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Taiga's (TBL) Q3 sales decreased 10% due to lower commodity prices

BURNABY, BC , Nov. 8, 2019 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported its financial results for the three and nine months ended September 30, 2019 .

Taiga Building Products (CNW Group/Taiga Building Products Ltd.)

Third Quarter Ended September 30, 2019 Earnings Results        

The Company's consolidated net sales for the quarter ended September 30, 2019 were $358.9 million compared to $399.6 million over the same period last year. The decrease in sales by $40.7 million or 10% was largely due to decreased selling prices for commodity products; this was offset by the inclusion of Exterior Wood Inc.'s results, which was acquired in July of 2018.

Gross margin for the third quarter increased to $36.5 million from $27.9 million in the same quarter last year. The increase in gross margin was primarily due to rising commodity prices in the current quarter, while they declined in the same quarter last year.

Net earnings for the quarter ended September 30, 2019 increased to $8.4 million from $5.6 million for the same period last year primarily due to the foregoing.

EBITDA for the quarter ended September 30, 2019 was $17.3 million compared to $9.2 million for the same period last year. Management estimates that if IFRS 16 were not taken into effect as of January 1, 2019 that EBITDA would have been $2.5 million lower, or $14.8 million for the quarter ended September 30, 2019 .

Nine Months Ended September 30, 2019 Earnings Results

Sales for the nine months ended September 30, 2019 were $1,001.0 million compared to $1,147.1 million over the same period last year. The decrease in sales by $146.1 million or 13% was largely due to decreased selling prices for commodity products; this was offset by the inclusion of Exterior Wood Inc.'s results, which was acquired in July of 2018.

Gross margin dollars for the nine months ended September 30, 2019 increased to $98.9 million from $98.0 million over the same period last year. Gross margin percentage for the nine months ended September 30, 2019 increased to 9.9% from 8.5% for the same period last year.

Net earnings for the nine month period ended September 30, 2019 were $20.1 million compared to $18.7 million for the same period last year.

EBITDA for the nine months ended September 30, 2019 was $44.8 million compared to $36.9 million for the same period last year. Management estimates that if IFRS 16 were not taken into effect as of January 1, 2019 that EBITDA would have been $7.2 million lower, or $37.6 million for the nine months ended September 30, 2019 .           

 Condensed Consolidated Statement of Earnings


For the Three Months Ended




September 30,

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

2019

2018

Sales

$358,875

$399,634

Gross margin

36,497

27,857

Distribution expense

6,800

6,817

Selling and administration expense

15,264

13,520

Finance expense

2,385

2,091

Subordinated debt interest expense

218

219

Other income

(30)

(96)

Earnings before income taxes

11,860

5,306

Income tax expense (recovery)

3,486

(273)

Net earnings

8,374

5,579

Net earnings per share(1)

0.07

0.05

EBITDA(2)

17,272

9,228



The following is the reconciliation of net earnings to EBITDA:




 September 30,

(in thousands of Canadian dollars)

2019

2018

Net earnings

8,373

5,579

Income tax expense (recovery)

3,486

(273)

Finance and subordinated debt interest expense

2,604

2,310

Amortization

2,809

1,611

EBITDA

17,272

9,228



For the Nine Months Ended


September 30,

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

2019

2018

Sales

$1,000,997

$1,147,106

Gross margin

98,864

98,043

Distribution expense

19,612

18,712

Selling and administration expense

42,874

46,658

Finance expense

7,455

5,106

Subordinated debt interest expense

656

618

Other income

(122)

(296)

Earnings before income taxes

28,389

27,245

Income tax expense

8,247

8,518

Net earnings

20,142

18,727

Net earnings per share(1)

0.18

0.16

EBITDA(2)

44,800

36,875



The following is the reconciliation of net earnings to EBITDA:      




September 30,

(in thousands of Canadian dollars)

2019

2018

Net earnings

20,142

18,727

Income tax expense

8,247

8,518

Finance and subordinated debt interest expense

8,111

5,724

Amortization

8,300

3,906

EBITDA

44,800

36,875

      

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, 2019 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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