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.