SJ Stella Jones Inc

Stella-Jones Inc. (TSX:SJ) today announced financial results for its third
quarter ended September 30, 2012.


"Stella-Jones delivered a strong operating and financial performance in the
third quarter. Our constant focus on optimizing efficiency continues to yield
solid year-over-year improvements in net income and cash flow. Demand for our
core products remains solid, as we leverage the strengths of our network and
further expand our reach across the North American market for treated wood
products," said Brian McManus, President and Chief Executive Officer of
Stella-Jones.




----------------------------------------------------------------------------
                                      Quarters ended       Nine months ended
Financial highlights                       Sept. 30,               Sept. 30,
(in thousands of Canadian                                                   
 dollars, except per share                                                  
 data)                              2012        2011        2012        2011
----------------------------------------------------------------------------
Sales                            195,435     181,812     558,149     492,628
Operating income                  31,799      25,569      88,469      67,569
Net income for the period         20,683      16,569      56,524      42,340
  Per share - basic ($)             1.29        1.04        3.54        2.66
  Per share - diluted ($)           1.29        1.03        3.52        2.65
Cash flow from operations                                                   
 (1)                              35,291      28,443      98,434      74,867
Weighted average shares                                                     
 outstanding (basic, in                                                     
 '000s)                           15,989      15,950      15,975      15,943
----------------------------------------------------------------------------
                                                                            
(1)  Before changes in non-cash working capital components and interest and 
     income tax paid.                                                       



THIRD QUARTER RESULTS

Sales for the quarter ended September 30, 2012 totalled $195.4 million, an
increase of $13.6 million, or 7.5%, over last year's sales of $181.8 million.
The Russellville, Arkansas operating facility acquired from Thompson Industries,
Inc. on December 7, 2011 ("Russellville Facility") contributed railway tie and
industrial product sales of approximately $12.3 million, while the conversion
effect from fluctuations in the value of the Canadian dollar, Stella-Jones'
reporting currency, versus the U.S. dollar, increased the value of U.S. dollar
denominated sales by about $4.1 million when compared with the previous year.


Railway tie sales amounted to $114.7 million, an increase of $22.3 million, or
24.2%, over sales of $92.3 million last year, reflecting solid market demand as
well as a $12.2 million contribution from the Russellville Facility. Utility
pole sales amounted to $53.1 million, down slightly from $55.5 million last
year. The variation reflects the year-over-year timing difference in
transmission pole orders for special projects, which had resulted in stronger
sales in the third quarter of 2011. Meanwhile, sales of distribution poles held
steady, reflecting regular demand for maintenance projects. Industrial product
sales reached $15.4 million, compared with $23.3 million a year earlier, due to
a reduction in the tie recycling business and lower demand for marine
applications in Canada. Sales of residential lumber totalled $12.3 million, up
14.9% from $10.7 million a year earlier as a result of more favourable weather
compared with the same period last year and stronger demand in Western Canada.


Operating income was $31.8 million or 16.3% of sales, up from $25.6 million or
14.1% of sales last year. The increase in monetary terms mainly reflects higher
business activity and the addition of the Russellville Facility, while the
increase as a percentage of sales is mainly due to a better absorption of fixed
costs resulting from higher business activity and from greater efficiency
throughout the Company's plant network.


Net income for the period increased 24.8% to $20.7 million or $1.29 per share,
fully diluted, compared with $16.6 million or $1.03 per share, fully diluted, in
the third quarter of 2011. Cash flow from operating activities before changes in
non-cash working capital components and interest and income tax paid rose 24.1%
to $35.3 million.


NINE-MONTH RESULTS

For the nine-month period ended September 30, 2012, sales amounted to $558.1
million, up 13.3% from $492.6 million a year earlier. The Russellville Facility
contributed sales of $32.0 million, while the conversion effect from
fluctuations in the value of the Canadian dollar, versus the U.S. dollar,
increased the year-over-year value of U.S. dollar denominated sales by about
$11.1 million.


Operating income reached $88.5 million or 15.9% of sales, compared with $67.6
million or 13.7% of sales last year. Net income for the period was $56.5 million
or $3.52 per share, fully diluted, up 33.5% from $42.3 million or $2.65 per
share, fully diluted, a year earlier. Cash flow from operating activities before
changes in non-cash working capital components and interest and income tax paid
rose 31.5% to $98.4 million.


FINANCIAL POSITION REMAINS HEALTHY

As at September 30, 2012, the Company's long-term debt, including the current
portion, amounted to $184.8 million, down from $192.3 million three months
earlier. The ratio of total debt, including short-term bank indebtedness, to
total capitalization was 0.33:1 as at September 30, 2012, down from 0.35:1 three
months earlier.


Working capital stood at $318.2 million as at September 30, 2012, up from $273.2
million at the beginning of the year. This variation mainly reflects an increase
of $22.8 million in accounts receivable, as a result of strong sales growth in
the first nine months of 2012, and a $25.7 million increase in inventories due
to higher planned inventory levels of air-dried wood, both to improve future
treating cycles and meet anticipated sales growth.


QUARTERLY DIVIDEND OF $0.16 PER SHARE

On November 8, 2012, the Board of Directors declared a quarterly dividend of
$0.16 per common share payable on December 20, 2012 to shareholders of record as
at the close of business on December 3, 2012.


OUTLOOK

"Driven by favourable fundamentals, we expect demand for our core products to
remain solid in the last quarter of 2012 and in 2013. The proposed acquisition
of McFarland Cascade Holdings, Inc. and the construction of a new railway tie
facility in Cordele, Georgia will further enhance Stella-Jones' offerings in its
core markets. These expansion initiatives will strengthen our position as a
leading North American supplier of treated wood products, as well as create
additional value for shareholders," concluded Mr. McManus.


CONFERENCE CALL

Stella-Jones will hold a conference call to discuss these results on Friday,
November 9, 2012, at 10:00 AM Eastern Time. Interested parties can join the call
by dialling 647-427-7450 (Toronto or overseas) or 1-888-231- 8191 (elsewhere in
North America). Parties unable to call in at this time may access a tape
recording of the meeting by calling 1-855-859-2056 and entering the passcode
35391409#. This tape recording will be available on November 9, 2012 as of 1:00
PM Eastern Time until 11:59 PM Eastern Time on Friday, November 16, 2012.


NON-IFRS FINANCIAL MEASURES

Operating income and cash flow from operations are financial measures not
prescribed by IFRS and are not likely to be comparable to similar measures
presented by other issuers. Management considers these measures to be useful
information to assist knowledgeable investors in evaluating the cash generating
capabilities of the Company.


ABOUT STELLA-JONES

Stella-Jones Inc. (TSX:SJ) is a leading producer and marketer of pressure
treated wood products. The Company supplies North America's railroad operators
with railway ties, timbers and recycling services; and the continent's
electrical utilities and telecommunications companies with utility poles.
Stella-Jones also provides industrial products and services for construction and
marine applications, as well as residential lumber to retailers and wholesalers
for outdoor applications. The Company's common shares are listed on the Toronto
Stock Exchange.


Except for historical information provided herein, this press release may
contain information and statements of a forward - looking nature concerning the
future performance of the Company. These statements are based on suppositions
and uncertainties as well as on management's best possible evaluation of future
events. Such factors may include, without excluding other considerations,
fluctuations in quarterly results, evolution in customer demand for the
Company's products and services, the impact of price pressures exerted by
competitors, the ability of the Company to raise the capital required for
acquisitions, and general market trends or economic changes. As a result,
readers are advised that actual results may differ from expected results.


Note to readers: Complete unaudited third quarter financial statements are
available on Stella-Jones' website at www.stella-jones.com


FOR FURTHER INFORMATION PLEASE CONTACT: 
Stella-Jones Inc.
Eric Vachon, CPA, CA
Senior Vice-President and Chief Financial Officer
(514) 940-3903
(514) 934-5327 (FAX)
evachon@stella-jones.com


Martin Goulet, CFA
MaisonBrison Communications
(514) 731-0000
martin@maisonbrison.com

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