Taiga (TBL) delivered higher Q3 sales due to rising commodity prices and strong results at Exterior Wood, Inc located in Washougal, WA

Taiga (TBL) delivered higher Q3 sales due to rising commodity prices and strong results at Exterior Wood, Inc located in Washougal, WA

Canada NewsWire

BURNABY, BC, Nov. 12, 2020

BURNABY, BC, Nov. 12, 2020 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and nine months ended September 30, 2020.

Third Quarter Ended September 30, 2020 Earnings Results

The Company's consolidated net sales for the quarter ended September 30, 2020 were $500.7 million compared to $358.9 million over the same period last year. The increase in sales was largely due to Taiga experiencing higher selling prices for its commodity products during the quarter. Taiga's US operations also experienced a significant increase compared to the same period last year, particularly Exterior Wood, Inc acquired in 2018 and located in Washougal, WA.

Gross margin percentage increased by 9.1% for the three months ended September 30, 2020 compared to the same period last year. These increases were primarily due to rising commodity prices and robust results experienced by Taiga's US operations.

Net earnings for the quarter ended September 30, 2020 increased to $33.4 million from $8.3 million for the same period last year primarily due to the increase in gross margin.

EBITDA for the quarter ended September 30, 2020 was $50.5 million compared to $17.2 million for the same period last year. EBITDA increased primarily due to higher margin during the period partially offset by higher selling and administration expenses.

Nine Months Ended September 30, 2020 Earnings Results

The Company's consolidated net sales for the nine months ended September 30, 2020 were $1,177.8 million compared to $1,001.0 million over the same period last year. The increase in sales by $176.8 million or 18% was largely due to the Company experiencing higher selling prices for its commodity products during the period.

Gross margin for the nine months ended September 30, 2020 increased 4.1% compared with the same period last year. These increases were primarily due to rising commodity prices and increased margin earned by Taiga's US operations.

Net earnings for the nine months period ended September 30, 2020 was $53.2 million compared to $20.1 million over the same period last year primarily due to the foregoing.

EBITDA was $87.5 million for the nine months ended September 30, 2020, compared to $44.8 million over the same period last year.  EBITDA increased primarily due to higher margin during the period partially offset by higher selling and administration expenses.

Management Update on the COVID-19 Pandemic

The outbreak of the coronavirus, also known as "COVID-19", has spread across the globe and is impacting worldwide economic activity. Conditions surrounding the coronavirus continue to rapidly evolve and government authorities have implemented emergency measures to mitigate the spread of the virus. As at the financial statement approval date, the outbreak and the related mitigation measures have had the following impacts on the Company's operations, among others: sales decline of over 30% for the month of April.  The Company's revenues recovered subsequent to this. However, the extent to which these events may impact the Company's business activities will depend on future developments, such as the ultimate geographic spread of the disease, the duration of the outbreak, travel restrictions, subsequent outbreaks, business disruptions, and the effectiveness of actions taken in Canada and other countries to contain and treat the disease.  These events are highly uncertain and as such, the Company cannot determine the ultimate financial impacts at this time.  However, the Company recognizes that there will be economic and financial challenges to be faced for the balance of the fiscal year

Condensed Consolidated Statement of Earnings

For the Three Months Ended


                  September 30,

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

2020

2019

Sales

500,667

358,875

Gross margin

91,515

36,497

Distribution expense

6,766

6,684

Selling and administration expense

36,898

15,415

Finance expense

1,910

2,385

Subordinated debt interest expense

218

218

Canada Emergency Wage Subsidy

(17)

-

Other income

174

(30)

Earnings before income taxes

45,566

11,824

Income tax expense

12,136

3,486

Net earnings

33,430

8,338

Net earnings per share(1)

0.31

0.07

EBITDA(2)

50,489

17,236

 

The following is the reconciliation of net earnings to EBITDA:     

September 30,

(in thousands of Canadian dollars)

2020

2019

Net earnings

33,430

8,338

Income tax expense

12,136

3,486

Finance and subordinated debt interest expense

2,128

2,603

Amortization

2,795

2,809

EBITDA

50,489

17,236

 

For the Nine Months Ended


September 30,

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

2020

2019

Sales

1,177,840

1,000,997

Gross margin

164,809

98,864

Distribution expense

19,404

19,612

Selling and administration expense

69,046

42,874

Finance expense

6,393

7,455

Subordinated debt interest expense

656

656

Canada Emergency Wage Subsidy

(2,919)

-

Other income

91

(122)

Earnings before income taxes

72,138

28,389

Income tax expense

18,947

8,247

Net earnings

53,191

20,142

Net earnings per share(1)

0.48

0.18

EBITDA(2)

87,494

44,800

 

The following is the reconciliation of net earnings to EBITDA:   

September 30,

(in thousands of Canadian dollars)

2020

2019

Net earnings

53,191

20,142

Income tax expense

18,947

8,247

Finance and subordinated debt interest expense

7,049

8,111

Amortization

8,307

8,300

EBITDA

87,494

44,800

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 nine months ended September 30, 2020 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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