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.

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

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, 2019Earnings 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.

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