Taiga's Q2 sales down 14% but margin percentage holds steady at 8.8%

BURNABY, BC, Nov. 3, 2016 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and six months ended September 30, 2016.

Second Quarter Ended September 30, 2016 Earnings Results    

Sales for the second quarter decreased to $335.1 million from $388.0 million in the same quarter last year. The decrease in sales by $52.9 million or 14% was largely due to the ceased operations relating to one of the Company's business units. 

Gross margin dollars for the second quarter decreased to $29.5 million compared to $33.6 million in the same quarter last year.  Gross margin percentage for the second quarter was 8.8% compared to 8.7% in the same quarter last year. The increase in gross margin percentage was primarily due to higher commodity prices in the current quarter compared to the same quarter last year. 

Net earnings for the quarter decreased to $3.1 million from $4.6 million in the same quarter last year primarily due to decreased gross margin dollars.

EBITDA for the quarter ended September 30, 2016 was $11.3 million compared to $12.9 million for the same period last year.   

Six Months Ended September 30, 2016 Earnings Results

Sales for the six months ended September 30, 2016 were $660.5 million compared to $792.0 million over the same period last year. The decrease in sales by $131.5 million or 17% was largely due to the ceased operations relating to one of the Company's business units. 

Gross margin dollars for the six months ended September 30, 2016 decreased to $60.9 million from $68.0 million over the same period last year. Gross margin percentage for the six months ended September 30, 2016 increased to 9.2% compared to 8.6% over the same period last year. The gross margin percentage was higher in the current period due to an increase in commodity prices.

Net earnings for the six month period ended September 30, 2016 were $7.9 million compared to $11.1 million for the same period last year.

EBITDA for the six months ended September 30, 2016 decreased to $24.8 million compared to $28.8 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)

2016

2015

Sales

335,052

387,991

Gross margin

29,493

33,568

Distribution expense

5,633

5,408

Selling and administration expense

13,668

16,412

Finance expense

1,228

1,311

Subordinated debt interest expense

4,088

4,088

Other income

(118)

(99)

Earnings before income taxes

4,994

6,448

Income tax expense

1,855

1,830

Net earnings

3,139

4,618

Net earnings per share(1)

0.10

0.14

EBITDA(2)

11,329

12,903

 

The following is the reconciliation of net earnings to EBITDA:



September 30,


(in thousands of Canadian dollars)


2016

2015


Net earnings


3,139

4,618


Income tax expense


1,855

1,830


Finance and subordinated debt interest expense


5,316

5,399


Amortization


1,019

1,056


EBITDA


11,329

12,903


 

For the Six Months Ended


September 30,

(in thousands of Canadian dollars, except for per share amounts)

2016

2015

Sales

660,518

791,964

Gross margin

60,901

68,043

Distribution expense

11,064

10,608

Selling and administration expense

27,287

30,944

Finance expense

2,547

2,901

Subordinated debt interest expense

8,175

8,175

Other income

(233)

(224)

Earnings before income taxes

12,061

15,639

Income tax expense

4,160

4,581

Net earnings

7,901

11,058

Net earnings per share(1)

0.24

0.34

EBITDA(2)

24,820

28,813

 

The following is the reconciliation of net earnings to EBITDA:



September 30,


(in thousands of Canadian dollars)


2016

2015


Net earnings


7,901

11,058


Income tax expense


4,160

4,581


Finance and subordinated debt interest expense


10,722

11,076


Amortization


2,037

2,098


EBITDA


24,820

28,813


 


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, 2016 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: regarding Taiga, please contact: Mark Schneidereit-Hsu, VP, Finance and Administration and CFO, Tel: 604.438.1471, Email: mschneidereit@taigabuilding.com

RELATED LINKS
http://www.taigabuilding.com/

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