Taiga Building Products Ltd. announces third quarter results and $10 million rights offering



    BURNABY, BC, February 12, 2009 /CNW/ - Taiga Building Products Ltd.
("Taiga" or the "Company") reported its results for the three and nine months
ended December 31, 2008 and announced a $10 million rights offering.

    Results from Operations - Three Months Ended December 31, 2008

    Sales for the three months ended December 31, 2008 was $213.8 million
compared to $235.1 million for the three months ended December 31, 2007.
    The 9.1% decline in sales is primarily attributable to slowing product
demand as retailers and other professional suppliers adjust inventory levels
in advance of slowing housing starts in Canada. Taiga continued to see strong
performance in flooring and other renovation products offsetting weakness in
structural products.
    Gross margin decreased by 11.3% to $21.3 million for the current quarter
compared to $24.0 million for the same period last year. The decrease was due
to lower sales volume. Gross margin percentages remained steady at 10.0%
compared to 10.2% for the same period last year.
    EBITDA was $2.9 million for the current quarter, compared to $4.3 million
in the same period last year.
    Net loss for the three months ended December 31, 2008 was $2.6 million or
$0.08 per share compared to $1.9 million or $0.06 per share for the same
period last year.

    Results from Operations - Nine Months Ended December 31, 2008

    Sales revenue for the nine months ended December 31, 2008 was $827.2
million compared to $853.7 million for the same period last fiscal year. The
decline of 3.1% was primarily attributable to the factors noted above in the
third quarter.
    Gross margin for the current nine month period decreased to $90.8 million
compared to $91.1 million for the same period last year. Gross margin
percentage for the period increased slightly to 11.0% from 10.7%.
    EBITDA decreased to $28.6 million for the nine month period, compared to
$30.8 million in the same period last year.
    Net earnings for the nine months ended December 31, 2008 was $4.7 million
or $0.15 per share. For the nine months ended December 31, 2007, Taiga earned
$5.9 million or $0.18 per share.

    Liquidity

    To increase the Company's financial flexibility and to remain in
compliance with existing credit agreements, the Company is currently
undertaking a number of initiatives, including cost reduction programs,
inventory reduction plans and operational efficiency projects. In addition,
the Company will be launching a $10 million rights offering (the "Offering"),
pursuant to which all shareholders will have the ability to participate and at
least maintain their current equity stake at a discounted offering price
through the basic and additional subscription privilege.

    Rights Offering

    Under the Offering, the Company will distribute rights ("Rights") which
will entitle existing shareholders ("Holders") to purchase additional common
shares, subject to regulatory and stock exchange approvals. While the offering
is not supported by a standby purchase commitment, the two major shareholders
have expressed an intention to exercise their rights subject to customary
conditions and provided that in any event, not to acquire beneficial ownership
or control over 50% of the common stock in the Company.
    The net proceeds of the offering will be used to reduce indebtedness
under the Company's revolving credit facilities, thereby providing additional
liquidity for working capital and general corporate purposes. The Offering is
expected to close in late March or early April 2009.
    The Offering will be made pursuant to a short form prospectus, which is
expected to be filed shortly. Rights will be issued to Holders of record in
each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba,
Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and
Labrador and the United States. Further details of the distribution of the
Rights will be provided in the short form prospectus. The Offering will
substantially increase the number of Taiga's common shares. Under the terms of
the Offering, Holders will receive Rights to subscribe for common shares of
Taiga. The subscription price shall be determined at the time the final
prospectus for the Offering is filed. The subscription price will be fixed at
50% of the volume weighted average trading price of Taiga's common shares
traded on the Toronto Stock Exchange (the "TSX") for the 10 day period ending
on the day prior to the date of filing of the final prospectus. The Rights
will be listed for trading on the Toronto Stock Exchange and will be
exercisable for 21 days following the date of mailing of the final prospectus.
Holders that fully exercise their Rights will be entitled to subscribe for
additional common shares, if available, that were not subscribed for by other
Holders.

    
               Comparative Consolidated Statement of Earnings

                         For the Three Months Ended
                          (in thousands of dollars)
                                 (Unaudited)

                                                   December 31,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Net sales                                     $    213,803  $    235,133
                                                  ---------------------------
    Gross profit                                        21,298        23,998
    Expenses                                            19,429        18,588
    Interest - other                                     1,361         1,741
                                                  ---------------------------
    Operating income                                       508         3,669
    Interest - sub note                                  3,946         3,946
    Non-operating expense (income)                        (258)        1,842
                                                  ---------------------------
    Net income before income tax                        (3,180)       (2,119)
    Income tax recovery                                   (560)         (222)
                                                  ---------------------------
    Net loss                                      $     (2,620) $     (1,897)
                                                  ---------------------------

    EPS(1)                                        $      (0.08) $      (0.06)
    EBITDA(2)                                     $      2,939  $      4,305


                          For the Nine Months Ended
                          (in thousands of dollars)
                                 (Unaudited)

                                                   December 31,  December 31,
                                                          2008          2007
    -------------------------------------------------------------------------

    Net sales                                     $    827,175  $    853,660
                                                  ---------------------------
    Gross profit                                        90,788        91,055
    Expenses                                            64,352        61,067
    Interest - other                                     5,126         6,400
                                                  ---------------------------
    Operating income                                    21,310        23,588
    Interest - sub note                                 11,837        11,837
    Non-operating expense                                  195         1,296
                                                  ---------------------------
    Net income before income tax                         9,278        10,455
    Income tax expense                                   4,592         4,576
                                                  ---------------------------
    Net earnings                                  $      4,686  $      5,879
                                                  ---------------------------

    EPS(1)                                        $       0.15  $       0.18
    EBITDA(2)                                     $     28,587  $     30,761

    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, depreciation 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.
    


    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. 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 factors 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.





For further information:

For further information: regarding Taiga please contact: Tom Stefan,
Vice President, Finance and Administration; Mark Schneidereit, Manager,
Corporate Planning, Phone: (604) 438-1471, Fax: (604) 439-4242


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