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Edited Transcript of CWX.TO earnings conference call or presentation 9-Nov-18 3:00pm GMT

Q3 2018 CanWel Building Materials Group Ltd Earnings Call

VANCOUVER Dec 18, 2018 (Thomson StreetEvents) -- Edited Transcript of CanWel Building Materials Group Ltd earnings conference call or presentation Friday, November 9, 2018 at 3:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ali Mahdavi

CanWel Building Materials Group Ltd. - Head of IR

* Amardeip Singh Doman

CanWel Building Materials Group Ltd. - Chairman & CEO

* James S. Code

CanWel Building Materials Group Ltd. - CFO

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Conference Call Participants

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* Anoop Prihar

GMP Securities L.P., Research Division - MD & Special Situations Analyst

* Charan Sanghera

RBC Capital Markets, LLC, Research Division - Senior Associate

* Colin Healey

Haywood Securities Inc., Research Division - Research Analyst of Mining

* Hamir Patel

CIBC Capital Markets, Research Division - Director of Institutional Equity Research & Paper and Forest Products Analyst

* Leon Aghazarian

National Bank Financial, Inc., Research Division - Special Situation Analyst

* Yuri Lynk

Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst

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Presentation

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Operator [1]

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Good day, and welcome to the CanWel Building Materials Group Ltd. Third Quarter 2018 Financial Results Conference Call.

Today's call is being recorded.

At this time, I would like to turn the conference over to Ali Mahdavi. Please go ahead.

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Ali Mahdavi, CanWel Building Materials Group Ltd. - Head of IR [2]

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Good morning, everyone, and thanks for joining us for CanWel Building Materials' Third Quarter 2018 Financial Results Conference Call.

Joining us this morning are CanWel's Chairman and Chief Executive Officer, Amar Doman; and Chief Financial Officer, James Code.

If you have not seen the news release which was issued yesterday after the close of markets, it is available on the company's website at canwel.com as well as on SEDAR, along with our MD&A and audited financial statements. I would also like to remind you that a replay of this call will be accessible until midnight on November 23. Following the presentation, we will conduct a Q&A session. Instructions will be provided at that time for you to join the queue for questions.

Before we begin, we are required to provide the following statements regarding forward-looking information which is made on behalf of CanWel Building Materials Group Ltd. and all of its representatives on this call. Remarks and answers to your questions today may contain forward-looking information about future events or the company's future performance. This information is subject to risks and uncertainties that may cause actual events or results to differ materially. Any information regarding forward-looking statements is made as of the date of this call, and the company does not undertake to update any forward-looking statements. Please read the forward-looking statements and risk factors in the MD&A, as these outline the material factors which could cause or would cause actual results to differ. The company will not provide guidance regarding future earnings during today's call, and management does not anticipate providing guidance in future quarterly or interim communications with investors.

I would like to now turn the call over to Amar.

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [3]

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Thanks, Ali. And good morning, everybody. Thanks for joining us on today's call.

I'll begin by highlighting some of our key financial metrics for the 3- and 9-month period in 2018, followed by some color on our operations during the quarter and what we are seeing so far which gives us continued confidence across our business segments. After that, I'll hand the call over to Jay, who will further drill into the numbers.

On a trailing 12-month basis, we continued to show growth and resilience in our business, with revenues once again surpassing the $1 billion mark. This is the result of our efforts over a number of years to build a diversified business model geographically and also form -- also from a product offering perspective through organic growth and acquisitions while providing best-in-class service to our customers. In short, CanWel is in the best position it has ever been, and we are going to continue to build on that.

The macroeconomic environment brought on some challenges to the lumber, OSB and plywood markets during the third quarter. We all saw prices drop by more than 50% from the peak in a matter of weeks. These movements, as they should have, had a negative impact on the equity value of a number of key industry players which are purely dependent on the underlying commodity prices. However, in the case of CanWel, I want to be crystal clear that we are a well-diversified distributor of building materials products and not a pure commodity price-driven company. Lumber-related products are a big part of what we do. However, it is our view that the market is missing the strength in the parts of the business which we put into place to withstand such pricing pressures.

As a result of these efforts and despite the aforementioned weak economic backdrop, I am pleased to report that, during the third quarter, we again achieved strong results across our key financial metrics with revenues increasing 10.5% to $350 million, gross margin dollars amounting to just under $51 million or 14.5% of revenues, EBITDA totaling $20.1 million and net earnings amounting to $8.5 million.

During the quarter, we paid a quarterly dividend of $0.14 per share and we continued to focus on growth and ongoing operational efficiencies. We also announced that we, subsequent to quarter-end, completed a bought deal offering of senior unsecured notes for total gross proceeds of $60 million. This is part of CanWel's balance sheet optimization plan to support its growth objectives. While the net proceeds of the offering were initially applied to reduce bank debt, the notes provide CanWel with readily available growth capital at an attractive locked-in cost of 6.375% per annum for a 5-year period in a rising rate environment.

In summary. During a weak macroeconomic quarter which included a lot of noise across the global equity markets stemming from a variety of geopolitical to economic data issues and the pricing of the commodities relevant to our business being negatively impacted, we continued to deliver top line growth, strong gross margins and earnings while further strengthening our balance sheet to take advantage of strategic and opportunistic growth opportunities. Overall, we continue to be very pleased with the net impact of our actions to date, which have provided us with these improved returns, while our operations continue to show strong performance.

We will continue to monitor the North American landscape for opportunistic and strategic growth opportunities to complement our organic growth profile. As we have done so in the past, we will remain extremely disciplined on pricing and evaluating any and all growth opportunities that may become available to us.

With year-to-date revenues up 20% and over $1 billion and EBITDA up 31% at a record $63.5 million (sic) [$63.1 million], 2018 has proven to be a strong year so far, and we remain very excited about the prospects for our business.

With that, I would like to ask Jay Code, our CFO, to take over and provide a review of the company's third quarter financial results in greater detail. And we will then open the call for questions.

Over to you, Jay.

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James S. Code, CanWel Building Materials Group Ltd. - CFO [4]

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Thank you, Amar. And good morning, everyone.

And just a reminder that CanWel's third quarter results were released after the close of market yesterday. Our results are presented in accordance with International Financial Reporting Standards and presented in Canadian dollars, unless otherwise noted. And please note our operations are, at times, impacted by the seasonal nature of our industry, and accordingly, our operating results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.

Sales for the 3-month period ended September 30, 2018, were $350.2 million versus $316.8 million in the comparative period of 2017, an increase of $33.3 million or 10.5% due to the foregoing or to the factors discussed below.

Sales for our Distribution segment increased by $34.6 million or 11.4% over the comparative 3-month period largely due to the inclusion of the results from our Honsador acquisition and the company's continuing focus on its product mix strategies and target customer base. Sales for the Forestry segment decreased by $0.8 million or 6%, inclusive of intersegment sales. As was the case in the previous year, 2018 third quarter sales for the segment were negatively affected by wildfires in British Columbia, with company harvesting activities temporarily halted due to forest area closures, resulting in decreased harvest and customer delivery levels. Direct impact to the company's forest lands from forest fires was minimal.

Gross margin dollars increased to $50.8 million in the quarter compared to $42 million in the comparative quarter of 2017, an increase of $8.8 million or 20.9%. Gross margin percentage was 14.5% in the quarter, an increase from the 13.3% achieved in the same quarter of 2017. This increase in margin dollars and margin percentage is mainly due to the positive impacts from our Honsador acquisition.

Expenses for the 3-month period ended September 30, 2018, were $35.2 million, as compared to $24.9 million for the same quarter in 2017, an increase of $10.3 million or 41.4% due to the factors discussed below. As a percentage of sales, expenses were 10.1% in the quarter versus 7.9% during the comparative quarter in 2017. Distribution, selling and administration expense increased by $9.1 million or 42% to $30.7 million in the third quarter of 2018 from $21.6 million in the same period of 2017. The increase is primarily due to the additional expenses relating to the Honsador operations. As a percentage of sales, these expenses were 8.8% in the quarter compared to 6.8% in the comparative period in 2017.

In the 3-month period ended September 30, 2018, depreciation and amortization expense was $4.6 million versus $3.3 million in the comparative period, with the increase largely reflecting the inclusion of Honsador this year.

Finance costs for the third quarter of 2018 were $3.1 million, an increase of $1.2 million or 63% from $1.9 million in the same period in 2017 resulting (inaudible) higher interest rates on the company's variable-rate loan facilities and higher average borrowing levels driven by the working capital requirements of Honsador in the current quarter. Acquisition costs in the comparative period of 2017 related to due diligence costs; allocation of management resources; as well as legal, environmental, financial and other advisory services primarily related to the advancement of the Honsador acquisition. There were no comparable costs in the current 3-month period.

Earnings before interest, taxes, depreciation and amortization for the 3-month period ended September 30, 2018, were $20.1 million versus $21.3 million in the comparative quarter of 2017, a decrease of $1.2 million or about 6% largely due to the impact of the significant, abrupt fall in commodity prices on both sales and gross margin. EBITDA for the third quarter of 2017 was impacted by acquisition costs of $0.4 million. Adjusted EBITDA before these nonrecurring items was $20.1 million compared to $21.7 million in the same quarter of 2017, a decrease of $1.6 million or 7.4% compared to the same quarter in 2017.

Our net earnings for the quarter ended September 30, 2018, were $8.5 million compared to $11.6 million in the period -- for the period in 2017, a decrease of $3.1 million or 26.7% due to the foregoing factors.

Moving to the statement of cash flows.

Operating activities generated $47.1 million in cash before noncash working capital versus $32.7 million in the comparative 9-month period of 2017. This year's stronger seasonal increase in cash generated is primarily a result of the inclusion of the Honsador operations and the positive impact of higher construction materials pricing earlier in the year.

For the 9-month period ended September 30, 2018, dividends (inaudible) shareholders amounted to $32.6 million versus $6.6 million (sic) [$26.6 million] in the comparative period in 2017. The increase in dividends paid reflects the greater number of shares outstanding in the current period resulting from the 2017 private placement and 2017 public offerings. The dividends declared and paid on a per share basis were unchanged from the comparative period.

As at November 8, 2018, there were 77,744,598 common shares issued and outstanding.

Our capital expenditures continue to be planned and managed prudently and deliberately to ensure capital is effectively deployed to provide long-term sustainable value to the business.

This concludes our formal commentary, and we'd be happy now to respond to any questions that you may have.

Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question is from Yuri Lynk from Canaccord Genuity.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [2]

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Just trying to get some pieces of the puzzle for next year. I understand the margin, gross margin, this quarter was negatively impacted by the commodity prices. I get that. If you look longer term since you bought Honsador, your gross margin has been about 15.2%. So that's 3 quarters of rising lumber prices and 1 really bad one, so is that number a good kind of run rate? Or would that be a bit inflated because of the 3 quarters of nice tailwinds you had just before Q3?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [3]

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Yes, I think that it's somewhere in that zone, Yuri. I don't think we can put out a precise gross margin number just due to some moving parts in the business, but it's in that zip code. We definitely had some good tailwinds, for sure, but as you recall, those tailwinds don't really affect our gross margin too much up or down, as reflected by the collapse here and how well we managed it. So you can see that we don't fall big or go up big due to the commodity movements, but I think we're somewhere in that zone as we start to recover and get stable pricing again in all product lines into 2019.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [4]

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Amar, what would have been the gross margin impact in the quarter? Are we talking 50 bps, 100 bps?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [5]

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Jay, maybe you can probably respond to that one better than me.

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James S. Code, CanWel Building Materials Group Ltd. - CFO [6]

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Yes. It is within that range, Yuri. It would be closer to 100 basis points, I would say, if you factored in the full drop.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [7]

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And as long as -- even if prices were to stabilize at lower levels, you should -- in a stable environment you should be able to earn your "normal margin," right? It's just that when they move up or down quickly is where it gets bumped around a little bit.

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [8]

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Correct.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [9]

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All right. Also for next year, I mean, what's kind of contribution should we expect from the Junction City facility, assuming that ramps up later this quarter?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [10]

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Yes, we can't really put out an estimate there, Yuri. We're just going to be firing up the facility in a few weeks, so we don't really have a firm outlook on that. I think in board footage we could probably estimate 10 million to 15 million feet as we get started probably after the first quarter. So I would think that would probably be kind of the starting point for 2019.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [11]

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Okay. That doesn't mean much to me then. How much have you invested in that facility? It's about $10 million all in.

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [12]

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It will be under that, but -- yes, go ahead, Jay.

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James S. Code, CanWel Building Materials Group Ltd. - CFO [13]

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Yes. I was just going to say, Yuri, we didn't disclose the actual initial purchase price for that equipment purchase, but when you look at our CapEx year-to-date, certainly it was a significant part of that overall $12 million number.

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Yuri Lynk, Canaccord Genuity Limited, Research Division - Director and Senior Engineering & Construction Equity Analyst [14]

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Yes, okay, yes. I'm just trying to figure, guys, if it's something that I shouldn't be really trying to model in next year if it's going to be significant, minimal. Just how to -- just any help on that (inaudible).

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [15]

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Yes, I think, Yuri, it's maybe -- it's just hard for us to say because it hasn't started yet. We've got ideas, but we've got to get out and sell material and get going. And it's Pacific Northwest plant, so the business really comes April through, call it, October due to the weather out in the West Coast. So we just don't have that visibility yet, but 10 million to 15 million feet. If you said maybe the material is between $500 and $600 1,000 board feet, that could probably give you a little bit of a view into the revenues.

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Operator [16]

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And moving on, our next question is from Lean -- Leon Aghazarian, National Bank Financial.

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Leon Aghazarian, National Bank Financial, Inc., Research Division - Special Situation Analyst [17]

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On -- I just had a question on the working capital actually. I mean we see obviously the fluctuation in lumber prices. I realize there is a bit of a lag, and there isn't a direct correlation with your inventory values to lumber prices. So could you just kind of help us understand a little bit in terms of what inventory value will be probably around for the Q4 mark and coming, going into next year, assuming prices stay where they are. I'm just trying to understand what the variability is going to be there in terms of the working capital.

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James S. Code, CanWel Building Materials Group Ltd. - CFO [18]

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Sure, Leon. It's Jay here. Just I would expect, of course again assuming that prices stay around where they are now, which is a little bit under where they were at the close of the fourth quarter of 2017, I think our volumes may be up in certain locations just planning-wise for the 2019 treated wood season. So I would expect they'll be level with the close of last year or maybe slightly higher.

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Leon Aghazarian, National Bank Financial, Inc., Research Division - Special Situation Analyst [19]

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And that's just based on when comparing the pricing of Q4 '18 to Q4 '17, correct?

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James S. Code, CanWel Building Materials Group Ltd. - CFO [20]

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Pricing and volumes, yes.

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Leon Aghazarian, National Bank Financial, Inc., Research Division - Special Situation Analyst [21]

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Okay. And if you can just remind us. I mean I seem to remember that you hold about 1 month of lumber inventory. Is that correct? So is that kind of the lag that we should be seeing in terms of pricing?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [22]

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Yes, correct. It depends on the region, but on average in the CanWel distribution system in Canada 3 to 4 weeks is kind of where we live, depending on the item, but we try to turn then. And we also have a lot of assistance with vendor-managed inventory, which certainly assists us these during periods of fluctuation either up or down and not being as sensitive to it as demonstrated here. Probably this is the biggest collapse I've seen in my almost 30 years in this.

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Leon Aghazarian, National Bank Financial, Inc., Research Division - Special Situation Analyst [23]

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Okay. And one final one for me, but just, I mean, clearly trying to put the emphasis on the fact of -- on diversification, that it's not exclusively -- it shouldn't be trading basically like a lumber stock at this point. Is it fair to assume that the focus going forward on M&A is going to be on the treated side of things and to further diversify away from that? And if so, on what area are you planning on targeting?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [24]

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Yes, absolutely, Yuri (sic) [Leon], that is the focus. And the strategic plan is still underway. Nothing has changed there, as far as our acquisition strategy. We won't disclose that too much because our competitors like to watch what we're doing. So certainly, the U.S. West Coast was an area of interest for us to continue to grow, yes. We can see some activity there, and a little bit more in Eastern Canada. And there's lots of room for us to run. The balance sheet is set up nicely for us to not have to worry about issuing stocks or doing certain things to fund these acquisitions. And we'll continue to be disciplined on them, but I think you will continue to see us on a pace of 1 to 2 treating plants per year as we roll up the lumber side of things.

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Operator [25]

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Our next question is from Anoop Prihar from GMP Securities.

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Anoop Prihar, GMP Securities L.P., Research Division - MD & Special Situations Analyst [26]

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Amar, just to kind of understand the impact of the commodity prices in Q3, can you give us a bit of color as to what happened to your volumes systemwide in Q3 as the prices decreased?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [27]

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Yes, I can't give it you in numbers, Anoop because, frankly, I wouldn't know that across the system and in all the different cities, but I can tell you that -- and started to tip over. A lot of buyers across the system North American wide just sat on their hands and stopped buying material. And that made it start to fall further faster, which we kind of like. It's sort of take your medicine. And although this was a dramatic drop, it was nice that it happened rapidly and it's leveled. So I can tell you the volumes did drop but then picked back up because, as we know, housing starts are healthy. They're a little bit sloppy right now, but they're certainly not in any way, shape or form, in our view, dropping severely. So the takeaway is still there. The volumes have been strong. And because we do a lot of treated lumber, that takeaway has been steady as she goes. We haven't missed a beat on that side. It was really more the construction materials. As it dropped, it slowed. And then of course, [guys that do buy the] material feel the order system can come back into the market. And we've seen volumes pick back up. And we got a good start to October and November too volume-wise.

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Anoop Prihar, GMP Securities L.P., Research Division - MD & Special Situations Analyst [28]

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I guess that's what I find a little confusing, in the sense that pricing has dropped but you haven't seen a commensurate impact on volumes, which would suggest that demand still seems relatively strong. Is that a fair assessment?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [29]

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Yes, absolutely. It is. And the U.S. side as well as Canada were busy. Provincially here and there there's pockets of weakness, but overall we're busy. And we're not feeling some monster slowdown. It's just, I think, more of a perception due to the impact of this lumber price decline and panel price decline.

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Operator [30]

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Our next question is from Charan Sanghera from RBC Capital Markets.

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Charan Sanghera, RBC Capital Markets, LLC, Research Division - Senior Associate [31]

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Just a quick question on with your increased footprint in the U.S. We've heard a lot of talk from kind of U.S. homebuilders, and it seems like there's a bit of a negative shift there. Just maybe talk about what you're seeing on -- in California and Hawaii.

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [32]

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Sure. So California, it is very, very strong for us. And of course, in California we're all specialty. We're pretty much 100% treated lumber, redwood lumber, a bit of cedar and composites. So we're dealing with more of the kind of secondary markets, and our top customers in the U.S. are box stores and then just some larger contractor yards. And we're extremely busy in California, Nevada and Arizona. So those states are busy. Hawaii has been very busy. Oahu has got some larger projects coming on that I think are going to bode well for us in 2019. The other islands are strong. We're up double digits on all of them, so -- and the electrical side is very busy. So we're not -- we're reading the same headlines you are, but we're not seeing a direct impact on slowdowns of volumes in the States at all.

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Charan Sanghera, RBC Capital Markets, LLC, Research Division - Senior Associate [33]

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Okay. And maybe just to be switching gears to the Canadian side. You saw Lowe's announced a significant number -- amount of closures for Rona stores. And given that's your largest customer, can you talk about potential impacts for CanWel?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [34]

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Yes, we looked at that. We have the store listing, so we understand. Some of those stores, we supply; some, we don't. They're relatively small stores. They're in areas where Rona may have been doubled up after their long acquisition strategy. It was never sort of sorted through to kind of say, "Okay, we bought all this stuff. Now what's strategic for Rona Lowe's going forwards, what to keep opened and closed?" So it's nice to see the clarity. A lot of those are corporate stores, and they will be shut down. And then of course, it's not going to stop a homebuilder or someone who is building a deck to go do his job. He's just going to shop somewhere else, so relatively it shouldn't impact our volumes very much at all, if at all.

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Operator [35]

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Our next question comes from Hamar -- Hamir Patel from CIBC Capital Markets.

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Hamir Patel, CIBC Capital Markets, Research Division - Director of Institutional Equity Research & Paper and Forest Products Analyst [36]

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Sorry. I jumped on late, so apologies if this have been asked already, but Jay, could you quantify, with IFRS 16, what's the EBITDA impact on an annual basis when that takes effect? And similarly, what's the effect on net debt?

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James S. Code, CanWel Building Materials Group Ltd. - CFO [37]

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Yes, well, we're not quite ready to just announce numbers on that yet, Hamir. As you know, it's effective Jan 1., but I'll just say that preliminarily from the numbers we're looking at, it's going to be very significant. We -- CanWel runs on a lease -- or largely a lease model for its facilities, its materials handling equipment, its transportation equipment, so it will be a -- it will have a very significant impact on EBITDA, to the good, and offset, of course, by interest and depreciation.

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Hamir Patel, CIBC Capital Markets, Research Division - Director of Institutional Equity Research & Paper and Forest Products Analyst [38]

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Right, okay. And then Amar, I'm not sure if you may have addressed this already, but the Junction City treatment facility, what type of revenue contribution should we expect from that in 2019?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [39]

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Yes. So we don't want to put on a forecast, but on volume I think what I said earlier was about 10 million to 15 million feet. The plant is not operating yet. It will be, but the season is really from April to October on the West Coast, being Washington and Oregon. So we don't have our forecast completely done on pricing yet, but it's between $500 and $600 1,000, 10 million to 15 million feet. You could probably run some math there.

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Operator [40]

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Our next question today is from Colin Healey from Haywood Securities.

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Colin Healey, Haywood Securities Inc., Research Division - Research Analyst of Mining [41]

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A lot of good questions already been asked, but just on -- since it's been a year since the Honsador acquisition, would you say that kind of all the potential synergies of that acquisition are now kind of fully realized? Or can we expect to see further operational improvement in the next few quarters there?

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Amardeip Singh Doman, CanWel Building Materials Group Ltd. - Chairman & CEO [42]

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Yes. I think part of the job is done, as we described. We said it would be a couple of years before we get the margin profile where we want, but I can tell you the things where we've made a difference are -- is in the purchasing side. We're consolidating and being direct on the purchasing, consolidating all the mill directs, et cetera, eliminating brokers. We're also very, very -- I would say, probably, yes, in almost the ninth inning now of completion of our treating plant efficiencies. That has gone extremely well. We focus now on the engineered wood side, where in the past it was taking a couple of weeks to get out an engineered wood order for Honsador. We want to execute these orders within 36 hours or less. I can tell you that we brought our expertise from Canada into Honsador to assist us with that. That's happening, and that's going to help boost sales. Just on orders, we think we were missing by probably being a little bit too slow in that business after we acquired it. So things that are in our hands are certainly being dealt with, but there's more to come. And we're pretty excited about more operational efficiencies and more direct strategies, which more and more each day that just starts to fall into place.

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Operator [43]

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And that's all the time we have for questions today. Mr. Mahdavi, I'll turn the conference back to you for additional or closing remarks.

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Ali Mahdavi, CanWel Building Materials Group Ltd. - Head of IR [44]

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Thank you, operator.

On behalf of the CanWel team, I would like to thank everyone for participating on today's call. And we look forward to reporting back to you on our full year 2018 results. That concludes today's call. Have a great day and a good weekend, everyone.

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Operator [45]

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And that does conclude our conference today. Thank you for your participation. You may now disconnect.