Taiga Building Products Ltd. - First Quarter Earnings Turnaround due to Cost Reductions and Foreign Exchange Gains
Fri Jul 31, 5:28 PMBURNABY, BC, July 31 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") is pleased to announce its results for the three months ended June 30, 2009. Net earnings were $6.6 million or $0.20 per share compared to $4.2 million or $0.13 per share for the comparative quarter in the previous year and also improved from a net loss of $4.5 million or $0.14 loss per share of the fourth quarter ended March 31, 2009. Earnings improvements were attributable to cost reductions and foreign exchange gains.
Sales were reduced by 17.5% to $246.9 million, from $299.3 million in the first quarter of the prior fiscal year, primarily due to dramatic declines in new home construction in Western Canada.
Gross margin dollars decreased to $27.2 million from $31.8 million for the first quarter year over year. Gross margin percentage for the quarter increased to 11.0% from 10.6% in the first quarter of the prior fiscal year. The increase in gross margin percentage was attributable to an upward movement in commodity prices.
EBITDA for the three months ended June 30, 2009 was $15.3 million compared to $13.3 million in the same period in 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 June 2009 was $4.0 million as at June 30, 2009.
Selected Consolidated Statement of Earnings
For the Three Months Ended June 30
(in thousands of dollars, except for per share amounts)
(Unaudited)
2009 2008
$ $
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Sales 246,911 299,336
Gross margin 27,222 31,783
Distribution 4,264 3,996
Selling and administration 8,707 15,528
Interest 1,043 2,032
Subordinated debt interest expense 4,027 3,946
Non-operating income (183) (253)
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Earnings before income taxes 9,364 6,534
Provision for income taxes 2,771 2,378
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Net earnings 6,593 4,156
Net earnings per share(1) 0.20 0.13
EBITDA(2) 15,320 13,298
The following is the reconciliation of net earnings to EBITDA:
Three Months Ended
June 30,
2009 2008
(in thousands of dollars) $ $
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Net Earnings 6,593 4,156
Income Tax Expense 2,771 2,378
Interest Expense 5,070 5,978
Amortization 886 786
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EBITDA 15,320 13,298
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 June 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.
Contactsregarding Taiga please contact: Tom StefanVice 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
48.60 (0.42%)
