Welcome!

News Feed Item

Stella-Jones Reports 2013 Fourth Quarter and Annual Results

Thirteenth consecutive year of growth in net income

MONTREAL, QUEBEC -- (Marketwired) -- 03/14/14 --


--  Sales of $970.1 million, up 35.2% from $717.5 million last year 
--  26.6% growth in operating income to $138.7 million, versus $109.6
    million in 2012 
--  Net income up 26.6% to $92.5 million, compared to $73.1 million last
    year 
--  Diluted EPS of $1.34 versus $1.13 a year ago 

Stella-Jones Inc. (TSX:SJ) ("Stella-Jones" or the "Company") today announced financial results for its fourth quarter and fiscal year ended December 31, 2013.

"2013 marked the thirteenth consecutive year of growth for Stella-Jones, as the Company further benefited from its proven expansion strategy. The ongoing growth of our continental network has resulted in improved efficiency of our operations and increased confidence of our customers. By virtue of recent acquisitions and key strategic decisions, Stella-Jones has not only become larger, it has become a stronger and more efficient organization, as well as a lasting source of value creation for its shareholders," said Brian McManus, President and Chief Executive Officer.


----------------------------------------------------------------------------
                                          Quarters ended         Years ended
Financial highlights                            Dec. 31,            Dec. 31,
(in thousands of Canadian dollars,                                          
 except per share data)                   2013      2012      2013      2012
----------------------------------------------------------------------------
Sales                                  211,862   159,345   970,149   717,494
Operating income                        29,519    21,127   138,699   109,596
Net income for the period               19,690    16,546    92,536    73,070
  Per share - basic ($)                   0.29      0.25      1.35      1.14
  Per share - diluted ($)                 0.29      0.25      1.34      1.13
Cash flows from operating activities                                        
 before changes in non-cash working                                         
 capital components and interest and                                        
 income taxes paid                      34,607    22,363   160,631   120,797
Cash flows provided by operating                                            
 activities                             23,883    21,086   104,218    28,516
Weighted average shares outstanding                                         
 (basic, in '000s)                      68,693    65,548    68,681    64,312
----------------------------------------------------------------------------

2013 RESULTS

Sales reached $970.1 million, up 35.2% over last year's sales of $717.5 million. The operating facilities acquired from McFarland Cascade Holdings, Inc. ("McFarland") on November 30, 2012 contributed additional sales of $275.4 million over an eleven-month period in 2013, net of production transferred from other Stella-Jones facilities, while the assets acquired from The Pacific Wood Preserving Companiesa ("PWP") on November 15, 2013 generated sales of approximately $4.1 million in the fourth quarter. The conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones' reporting currency, versus the U.S. dollar, increased the value of U.S. dollar denominated sales by about $12.9 million when compared with the previous year. Excluding these factors, sales decreased approximately $39.8 million due to a timing effect on railway tie sales resulting from the transition of a Class 1 railroad customer from a treating services only ("TSO") program to a black tie ("Black Tie") program and to the year-over-year timing difference for certain utility pole orders.

Railway tie sales amounted to $394.0 million, compared with $404.5 million last year. This slight decrease reflects the transition of a Class 1 railroad customer from a TSO program to a Black Tie program, which had a timing effect of $30.9 million on 2013 sales. Excluding this factor, railway tie sales rose approximately 5.0%. This transition is mostly complete and should have a minimal impact on results in the first quarter of 2014. Thereafter, annualized sales to that customer should be greater than the aforementioned amount due to more value added under a Black Tie program. Sales of utility poles totalled $405.8 million, up from $218.5 million in 2012. This increase is essentially attributable to additional utility pole sales of $197.9 million from the McFarland operations. Sales of residential lumber reached $112.3 million, up from $35.5 million a year earlier as a result of additional residential lumber sales of $73.8 million from the McFarland operations. Finally, industrial product sales were $58.1 million, compared with $59.0 million a year earlier.

Operating income rose 26.6% to $138.7 million, or 14.3% of sales, versus $109.6 million, or 15.3% of sales, last year. While the increase in monetary terms mainly reflects the addition of the McFarland operations, the reduction as a percentage of sales stems from a less favourable product mix and McFarland's lower margins at the beginning of the year. Reflecting a successful integration, McFarland's margins progressively improved during the year.

Net income for the year increased 26.6% to $92.5 million or $1.34 per share, fully diluted, compared with $73.1 million or $1.13 per share, fully diluted, in 2012. Cash flows from operating activities before changes in non-cash working capital components and interest and income taxes paid rose 33.0% to $160.6 million. Cash flow provided by operating activities was $104.2 million compared to $28.5 million in 2012.

FOURTH QUARTER RESULTS

Sales amounted to $211.9 million, up 33.0% from $159.3 million for the same period a year earlier. The McFarland operations contributed additional sales of $49.3 million, net of production transferred from other Stella-Jones facilities, over a two-month period, while assets acquired from PWP generated sales of $4.1 million. The year-over-year conversion effect from fluctuations in the value of the Canadian dollar, versus the U.S. dollar, increased the value of U.S. dollar denominated sales by $5.8 million. Excluding these factors, sales decreased approximately $6.7 million, as the year-over-year timing difference for certain utility pole orders and the timing effect on sales from the program transition of a Class 1 railroad customer more than offset solid industry demand for railway ties.

Sales of railway ties reached $78.3 million in 2013, versus $73.7 million in 2012. This increase reflects solid market demand, including higher year-over-year advanced deliveries, and the PWP acquisition, partially offset by a timing effect of $13.4 million from the transition of a Class 1 railroad customer to a Black Tie program. Utility pole sales rose $36.9 million to $107.1 million due to a $41.3 million additional net contribution from the McFarland operations over a two-month period and the PWP acquisition. Excluding these factors, sales declined due to the year-over-year timing difference for certain orders. Residential lumber sales reached $13.8 million, up from $5.1 million last year, mainly due to additional sales of $8.1 million from the McFarland operations. Finally, industrial product sales were $12.7 million, versus $10.4 million a year ago, as a result of higher sales of industrial timber for railway bridges.

Operating income was $29.5 million, or 13.9% of sales, versus $21.1 million, or 13.3% of sales, last year. 2013 results include acquisition costs of $1.2 million related to the PWP transaction, while last year's results included acquisition costs of $2.4 million related to the McFarland transaction. Excluding these elements, operating income for the fourth quarter of 2013 was $30.7 million, or 14.5% of sales, compared with $23.5 million, or 14.8% of sales, a year earlier. The variation as a percentage of sales reflects a less favourable year-over-year product mix, partially offset by greater efficiencies throughout the Company's plant network.

Net income for the period rose 19.0% to $19.7 million, or $0.29 per share, fully diluted, compared with $16.5 million, or $0.25 per share, fully diluted, last year. Cash flows from operating activities before changes in non-cash working capital components and interest and income taxes paid reached $34.6 million, up 54.8% from $22.4 million a year earlier.

SOLID FINANCIAL POSITION

As at December 31, 2013, the Company's long-term debt, including the current portion, stood at $372.9 million compared with $349.6 million at the end of the previous year. The increase essentially reflects the additional long-term debt required to finance the acquisition of PWP and the effect of local currency translation on U.S. dollar denominated long-term debt. Despite this acquisition completed shortly before year end, Stella-Jones total debt to total capitalization improved to 0.39:1 as at December 31, 2013, versus 0.44:1 a year earlier.

QUARTERLY DIVIDEND OF $0.07 PER SHARE

On March 13, 2014, the Board of Directors declared a quarterly dividend of $0.07 per common share payable on April 30, 2014 to shareholders of record at the close of business on April 2, 2014.

OUTLOOK

"As the North American economy continues to strengthen, demand for our core products should remain healthy in 2014. While a stronger economy could result in a tighter market for untreated railway ties and utility poles, as demand for other wood-based products also increases, we believe our inventory position and the strength of our procurement network should allow Stella-Jones to meet demand at the most optimal cost. The integration of the PWP assets will be a key focus in the year ahead. The operating efficiencies we expect to achieve should further strengthen our market penetration and status as a leading provider of treated wood products in our core categories," concluded Mr. McManus.

CONFERENCE CALL

Stella-Jones will hold a conference call to discuss these results on March 14, 2014, at 10:00 AM Eastern Time. Interested parties can join the call by dialing 647-427-7450 (Toronto or overseas) or 1-888-231-8191 (elsewhere in North America). Parties unable to call in at this time may access a tape recording of the meeting by calling 1-855-859-2056 and entering the passcode 69145418. This tape recording will be available on Friday, March 14, 2014 as of 1:00 PM Eastern Time until 11:59 PM Eastern Time on Friday, March 21, 2014.

NON-IFRS FINANCIAL MEASURES

Operating income and cash flow from operating activities before changes in non-cash working capital components and interest and income tax paid 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 regarding the Company's financial condition and results of operations as they provide additional measures of its performance.

ABOUT STELLA-JONES

Stella-Jones Inc. (TSX:SJ) is a leading producer and marketer of pressure treated wood products. The Company supplies North America's railroad operators with railway ties and timbers, and the continent's electrical utilities and telecommunication companies with utility poles. Stella-Jones also provides residential lumber to retailers and wholesalers for outdoor applications, as well as industrial products for construction and marine applications. The Company's common shares are listed on the Toronto Stock Exchange.

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, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, the ability of the Company to raise the capital required for acquisitions, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.

Note to readers: Condensed interim unaudited consolidated financial statements for the fourth quarter and year ended December 31, 2013 are available on Stella-Jones' website at www.stella-jones.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
In his session at 20th Cloud Expo, Mike Johnston, an infrastructure engineer at Supergiant.io, discussed how to use Kubernetes to set up a SaaS infrastructure for your business. Mike Johnston is an infrastructure engineer at Supergiant.io with over 12 years of experience designing, deploying, and maintaining server and workstation infrastructure at all scales. He has experience with brick and mortar data centers as well as cloud providers like Digital Ocean, Amazon Web Services, and Rackspace. H...
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
As businesses adopt functionalities in cloud computing, it’s imperative that IT operations consistently ensure cloud systems work correctly – all of the time, and to their best capabilities. In his session at @BigDataExpo, Bernd Harzog, CEO and founder of OpsDataStore, presented an industry answer to the common question, “Are you running IT operations as efficiently and as cost effectively as you need to?” He then expounded on the industry issues he frequently came up against as an analyst, and ...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
All organizations that did not originate this moment have a pre-existing culture as well as legacy technology and processes that can be more or less amenable to DevOps implementation. That organizational culture is influenced by the personalities and management styles of Executive Management, the wider culture in which the organization is situated, and the personalities of key team members at all levels of the organization. This culture and entrenched interests usually throw a wrench in the work...
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
SYS-CON Events announced today that Datera, that offers a radically new data management architecture, has been named "Exhibitor" of SYS-CON's 21st International Cloud Expo ®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Datera is transforming the traditional datacenter model through modern cloud simplicity. The technology industry is at another major inflection point. The rise of mobile, the Internet of Things, data storage and Big...
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...
FinTechs use the cloud to operate at the speed and scale of digital financial activity, but are often hindered by the complexity of managing security and compliance in the cloud. In his session at 20th Cloud Expo, Sesh Murthy, co-founder and CTO of Cloud Raxak, showed how proactive and automated cloud security enables FinTechs to leverage the cloud to achieve their business goals. Through business-driven cloud security, FinTechs can speed time-to-market, diminish risk and costs, maintain continu...
Existing Big Data solutions are mainly focused on the discovery and analysis of data. The solutions are scalable and highly available but tedious when swapping in and swapping out occurs in disarray and thrashing takes place. The resolution for thrashing through machine learning algorithms and support nomenclature is through simple techniques. Organizations that have been collecting large customer data are increasingly seeing the need to use the data for swapping in and out and thrashing occurs ...
In his session at @ThingsExpo, Arvind Radhakrishnen discussed how IoT offers new business models in banking and financial services organizations with the capability to revolutionize products, payments, channels, business processes and asset management built on strong architectural foundation. The following topics were covered: How IoT stands to impact various business parameters including customer experience, cost and risk management within BFS organizations.