Jun. 25, 2011 (Canada NewsWire Group) --
BURNABY, BC, June 25, 2011 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported fourth quarter and March 31, 2011 fiscal year financial results.
Fiscal Year 2011 Earnings Results
For the fiscal year ended March 31, 2011, sales were $955.6 million, up 2.6% from $931.5 million last fiscal year. The increase was primarily driven by stronger sales in the first quarter as a result of higher lumber and OSB prices associated with re-stocking demand from low supply chain inventories. The summer expiry of the home renovation tax credit provided for moderating second and third quarter sales performance amidst increasingly competitive supply conditions. This had an impact on our gross margin performance. The fourth quarter results reflect weaker underlying commodity price conditions in lumber and panels, compared to the same quarter last year, but Taiga posted resilient market share performance of the company during a longer than usual winter period.
Gross margin for the fiscal year ended March 31, 2011 declined to $88.7 million from $97.4 million in the last year. Gross margin percentage for the fiscal year was 9.3% compared to 10.5% last year. After peaking in May, commodity prices declined sharply and remained relatively low for the remaining year. This volatility in lumber prices combined with an increasingly competitive marketplace put pressures on gross margin during the year.
Net earnings for the fiscal year ended March 31, 2011 was $4.6 million compared to $12.0 million last year. EBITDA for the fiscal year ended March 31, 2011 was $32.2 million compared to $41.9 million last year. These decreases were primarily due to lower gross margin, reduced foreign exchange gains and higher interest expense, associated with the company's refinanced credit facilities.
Fourth Quarter Ended March 31, 2011 Earnings Results
Sales for the fourth quarter were $202.1 million compared to $223.1 million. Last year's fourth quarter benefited from a strong upward movement in OSB prices and additional demands related to home renovation tax credit. Current quarter faced declining OSB and lumber prices coupled with a slowing demand partially driven by bad weather and late arrival of spring season. Gross margin for the fourth quarter was $17.6 million compared to $21.2 million in the same quarter last year. Taiga's gross margin percentage for the quarter ended March 31, 2011 decreased to 8.7% compared to 9.5% for the same period last year. These decreases were due to more competitive pricing environment and lack of upward movement in lumber prices compared to the same period last year. Net loss for the fourth quarter was $1.8 million compared to net earnings of $1.1 million in the same quarter last year. EBITDA was $4.1 million compared to $8.6 million in the same quarter last year.
Dividend
In light of the moderating financial performance of the company, the Board of Directors have decided not to declare and pay the first instalment payment of its semi-annual dividend policy with respect of the 2011 fiscal year's net earnings. The decision to make the second instalment payment with respect to the 2011 fiscal year's net earnings will be addressed in early January 2012.
| Selected Consolidated Statement of Earnings | |||||||
| For the Fiscal Year Ended | |||||||
| (in thousands of dollars, except for per share amounts) | |||||||
| March 31, | |||||||
| 2011 | 2010 | ||||||
| Sales | $955,625 | $931,514 | |||||
| Gross margin | 88,655 | 97,437 | |||||
| Distribution | 18,097 | 19,102 | |||||
| Selling and administration | 42,673 | 40,694 | |||||
| Interest | 5,015 | 3,814 | |||||
| Subordinated debt interest expense | 16,064 | 17,333 | |||||
| Non-operating expense (income) | (1,258) | (883) | |||||
| Earnings before income taxes | 8,064 | 17,377 | |||||
| Provision for income taxes | 3,418 | 5,397 | |||||
| Net earnings | 4,646 | 11,980 | |||||
| Net earnings per share(1) | 0.14 | 0.37 | |||||
| EBITDA(2) | 32,205 | 41,905 | |||||
| The following is the reconciliation of net earnings to EBITDA: | |||||||
| March 31, | |||||||
| (in thousands of dollars) |
2011 $ |
2010 $ |
|||||
| Net earnings | 4,646 | 11,980 | |||||
| Income taxes | 3,418 | 5,397 | |||||
| Interest | 21,079 | 21,147 | |||||
| Amortization | 3,062 | 3,381 | |||||
| EBITDA | 32,205 | 41,905 | |||||
| For the Three Months Ended | |||||||
| (in thousands of dollars, except for per share amounts) | |||||||
| March 31, | |||||||
| 2011 | 2010 | ||||||
| Sales | $202,078 | $223,094 | |||||
| Gross margin | 17,566 | 21,222 | |||||
| Distribution | 4,914 | 4,567 | |||||
| Selling and administration | 8,995 | 9,197 | |||||
| Interest | 1,600 | 1,017 | |||||
| Subordinated debt interest expense | 4,016 | 4,873 | |||||
| Non-operating expense (income) | 82 | (241) | |||||
| Earnings (loss) before income taxes | (2,041) | 1,809 | |||||
| Provision for (recovery of) income taxes | (218) | 725 | |||||
| Net earnings (loss) | (1,823) | 1,084 | |||||
| Net earnings (loss) per share(1) | (0.06) | 0.03 | |||||
| EBITDA(2) | 4,096 | 8,569 | |||||
| The following is the reconciliation of net earnings (loss) to EBITDA: | |||||||
|
Three Months Ended March 31, |
|||||||
| (in thousands of dollars) |
2011 $ |
2010 $ |
|||||
| Net earnings (loss) | (1,823) | 1,084 | |||||
| Income taxes | (218) | 725 | |||||
| Interest | 5,616 | 5,890 | |||||
| Amortization | 521 | 870 | |||||
| EBITDA | 4,096 | 8,569 | |||||
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 Canadian generally accepted
accounting principles.
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, 2011 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.
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