Taiga Building Products Ltd. Announces Steady Second Quarter Sales Despite
Soft Commodity Prices
BURNABY, BC, Nov. 8 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its quarterly results for the three months ended September 30, 2010.
Earnings Results - Three Months Ended September 30, 2010
The Company's consolidated net sales for the quarter ended September 30, 2010 remained steady at $260.8 million compared to $260.4 million over the same period last year. Performance was driven by year over year sales volume improvements, while commodity prices sunk to very low levels.
Due to soft commodity prices, gross margin for the quarter ended September 30, 2010 decreased to $22.6 million from $28.2 million over the same period last year. Gross margin percentage for the quarter declined to 8.7% compared to 10.8% for the same period last year.
EBITDA for the quarter ended September 30, 2010 was $9.0 million, a decrease of $1.6 million, compared to $10.6 million over the same period last year. These decreases were primarily due to lower gross margin dollars partially offset by reduced operating expenses. Net earnings for the quarter ended September 30, 2010 was $2.1 million, a decrease of $1.3 million compared to $3.4 million over the same period last year.
Earnings Results - Six Months Ended September 30, 2010
Sales were increased by 9.4% to $555.1 million for the six months ended September 30, 2010 compared to $507.3 million for the six months ended September 30, 2009. The Company benefited from stronger sales in the first quarter supported by higher commodity prices and a very weak comparable sales performance period as a result of the international credit crisis. The Company recorded good sales during the second quarter after commodity prices weakened to low levels.
Gross margin dollars decreased to $52.6 million from $55.5 million for the six months ended September 30, 2010 from the same period last year. Gross margin percentage for the period decreased to 9.5% from 10.9% in the same period of the prior fiscal year. After peaking in May, commodity prices continued to decline during the following months, resulting in reduced margins.
Net earnings were $7.6 million or $0.23 per share compared to $10.0 million or $0.31 per share for the comparative period. EBITDA for the six months ended September 30, 2010 was $22.8 million compared to $26.0 million in the same period of the prior year.
These decreases were primarily due to lower gross margin dollars and lower positive foreign exchange fluctuation during the period.
Selected Consolidated Statement of Earnings
For the Three Months Ended September 30
(in thousands of dollars, except for per share amounts)
2010 2009
$ $
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Sales 260,750 260,390
Gross margin 22,649 28,228
Distribution 4,620 5,774
Selling and administration 10,738 12,822
Interest 1,249 1,009
Subordinated debt interest expense 4,016 4,152
Non-operating income (870) (224)
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Earnings before income taxes 2,896 4,695
Provision for income taxes 831 1,333
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Net earnings 2,065 3,362
Net earnings per share(1) 0.06 0.10
EBITDA(2) 9,034 10,643
The following is the reconciliation of net earnings to EBITDA:
Three Months Ended
September 30,
2010 2009
(in thousands of dollars) $ $
-------------------------------------------------------------------------
Net earnings 2,065 3,362
Income taxes 831 1,333
Interest 5,265 5,161
Amortization 873 787
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EBITDA 9,034 10,643
Selected Consolidated Statement of Earnings
For the Six Months Ended September 30
(in thousands of dollars, except for per share amounts)
(Unaudited)
2010 2009
$ $
-------------------------------------------------------------------------
Sales 555,132 507,301
Gross margin 52,649 55,450
Distribution 9,013 10,038
Selling and administration 23,594 21,529
Interest 2,261 2,052
Subordinated debt interest expense 8,032 8,179
Non-operating expense (income) (1,122) (407)
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Earnings before income taxes 10,871 14,059
Provision for income taxes 3,314 4,104
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Net earnings 7,557 9,955
Net earnings per share(1) 0.23 0.31
EBITDA(2) 22,834 25,963
The following is the reconciliation of net earnings to EBITDA:
Six Months Ended
September 30,
2010 2009
(in thousands of dollars) $ $
-------------------------------------------------------------------------
Net Earnings 7,557 9,955
Income Tax Expense 3,314 4,104
Interest Expense 10,293 10,231
Amortization 1,670 1,673
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EBITDA 22,834 25,963
Notes:
(1) EPS is earnings per share calculated using the weighted average
number of shares.
(2) Reference is made above to EBITDA, which represents earnings before
interest, taxes, and amortization. As there is no generally accepted
method of calculating EBITDA, the measure as calculated by Taiga
might not be comparable to similarly titled measures reported by
other issuers. EBITDA is presented as management believes it is a
useful indicator of a company's ability to meet debt service and
capital expenditure requirements and because management interprets
trends in EBITDA as an indicator of relative operating performance.
EBITDA should not be considered by an investor as an alternative to
net income or cash flows as determined in accordance with Canadian
generally accepted accounting principles.
The foregoing selected financial information is qualified in its entirety by and should be read in conjunction with, our unaudited interim consolidated financial statements for the quarter ended September 30, 2010 and accompanying notes and management's discussion and analysis which will be available shortly on Sedar at www.sedar.com.
Forward-Looking Statements:
This press release contains certain forward-looking information and statements relating, but not limited, to future events or performance and strategies and expectations of Taiga. Forward-looking information typically contains statements with words such as "consider", "anticipate", "believe", "expect", "plan", "intend", "likely", "may", "will", "should", "predict", "potential", "continue" or similar words suggesting future outcomes or statements regarding expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Examples of such forward looking statements within this press release include statements relating to: our anticipated results of operations, including cost reduction savings; our expectations regarding market conditions; the sufficiency of our cash requirements and our ability to remain in compliance with our debt covenants. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These forward-looking statements reflect management's current expectations or beliefs and are based on information currently available to Taiga and although Taiga believes it has a reasonable basis for making the forward-looking statements included in this document, readers are cautioned not to place undue reliance on such forward-looking information. By its nature, the forward-looking information of Taiga involves numerous assumptions and inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur. These risks include, but are not limited to, changes in business strategies; the effects of litigation, competition and pricing pressures; changes in operational costs; changes in laws and regulations, including tax, environmental, employment, competition, anti-terrorism and trade laws; and Taiga's anticipation of and success in managing the risks associated with the foregoing. A further description of these additional factors can be found in the periodic and other reports filed by Taiga with Canadian securities commissions and available on Sedar (http://www.sedar.com). These forward-looking statements speak only as of the date of this press release. Taiga does not undertake, and specifically disclaims, any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise, except as required by applicable law.
%SEDAR: 00022285E
For further information: regarding Taiga please contact: Tom Stefan, CFO & Vice President, Finance and Administration, Phone: 604-438-1471, Fax: 604-439-4242; Mark Schneidereit, Manager, Corporate Planning, Phone: 604-438-1471, Fax: 604-439-4242
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