Taiga Building Products Ltd. Announces Second Quarter Net Earnings Improvement to $3.3 Million

BURNABY, BC, Nov. 4, 2011 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its quarterly results for the three months ended September 30, 2011.

Taiga's quarterly results for the three months ended September 30, 2011 are presented in accordance with International Financial Reporting Standards ("IFRS") and comparative information for the corresponding 2010 results have been restated accordingly.

Earnings Results - Three Months Ended September 30, 2011

Taiga's consolidated net sales for the quarter ended September 30, 2011 were $278.0 million compared to $260.8 million during the same period last year, an increase of $17.2 million or 6.6%. The increase was due to a strong demand for product during the peak building season and relatively steady commodity prices.

Gross margin for the quarter ended September 30, 2011 was $27.9 million compared to $22.6 million over the same period last year. Gross margin percentage for the quarter was 10.0% compared to 8.7% over the same period last year. Commodity prices were low, but relatively stable during the current quarter. Gross margin percentage in the second quarter of last year was severely impacted by a sharp decline in commodity prices.

Net earnings for the quarter ended September 30, 2011 were $3.3 million, an increase of $1.4 million, compared to $1.9 million over the same period last year. The increase was primarily due to an increase in gross margin, partially offset by higher variable compensation costs and higher borrowing costs.

EBITDA for the quarter ended September 30, 2011 was $11.0 million, an increase of $2.3 million, compared to $8.7 million over the same period last year.

Earnings Results - Six Months Ended September 30, 2011

Taiga's consolidated net sales for the six months ended September 30, 2011 were $541.6 million compared to $555.1 million over the same period last year, a decrease of $13.5 million or 2.4%. The weaker sales figures were due to longer winter weather conditions which delayed demand.

Gross margin for the six months ended September 30, 2011 was $54.7 million compared to $52.6 million over the same period last year. Gross margin percentage for the quarter was 10.1% compared to 9.5% over the same period last year. The increase was due to more stable commodity prices compared for the same period last year.

Net earnings for the six months ended September 30, 2011 were $7.0 million, a decrease of $0.2 million compared to $7.2 million over the same period last year. This slight decrease was due to higher operating expenses which were partially offset by an increased gross margin. The company's net earnings performance is reflective of stable Canadian housing starts activity over the comparable period.

EBITDA for the six months ended September 30, 2011 was $22.8 million, an increase of $0.5 million, compared to $22.3 million over the same period last year.

Looking forward in the next 6 months, Taiga expects Canadian housing starts and renovation activity to remain relatively flat, US housing start activity to continue to be weak, and associated commodity prices to remain depressed.  Taiga will remain vigilant with cost control, work to increase inventory efficiency and focus on cash conservation.

Condensed Consolidated Statement of Earnings
 
For the Three Months Ended
(in thousands of Canadian dollars, except for per share amounts)
    September 30,
      2011   2010
Sales       $277,992     $260,750
Gross margin       27,947     22,649
Distribution expense       4,897     4,620
Selling and administration expense       12,905     10,738
Finance expense       1,533     1,249
Subordinated debt interest expense       4,016     4,016
Other income       (44)     (676)
Earnings before income taxes       4,640     2,702
Provision for income taxes       1,324     792
Net earnings       3,316     1,910
Net earnings per share(1)       0.10     0.06
EBITDA(2)       10,957     8,715

The following is the reconciliation of net earnings to EBITDA:

    Three Months Ended
September 30,  
(in thousands of Canadian dollars)   2011
$
2010
$
Net earnings   3,316 1,910
Income taxes   1,324 792
Finance and subordinated debt interest expense   5,549 5,265
Amortization   768 748
EBITDA   10,957 8,715

Condensed Consolidated Statement of Earnings
 
For the Six Months Ended
(in thousands of Canadian dollars, except for per share amounts)
    September 30,
      2011   2010
Sales        $541,598     $555,132
Gross margin       54,652     52,649
Distribution expense       9,485     9,013
Selling and administration expense       24,005     23,542
Finance expense       3,047     2,313
Subordinated debt interest expense       8,032     8,032
Other income       (22)     (734)
Earnings before income taxes       10,105     10,483
Provision for income taxes       3,145     3,236
Net earnings       6,960     7,247
Net earnings per share(1)       0.21     0.22
EBITDA(2)       22,771     22,323

The following is the reconciliation of net earnings to EBITDA:

    Six Months Ended
September 30,  
(in thousands of Canadian dollars)   2011
$
2010
$
Net earnings   6,960 7,247
Income taxes   3,145 3,236
Finance and subordinated debt interest expense   11,079 10,345
Amortization   1,587 1,495
EBITDA   22,771 22,323

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 IFRS.

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, 2011 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. 

 

 

SOURCE Taiga Building Products Ltd.

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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