Taiga's Q2 sales up by 1.2%, but margin hurt by declining lumber prices

BURNABY, BC, Nov. 5, 2015 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and six months ended September 30, 2015.

Second Quarter Ended September 30, 2015 Earnings Results    

Sales for the second quarter increased to $388.0 million from $383.6 million in the same quarter last year. The increase in sales by $4.4 million or 1.2% was largely due to increased demand in the US.

Gross margin for the second quarter was $33.6 million compared to $34.4 million in the same quarter last year. Gross margin percentage for the second quarter was 8.7% compared to 9.0% for the same quarter last year. The gross margin percentage for the current quarter was impacted by a decline in commodity prices.

Net earnings for the quarter decreased to $4.6 million from $5.7 million in the same quarter last year primarily due to decreased gross margin dollars.

EBITDA for the quarter ended September 30, 2015 was $12.9 million compared to $13.7 million for the same period last year.   

Six Months Ended September 30, 2015 Earnings Results

Sales for the six months ended September 30, 2015 were $792.0 million compared to $758.3 million over the same period last year. The increase in sales by $33.6 million or 4% was largely due to higher sales from US and export operations selling into the United States.

Gross margin for the six months ended September 30, 2015 increased to $68.0 million from $67.5 million over the same period last year. Gross margin percentage for the six months ended decreased to 8.6% compared to 8.9% over the same period last year. The gross margin percentage was lower in the current year's period due to a decline in commodity prices.

Net earnings for the six month period ended September 30, 2015 were $11.1 million compared to $11.2 million for the same period last year.

EBITDA for the six months ended September 30, 2015 decreased to $28.8 million compared to $29.9 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)

2015

2014

Sales

387,991

383,559

Gross margin

33,568

34,440

Distribution expense

5,408

5,257

Selling and administration expense

16,412

16,246

Finance expense

1,311

1,535

Subordinated debt interest expense

4,088

4,089

Other income

(99)

279

Earnings before income taxes

6,448

7,034

Income tax expense

1,830

1,374

Net earnings

4,618

5,660

Net earnings per share(1)

0.14

0.17

EBITDA(2)

12,903

13,679

 

The following is the reconciliation of net earnings to EBITDA:



September 30,

(in thousands of Canadian dollars)


2015

2014

Net earnings


4,618

5,660

Income tax expense


1,830

1,374

Finance and subordinated debt interest expense


5,399

5,624

Amortization


1,056

1,021

EBITDA


12,903

13,679

 

For the Six Months Ended


September 30,

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

2015

2014

Sales

791,964

758,325

Gross margin

68,043

67,450

Distribution expense

10,608

10,338

Selling and administration expense

30,944

29,088

Finance expense

2,901

3,310

Subordinated debt interest expense

8,175

8,178

Other expense (income)

(224)

183

Earnings before income taxes

15,639

16,353

Income tax expense

4,581

5,115

Net earnings

11,058

11,238

Net earnings per share(1)

0.34

0.35

EBITDA(2)

28,813

29,850

 

The following is the reconciliation of net earnings to EBITDA:



September 30,


(in thousands of Canadian dollars)


2015

2014


Net earnings


11,058

11,238


Income tax expense


4,581

5,115


Finance and subordinated debt interest expense


11,076

11,488


Amortization


2,098

2,009


EBITDA


28,813

29,850


 


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, 2015 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


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