BURNABY, BC, Aug. 7, 2020 /CNW/ - Taiga Building Products
Ltd. ("Taiga" or the "Company") today reported its financial
results for the three and six months ended June 30, 2020.
Second Quarter Ended June 30,
2020 Earnings Results
The Company's consolidated net sales for the quarter ended
June 30, 2020 were $356.9 million compared to $354.7 million over the same period last year.
The increase in sales by $2.2 million
or 1% was largely due to the Company experiencing higher selling
prices for its commodity products during the quarter which was
offset by a significant decline in sales during April 2020 as a result of COVID-19.
Gross margin for the quarter ended June
30, 2020 increased to $42.7
million from $34.9 million
over the same period last year. Gross margin percentage was 12.0%
for the three months ended June 30,
2020 compared to 9.8% in the same period last year. These
increases were primarily due to rising commodity prices
Net earnings for the quarter ended June
30, 2020 increased to $13.1
million from $7.1 million over
the same period last year primarily due to increased gross
margin.
EBITDA for the quarter ended June 30,
2020 was $23.9 million
compared to $16.4 million for the
same period last year. EBITDA increased primarily due to higher
margin during the quarter combined with the Canada Emergency Wages Subsidy (CEWS) reducing
overall expenses.
Six Months Ended June 30,
2019 Earnings Results
Sales for the six months ended June 30,
2020 were $677.2 million
compared to $642.1 million over the
same period last year. The increase in sales by $35.1 million or 5% was largely due to the
Company experiencing higher selling prices for its commodity
products during the period which was offset by a significant
decline in sales during April 2020 as
a result of COVID-19.
Gross margin dollars for the six months ended June 30, 2020 increased to $73.3 million from $62.4
million over the same period last year. Gross margin
percentage for the six months ended June 30,
2020 increased to 10.8% from 9.7% for the same period last
year. These increases were primarily due to rising commodity
prices
Net earnings for the six-month period ended June 30, 2020 were $19.8
million compared to $11.8
million for the same period last year.
EBITDA for the six months ended June 30,
2020 was $37.0 million
compared to $27.5 million for the
same period last year. EBITDA increased primarily due to
higher margin during the period combined with the Canada Emergency Wages Subsidy (CEWS) reducing
overall 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
|
|
June 30,
|
(in thousands of Canadian dollars, except for per share
amounts) |
2020
|
2019
|
Sales
|
356,894
|
354,723
|
Gross
margin
|
42,741
|
34,910
|
Distribution
expense
|
6,238
|
6,775
|
Selling and
administration expense
|
18,384
|
14,583
|
Finance
expense
|
2,206
|
2,840
|
Subordinated debt
interest expense
|
219
|
219
|
Canada Emergency Wage
Subsidy
|
(2,902)
|
-
|
Other
income
|
(52)
|
(55)
|
Earnings before
income taxes
|
18,648
|
10,547
|
Income tax
expense
|
5,500
|
3,512
|
Net
earnings
|
13,148
|
7,035
|
Net earnings per
share(1)
|
0.12
|
0.06
|
EBITDA(2)
|
23,862
|
16,414
|
The following is the
reconciliation of net earnings to EBITDA:
|
June 30,
|
(in thousands of
Canadian dollars)
|
|
2020
|
2019
|
Net
earnings
|
|
13,148
|
7,073
|
Income tax
expense
|
|
5,500
|
3,512
|
Finance and
subordinated debt interest expense
|
|
2,425
|
3,059
|
Amortization
|
|
2,789
|
2,770
|
EBITDA
|
|
23,862
|
16,414
|
For the Six Months
Ended
|
|
June 30,
|
(in thousands of
Canadian dollars, except for per share amounts)
|
2020
|
2019
|
Sales
|
677,173
|
642,122
|
Gross
margin
|
73,294
|
62,367
|
Distribution
expense
|
12,638
|
12,812
|
Selling and
administration expense
|
32,148
|
27,610
|
Finance
expense
|
4,483
|
5,070
|
Subordinated debt
interest expense
|
438
|
438
|
Canada Emergency Wage
Subsidy
|
(2,902)
|
-
|
Other
income
|
(83)
|
(92)
|
Earnings before
income taxes
|
26,572
|
16,529
|
Income tax
expense
|
6,811
|
4,761
|
Net
earnings
|
19,761
|
11,768
|
Net earnings per
share(1)
|
0.18
|
0.10
|
EBITDA(2)
|
37,005
|
27,528
|
The following is the
reconciliation of net earnings to EBITDA:
|
June 30,
|
(in thousands of
Canadian dollars)
|
|
2020
|
2019
|
Net
earnings
|
|
19,761
|
11,768
|
Income tax
expense
|
|
6,811
|
4,761
|
Finance and
subordinated debt interest expense
|
|
4,921
|
5,508
|
Amortization
|
|
5,512
|
5,491
|
EBITDA
|
|
37,005
|
27,528
|
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
months ended June 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.