BURNABY, BC, Nov. 13 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") reported its results for the three and six months ended September 30, 2008.
Results from Operations - Three Months Ended September 30, 2008
Sales revenue for the three months ended September 30, 2008 was $292.2 million compared to $286.9 million for the same quarter last fiscal year.
Sales grew slightly as the Company continued its focus on growing value added product market share. This offset weakness in engineered wood products' sales performance. Average prices of lumber and OSB remained largely constant period over period and commodity sales performance was steady.
For the second quarter, gross margin dollars increased by 3.3% to $35.1 million, compared to $34.0 million for the second quarter of last fiscal year. Gross margin percentages increased to 12.0% from 11.8%. This improvement is attributed to the Company's value added product mix strategy.
EBITDA performance remained seasonally strong, at $12.4 million, compared to $12.7 million in the same quarter last fiscal year.
Net earnings for the three months ended September 30, 2008 were $3.2 million or $0.10 per share, including a $1.0 million expense or $0.03 per share, related to Taiga's income tax reassessment settlement. For the three months ended September 30, 2007, Taiga earned $3.8 million or $0.12 per share.
Results from Operations - Six Months Ended September 30, 2008
Sales revenue for the six months ended September 30, 2008 was $576.7 million compared to $576.6 million for the six months ended September 30, 2007. Steady growth has been achieved in sales of value added products, offsetting weakness in average prices of lumber and engineered wood.
Gross margin dollars for the six month period increased by 3.6% to $69.5 million compared to $67.1 million for the same period last year. Gross margin percentage for the period increased to 12.0% from 11.6%.
EBITDA performance remained steady, at $25.6 million, compared to $26.5 million in the same quarter last year.
Net earnings for the six months ended September 30, 2008 were $7.3 million or $0.23 per share, including a $1.0 million expense or $0.03 per share, related to Taiga's income tax reassessment settlement. For the six months ended September 30, 2007, Taiga earned $7.8 million or $0.24 per share.
Tax Reassessment Settlement and New Dividend Policy
On October 15, 2008 Taiga settled its income tax reassessment and agreed to pay a total amount of $9.6 Million in income taxes and interest. Taiga refers you to its press releases of May 16, 2007, May 28, 2008 and October 15, 2008 and other financial disclosure, for further description.
As at March 31, 2008, Taiga had already expensed $8.6 Million of the Settlement Amount in its financial statements and the balance $1.0 Million was accounted for during the three months ended September 30, 2008.
The Reassessment was the result of an intra-corporate tax financing structure arranged and sold by Deloitte and Touche, the Company's advisors and auditors at the time. Taiga has launched a lawsuit against Deloitte and Touche for, among other things, breach of contract, breach of fiduciary duty and professional negligence.
In connection with the income tax reassessment settlement, Taiga announced a revised Dividend Policy. Pursuant to the revised policy, the Company intends to pay dividends on its common shares equal to 25% of the prior fiscal year's Net Income. This revised policy is designed to link dividends more directly to accomplishment. Taiga discontinued its monthly Dividend payment policy of $0.015 per share per month. Monthly payments on Taiga's Subordinated Notes continue, pursuant to the terms of the Note Indenture.
The payment of any dividends by the Company is subject to the discretion of its board of directors and subject to its determination of the Company's capital and operational requirements, adequacy of reserves and compliance with contractual and legal requirements.
Taiga will continue to consider new sources of financing to fund future operational requirements arising from anticipated slower demand.
Comparative Consolidated Statement of Earnings
For the Three Months Ended
(in thousands of dollars)
(Unaudited)
September 30, 2008 September 30, 2007
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Net sales $ 292,249 $ 286,935
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Gross profit 35,107 33,979
Expenses 22,799 22,211
Interest - other 1,733 2,314
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Operating income 10,575 9,454
Interest - sub note 3,946 3,946
Non-operating expense (income) 705 (272)
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Net income before income tax 5,924 5,780
Current income tax expense 2,774 1,952
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Net earnings (loss) $ 3,150 $ 3,828
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EPS(1) $ 0.10 $ 0.12
EBITDA(2) $ 12,386 $ 12,748
For the Six Months Ended
(in thousands of dollars)
(Unaudited)
September 30, 2008 September 30, 2007
-------------------------------------------------------------------------
Net sales $ 576,694 $ 576,585
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Gross profit 69,490 67,057
Expenses 44,923 42,480
Interest - other 3,765 4,660
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Operating income 20,802 19,917
Interest - sub note 7,891 7,891
Non-operating expense (income) 453 (547)
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Net income before income tax 12,458 12,573
Current income tax expense 5,152 4,797
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Net earnings (loss) $ 7,306 $ 7,776
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EPS(1) $ 0.23 $ 0.24
EBITDA(2) $ 25,648 $ 26,456
Notes:
(1) EPS is earnings per share calculated using the weighted average
number of shares.
(2) Reference is made above 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 the preliminary
prospectus referred to above under the headings "Non-GAAP Measures"
and "Reconciliation of Net Earnings to EBITDA and Adjusted EBITDA".
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. 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 factors 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.
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