of capital assets,
plus interest and other income, in the three-month period declined to
$56.4 million from $89.2 million in the same period of 2003 due to the
lower average OSB margins and the unfavourable impact of the significant
appreciation in the Canadian dollar. The increase in net income is
mainly attributable to a $33.3 million increase in the unrealized
foreign exchange gain on U.S.-dollar denominated debt and a $15.7
million decrease in income tax expense being partly offset by the lower
average OSB margins. Cash provided by operations (after changes in
non-cash working capital) was $59.0 million compared to $77.8 million in
the same period of 2003.

For the twelve months ended December 31, 2004, net income was a record
high $165.4 million or $11.32 per share compared to $123.7 million or
$8.49 per share for the same period of 2003. This higher net income is
largely explained by a $170.8 million improvement in operating earnings
that was partly offset by a $106.2 million one-time expense related to
refinancing long-term debt in early 2004. A 51.8% increase in OSB
shipments and a 17.3% increase in OSB prices were the principal reasons
for higher operating earnings compared to 2003. For the year, EBITDA was
$365.6 million on sales of $909.9 million compared to $201.5 million on
sales of $543.0 million in 2003. Cash provided by operations (after
changes in non-cash working capital) totaled $352.7 million in 2004
compared to $133.6 million in the prior year.

Brian Ainsworth, Chairman and Chief Executive Officer, said: "We are
pleased with the excellent financial and operational results achieved in
2004; a performance that reflects the successful execution of our
engineered wood strategy. Our strategic positioning enabled us to fully
capture the opportunity provided by very favourable market conditions.
The acquisition during 2004 of another four OSB plants further enhances
our capacity to benefit in future periods from solid homebuilding
fundamentals and strong demand for our products."

The company will hold a conference call at 8:30 A.M. PST (11:30 A.M.
EST) on Tuesday, March 1, 2005 to discuss the company's fourth quarter
and year end 2004 results. To access the conference call, listeners
should dial 1-800-660-7963 (reservation number 21233200). For those
unable to participate in the live call, a recording of the call will be
available until March 8, 2005 and can be accessed at 1-800-558-5253
(reservation number 21233200).

Forward-looking statements in this news release relating to the
Company's expectations regarding OSB demand and pricing are made
pursuant to the "safe harbor" provisions of the United States Private
Securities Litigation Reform Act of 1995. When used herein, words such
as "expect" and similar expressions are intended to identify
forward-looking statements. Forward-looking statements are based on
assumptions made by and information available to Ainsworth Lumber Co.
Ltd. Investors are cautioned that such forward-looking statements
involve risks and uncertainties. Important factors that could cause
actual results to differ materially from those expressed or implied by
such forward looking statements include, without limitation, the future
demand for, and sales volumes of, the Company's products, future
production volumes, efficiencies and operating costs, increases or
decreases in the prices of the Company's products, the Company's future
stability and growth prospects, the Company's future profitability and
capital needs, including capital expenditures, and the outlook for and
other future developments in the Company's affairs or in the industries
in which the Company participates and factors detailed from time to time
in the Company's periodic reports filed with the United States
Securities and Exchange Commission, and other regulatory authorities.
The Company has no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.

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