Taiga Building Products Ltd. - Steady Second Quarter Results Lead to 37%<br>Increase in Net Earnings Year to Date
BURNABY, BC, Nov. 13 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") is pleased to announce its results for the three and six months ended September 30, 2009.
Results from Operations - Three Months Ended September 30, 2009
Net earnings for the quarter were $3.4 million or constant at $0.10 per share compared to $3.2 million or $0.10 per share for the comparative quarter in the previous year.
Sales weakness was offset by reduced selling and admin costs as management continued its cost reduction program. Also, income tax related expenses were lower compared to the prior year. The prior year comparative quarter included costs associated with Taiga's CRA tax assessment. On the other hand, distribution expenses were higher due to non-cash charge of $1.1 million as the Company consolidated its warehouse operations in the Greater Toronto Area by closing a warehouse in Brampton and migrating its operation into a warehouse in Milton.
Sales were reduced by 17.1% to $260.4 million, from $314.0 million in the second quarter of the prior fiscal year, primarily due to declining demand in new home construction.
Gross margin dollars decreased to $28.2 million from $32.4 million or 13% approximately, for the second quarter year over year. Gross margin percentage for the quarter increased to 10.8% from 10.3% in the second quarter of the prior fiscal year. The increase in gross margin percentage was attributable to commodity product trading gains and reduced purchasing costs due to a stronger Canadian dollar.
EBITDA for the three months ended September 30, 2009 was $10.6 million compared to $13.3 million in the same quarter of the prior year.
Results from Operations - Six Months Ended September 30, 2009
Net earnings were $10.0 million or $0.31 per share compared to $7.3 million or $0.23 per share for the comparative period. Earnings improvements were attributable to cost reductions and foreign exchange gains.
Sales were reduced by 17.3% to $507.3 million for the six months ended September 30, 2009 compared to $613.4 million for the six months ended September 30, 2008, primarily due to declining demand in new home construction.
Gross margin dollars decreased to $55.5 million from $64.2 million for the six months ended September 30, 2008 from the same period last year. Gross margin percentage for the period increased to 10.9% from 10.5% in the same period of the prior fiscal year. The increase in gross margin percentage was attributable to commodity product trading gains and reduced purchasing costs by a stronger Canadian dollar.
EBITDA for the six months ended September 30, 2009 was $26.0 million compared to $26.6 million in the same period of the prior year.
During the quarter, Taiga continued to defer its subordinated note interest payments, which, when unpaid, attract a further 14% interest on interest. The amount of deferred interest payable representing the interests earned from the month of March to September 2009 was $9.5 million as at September 30, 2009.
Selected Consolidated Statement of Earnings
For the Three Months Ended September 30
(in thousands of dollars, except for per share amounts)
(Unaudited)
2009 2008
$ $
-------------------------------------------------------------------------
Sales 260,390 314,035
Gross margin 28,228 32,385
Distribution 5,774 5,191
Selling and administration 12,822 14,886
Interest 1,009 1,733
Subordinated debt interest expense 4,152 3,946
Non-operating expense (income) (224) 705
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Earnings before income taxes 4,695 5,924
Provision for income taxes 1,333 2,774
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Net Earnings 3,362 3,150
Net earnings per share(1) 0.10 0.10
EBITDA(2) 10,643 13,297
The following is the reconciliation of net earnings to EBITDA:
Three Months Ended
September 30,
2009 2008
(in thousands of dollars) $ $
-------------------------------------------------------------------------
Net Earnings 3,362 3,150
Income Tax Expense 1,333 2,774
Interest Expense 5,161 6,529
Amortization 787 844
-------------------------------------------------------------------------
EBITDA 10,643 13,297
Selected Consolidated Statement of Earnings
For the Six Months Ended September 30
(in thousands of dollars, except for per share amounts)
(Unaudited)
2009 2008
$ $
-------------------------------------------------------------------------
Sales 507,301 613,371
Gross margin 55,450 64,168
Distribution 10,038 9,187
Selling and administration 21,529 30,414
Interest 2,052 3,765
Subordinated debt interest expense 8,179 7,891
Non-operating expense (income) (407) 453
-------------------------------------------------------------------------
Earnings before income taxes 14,059 12,458
Provision for income taxes 4,104 5,152
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Net earnings 9,955 7,306
Net earnings per share(1) 0.31 0.23
EBITDA(2) 25,963 26,602
The following is the reconciliation of net earnings to EBITDA:
Six Months Ended
September 30,
2009 2008
(in thousands of dollars) $ $
-------------------------------------------------------------------------
Net Earnings 9,955 7,306
Income Tax Expense 4,104 5,152
Interest Expense 10,231 12,506
Amortization 1,673 1,638
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EBITDA 25,963 26,602
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.
The foregoing selected financial information is qualified in its entirety by and should be read in conjunction with, Taiga's unaudited interim consolidated financial statements and the corresponding notes thereto and related management's discussion and analysis for the quarters ended September 30, 2009 and 2008, available 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.
%SEDAR: 00022285E
For further information: regarding Taiga please contact: Tom Stefan, 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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