Taiga's Q3 sales up by 6.6%, but net loss of $0.5 million due to margin pressures

BURNABY, BC, Feb. 6, 2014 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and nine months ended December 31, 2013.

Three Months Ended December 31, 2013

Taiga's consolidated net sales for the quarter ended December 31, 2013 were $264.1 million compared to $247.7 million in the same period last year. The increase in sales by $16.4 million or 6.6% was largely due to higher sales from US operations as well as higher average lumber prices.

Gross margin for the quarter ended December 31, 2013 decreased to $20.8 million from $21.4 million in the same period last year. Gross margin percentage for the quarter declined to 7.9% compared to 8.6% in the same period last year. The gross margin percentage was negatively impacted by the increase in inventory reserve related to mark to market adjustments.

Taiga recorded a net loss of $0.5 million for the quarter ended December 31, 2013 compared to net earnings of $0.4 million in the same period last year.

EBITDA for the quarter ended December 31, 2013 was $6.5 million compared to $7.1 million in the same period last year.

Nine Months Ended December 31, 2013

Taiga's consolidated net sales for the nine months ended December 31, 2013 were $944.8 million compared to $873.1 million in the same period last year. The 8.2% increase in sales was largely due to higher sales from US and export operations selling into the United States and Asian markets as well as higher average lumber prices.

Gross margin for the nine months ended December 31, 2013 decreased to $75.9 million from $81.0 million in the previous year. Gross margin percentage for the nine months declined to 8.0% compared to 9.3% in the same period last year. These declines were primarily due to lower gross margin percentage on sales of commodity products since commodity prices declined significantly during the first quarter.     

Net earnings for the nine months ended December 31, 2013 decreased to $5.0 million compared to $10.1 million in the same period last year primarily due to lower gross margin dollars and higher selling and administrative expenses.

EBITDA for the nine months ended December 31, 2013 decreased to $28.8 million compared to $35.4 million last year primarily due to lower net earnings.

Condensed Consolidated Statement of Earnings
 
For the Three Months Ended
 
  December 31,
(in thousands of Canadian dollars, except for per share amounts) 2013 2012
Sales       264,081 247,714
Gross margin 20,784 21,366
Distribution expense 4,707 4,614
Selling and administration expense 10,766 10,674
Finance expense 1,454 1,689
Subordinated debt interest expense 4,089 4,071
Other income (143) (91)
Earnings (loss) before income taxes (89) 409
Income tax expense 426 45
Net earnings (loss) (515) 364
Net earnings (loss) per share(1) (0.02) 0.01
EBITDA(2) 6,483 7,106
     
The following is the reconciliation of net earnings to EBITDA:
    December 31,
(in thousands of Canadian dollars)   2013 2012
Net earnings (loss)   (515) 364
Income tax expense   426 45
Finance and subordinated debt interest expense   5,543 5,760
Amortization   1,029 937
EBITDA   6,483 7,106
 
For the Nine Months Ended
  December 31,
(in thousands of Canadian dollars, except for per share amounts) 2013 2012
Sales       944,808 873,147
Gross margin 75,930 81,019
Distribution expense 13,564 13,821
Selling and administration expense 37,223 35,173
Finance expense 5,301 5,372
Subordinated debt interest expense 12,267 12,213
Other income (611) (440)
Earnings before income taxes 8,186 14,880
Income tax expense 3,214 4,811
Net earnings 4,972 10,069
Net earnings per share(1) 0.15 0.31
EBITDA(2) 28,806 35,434
 
The following is the reconciliation of net earnings to EBITDA:
    December 31,
(in thousands of Canadian dollars)   2013 2012
Net earnings   4,972 10,069
Income tax expense   3,214 4,811
Finance and subordinated debt interest expense   17,568 17,585
Amortization   3,052 2,969
EBITDA   28,806 35,434
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 nine months ended December 31, 2013 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.

For further information:

For further information regarding Taiga, please contact:

Mark Schneidereit-Hsu
CFO and VP, Finance & Administration
Tel:  604.438.1471
Email: mschneidereit@taigabuilding.com