Taiga's (TBL) Q2 sales decreased 16% due to lower commodity prices

Taiga's (TBL) Q2 sales decreased 16% due to lower commodity prices

Canada NewsWire

BURNABY, BC, Aug. 8, 2019

BURNABY, BC, Aug. 8, 2019 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and six months ended June 30, 2019.

Second Quarter Ended June 30, 2019 Earnings Results   

The Company's consolidated net sales for the quarter ended June 30, 2019 were $354.7 million compared to $422.9 million over the same period last year. The decrease in sales by $68.2 million or 16% was largely due to decreased selling prices for commodity products; this was offset by the inclusion of Exterior Wood Inc.'s results, which was acquired in July of 2018.

Gross margin for the second quarter decreased to $34.9 million from $39.4 million in the same quarter last year. The decrease in gross margin was primarily due to lower commodity prices in the current quarter compared to the same quarter last year; this was offset by the inclusion of Exterior Wood Inc.'s results, which was acquired in July of 2018.

Net earnings for the quarter ended June 30, 2019 increased to $7.1 million from $6.4 million for the same period last year primarily due to the foregoing.

EBITDA for the quarter ended June 30, 2019 was $16.4 million compared to $16.1 million for the same period last year. Management estimates that if IFRS 16 were not taken into effect as of January 1, 2019 that EBITDA would have been $1.7M lower, or $14.7M for the quarter ended June 30, 2019.

Six Months Ended June 30, 2019 Earnings Results

Sales for the six months ended June 30, 2019 were $642.1 million compared to $747.5 million over the same period last year. The decrease in sales by $105.4 million or 14% was largely due to decreased selling prices for commodity products; this was offset by the inclusion of Exterior Wood Inc.'s results, which was acquired in July of 2018.

Gross margin dollars for the six months ended June 30, 2019 decreased to $62.4 million from $70.2 million over the same period last year. Gross margin percentage for the six months ended June 30, 2019 increased to 9.7% from 9.4% for the same period last year.

Net earnings for the six month period ended June 30, 2019 were $11.8 million compared to $13.1 million for the same period last year.

EBITDA for the six months ended June 30, 2019 was $27.5 million compared to $27.6 million for the same period last year. Management estimates that if IFRS 16 were not taken into effect as of January 1, 2019 that EBITDA would have been $3.0M lower, or $24.5M for the six months ended June 30, 2019.

Condensed Consolidated Statement of Earnings

For the Three Months Ended


June 30,

(in thousands of Canadian dollars, except for per share amounts)

2019

2018

Sales

354,723

422,875

Gross margin

34,910

39,428

Distribution expense

6,891

6,012

Selling and administration expense

14,432

18,558

Finance expense

2,840

1,700

Subordinated debt interest expense

219

219

Other income

(55)

(104)

Earnings before income taxes

10,583

13,043

Income tax expense

3,512

6,685

Net earnings

7,071

6,358

Net earnings per share(1)

0.06

0.05

EBITDA(2)

16,412

16,128

 

The following is the reconciliation of net earnings to EBITDA:


June 30,

(in thousands of Canadian dollars)

2019

2018

Net earnings

7,071

6,358

Income tax expense

3,512

6,685

Finance and subordinated debt interest expense

3,059

1,919

Amortization

2,770

1,166

EBITDA

16,412

16,128

 

For the Six Months Ended


June 30,

(in thousands of Canadian dollars, except for per share amounts)

2019

2018

Sales

642,122

747,472

Gross margin

62,367

70,186

Distribution expense

12,812

11,895

Selling and administration expense

27,610

33,138

Finance expense

5,070

3,015

Subordinated debt interest expense

438

399

Other income

(92)

(200)

Earnings before income taxes

16,529

21,939

Income tax expense

4,761

8,791

Net earnings

11,768

13,148

Net earnings per share(1)

0.10

0.11

EBITDA(2)

27,528

27,647

 

The following is the reconciliation of net earnings to EBITDA:                                      


June 30,

(in thousands of Canadian dollars)

2019

2018

Net earnings

11,768

13,148

Income tax expense

4,761

8,791

Finance and subordinated debt interest expense

5,508

3,414

Amortization

5,491

2,294

EBITDA

27,528

27,647




Notes:


(1)

Earnings per share is 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 IFRS.
For the disclosure of the manner in which EBITDA is calculated and reconciliation to net earnings refer to the
"EBITDA" section of the Company's management's discussion and analysis which will be available shortly on
SEDAR at www.sedar.com.

 

The foregoing selected financial information is qualified in its entirety by and should be read in conjunction with, our unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2019 and accompanying notes and management's discussion and analysis which will be available shortly on SEDAR at www.sedar.com.

SOURCE Taiga Building Products Ltd.

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