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Summary Financial Highlights
Q3 Q2 Q3
2009 2009 2008
--------- --------- ---------
(in millions of Euros,
except where otherwise stated)
Pulp revenues EUR 145.9 EUR 147.5 EUR 178.6
Energy revenues 10.4 11.4 6.2
Operating income (loss) (0.5) (9.7) 9.9
Operating EBITDA 13.0 3.9 24.0
Unrealized gain (loss) on
derivative instruments (3.3) 7.5 (8.2)
Foreign exchange gain (loss) on debt 3.8 5.2 (9.6)
Net income (loss) attributable to
common shareholders (14.1) (11.5) (17.2)
Net income (loss) per share
attributable to common
shareholders:
Basic EUR (0.39) EUR (0.32) EUR (0.47)
Diluted EUR (0.39) EUR (0.32) EUR (0.47)
Summary Operating Highlights
Q3 Q2 Q3
2009 2009 2008
--------- --------- ---------
Pulp Production ('000 ADMTs) 345.8 349.1 368.4
Scheduled Production Downtime
('000 ADMTs) 35.4 0.6 9.0
Pulp Sales ('000 ADMTs) 361.6 395.4 363.8
NBSK pulp list price in Europe
(US$/ADMT) 693 602 878
NBSK pulp list price in Europe
(EUR/ADMT) 485 442 585
Average pulp sales realizations
(EUR/ADMT)(1) 397 367 484
Energy Production ('000 MWh) 354.4 376.0 377.3
Energy Sales ('000 MWh) 121.8 128.5 119.5
Average Spot Currency Exchange
Rates(2):
EUR / $ 0.6990 0.7338 0.6658
C$ / $ 1.0974 1.1671 1.0416
C$ / EUR 1.5694 1.5890 1.5620
-------------------------
(1) List price, less discounts and commissions.
(2) Average Bank of Canada noon spot rates over the reporting period.
President's Comments
Mr. Jimmy S.H. Lee, President and Chairman, stated: "In the third quarter, pulp markets continued to strengthen. Strong demand from China and historically low global inventories for bleached softwood kraft pulp, which are reported to have currently fallen to approximately 22 days of supply, helped support upward pricing momentum. During the current quarter, three price increases raised European list prices by a total of U.S.$100 per ADMT to U.S.$730 per ADMT by quarter end. Subsequently, in October, producers implemented a further U.S.$30 per ADMT price increase and, effective November 1, 2009, have announced a further U.S.$40 per ADMT price increase. Such price increases were partially offset by the continued weakening of the U.S. dollar versus the Euro and Canadian dollar in the period. While prices are substantially improved from the prior quarter, they are still well below prices in the same period of last year."
Mr. Lee continued: "Our results were impacted by 30 days of scheduled production downtime at our German mills, including 21 days at our Rosenthal mill in September. Operationally the quarter was a positive one as we benefitted from lower production costs due to improved productivity, lower fiber costs and cost-saving initiatives at all of our mills."
Mr. Lee added: "We are also pleased with the approximately Cdn.$57.7 million in credits we have been allocated under the Canadian government's Pulp and Paper Green Transformation Program. We intend to complete construction of the Celgar green energy project with funding from such credits."
Mr. Lee concluded: "We are beginning to see signs of a global economic revival including gains in key Asian economies and improved outlooks in developed economies. In the pulp markets, pricing improvements have been driven by strong demand from China and production curtailments taken by many producers. We currently expect recent pulp price improvements combined with only seven days of scheduled downtime to result in improved operating results in the fourth quarter. Possible headwinds to a robust recovery in our industry include the potential of recently shut capacity coming back online more quickly than anticipated and a second wave of government subsidies for U.S. producers. In general, we are optimistic on the short-term outlook for pulp prices and believe that the sustainability of restarts and other high cost producers is possible only in a sustained higher pulp price environment."
Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008
Pulp revenues for the three months ended September 30, 2009 decreased by approximately 18.3% to EUR 145.9 million from EUR 178.6 million in the comparative period of 2008, primarily due to lower pulp list prices. Revenues from the sale of excess energy increased by approximately 67.7% in the third quarter to EUR 10.4 million from EUR 6.2 million in the same quarter last year as a result of the higher tariffs in effect under Germany's Renewable Energy Resources Act.
Pulp production decreased to 345,833 ADMTs in the current quarter from 368,378 ADMTs in the same quarter of 2008 primarily as a result of 30 days of scheduled maintenance shutdowns at our German mills. In the comparative quarter of 2008, we had only ten days of scheduled maintenance downtime.
Pulp sales volume decreased slightly to 361,627 ADMTs in the current quarter from 363,775 ADMTs in the comparative period of 2008. Average pulp sales realizations decreased by approximately 18.0% to EUR 397 per ADMT in the third quarter of 2009, compared to EUR 484 per ADMT in the same period last year, primarily due to lower pulp prices.
Costs and expenses in the third quarter of 2009 decreased to EUR 156.7 million from EUR 175.0 million in the comparative period of 2008 primarily due to lower pulp production and operating costs.
Overall, our fiber costs decreased by approximately 17.9% in the third quarter of 2009 from the same period in 2008. Fiber costs at our German mills were lower as demand from the European board industry remains limited. At our Celgar mill, fiber costs continue to benefit from improved woodroom performance and decreased reliance on fiber sourced from third party field chippers. As we move into the final quarter of the year, we expect some upward pressure in pricing for our German mills due to restocking by pulp and paper producers and seasonal demand for firewood.
During the third quarter of 2009, our pulp inventories decreased by approximately 22.2% to EUR 20.3 million from EUR 26.1 million at the end of the prior quarter, primarily due to lower production as a result of the scheduled maintenance shutdowns at our German mills. Our raw material inventories increased to EUR 25.2 million in the current quarter from EUR 21.0 million at the end of the second quarter of 2009 as a result of lower production and commencement of our regular seasonal build-up.
For the third quarter of 2009, we recorded an operating loss of EUR 0.5 million compared to operating income of EUR 9.9 million in the comparative quarter of 2008, primarily due to lower price realizations.
Interest expense in the third quarter of 2009 decreased marginally to EUR 16.1 million from EUR 16.4 million in the comparative quarter of 2008.
Our Stendal mill recorded an unrealized loss of EUR 3.3 million on its interest rate derivatives in the current quarter, compared to an unrealized loss of EUR 8.2 million in the same period last year. In the three months ended September 30, 2009, we recorded a foreign exchange gain on our debt of EUR 3.8 million compared to a loss of EUR 9.6 million in the same three months of 2008.
In the third quarter of 2009, the noncontrolling shareholder's interest in the Stendal mill's loss was EUR 1.9 million, compared to EUR 3.3 million in the same quarter last year.
In the third quarter of 2009, we reported Operating EBITDA of EUR 13.0 million compared to Operating EBITDA of EUR 3.9 million in the prior quarter and Operating EBITDA of EUR 24.0 million in the third quarter of 2008. Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and non-recurring capital asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income as a performance measure primarily because depreciation expense and non-recurring capital asset impairment charges are not an actual cash cost, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of their operating facilities. In addition, we believe Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.
Operating EBITDA does not reflect the impact of a number of items that affect our net income, including financing costs and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP, and should not be considered as an alternative to net income attributable to common shareholders or income from operations as a measure of performance, nor as an alternative to net cash from operating activities as a measure of liquidity. Operating EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. For a reconciliation of Operating EBITDA to net income (loss) attributable to common shareholders, see page 7 of the financial tables included in this press release.
We reported a net loss attributable to common shareholders of EUR 14.1 million, or EUR 0.39 per basic and diluted share, in the current quarter and a net loss attributable to common shareholders of EUR 17.2 million, or EUR 0.47 per basic and diluted share, in the comparative quarter of 2008. As at September 30, 2009 and 2008, respectively, we had 36,443,487 and 36,422,487 common shares outstanding.
Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008
Pulp revenues for the nine months ended September 30, 2009 decreased to EUR 422.4 million from EUR 528.3 million in the comparative period of 2008, primarily due to lower pulp list prices. Revenues from the sale of excess energy increased to EUR 32.3 million from EUR 20.0 million in the same period last year as a result of the higher tariffs in effect under Germany's Renewable Energy Resources Act.
In the first nine months of 2009 we reported Operating EBITDA of EUR 17.9 million compared to Operating EBITDA of EUR 76.6 million in the nine months ended September 30, 2008. Operating EBITDA has significant limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. See the discussion of our results for the third quarter of 2009 for additional information relating to Operating EBITDA and page 7 of the financial tables for a reconciliation to net income (loss) attributable to common shareholders.
We reported a net loss attributable to common shareholders for the first nine months of 2009 of EUR 64.9 million, or EUR 1.79 per basic and diluted share. In the first nine months of 2008, we reported a net loss attributable to common shareholders of EUR 13.4 million, or EUR 0.37 per basic and diluted share.
Liquidity and Capital Resources
The following table is a summary of selected financial information
for the periods indicated:
As at As at
Sept. 30, Dec. 31,
2009 2008
---------- ----------
(in thousands)
Financial Position
Cash and cash equivalents EUR 51,275 EUR 42,452
Cash, restricted -- 13,000
Working capital 70,163 154,374
Property, plant and equipment 874,830 881,704
Total assets 1,085,649 1,151,600
Long-term liabilities 876,916 914,970
Total equity 80,417 132,103
---------- ----------
As at September 30, 2009, our cash and cash equivalents were EUR 51.3 million and working capital was EUR 70.2 million. The decrease in working capital includes EUR 14.0 million of higher current indebtedness resulting from the reclassification of the revolving credit facility for our Celgar mill, which matures in May 2010, to a current liability. The lower working capital also reflects improvements in fiber supply chain management and a rebalancing of finished goods inventories from the very high levels we experienced at the end of 2008 amid plummeting world pulp markets. We currently expect to complete an extension of the maturity of the revolving credit facility for Celgar in the fourth quarter of 2009.
Restricted Group
The following table is a summary of selected financial
information for the Restricted Group for the periods indicated:
As at As at
Sept. 30, Dec. 31,
2009 2008
---------- ----------
(in thousands)
Restricted Group Financial Position
Cash and cash equivalents EUR 25,294 EUR 26,176
Working capital 38,346 101,490
Property, plant and equipment 362,748 351,009
Total assets 552,960 564,374
Long-term liabilities 279,648 309,235
Total equity 199,210 210,179
As at September 30, 2009, our Restricted Group had cash and cash equivalents of EUR 25.3 million and working capital of EUR 38.3 million. The decrease in working capital includes EUR 14.0 million of higher current indebtedness resulting from the reclassification of the Celgar working capital facility to a current liability. The lower working capital amount also reflects improvements in fiber supply chain management and a rebalancing of finished goods inventories from the very high levels the Restricted Group experienced at the end of 2008.
Earnings Release Call
In conjunction with this release, Mercer International Inc. will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for Thursday, October 29, 2009 at 10:00 AM (Eastern Daylight Time). Listeners can access the conference call live and archived through November 29, 2009, over the Internet at http://investor.shareholder.com/media/eventdetail.cfm?mediaid=39172&c=MERC&mediakey=248B7FC2C4F131242A1E99AB95341C57&e=0 or through a link on the Company's News/Financial page at http://www.mercerint.com/s/NewsReleases.asp. Please allow 15 minutes prior to the call to visit the site and download and install any necessary audio software. A replay of this call will be available approximately two hours after the live call ends until November 5, 2009 at 11:59 PM (Eastern Standard Time). The replay number is (800) 642-1687 for domestic callers or (706) 645-9291 for international callers, and the passcode is 36160303.
Mercer International Inc. is a global pulp manufacturing company. To obtain further information on the company, please visit its web site at http://www.mercerint.com.
The Mercer International Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5417
The preceding includes forward looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Among those factors which could cause actual results to differ materially are the following: the continuing effects of the ongoing economic and financial turmoil, the highly cyclical nature of our business, raw material costs, our level of indebtedness, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our SEC reports.
MERCER INTERNATIONAL INC.
INTERIM CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands of Euros)
Sept. 30, Dec. 31,
2009 2008
------------- -------------
ASSETS
Current assets
Cash and cash equivalents EUR 51,275 EUR 42,452
Cash, restricted -- 13,000
Receivables 73,133 100,158
Inventories 68,459 98,457
Prepaid expenses and other 5,612 4,834
------------- -------------
Total current assets 198,479 258,901
------------- -------------
Long-term assets
Property, plant and equipment 874,830 881,704
Investments 133 419
Deferred note issuance and other costs 7,659 4,011
Deferred income tax 2,232 3,036
Note receivable, less current portion 2,316 3,529
------------- -------------
887,170 892,699
------------- -------------
Total assets EUR 1,085,649 EUR 1,151,600
============= =============
LIABILITIES
Current liabilities
Accounts payable and accrued expenses EUR 99,292 EUR 87,517
Pension and other post-retirement
benefit obligations 554 510
Debt, current portion 28,470 16,500
------------- -------------
Total current liabilities 128,316 104,527
------------- -------------
Long-term liabilities
Debt, less current portion 795,303 837,918
Unrealized interest rate derivative
losses 58,001 47,112
Pension and other post-retirement
benefit obligations 14,245 12,846
Capital leases and other 9,367 11,267
Deferred income tax -- 5,827
------------- -------------
876,916 914,970
------------- -------------
Total liabilities 1,005,232 1,019,497
------------- -------------
EQUITY
Shareholders' equity
Share capital 202,844 202,844
Paid-in capital (5,477) 299
Retained earnings (deficit) (99,984) (35,046)
Accumulated other comprehensive
income (loss) 22,190 (1,872)
------------- -------------
Total shareholders' equity 119,573 166,225
------------- -------------
Noncontrolling interest (deficit) (39,156) (34,122)
------------- -------------
Total equity 80,417 132,103
------------- -------------
Total liabilities and equity EUR 1,085,649 EUR 1,151,600
============= =============
MERCER INTERNATIONAL INC.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands of Euros, except per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
----------- ----------- ----------- -----------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenues
Pulp EUR 145,857 EUR 178,603 EUR 422,412 EUR 528,289
Energy 10,374 6,225 32,275 20,006
----------- ----------- ----------- -----------
156,231 184,828 454,687 548,295
Costs and expenses
Operating costs 136,566 150,987 417,596 447,111
Operating
depreciation and
amortization 13,385 14,033 40,325 41,668
----------- ----------- ----------- -----------
6,280 19,808 (3,234) 59,516
Selling, general
and
administrative
expenses 6,620 9,954 19,797 24,803
Purchase (sale)
of emission
allowances 153 -- (389) --
----------- ----------- ----------- -----------
Operating income
(loss) (493) 9,854 (22,642) 34,713
----------- ----------- ----------- -----------
Other income
(expense)
Interest expense (16,085) (16,424) (48,953) (49,057)
Investment income
(loss) 20 (2,031) (3,044) (300)
Foreign exchange
gain (loss) on
debt 3,779 (9,560) 4,533 (3,291)
Unrealized gain
(loss) on
derivative
instruments (3,327) (8,215) (10,889) 4,515
----------- ----------- ----------- -----------
Total other income
(expense) (15,613) (36,230) (58,353) (48,133)
----------- ----------- ----------- -----------
Income (loss)
before income
taxes (16,106) (26,376) (80,995) (13,420)
Income tax benefit
(provision)
- current (13) (231) (127) (68)
- deferred 70 6,144 4,989 (2,982)
----------- ----------- ----------- -----------
Net income (loss) (16,049) (20,463) (76,133) (16,470)
Less: net loss
(income)
attributable
to noncontrolling
interest 1,937 3,290 11,195 3,037
----------- ----------- ----------- -----------
Net income (loss)
attributable to
common
shareholders (14,112) (17,173) (64,938) (13,433)
Retained earnings
(deficit),
beginning of
period (85,872) 41,159 (35,046) 37,419
----------- ----------- ----------- -----------
Retained earnings
(deficit), end of
period EUR (99,984) EUR 23,986 EUR (99,984) EUR 23,986
=========== =========== =========== ===========
Net income (loss)
per share
attributable to
common
shareholders:
Basic and
diluted EUR (0.39) EUR (0.47) EUR (1.79) EUR (0.37)
=========== =========== =========== ===========
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheet
(Unaudited)
(In thousands of Euros)
The terms of the indenture governing our 9.25% senior unsecured notes
require that we provide the results of operations and financial
condition of Mercer International Inc. and our restricted subsidiaries
under the indenture, collectively referred to as the "Restricted
Group". As at and during the three and nine months ended September 30,
2009 and 2008, the Restricted Group was comprised of Mercer
International Inc., our Rosenthal and Celgar mills and certain holding
subsidiaries. The Restricted Group excludes the Stendal mill.
September 30, 2009
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------- ----------- ----------- -------------
ASSETS
Current assets
Cash and cash
equivalents EUR 25,294 EUR 25,981 EUR -- EUR 51,275
Cash,
restricted -- -- -- --
Receivables 32,382 40,751 -- 73,133
Inventories 51,395 17,064 -- 68,459
Prepaid
expenses
and other 3,377 2,235 -- 5,612
----------- ----------- ----------- -------------
Total current
assets 112,448 86,031 -- 198,479
Property, plant
and equipment 362,748 512,082 -- 874,830
Other 2,840 4,952 -- 7,792
Deferred income
tax 2,232 -- -- 2,232
Due from
unrestricted
group 70,376 -- (70,376) --
Note receivable,
less current
portion 2,316 -- -- 2,316
----------- ----------- ----------- -------------
Total assets EUR 552,960 EUR 603,065 EUR (70,376) EUR 1,085,649
=========== =========== =========== =============
LIABILITIES
Current
liabilities
Accounts
payable and
accrued
expenses EUR 58,995 EUR 40,297 EUR -- EUR 99,292
Pension and
other post-
retirement
benefit
obligations 554 -- -- 554
Debt, current
portion 14,553 13,917 -- 28,470
----------- ----------- ----------- -------------
Total current
liabilities 74,102 54,214 -- 128,316
Debt, less
current
portion 259,205 536,098 -- 795,303
Due to
restricted
group -- 70,376 (70,376) --
Unrealized
interest rate
derivative
losses -- 58,001 -- 58,001
Pension and
other post-
retirement
benefit
obligations 14,245 -- -- 14,245
Capital leases
and other 6,198 3,169 -- 9,367
----------- ----------- ----------- -------------
Total
liabilities 353,750 721,858 (70,376) 1,005,232
----------- ----------- ----------- -------------
EQUITY
Total
shareholders'
equity (deficit) 199,210 (79,637) -- 119,573
Noncontrolling
interest
(deficit) -- (39,156) -- (39,156)
----------- ----------- ----------- -------------
Total
liabilities
and equity EUR 552,960 EUR 603,065 EUR (70,376) EUR 1,085,649
=========== =========== =========== =============
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Balance Sheet
(Unaudited)
(In thousands of Euros)
December 31, 2008
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------- ----------- ----------- -------------
ASSETS
Current assets
Cash and cash
equivalents EUR 26,176 EUR 16,276 EUR -- EUR 42,452
Cash,
restricted -- 13,000 -- 13,000
Receivables 57,258 42,900 -- 100,158
Inventories 59,801 38,656 -- 98,457
Prepaid
expenses and
other 3,215 1,619 -- 4,834
----------- ----------- ----------- -------------
Total current
assets 146,450 112,451 -- 258,901
Property, plant
and equipment 351,009 530,695 -- 881,704
Other 4,425 5 -- 4,430
Deferred income
tax 3,036 -- -- 3,036
Due from
unrestricted
group 55,925 -- (55,925) --
Note
receivable,
less current
portion 3,529 -- -- 3,529
----------- ----------- ----------- -------------
Total assets EUR 564,374 EUR 643,151 EUR (55,925) EUR 1,151,600
=========== =========== =========== =============
LIABILITIES
Current
liabilities
Accounts
payable and
accrued
expenses EUR 44,450 EUR 43,067 EUR -- EUR 87,517
Pension and
other post-
retirement
benefit
obligations 510 -- -- 510
Debt, current
portion -- 16,500 -- 16,500
----------- ----------- ----------- -------------
Total current
liabilities 44,960 59,567 -- 104,527
Debt, less
current
portion 289,222 548,696 -- 837,918
Due to
restricted
group -- 55,925 (55,925) --
Unrealized
interest rate
derivative
losses -- 47,112 -- 47,112
Pension and
other post-
retirement
benefit
obligations 12,846 -- -- 12,846
Capital
leases and
other 7,167 4,100 -- 11,267
Deferred
income tax -- 5,827 -- 5,827
----------- ----------- ----------- -------------
Total
liabilities 354,195 721,227 (55,925) 1,019,497
----------- ----------- ----------- -------------
EQUITY
Total
shareholders'
equity (deficit) 210,179 (43,954) -- 166,225
Noncontrolling
interest
(deficit) -- (34,122) -- (34,122)
----------- ----------- ----------- -------------
Total
liabilities
and equity EUR 564,374 EUR 643,151 EUR (55,925) EUR 1,151,600
=========== =========== =========== =============
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
(Unaudited)
(In thousands of Euros)
Three Months Ended September 30, 2009
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------- ----------- ----------- -------------
Revenues
Pulp EUR 79,213 EUR 66,644 EUR -- EUR 145,857
Energy 3,201 7,173 -- 10,374
----------- ----------- ----------- -------------
82,414 73,817 -- 156,231
----------- ----------- ----------- -------------
Operating costs 78,360 58,206 -- 136,566
Operating
depreciation
and
amortization 6,816 6,569 -- 13,385
Selling, general
and
administrative
expenses and
other 3,824 2,949 -- 6,773
----------- ----------- ----------- -------------
89,000 67,724 -- 156,724
----------- ----------- ----------- -------------
Operating
income (loss) (6,586) 6,093 -- (493)
----------- ----------- ----------- -------------
Other income
(expense)
Interest
expense (6,546) (10,674) 1,135 (16,085)
Investment
income (loss) 1,112 43 (1,135) 20
Foreign
exchange
gain (loss)
on debt 3,779 -- -- 3,779
Unrealized
gain (loss)
on derivative
instruments -- (3,327) -- (3,327)
----------- ----------- ----------- -------------
Total other
income
(expense) (1,655) (13,958) -- (15,613)
----------- ----------- ----------- -------------
Income (loss)
before
income
taxes (8,241) (7,865) -- (16,106)
Income tax
benefit
(provision) 108 (51) -- 57
----------- ----------- ----------- -------------
Net income
(loss) (8,133) (7,916) -- (16,049)
Less: net
(income) loss
attributable to
noncontrolling
interest -- 1,937 -- 1,937
----------- ----------- ----------- -------------
Net income
(loss)
attributable
to common
shareholders EUR (8,133) EUR (5,979) EUR -- EUR (14,112)
=========== =========== =========== =============
Three Months Ended September 30, 2008
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------- ----------- ----------- -------------
Revenues
Pulp EUR 102,604 EUR 75,999 EUR -- EUR 178,603
Energy 2,316 3,909 -- 6,225
----------- ----------- ----------- -------------
104,920 79,908 -- 184,828
----------- ----------- ----------- -------------
Operating costs 91,034 59,953 -- 150,987
Operating
depreciation
and
amortization 7,333 6,700 -- 14,033
Selling, general
and
administrative
expenses 6,585 3,369 -- 9,954
----------- ----------- ----------- -------------
104,952 70,022 -- 174,974
----------- ----------- ----------- -------------
Operating
income (loss) (32) 9,886 -- 9,854
----------- ----------- ----------- -------------
Other income
(expense)
Interest
expense (6,687) (10,719) 982 (16,424)
Investment
income (loss) 1,679 (2,728) (982) (2,031)
Foreign
exchange
gain (loss)
on debt (9,560) -- -- (9,560)
Unrealized
gain (loss)
on derivative
instruments -- (8,215) -- (8,215)
----------- ----------- ----------- -------------
Total other
income
(expense) (14,568) (21,662) -- (36,230)
----------- ----------- ----------- -------------
Income (loss)
before
income taxes (14,600) (11,776) -- (26,376)
Income tax
benefit
(provision) 5,173 740 -- 5,913
----------- ----------- ----------- -------------
Net income
(loss) (9,427) (11,036) -- (20,463)
Less: net
(income) loss
attributable to
noncontrolling
interest -- 3,290 -- 3,290
----------- ----------- ----------- -------------
Net income
(loss)
attributable
to common
shareholders EUR (9,427) EUR (7,746) EUR -- EUR (17,173)
=========== =========== =========== =============
MERCER INTERNATIONAL INC.
RESTRICTED GROUP SUPPLEMENTAL DISCLOSURE
Combined Condensed Statements of Operations
(Unaudited)
(In thousands of Euros)
Nine Months Ended September 30, 2009
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------- ----------- ----------- -------------
Revenues
Pulp EUR 230,672 EUR 191,740 EUR -- EUR 422,412
Energy 11,162 21,113 -- 32,275
----------- ----------- ----------- -------------
241,834 212,853 -- 454,687
----------- ----------- ----------- -------------
Operating costs 230,489 187,107 -- 417,596
Operating
depreciation
and
amortization 20,408 19,917 -- 40,325
Selling, general
and
administrative
expenses and
other 12,540 6,868 -- 19,408
----------- ----------- ----------- -------------
263,437 213,892 -- 477,329
----------- ----------- ----------- -------------
Operating
income (loss) (21,603) (1,039) -- (22,642)
----------- ----------- ----------- -------------
Other income
(expense)
Interest
expense (20,775) (31,543) 3,365 (48,953)
Investment
income (loss) 3,262 (2,941) (3,365) (3,044)
Foreign
exchange gain
(loss) on debt 4,533 -- -- 4,533
Unrealized gain
(loss) on
derivative
instruments -- (10,889) -- (10,889)
----------- ----------- ----------- -------------
Total other
income
(expense) (12,980) (45,373) -- (58,353)
----------- ----------- ----------- -------------
Income (loss)
before income
taxes (34,583) (46,412) -- (80,995)
Income tax
benefit
(provision) (833) 5,695 -- 4,862
----------- ----------- ----------- -------------
Net income
(loss) (35,416) (40,717) -- (76,133)
Less: net
(income) loss
attributable to
noncontrolling
interest -- 11,195 -- 11,195
----------- ----------- ----------- -------------
Net income
(loss)
attributable
to common
shareholders EUR (35,416) EUR (29,522) EUR -- EUR (64,938)
=========== =========== =========== =============
Nine Months Ended September 30, 2008
----------------------------------------------------
Restricted Unrestricted Consolidated
Group Subsidiaries Eliminations Group
----------------------------------------------------
Revenues
Pulp EUR 301,400 EUR 226,889 EUR -- EUR 528,289
Energy 7,996 12,010 -- 20,006
----------- ----------- ----------- -------------
309,396 238,899 -- 548,295
----------- ----------- ----------- -------------
Operating costs 262,308 184,803 -- 447,111
Operating
depreciation
and
amortization 21,528 20,140 -- 41,668
Selling, general
and
administrative
expenses and
other 15,194 9,609 -- 24,803
----------- ----------- ----------- -------------
299,030 214,552 -- 513,582
----------- ----------- ----------- -------------
Operating
income (loss) 10,366 24,347 -- 34,713
----------- ----------- ----------- -------------
Other income
(expense)
Interest
expense (19,769) (32,200) 2,912 (49,057)
Investment
income (loss) 4,972 (2,360) (2,912) (300)
Foreign
exchange gain
(loss) on
debt (3,181) (110) -- (3,291)
Unrealized
gain (loss)
on derivative
instruments -- 4,515 -- 4,515
----------- ----------- ----------- -------------
Total other
income
(expense) (17,978) (30,155) -- (48,133)
----------- ----------- ----------- -------------
Income (loss)
before
income
taxes (7,612) (5,808) -- (13,420)
Income tax
benefit
(provision) 1,716 (4,766) -- (3,050)
----------- ----------- ----------- -------------
Net income
(loss) (5,896) (10,574) -- (16,470)
Less: net
(income) loss
attributable to
noncontrolling
interest -- 3,037 -- 3,037
----------- ----------- ----------- -------------
Net income
(loss)
attributable
to common
shareholders EUR (5,896) EUR (7,537) EUR -- EUR (13,433)
=========== =========== =========== =============
MERCER INTERNATIONAL INC.
COMPUTATION OF OPERATING EBITDA
(Unaudited)
(In thousands of Euros)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ --------------------------
2009 2008 2009 2008
----------- ----------- ----------- -------------
Net income
(loss)
attributable
to common
shareholders EUR (14,112) EUR (17,173) EUR (64,938) EUR (13,433)
Net income
(loss)
attributable
to non-
controlling
interest (1,937) (3,290) (11,195) (3,037)
Income taxes
(benefits) (57) (5,913) (4,862) 3,050
Interest
expense 16,085 16,424 48,953 49,057
Investment
(income) loss (20) 2,031 3,044 300
Foreign
exchange
(gain) loss
on debt (3,779) 9,560 (4,533) 3,291
Unrealized
(gain) loss
on derivative
instruments 3,327 8,215 10,889 (4,515)
----------- ----------- ----------- -------------
Operating
income (loss) (493) 9,854 (22,642) 34,713
Add: Depreciation
and amortization 13,447 14,103 40,518 41,879
----------- ----------- ----------- -------------
Operating
EBITDA(1) EUR 12,954 EUR 23,957 EUR 17,876 EUR 76,592
=========== =========== =========== =============
-----------------
(1) Operating EBITDA does not reflect the impact of a number of
items that affect our net income (loss) attributable to common
shareholders, including financing costs and the effect of
derivative instruments. Operating EBITDA is not a measure of
financial performance under accounting principles generally
accepted in the United States, and should not be considered as
an alternative to net income (loss) attributable to common
shareholders or income (loss) from operations as a measure of
performance, nor as an alternative to net cash from operating
activities as a measure of liquidity. Operating EBITDA has
significant limitations as an analytical tool, and should not be
considered in isolation, or as a substitute for analysis of our
results as reported under GAAP.
COMPUTATION OF RESTRICTED GROUP OPERATING EBITDA
(Unaudited)
(In thousands of Euros)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ --------------------------
2009 2008 2009 2008
----------- ----------- ----------- -------------
Restricted Group
Net income
(loss)
attributable
to common
shareholders EUR (8,133) EUR (9,427) EUR (35,416) EUR (5,896)
Income taxes
(benefits) (108) (5,173) 833 (1,716)
Interest
expense 6,546 6,687 20,775 19,769
Investment
(income) loss (1,112) (1,679) (3,262) (4,972)
Foreign exchange
(gain) loss
on debt (3,779) 9,560 (4,533) 3,181
----------- ----------- ----------- -------------
Operating
income (loss) (6,586) (32) (21,603) 10,366
Add: Depreciation
and amortization 6,878 7,403 20,601 21,739
----------- ----------- ----------- -------------
Operating
EBITDA(1) EUR 292 EUR 7,371 EUR (1,002) EUR 32,105
=========== =========== =========== =============
-----------------
(1) Operating EBITDA does not reflect the impact of a number of
items that affect our net income (loss) attributable to common
shareholders, including financing costs and the effect of
derivative instruments. Operating EBITDA is not a measure of
financial performance under accounting principles generally
accepted in the United States, and should not be considered as
an alternative to net income (loss) attributable to common
shareholders or income (loss) from operations as a measure of
performance, nor as an alternative to net cash from operating
activities as a measure of liquidity. Operating EBITDA has
significant limitations as an analytical tool, and should not be
considered in isolation, or as a substitute for analysis of our
results as reported under GAAP.
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Mercer International Inc.
CONTACT: Mercer International Inc. Jimmy S.H. Lee, Chairman & President (604) 684-1099 David M. Gandossi, Executive Vice-President & Chief Financial Officer (604) 684-1099 FD Investors: Eric Boyriven Alexandra Tramont Media: Jordana Miller (212) 850-5600
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