- EBITDA increased 28% to a record
$120 million - Net income rose to
$69 million or$1.02 per share - Net debt to trailing 12-month EBITDA decreased to 1.9x
- Updated 2020 outlook to reflect strong quarterly performance
- Announced a Normal Course Issuer Bid
“We are pleased with our financial performance, as each of our three core product categories continued to deliver improved results. Bolstered by exceptional demand for residential lumber, we realized double-digit sales growth of 15% and increased EBITDA by 28% to
“Critical to the integrity of the supply chain for utilities, railroads and the construction industry, Stella-Jones has continued to operate all of its North American facilities and support its customers during the varying stages of restrictions and re-openings implemented by authorities to address the COVID-19 pandemic. The Company continues to reinforce measures implemented to mitigate health risks to its employees, business partners and communities where it operates. I wish to thank each and every one of our 2,300 employees across
Financial Highlights (in millions of Canadian dollars, except per share data and margin) | Q2-20 | Q2-19 | YTD Q2-20 | YTD Q2-19 | ||||
Sales(1) | 768 | 667 | 1,276 | 1,113 | ||||
Gross Profit(2) | 131 | 108 | 214 | 178 | ||||
EBITDA(2) | 120 | 94 | 183 | 158 | ||||
EBITDA margin (%)(2) | 15.6 | % | 14.1 | % | 14.3 | % | 14.2 | % |
Operating income(2) | 101 | 77 | 146 | 123 | ||||
Net income for the period | 69 | 52 | 97 | 81 | ||||
Per share – basic and diluted ($) | 1.02 | 0.76 | 1.43 | 1.18 | ||||
Weighted average shares outstanding (basic, in ‘000s) | 67,479 | 69,131 | 67,474 | 69,134 |
- Prior period figures have been adjusted to conform to the current period presentation.
- This is a non-IFRS financial measure which does not have a standardized meaning prescribed by IFRS and may therefore not be comparable to similar measures presented by other issuers.
SECOND QUARTER RESULTS
Sales for the second quarter reached
Pressure-treated wood products:
- Utility poles (30% of Q2-20 sales): Utility pole sales rose to
$230 million , up 9% from sales of$211 million in the corresponding period last year. Excluding the currency conversion effect, utility pole sales increased by$13 million , primarily driven by upward price adjustments in response to raw material cost increases.
- Railway ties (29% of Q2-20 sales): Railway tie sales were
$225 million , an increase of 13% compared to sales of$199 million in the same period last year. Excluding the currency conversion effect, railway tie sales increased$20 million , mainly due to the acceleration of the 2020 maintenance program for certain Class 1 customers and solid demand from non-Class 1 customers, which was supported by a healthy level of untreated ties inventory.
- Residential lumber (34% of Q2-20 sales): Sales in the residential lumber category were greater than expected, rising to
$257 million , up 32% from sales of$195 million in the corresponding period last year. The significant increase in sales is due to higher volumes, largely stemming from strong home improvement activity in the context of the COVID-19 pandemic.
- Industrial products (4% of Q2-20 sales): Industrial product sales were
$33 million , down 6% compared to sales of$35 million in the second quarter last year, primarily as a result of lower piling project activities.
Logs and lumber:
- Logs and lumber (3% of Q2-20 sales): Sales in the logs and lumber product category were
$23 million , down 15% compared to$27 million in the corresponding period last year. Sales declined given the limited market supply availability and resulting decrease in lumber trading activity.
Driven by the strong sales growth across the three core product categories, gross profit and operating income increased 21% and 31% to
Net income was
SIX-MONTH RESULTS
Sales amounted to
Operating income was
STRONG LIQUIDITY AND CAPITAL RESOURCES
The Company generated cash from operations of
As a result of the continued strength of the Company’s balance sheet and resiliency of its business model, the Board of Directors has authorized the repurchase of up to 2,500,000 of the Company’s Common Shares, representing approximately 3.7% of its outstanding Common Shares, under a Normal Course Issuer Bid.
QUARTERLY DIVIDEND
On
UPDATED OUTLOOK
The financial outlook provided in the Company’s Management’s Discussion and Analysis for the quarter ended
As part of its capital allocation approach, the Company intends to target a net debt-to-EBITDA ratio between 2.0x and 2.5x. While maintaining a healthy financial position, the targeted leverage should allow the Company to return capital to shareholders and take advantage of growth opportunities to further strengthen its position in the Company’s core product categories, both organically and through acquisitions, and enhance shareholder value.
Please refer to the Company’s Management’s Discussion and Analysis for further details.
CONFERENCE CALL
Stella-Jones will hold a conference call to discuss these results on
NON-IFRS FINANCIAL MEASURES
EBITDA (operating income before depreciation of property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets), gross profit, operating income and EBITDA margin are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these non-IFRS measures to be useful information to assist knowledgeable investors understand the Company’s operating results, financial condition and cash flows as they provide an additional measure about its performance. Please refer to the non-IFRS financial measures described in the Management’s Discussion and Analysis.
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 factors may include, without excluding other considerations, general economic and business conditions (including the impact of the global outbreak of the coronavirus pandemic), evolution in customer demand for the Company's products and services, product selling prices, availability and cost of raw materials, changes in foreign currency rates, and the ability of the Company to raise capital. 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 second quarter ended
Source: | ||
Contacts: | ||
Senior Vice-President and Chief Financial Officer | ||
Stella-Jones | ||
Tel.: (514) 940-8660 | Tel.: (514) 731-0000 | |
stravaglini@stella-jones.com | pierre@maisonbrison.com | |
jennifer@maisonbrison.com |
Source:
2020 GlobeNewswire, Inc., source