Taiga Building Products Ltd. Announces Fourth Quarter and Fiscal Year 2007 Financial Results and Fiscal 2006 Restatement

    BURNABY, BC, June 8 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the
"Company") today reported its results for the three month period and fiscal
year ended March 31, 2007 and announced restated fiscal 2006 results. As a
result of this adjustment, net earnings for the fiscal year ended March 31,
2006 (restated) increased by $3.2 million.

                        Fiscal 2007 Financial Results

    The following discussion of financial results takes into account the
restatement of the Company's financial statements for fiscal 2006 and the
first three quarters of fiscal 2007.
    Sales for the three months ended March 31, 2007 were $229.6 million, down
18.3 percent from $281.0 million reported for the same quarter last year.
Gross margin dollars for the fourth quarter was 12.1 percent or $27.9 million
compared to 9.7 percent or $27.4 million over the prior year. Sales were
impacted mainly by lower market prices of lumber and panel products, and
slower weather related demand while the higher gross margin percentage
reflects Taiga's continued product mix strategy. Net loss for the fourth
quarter was 2.7 million compared to a net loss of 1.7 million over the prior
year. EBITDA was $4.9 million compared to $9.0 million over the prior year, a
decrease of $4.1 million, primarily due to new Real Estate leasing costs
during the year and a one time reclassification associated with the Stapled
Unit conversion.
    For the fiscal period ending March 31, 2007, sales were $1,095.1 million,
down 7.1 percent from $1,179.3 million last year. Sales were lower due to
reduced prices for lumber and panel products. Gross margin for the fiscal year
was 10.7 percent or $117.2 million versus 9.3 percent or $109.1 million in
2006. The increase in gross margins as a percentage of sales was accomplished
by improving product mix to higher margin products. Net earnings for the
fiscal year were $4.1 million compared to $3.6 million in 2006. EBITDA for the
fiscal period increased to $39.8 million versus $32.9 million in 2006.
Earnings from operations in fiscal year 2007, before subordinated note
interest, were $23.8 million, up 3.5 percent from $23.0 million.
    On October 12, 2006, the 2006 Canada-US Softwood Lumber Agreement ("SLA")
entered into force, which governs the shipment of Canadian softwood lumber
into the United States. The agreement provided for approximately 81% of the
deposits paid since May 2002 to be refunded with interest to Canadian
exporters. In connection with the SLA, the Government of Canada has designated
Export Development Canada ("EDC") as its agent to facilitate a deposit refund
mechanism in order to accelerate the return of duties and interest owed to
Canadian companies by the U.S. Government.
    As a result of the SLA settlement and the Company's participation through
EDC, the Company recognized a one time non-operating income of $4.3 million
net of accrued liabilities during the year.

         Comparative Consolidated Statement of Earnings and Deficit

                         For the Three Months Ended
                          (in thousands of dollars)

                                                      March 31,     March 31,
                                                          2007          2006

    Net sales                                      $   229,581   $   281,026
    Gross profit                                        27,846        27,389
    Expenses                                            23,841        19,416
    Interest - other                                     1,735         1,729
    Interest - sub note                                  3,946         5,173
    Non-operating income                                   (67)         (364)
    Net income before income tax                        (1,609)        1,435
    Current income taxes                                 1,408         3,141
    Future and withholding income taxes                   (333)            -
    Net loss                                       $    (2,684)  $    (1,706)

    EPS(1)                                         $     (0.08)  $     (0.05)
    EBITDA(2)                                      $     4,933   $     8,965

                          For the Fiscal Year Ended
                          (in thousands of dollars)
                                                      March 31,     March 31,
                                                          2007          2006

    Net sales                                      $ 1,095,117   $ 1,179,294
    Gross profit                                       117,169       109,093
    Expenses                                            85,318        79,421
    Interest - other                                     8,009         6,682
    Interest - sub note                                 18,989        12,072
    Non-operating income                                (5,516)         (495)
    Net income before income tax                        10,369        11,413
    Current income taxes                                 1,881         4,479
    Future and withholding income taxes                  4,392         3,332
    Net earnings                                   $     4,096   $     3,602

    EPS(1)                                         $      0.13   $      0.11
    EBITDA(2)                                      $    39,764   $    32,884


    (1) EPS is earnings per share calculated using the weighted average
    number of shares.

    (2) EBITDA is not a recognized measure under GAAP and does not have a
    standardized meaning prescribed by GAAP. Therefore, EBITDA may not be
    comparable to similar measures presented by other issuers. Expressed in
    dollars before subordinated debt interest expense of $3.9 million and
    $19.0 million, respectively, for the three month period and fiscal year
    ended March 31, 2007.

                           Fiscal 2006 Restatement

    The Company has determined that the future income taxes were calculated
incorrectly during the year ended March 31, 2006. As such, the Company has
adjusted its 2006 future tax assets to recognize, principally, the future tax
benefits associated with the capital lease obligations arising from the
sale-leaseback transaction and finance costs associated with the stapled unit
conversion, as well as to reflect the appropriate tax rate related to the
future tax assets associated with the deferred gain arising from the
sales-leaseback transaction. There have been adjustments related to the above
made to future and current taxes that reflect actual tax rates and losses
carried forward since the original calculations were based on estimates. The
restated interim and annual financial statements for the fiscal year ended
March 31, 2006 and the first three quarters for the fiscal year ended March
31, 2007 have been filed on SEDAR at www.sedar.com.
    The following presents a summary of changes to the Company's previously
issued financial statements as at and for the year ended March 31, 2006:

    Consolidated Balance Sheet as at March 31, 2006
    (in thousands of dollars)
                                          Previously    Increase
                                            Reported   (Decrease)   Restated
                                                   $           $           $
    Income taxes recoverable                   5,488         256       5,744
    Future income taxes (current)                850        (518)        332
    Future income taxes (long-term)            5,329       2,745       8,074

    Future income taxes (current)              8,195        (721)      7,474

    Shareholders' Equity:
    Deficit                                   93,899      (3,204)     90,695

    Consolidated Statement of Earnings And Retained Earnings
    for the year ended March 31, 2006
    (in thousands of dollars, except per share amount in dollars)
                                          Previously    Increase
                                            Reported   (Decrease)   Restated
                                                   $           $           $
    Current income taxes                       4,735        (256)      4,479
    Future and withholding taxes               6,280      (2,948)      3,332
    Net earnings                                 398       3,204       3,602
    Basic and diluted EPS                        .01         .10         .11

                       Stapled Unit Conversion History

    On September 1, 2005, Taiga Forest Products Ltd. ("Old Taiga") converted
to a Stapled Unit structure using Stapled Units. The transaction was effected
through a plan of arrangement (the "reorganization") approved by the
shareholders of Old Taiga on June 27, 2005. Under the reorganization, the
issued and outstanding common shares of Old Taiga were exchanged for Stapled
Units of Taiga on the basis of four Stapled Units for each Old Taiga common
share. Each Stapled Unit consists of one common share of Taiga and a 14%
unsecured Subordinated Note of Taiga in the principal amount of $5.32. A total
of 32,205,680 Stapled Units of the Taiga were issued. Stapled Units of Taiga
commenced trading on September 1, 2005 under the symbol "TBL.UN" on the
Toronto Stock Exchange. As the reorganization resulted in the shareholders of
Old Taiga owning directly all of the equity interests of the Company, the
reorganization did not result in any change in beneficial ownership of the
Company. Results for periods prior to September 1, 2005 are results of Old
    On April 26, 2006, Taiga received the requisite consents to its consent
solicitation which sought to amend certain provisions of the indenture
governing the Notes. As a result of the consummation of the consent
solicitation, the Stapled Units automatically separated into the constituent
Notes and common shares on May 8, 2006 with the Notes and common shares
trading separately on the Toronto Stock Exchange as of May 9, 2006 under the
symbols TBL.NT and TBL, respectively. Taiga is Canada's largest independent
distributor of building products, as measured by revenue.

    Forward-Looking Statements:

    Statements in this release include forward-looking statements based on
audited financial results and management's expectations and assumptions. These
statements and Taiga's results of operation and business are subject to a
number of risks described in Taiga Building Products Ltd. published management
discussion and analysis of results of operations for fiscal year ended
March 31, 2007 and under the heading "Risk Factors" in the Company's Annual
Information Form (both of which are available at www.sedar.com), and include,
but are not limited to, dependence on market economic conditions, sales and
margin risk and fluctuations in commodity prices, customer risk, interest rate
risk, growth risk, risks of acquisitions, competition, supply of commodities,
supply-side risks, inventory risks, seasonal and cyclical nature of Taiga's
business, Canada - United States softwood lumber dispute, product liability
claims, new regulations, environmental liabilities, credit risk, foreign
currency risk, dependence on key personnel, information system risk and
availability of future financing. These risks and uncertainties may cause
actual results to differ materially from those contained in such
forward-looking statements. Investors are cautioned not to place undue
reliance on such forward-looking statements. No forward-looking statement is a
guarantee of future results.
    In this release, reference is made to EBITDA, which represents earning
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. For further
information regarding EBITDA please refer to management's discussion and
analysis of results of operations for the fiscal year ended March 31, 2007
(available at www.sedar.com).

For further information:

For further information: Tom Stefan, Vice President, Finance and
Administration, Phone: (604) 438-1471, Fax: (604) 439-4242

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890