Taiga's Q2 sales up by 1.2%, but margin hurt by declining lumber prices

BURNABY, BC, Nov. 5, 2015 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and six months ended September 30, 2015.

Second Quarter Ended September 30, 2015 Earnings Results    

Sales for the second quarter increased to $388.0 million from $383.6 million in the same quarter last year. The increase in sales by $4.4 million or 1.2% was largely due to increased demand in the US.

Gross margin for the second quarter was $33.6 million compared to $34.4 million in the same quarter last year. Gross margin percentage for the second quarter was 8.7% compared to 9.0% for the same quarter last year. The gross margin percentage for the current quarter was impacted by a decline in commodity prices.

Net earnings for the quarter decreased to $4.6 million from $5.7 million in the same quarter last year primarily due to decreased gross margin dollars.

EBITDA for the quarter ended September 30, 2015 was $12.9 million compared to $13.7 million for the same period last year.   

Six Months Ended September 30, 2015 Earnings Results

Sales for the six months ended September 30, 2015 were $792.0 million compared to $758.3 million over the same period last year. The increase in sales by $33.6 million or 4% was largely due to higher sales from US and export operations selling into the United States.

Gross margin for the six months ended September 30, 2015 increased to $68.0 million from $67.5 million over the same period last year. Gross margin percentage for the six months ended decreased to 8.6% compared to 8.9% over the same period last year. The gross margin percentage was lower in the current year's period due to a decline in commodity prices.

Net earnings for the six month period ended September 30, 2015 were $11.1 million compared to $11.2 million for the same period last year.

EBITDA for the six months ended September 30, 2015 decreased to $28.8 million compared to $29.9 million for the same period last year.

Condensed Consolidated Statement of Earnings
For the Three Months Ended
	September 30,
(in thousands of Canadian dollars, except for per share amounts)	2015	2014
Sales	387,991	383,559
Gross margin	33,568	34,440
Distribution expense	5,408	5,257
Selling and administration expense	16,412	16,246
Finance expense	1,311	1,535
Subordinated debt interest expense	4,088	4,089
Other income	(99)	279
Earnings before income taxes	6,448	7,034
Income tax expense	1,830	1,374
Net earnings	4,618	5,660
Net earnings per share^(1)	0.14	0.17
EBITDA^(2)	12,903	13,679

The following is the reconciliation of net earnings to EBITDA:

		September 30,
(in thousands of Canadian dollars)		2015	2014
Net earnings		4,618	5,660
Income tax expense		1,830	1,374
Finance and subordinated debt interest expense		5,399	5,624
Amortization		1,056	1,021
EBITDA		12,903	13,679

For the Six Months Ended
	September 30,
(in thousands of Canadian dollars, except for per share amounts)	2015	2014
Sales	791,964	758,325
Gross margin	68,043	67,450
Distribution expense	10,608	10,338
Selling and administration expense	30,944	29,088
Finance expense	2,901	3,310
Subordinated debt interest expense	8,175	8,178
Other expense (income)	(224)	183
Earnings before income taxes	15,639	16,353
Income tax expense	4,581	5,115
Net earnings	11,058	11,238
Net earnings per share^(1)	0.34	0.35
EBITDA^(2)	28,813	29,850

The following is the reconciliation of net earnings to EBITDA:

		September 30,
(in thousands of Canadian dollars)		2015	2014
Net earnings		11,058	11,238
Income tax expense		4,581	5,115
Finance and subordinated debt interest expense		11,076	11,488
Amortization		2,098	2,009
EBITDA		28,813	29,850

	Notes:
	(1) Earnings per share is 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 IFRS.

The foregoing selected financial information is qualified in its entirety by and should be read in conjunction with, our unaudited condensed interim consolidated financial statements for the three and six months ended September 30, 2015 and accompanying notes and management's discussion and analysis which will be available shortly on SEDAR at www.sedar.com.

SOURCE Taiga Building Products Ltd.

regarding Taiga, please contact: Mark Schneidereit-Hsu, VP, Finance and Administration and CFO, Tel: [phone], Email: [email protected]