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Taiga Building Products Ltd. announces third quarter results and $10 million rights offering
(Canada Newswire English Via Acquire Media NewsEdge) Attention Business/Financial Editors
BURNABY, BC, February 12, 2009 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") reported its results for the three and nine months ended December 31, 2008 and announced a $10 million rights offering.
Results from Operations - Three Months Ended December 31, 2008
Sales for the three months ended December 31, 2008 was $213.8 million compared to $235.1 million for the three months ended December 31, 2007.
The 9.1% decline in sales is primarily attributable to slowing product demand as retailers and other professional suppliers adjust inventory levels in advance of slowing housing starts in Canada. Taiga continued to see strong performance in flooring and other renovation products offsetting weakness in structural products.
Gross margin decreased by 11.3% to $21.3 million for the current quarter compared to $24.0 million for the same period last year. The decrease was due to lower sales volume. Gross margin percentages remained steady at 10.0% compared to 10.2% for the same period last year.
EBITDA was $2.9 million for the current quarter, compared to $4.3 million in the same period last year.
Net loss for the three months ended December 31, 2008 was $2.6 million or $0.08 per share compared to $1.9 million or $0.06 per share for the same period last year.
Results from Operations - Nine Months Ended December 31, 2008
Sales revenue for the nine months ended December 31, 2008 was $827.2 million compared to $853.7 million for the same period last fiscal year. The decline of 3.1% was primarily attributable to the factors noted above in the third quarter.
Gross margin for the current nine month period decreased to $90.8 million compared to $91.1 million for the same period last year. Gross margin percentage for the period increased slightly to 11.0% from 10.7%.
EBITDA decreased to $28.6 million for the nine month period, compared to $30.8 million in the same period last year.
Net earnings for the nine months ended December 31, 2008 was $4.7 million or $0.15 per share. For the nine months ended December 31, 2007, Taiga earned $5.9 million or $0.18 per share.
Liquidity
To increase the Company's financial flexibility and to remain in compliance with existing credit agreements, the Company is currently undertaking a number of initiatives, including cost reduction programs, inventory reduction plans and operational efficiency projects. In addition, the Company will be launching a $10 million rights offering (the "Offering"), pursuant to which all shareholders will have the ability to participate and at least maintain their current equity stake at a discounted offering price through the basic and additional subscription privilege.
Rights Offering
Under the Offering, the Company will distribute rights ("Rights") which will entitle existing shareholders ("Holders") to purchase additional common shares, subject to regulatory and stock exchange approvals. While the offering is not supported by a standby purchase commitment, the two major shareholders have expressed an intention to exercise their rights subject to customary conditions and provided that in any event, not to acquire beneficial ownership or control over 50% of the common stock in the Company.
The net proceeds of the offering will be used to reduce indebtedness under the Company's revolving credit facilities, thereby providing additional liquidity for working capital and general corporate purposes. The Offering is expected to close in late March or early April 2009.
The Offering will be made pursuant to a short form prospectus, which is expected to be filed shortly. Rights will be issued to Holders of record in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador and the United States. Further details of the distribution of the Rights will be provided in the short form prospectus. The Offering will substantially increase the number of Taiga's common shares. Under the terms of the Offering, Holders will receive Rights to subscribe for common shares of Taiga. The subscription price shall be determined at the time the final prospectus for the Offering is filed. The subscription price will be fixed at 50% of the volume weighted average trading price of Taiga's common shares traded on the Toronto Stock Exchange (the "TSX") for the 10 day period ending on the day prior to the date of filing of the final prospectus. The Rights will be listed for trading on the Toronto Stock Exchange and will be exercisable for 21 days following the date of mailing of the final prospectus. Holders that fully exercise their Rights will be entitled to subscribe for additional common shares, if available, that were not subscribed for by other Holders.
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Comparative Consolidated Statement of Earnings
For the Three Months Ended
(in thousands of dollars)
(Unaudited)
December 31, December 31,
2008 2007
-------------------------------------------------------------------------
Net sales $ 213,803 $ 235,133
---------------------------
Gross profit 21,298 23,998
Expenses 19,429 18,588
Interest - other 1,361 1,741
---------------------------
Operating income 508 3,669
Interest - sub note 3,946 3,946
Non-operating expense (income) (258) 1,842
---------------------------
Net income before income tax (3,180) (2,119)
Income tax recovery (560) (222)
---------------------------
Net loss $ (2,620) $ (1,897)
---------------------------
EPS(1) $ (0.08) $ (0.06)
EBITDA(2) $ 2,939 $ 4,305
For the Nine Months Ended
(in thousands of dollars)
(Unaudited)
December 31, December 31,
2008 2007
-------------------------------------------------------------------------
Net sales $ 827,175 $ 853,660
---------------------------
Gross profit 90,788 91,055
Expenses 64,352 61,067
Interest - other 5,126 6,400
---------------------------
Operating income 21,310 23,588
Interest - sub note 11,837 11,837
Non-operating expense 195 1,296
---------------------------
Net income before income tax 9,278 10,455
Income tax expense 4,592 4,576
---------------------------
Net earnings $ 4,686 $ 5,879
---------------------------
EPS(1) $ 0.15 $ 0.18
EBITDA(2) $ 28,587 $ 30,761
Notes:
(1) EPS is earnings per share calculated using the weighted average
number of shares.
(2) Reference is made above to EBITDA, which represents earnings before
interest, taxes, depreciation 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 Canadian generally accepted accounting principles.
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Forward-Looking Statements:
This press release contains certain forward-looking information and statements relating, but not limited, to future events or performance and strategies and expectations of Taiga. Forward-looking information typically contains statements with words such as "consider", "anticipate", "believe", "expect", "plan", "intend", "likely", "may", "will", "should", "predict", "potential", "continue" or similar words suggesting future outcomes or statements regarding expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Readers should be aware that these statements are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements.
These forward-looking statements reflect management's current expectations or beliefs and are based on information currently available to Taiga and although Taiga believes it has a reasonable basis for making the forward-looking statements included in this document, readers are cautioned not to place undue reliance on such forward-looking information. By its nature, the forward-looking information of Taiga involves numerous assumptions and inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts and other forward-looking statements will not occur. These factors include, but are not limited to, changes in business strategies; the effects of litigation, competition and pricing pressures; changes in operational costs; changes in laws and regulations, including tax, environmental, employment, competition, anti-terrorism and trade laws; and Taiga's anticipation of and success in managing the risks associated with the foregoing. A further description of these additional factors can be found in the periodic and other reports filed by Taiga with Canadian securities commissions and available on Sedar (http://www.sedar.com). These forward-looking statements speak only as of the date of this press release. Taiga does not undertake, and specifically disclaims, any obligation to update or revise any forward looking information, whether as a result of new information, future developments or otherwise, except as required by applicable law.
regarding Taiga please contact: Tom Stefan, Vice President, Finance and Administration; Mark Schneidereit, Manager, Corporate Planning, Phone: (604) 438-1471, Fax: (604) 439-4242
Copyright ? 2009 Canada Newswire Ltd. All Rights Reserved.
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