BURNABY, BC, Nov. 5, 2021 /CNW/ - Taiga Building Products Ltd.
("Taiga" or the "Company") today reported its financial results for
the three and nine months ended September
30, 2021.
Third Quarter Ended September 30,
2021 Earnings Results
Sales for the quarter ended September 30,
2021 were $484.6 million
compared to $500.7 million over the
same period last year. The decrease in sales by $16.1 million or 3% was largely due to decreased
selling prices for commodity products.
Gross margin for the quarter ended September 30, 2021 decreased to $7.6 million from $91.5
million over the same period last year. Gross margin
percentage was 1.6% for the three months ended September 30, 2021 compared to 18.3% in the same
period last year. These decreases were due to commodity prices
falling dramatically during the quarter. Furthermore, the
Company booked a $13.4 million
inventory reserve due to the impact falling commodity prices had on
its treated inventory values.
Net earnings (loss) for the quarter ended September 30, 2021 decreased to a loss of
($5.2) million from $33.4 million over the same period last year
primarily due to decreased gross margin.
EBITDA for the quarter ended September
30, 2021 was ($1.8) million
compared to $50.5 million for the
same period last year. EBITDA decreased primarily due to lower
margin earned during the quarter.
Nine Months Ended September 30,
2021 Earnings Results
Sales for the nine months ended September
30, 2021 were $1,807.2 million
compared to $1,177.8 million over the
same period last year. The increase in sales by $629.4 million or 53% was largely due to the
Company experiencing higher selling prices for its commodity
products at the beginning of the period before prices fell
dramatically partway through the third quarter.
Gross margin for the nine months ended September 30, 2021 increased to $245.9 million from $164.8
million over the same period last year. Gross margin
percentage decreased to 13.6% for the nine months ended
September 30, 2021 compared to the
same period last year at 14.0%. The increase in margin is
primarily due to rising commodity prices at the beginning of the
period before prices fell dramatically partway through the third
quarter.
Net earnings for the nine month period ended September 30, 2021 were $82.4 million compared to $53.2 million for the same period last year.
EBITDA for the nine months ended September 30, 2021 was $127.8 million compared to $87.5 million for the same period last
year. EBITDA increased primarily due to higher margin earned
during the current period.
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 pandemic has had a positive
impact on Taiga's business and financial performance in fiscal 2020
and the first half of fiscal 2021. This is a direct result of the
increased demand for detached housing, record high commodity prices
and low borrowing rates experienced during the pandemic. However,
commodity prices did fall dramatically during the Company's third
quarter which had a material impact on its results. The extent to
which these events may continue to impact the Company's business
activities in the same manner in future periods will depend on a
number of factors, such as the ultimate geographic spread of the
disease, the duration of the outbreak, travel restrictions, the
rate at which vaccines are administered, the effectiveness of
vaccines against the coronavirus and its mutations, subsequent
outbreaks, business disruptions, and the effectiveness of actions
taken in Canada, the United States and other countries to
contain and treat the disease, the demand for detached housing in
North America, future commodity
prices, interest rates and the strength of the general
economy. These events are highly uncertain and as such, the
Company cannot predict with any certainty how the progression of
the coronavirus pandemic and these events will ultimately impact
the Company's financial performance in 2021.
Condensed Consolidated Statement of
Earnings
For the Three Months Ended
|
September
30,
|
|
(in thousands of
Canadian dollars, except for per share amounts)
|
2021
|
2020
|
|
Sales
|
484,563
|
500,667
|
|
Gross
margin
|
7,646
|
91,515
|
|
Distribution
expense
|
6,834
|
6,766
|
|
Selling and
administration expense
|
5,399
|
36,898
|
|
Finance
expense
|
1,855
|
1,910
|
|
Subordinated debt
interest expense
|
218
|
218
|
|
Canada Emergency Wage
Subsidy
|
-
|
(17)
|
|
Other (income)
expense
|
12
|
174
|
|
Earnings (loss)
before income taxes
|
(6,672)
|
45,566
|
|
Income tax expense
(recovery)
|
(1,432)
|
12,136
|
|
Net earnings
(loss)
|
(5,240)
|
33,430
|
|
Net earnings (loss)
per share(1)
|
(0.05)
|
0.31
|
|
EBITDA(2)
|
(1,841)
|
50,489
|
|
The following is the
reconciliation of net earnings to
EBITDA:
|
|
September
30,
|
|
(in thousands of
Canadian dollars)
|
|
2021
|
2020
|
|
Net earnings
(loss)
|
|
(5,240)
|
33,430
|
|
Income tax expense
(recovery)
|
|
(1,432)
|
12,136
|
|
Finance and
subordinated debt interest expense
|
|
2,073
|
2,128
|
|
Amortization
|
|
2,758
|
2,795
|
|
EBITDA
|
|
(1,841)
|
50,489
|
For the Nine Months Ended
|
September
30,
|
|
(in thousands of
Canadian dollars, except for per share amounts)
|
2021
|
2020
|
|
Sales
|
1,807,213
|
1,177,840
|
|
Gross
margin
|
245,907
|
164,809
|
|
Distribution
expense
|
20,708
|
19,404
|
|
Selling and
administration expense
|
105,493
|
69,046
|
|
Finance
expense
|
5,795
|
6,393
|
|
Subordinated debt
interest expense
|
656
|
656
|
|
Canada Emergency Wage
Subsidy
|
-
|
(2,919)
|
|
Other
income
|
302
|
91
|
|
Earnings before
income taxes
|
112,953
|
72,138
|
|
Income tax
expense
|
30,549
|
18,947
|
|
Net
earnings
|
82,404
|
53,191
|
|
Net earnings per
share(1)
|
0.76
|
0.48
|
|
EBITDA(2)
|
127,756
|
87,494
|
|
The following is the
reconciliation of net earnings to
EBITDA:
|
|
September
30,
|
|
(in thousands of
Canadian dollars)
|
|
2021
|
2020
|
|
Net
earnings
|
|
82,404
|
53,191
|
|
Income tax
expense
|
|
30,549
|
18,947
|
|
Finance and
subordinated debt interest expense
|
|
6,451
|
7,049
|
|
Amortization
|
|
8,352
|
8,307
|
|
EBITDA
|
|
127,756
|
87,494
|
|
|
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 three and
nine months ended September 30, 2021
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.