Taiga improves its operating profits in fiscal 2012

BURNABY, BC, June 21, 2012 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported fourth quarter and March 31, 2012 fiscal year financial results.

The Company's results are presented in accordance with International Financial Reporting Standards ("IFRS") and comparative information for the corresponding 2011 results has been restated accordingly.

Fiscal Year 2012 Earnings Results

EBITDA for the year ended March 31, 2012 was $34.6 million compared to $33.4 million last year.

Gross margin for the fiscal year ended March 31, 2012 increased to $95.8 million from $88.7 million in the previous year. Gross margin percentage for the year improved to 9.9% compared to 9.0% in the previous year. During the first quarter, fiscal year 2011, gross margin percentage was impacted by a sharp decline in lumber and panel commodity prices. Commodity price weakness continued throughout fiscal year 2011.

Net earnings for the year ended March 31, 2012 were $3.7 million compared to $4.0 million last year. Pre-tax net earnings results were impacted by one-time charges of $2.1 million.  Operating costs increases included compensation of $2.6 million, distribution and warehousing of $1.0 million and interest expense of $1.0 million.

The Company's consolidated net sales for the year ended March 31, 2012 were $971.6 million compared to $981.8 million over the last fiscal year. The 1% decrease in sales was largely due to weak first quarter performance, notably poor spring weather and low commodity prices. The decrease was partially offset by stronger fourth quarter sales performance attributable to very mild winter conditions in the eastern half of Canada. Fourth quarter conditions have led to improved lumber and panels prices heading into fiscal year 2013.

Fourth Quarter Ended March 31, 2012 Earnings Results

EBITDA for the fourth quarter March 31, 2012 was $6.2 million compared to $4.7 million in the same quarter last year.

Gross margin for the fourth quarter was $22.6 million compared to $17.6 million in the same quarter last year. Taiga's gross margin percentage for the quarter ended March 31, 2012 was 9.9% compared to 8.5% for the same period last year. The increases were due to an improved commodity pricing environment and a $1.5 million reversal of product costs over-accrued during fiscal year 2012.

Net loss for the fourth quarter was $1.5 million compared to a loss of $2.0 million in the same quarter last year. Pre-tax net loss results were impacted by one-time charges of $1.3 million.  Operating costs included increased variable compensation of $3.5 million during the quarter.

Sales for the fourth quarter increased by $21.3 million or 10.4% to $227.0 million compared to $205.7 million in the same quarter last year. Taiga experienced healthy demand for its product offering as retailers began restocking for the spring building season earlier in the quarter compared to last year.

Dividend

In light of the continuing economic uncertainty and cautious residential housing sentiment in Canada, the Board of Directors has decided not to declare and pay the first instalment payment of its semi-annual dividend policy with respect to the 2012 fiscal year's net earnings.  The decision regarding the second instalment payment with respect to the 2012 fiscal year's net earnings will be announced in early January 2013.

Condensed Consolidated Statement of Earnings

For the Fiscal Year Ended
(in thousands of Canadian dollars, except for per share amounts)

    March 31,
      2012
$
  2011
$
Sales                   971,625                 981,777
Gross margin       95,811     88,655
Distribution expense       18,603     17,464
Selling and administration expense       46,441     42,233
Finance expense       6,984     6,352
Subordinated debt interest expense       16,385     16,064
Other expense (income)       161     (683)
Earnings before income taxes       7,237     7,225
Provision for income taxes       3,513     3,224
Net earnings       3,724     4,001
Net earnings per share(1)       0.11     0.12
EBITDA(2)       34,555     33,448

The following is the reconciliation of net earnings to EBITDA:

    March 31,  
(in thousands of Canadian dollars)   2012
$
2011
$
Net earnings   3,724 4,001
Income taxes   3,513 3,224
Finance and subordinated debt interest expense   23,369 22,416
Amortization   3,949 3,807
EBITDA   34,555 33,448
       

For the Three Months Ended
(in thousands of Canadian dollars, except for per share amounts)

        March 31,
      2012
$
  2011
$
Sales                   $226,977                 $205,717
Gross margin       22,552     17,566
Distribution expense       4,816     4,756
Selling and administration expense       12,179     8,863
Finance expense       1,938     1,956
Subordinated debt interest expense       4,337     4,016
Other expense       394     273
Loss before income taxes       (1,112)     (2,298)
Provision for (recovery of) income taxes       381     (295)
Net loss       (1,493)     (2,003)
Net loss per share(1)       (0.05)     (0.06)
EBITDA(2)       6,151     4,652

The following is the reconciliation of net earnings to EBITDA:

    Three Months Ended
March 31,  
(in thousands of Canadian dollars)   2012
$
2011
$
Net loss   (1,493) (2,003)
Income taxes   381 (295)
Finance and subordinated debt interest expense   6,275 5,972
Amortization   988 978
EBITDA   6,151 4,652

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 audited consolidated financial statements for the fiscal year ended March 31, 2012 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:

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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