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

Contacts:
Source:
Stella-Jones Inc.

Eric Vachon, CPA, CA
Senior Vice-President and Chief Financial Officer
(514) 940-3903
evachon@stella-jones.com

Martin Goulet, CFA
MaisonBrison Communications
(514) 731-0000
martin@maisonbrison.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
The taxi industry never saw Uber coming. Startups are a threat to incumbents like never before, and a major enabler for startups is that they are instantly “cloud ready.” If innovation moves at the pace of IT, then your company is in trouble. Why? Because your data center will not keep up with frenetic pace AWS, Microsoft and Google are rolling out new capabilities. In his session at 20th Cloud Expo, Don Browning, VP of Cloud Architecture at Turner, posited that disruption is inevitable for comp...
"When we talk about cloud without compromise what we're talking about is that when people think about 'I need the flexibility of the cloud' - it's the ability to create applications and run them in a cloud environment that's far more flexible,” explained Matthew Finnie, CTO of Interoute, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
No hype cycles or predictions of zillions of things here. IoT is big. You get it. You know your business and have great ideas for a business transformation strategy. What comes next? Time to make it happen. In his session at @ThingsExpo, Jay Mason, Associate Partner at M&S Consulting, presented a step-by-step plan to develop your technology implementation strategy. He discussed the evaluation of communication standards and IoT messaging protocols, data analytics considerations, edge-to-cloud tec...
IoT solutions exploit operational data generated by Internet-connected smart “things” for the purpose of gaining operational insight and producing “better outcomes” (for example, create new business models, eliminate unscheduled maintenance, etc.). The explosive proliferation of IoT solutions will result in an exponential growth in the volume of IoT data, precipitating significant Information Governance issues: who owns the IoT data, what are the rights/duties of IoT solutions adopters towards t...
Wooed by the promise of faster innovation, lower TCO, and greater agility, businesses of every shape and size have embraced the cloud at every layer of the IT stack – from apps to file sharing to infrastructure. The typical organization currently uses more than a dozen sanctioned cloud apps and will shift more than half of all workloads to the cloud by 2018. Such cloud investments have delivered measurable benefits. But they’ve also resulted in some unintended side-effects: complexity and risk. ...
It is ironic, but perhaps not unexpected, that many organizations who want the benefits of using an Agile approach to deliver software use a waterfall approach to adopting Agile practices: they form plans, they set milestones, and they measure progress by how many teams they have engaged. Old habits die hard, but like most waterfall software projects, most waterfall-style Agile adoption efforts fail to produce the results desired. The problem is that to get the results they want, they have to ch...
With the introduction of IoT and Smart Living in every aspect of our lives, one question has become relevant: What are the security implications? To answer this, first we have to look and explore the security models of the technologies that IoT is founded upon. In his session at @ThingsExpo, Nevi Kaja, a Research Engineer at Ford Motor Company, discussed some of the security challenges of the IoT infrastructure and related how these aspects impact Smart Living. The material was delivered interac...
In 2014, Amazon announced a new form of compute called Lambda. We didn't know it at the time, but this represented a fundamental shift in what we expect from cloud computing. Now, all of the major cloud computing vendors want to take part in this disruptive technology. In his session at 20th Cloud Expo, Doug Vanderweide, an instructor at Linux Academy, discussed why major players like AWS, Microsoft Azure, IBM Bluemix, and Google Cloud Platform are all trying to sidestep VMs and containers wit...
The Internet giants are fully embracing AI. All the services they offer to their customers are aimed at drawing a map of the world with the data they get. The AIs from these companies are used to build disruptive approaches that cannot be used by established enterprises, which are threatened by these disruptions. However, most leaders underestimate the effect this will have on their businesses. In his session at 21st Cloud Expo, Rene Buest, Director Market Research & Technology Evangelism at Ara...
"We are a monitoring company. We work with Salesforce, BBC, and quite a few other big logos. We basically provide monitoring for them, structure for their cloud services and we fit into the DevOps world" explained David Gildeh, Co-founder and CEO of Outlyer, in this SYS-CON.tv interview at DevOps Summit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
When growing capacity and power in the data center, the architectural trade-offs between server scale-up vs. scale-out continue to be debated. Both approaches are valid: scale-out adds multiple, smaller servers running in a distributed computing model, while scale-up adds fewer, more powerful servers that are capable of running larger workloads. It’s worth noting that there are additional, unique advantages that scale-up architectures offer. One big advantage is large memory and compute capacity...
SYS-CON Events announced today that IBM has been named “Diamond Sponsor” of SYS-CON's 21st Cloud Expo, which will take place on October 31 through November 2nd 2017 at the Santa Clara Convention Center in Santa Clara, California.
A look across the tech landscape at the disruptive technologies that are increasing in prominence and speculate as to which will be most impactful for communications – namely, AI and Cloud Computing. In his session at 20th Cloud Expo, Curtis Peterson, VP of Operations at RingCentral, highlighted the current challenges of these transformative technologies and shared strategies for preparing your organization for these changes. This “view from the top” outlined the latest trends and developments i...
"Loom is applying artificial intelligence and machine learning into the entire log analysis process, from start to finish and at the end you will get a human touch,” explained Sabo Taylor Diab, Vice President, Marketing at Loom Systems, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
In his session at @ThingsExpo, Eric Lachapelle, CEO of the Professional Evaluation and Certification Board (PECB), provided an overview of various initiatives to certify the security of connected devices and future trends in ensuring public trust of IoT. Eric Lachapelle is the Chief Executive Officer of the Professional Evaluation and Certification Board (PECB), an international certification body. His role is to help companies and individuals to achieve professional, accredited and worldwide re...