- Sales of
$775 million , up 9%, driven by organic sales growth in infrastructure product categories - Record first quarter EBITDA up 30% to
$156 million , a margin of 20.1% - Net income of
$77 million or$1.36 per share, up 32% from Q1 2023 EPS
“I am pleased with our performance in the first quarter, which marks a strong start to the year and builds upon the momentum we generated in 2023,” said
“The sustained strength of our results is a testament to our focus on growing our infrastructure business and leveraging our unique competitive advantages. We are drawing on the strength of our customer relationships and expansive network to capitalize on growth opportunities and deliver on our strategic objectives,” concluded
Financial Highlights (in millions of Canadian dollars, except per share data and margins) | Q1-24 | Q1-23 | ||
Sales | 775 | 710 | ||
Gross profit(1) | 172 | 136 | ||
Gross profit margin(1) | 22.2% | 19.2% | ||
EBITDA(1) | 156 | 120 | ||
EBITDA margin(1) | 20.1% | 16.9% | ||
Operating income | 124 | 95 | ||
Operating income margin(1) | 16.0% | 13.4% | ||
Net income for the period | 77 | 60 | ||
Earnings per share ("EPS") - basic and diluted | 1.36 | 1.03 | ||
Weighted average shares outstanding (basic, in ‘000s) | 56,786 | 58,801 | ||
(1) Refer to the section "Non-GAAP and other financial measures" in this press release. | ||||
FIRST QUARTER RESULTS
Sales in the first quarter of 2024 were up 9% to
Pressure-treated wood products:
- Utility poles (52% of Q1-24 sales): Utility poles sales increased to
$402 million in the first quarter of 2024, compared to sales of$362 million in the corresponding period last year. Excluding the contribution from the acquisition of the Baldwin assets, utility poles sales increased by$26 million , or 7%, driven by higher pricing. While sales volumes were higher compared to the previous quarter, volumes were below levels realized in the first quarter of last year. Incremental multi-year commitments were secured from new and existing customers but the growth in volumes continued to be impacted and deferred by the slower pace of utility poles purchases by certain contract customers.
- Railway ties (29% of Q1-24 sales): Railway ties sales increased by
$32 million , or 16%, to$227 million in the first quarter of 2024, compared to sales of$195 million in the same period last year. The increase was largely attributable to higher volumes for non-Class 1 business due to the replenished level of ties inventory, as well as sales price increases to cover higher costs, when compared to the same period last year.
- Residential lumber (11% of Q1-24 sales): Sales in residential lumber decreased by
three million dollars , or 3%, to$87 million in the first quarter of 2024, compared to sales of$90 million in the corresponding period last year. This decrease was mainly driven by lower pricing attributable to the decrease in the market price of lumber.
- Industrial products (5% of Q1-24 sales): Industrial product sales were
$36 million in the first quarter of 2024, unchanged compared to the corresponding period last year.
Logs and lumber:
- Logs and lumber (3% of Q1-24 sales): Logs and lumber sales totaled
$23 million , down 15% compared to the same period last year. The decrease in sales compared to the first quarter last year was largely attributable to less lumber trading activity. Logs sales remained stable as higher log sales activity was offset by the lower market price of logs.
Gross profit was
Similarly, operating income totaled
Net income for the first quarter of 2024 was
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended
During the first quarter of 2024, the Company amended and restated the syndicated credit agreement in order to increase the amount available under the unsecured revolving credit facility to
As at
(1) | Refer to the section "Non-GAAP and other financial measures" in this press release. |
QUARTERLY DIVIDEND
On
ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
Stella-Jones will hold its Annual and Special Meeting of Shareholders on
CONFERENCE CALL
Stella-Jones will hold a conference call to discuss these results on
ABOUT STELLA-JONES
CAUTION REGARDING FORWARD-LOOKING INFORMATION
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such items include, among others: general political, economic and business conditions, evolution in customer demand for the Company's products and services, product selling prices, availability and cost of raw materials, operational disruption, climate change, failure to recruit and retain qualified workforce, information security breaches or other cyber-security threats, changes in foreign currency rates, the ability of the Company to raise capital and factors and assumptions referenced herein and in the Company’s continuous disclosure filings. As a result, readers are advised that actual results may differ from expected results. Unless required to do so under applicable securities legislation, the Company does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes after the date hereof.
Note to readers: Condensed interim unaudited consolidated financial statements for the first quarter ended
Head Office 3100 de la Côte- H4R 2J8 Tel.: (514) 934-8666 Fax: (514) 934-5327 | Exchange Listings Stock Symbol: SJ Transfer Agent and Registrar | Investor Relations Senior Vice-President and Chief Financial Officer Tel.: (514) 934-8660 Fax: (514) 934-5327 stravaglini@stella-jones.com |
Condensed Interim Consolidated Statements of Income (Unaudited) For the three-month periods ended |
(expressed in millions of Canadian dollars, except earnings per common share)
2024 | 2023 | |||
Sales | 775 | 710 | ||
Expenses | ||||
Cost of sales (including depreciation and amortization of | 603 | 574 | ||
Selling and administrative (including depreciation and amortization of | 47 | 41 | ||
Other losses, net | 1 | — | ||
651 | 615 | |||
Operating income | 124 | 95 | ||
Financial expenses | 22 | 14 | ||
Income before income taxes | 102 | 81 | ||
Income tax expense | ||||
Current | 24 | 24 | ||
Deferred | 1 | (3 | ) | |
25 | 21 | |||
Net income | 77 | 60 | ||
Basic and diluted earnings per common share | 1.36 | 1.03 | ||
Condensed Interim Consolidated Statements of Financial Position (Unaudited) |
(expressed in millions of Canadian dollars)
As at | As at | |||
Assets | ||||
Current assets | ||||
Accounts receivable | 398 | 308 | ||
Inventories | 1,723 | 1,580 | ||
Income taxes receivable | 12 | 11 | ||
Other current assets | 42 | 48 | ||
2,175 | 1,947 | |||
Non-current assets | ||||
Property, plant and equipment | 934 | 906 | ||
Right-of-use assets | 291 | 285 | ||
Intangible assets | 168 | 169 | ||
383 | 375 | |||
Derivative financial instruments | 25 | 21 | ||
Other non-current assets | 7 | 5 | ||
3,983 | 3,708 | |||
Liabilities and Shareholders’ Equity | ||||
Current liabilities | ||||
Accounts payable and accrued liabilities | 234 | 204 | ||
Income taxes payable | 18 | — | ||
Current portion of long-term debt | 1 | 100 | ||
Current portion of lease liabilities | 56 | 54 | ||
Current portion of provisions and other long-term liabilities | 32 | 26 | ||
341 | 384 | |||
Non-current liabilities | ||||
Long-term debt | 1,444 | 1,216 | ||
Lease liabilities | 245 | 240 | ||
Deferred income taxes | 181 | 175 | ||
Provisions and other long-term liabilities | 29 | 31 | ||
Employee future benefits | 9 | 10 | ||
2,249 | 2,056 | |||
Shareholders’ equity | ||||
Capital stock | 189 | 189 | ||
Retained earnings | 1,376 | 1,329 | ||
Accumulated other comprehensive income | 169 | 134 | ||
1,734 | 1,652 | |||
3,983 | 3,708 | |||
Condensed Interim Consolidated Statements of Cash Flows (Unaudited) For the three-month periods ended |
(expressed in millions of Canadian dollars)
2024 | 2023 | |||
Cash flows from (used in) | ||||
Operating activities | ||||
Net income | 77 | 60 | ||
Adjustments for | ||||
Depreciation of property, plant and equipment | 11 | 9 | ||
Depreciation of right-of-use assets | 16 | 12 | ||
Amortization of intangible assets | 5 | 4 | ||
Financial expenses | 22 | 14 | ||
Income tax expense | 25 | 21 | ||
Other | 3 | 2 | ||
159 | 122 | |||
Changes in non-cash working capital components | ||||
Accounts receivable | (94 | ) | (103 | ) |
Inventories | (117 | ) | (138 | ) |
Other current assets | 7 | (2 | ) | |
Accounts payable and accrued liabilities | 11 | 11 | ||
(193 | ) | (232 | ) | |
Interest paid | (22 | ) | (15 | ) |
Income taxes paid | (6 | ) | (7 | ) |
(62 | ) | (132 | ) | |
Financing activities | ||||
Net change in revolving credit facilities | 41 | 217 | ||
Proceeds from long-term debt | 168 | — | ||
Repayment of long-term debt | (102 | ) | — | |
Repayment of lease liabilities | (15 | ) | (11 | ) |
Repurchase of common shares | (15 | ) | (30 | ) |
Other | — | (1 | ) | |
77 | 175 | |||
Investing activities | ||||
Business combinations | — | (13 | ) | |
Purchase of property, plant and equipment | (23 | ) | (28 | ) |
Property insurance proceeds | 10 | — | ||
Additions of intangible assets | (2 | ) | (2 | ) |
(15 | ) | (43 | ) | |
Net change in cash and cash equivalents during the period | — | — | ||
Cash and cash equivalents – Beginning of period | — | — | ||
Cash and cash equivalents – End of period | — | — | ||
NON-GAAP AND OTHER FINANCIAL MEASURES
This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of “specified financial measures” (as defined therein).
The below-described non-GAAP measures have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. The Company’s method of calculating these measures may differ from the methods used by others, and, accordingly, the definition of these non-GAAP financial measures may not be comparable to similar measures presented by other issuers. In addition, non-GAAP financial measures should not be viewed as a substitute for the related financial information prepared in accordance with GAAP.
Non-GAAP financial measures include:
- Gross profit: Sales less cost of sales
- EBITDA: Operating income before depreciation of property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets (also referred to as earnings before interest, taxes, depreciation and amortization)
- Net debt: Sum of long-term debt and lease liabilities (including the current portion)
Non-GAAP ratios include:
- Gross profit margin: Gross profit divided by sales for the corresponding period
- EBITDA margin: EBITDA divided by sales for the corresponding period
- Net debt-to-EBITDA: Net debt divided by trailing 12-month (TTM) EBITDA
Other specified financial measures include:
- Operating income margin: Operating income divided by sales for the corresponding period
Management considers these non-GAAP and other financial measures to be useful information to assist knowledgeable investors to understand the Company’s operating results, financial position and cash flows as they provide a supplemental measure of its performance. Management uses non-GAAP and other financial measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets, to assess the Company’s ability to meet future debt service, capital expenditure and working capital requirements, and to evaluate senior management’s performance. More specifically:
- Gross profit and gross profit margin: The Company uses these financial measures to evaluate its ongoing operational performance.
- EBITDA and EBITDA margin: The Company believes these measures provide investors with useful information because they are common industry measures, used by investors and analysts to measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement. These measures are also key metrics of the Company's operational and financial performance and are used to evaluate senior management’s performance.
- Net debt and net debt-to EBITDA: The Company believes these measures are indicators of the financial leverage of the Company.
The following tables present the reconciliations of non-GAAP financial measures to their most comparable GAAP measures.
Reconciliation of operating income to EBITDA (in millions of dollars) | Three-month periods ended | |||
2024 | 2023 | |||
Operating income | 124 | 95 | ||
Depreciation and amortization | 32 | 25 | ||
EBITDA | 156 | 120 | ||
Reconciliation of Long-Term Debt to Net Debt (in millions of dollars) | As at | As at | ||
Long-term debt, including current portion | 1,445 | 1,316 | ||
Add: | ||||
Lease liabilities, including current portion | 301 | 294 | ||
Net Debt | 1,746 | 1,610 | ||
EBITDA (TTM) | 644 | 608 | ||
Net Debt-to-EBITDA | 2.7 | x | 2.6 | x |
Contacts: | ||
Senior Vice-President and Chief Financial Officer Stella-Jones | Director, Corporate Communications Stella-Jones | |
Tel.: (514) 934-8660 | ||
stravaglini@stella-jones.com | communications@stella-jones.com | |
Source:
2024 GlobeNewswire, Inc., source