|By Marketwired .||
|March 14, 2014 07:00 AM EDT||
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 ----------------------------------------------------------------------------
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.
"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.
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.
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
Let’s face it, embracing new storage technologies, capabilities and upgrading to new hardware often adds complexity and increases costs. In his session at 18th Cloud Expo, Seth Oxenhorn, Vice President of Business Development & Alliances at FalconStor, will discuss how a truly heterogeneous software-defined storage approach can add value to legacy platforms and heterogeneous environments. The result reduces complexity, significantly lowers cost, and provides IT organizations with improved effi...
Feb. 14, 2016 01:15 AM EST Reads: 291
With the Apple Watch making its way onto wrists all over the world, it’s only a matter of time before it becomes a staple in the workplace. In fact, Forrester reported that 68 percent of technology and business decision-makers characterize wearables as a top priority for 2015. Recognizing their business value early on, FinancialForce.com was the first to bring ERP to wearables, helping streamline communication across front and back office functions. In his session at @ThingsExpo, Kevin Roberts...
Feb. 13, 2016 11:15 PM EST Reads: 433
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Feb. 13, 2016 11:15 PM EST Reads: 314
It's easy to assume that your app will run on a fast and reliable network. The reality for your app's users, though, is often a slow, unreliable network with spotty coverage. What happens when the network doesn't work, or when the device is in airplane mode? You get unhappy, frustrated users. An offline-first app is an app that works, without error, when there is no network connection.
Feb. 13, 2016 09:00 PM EST Reads: 258
Data-as-a-Service is the complete package for the transformation of raw data into meaningful data assets and the delivery of those data assets. In her session at 18th Cloud Expo, Lakshmi Randall, an industry expert, analyst and strategist, will address: What is DaaS (Data-as-a-Service)? Challenges addressed by DaaS Vendors that are enabling DaaS Architecture options for DaaS
Feb. 13, 2016 08:45 PM EST Reads: 400
One of the bewildering things about DevOps is integrating the massive toolchain including the dozens of new tools that seem to crop up every year. Part of DevOps is Continuous Delivery and having a complex toolchain can add additional integration and setup to your developer environment. In his session at @DevOpsSummit at 18th Cloud Expo, Miko Matsumura, Chief Marketing Officer of Gradle Inc., will discuss which tools to use in a developer stack, how to provision the toolchain to minimize onboa...
Feb. 13, 2016 08:00 PM EST Reads: 150
SYS-CON Events announced today that Catchpoint Systems, Inc., a provider of innovative web and infrastructure monitoring solutions, has been named “Silver Sponsor” of SYS-CON's DevOps Summit at 18th Cloud Expo New York, which will take place June 7-9, 2016, at the Javits Center in New York City, NY. Catchpoint is a leading Digital Performance Analytics company that provides unparalleled insight into customer-critical services to help consistently deliver an amazing customer experience. Designed...
Feb. 13, 2016 07:00 PM EST Reads: 419
With the proliferation of both SQL and NoSQL databases, organizations can now target specific fit-for-purpose database tools for their different application needs regarding scalability, ease of use, ACID support, etc. Platform as a Service offerings make this even easier now, enabling developers to roll out their own database infrastructure in minutes with minimal management overhead. However, this same amount of flexibility also comes with the challenges of picking the right tool, on the right ...
Feb. 13, 2016 04:45 PM EST Reads: 207
CIOs and those charged with running IT Operations are challenged to deliver secure, audited, and reliable compute environments for the applications and data for the business. Behind the scenes these tasks are often accomplished by following onerous time-consuming processes and often the management of these environments and processes will be outsourced to multiple IT service providers. In addition, the division of work is often siloed into traditional "towers" that are not well integrated for cro...
Feb. 13, 2016 04:00 PM EST Reads: 513
SYS-CON Events announced today that FalconStor Software® Inc., a 15-year innovator of software-defined storage solutions, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. FalconStor Software®, Inc. (NASDAQ: FALC) is a leading software-defined storage company offering a converged, hardware-agnostic, software-defined storage and data services platform. Its flagship solution FreeStor®, utilizes a horizonta...
Feb. 13, 2016 02:30 PM EST
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, will discuss the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filte...
Feb. 13, 2016 02:00 PM EST Reads: 259
SYS-CON Events announced today that Avere Systems, a leading provider of enterprise storage for the hybrid cloud, will exhibit at SYS-CON's 18th International Cloud Expo®, which will take place on June 7-9, 2016, at the Javits Center in New York City, NY. Avere delivers a more modern architectural approach to storage that doesn’t require the overprovisioning of storage capacity to achieve performance, overspending on expensive storage media for inactive data or the overbuilding of data centers ...
Feb. 13, 2016 01:30 PM EST Reads: 148
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies adopt disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advanced analytics, and DevO...
Feb. 13, 2016 01:30 PM EST Reads: 291
SYS-CON Events announced today that Commvault, a global leader in enterprise data protection and information management, has been named “Bronze Sponsor” of SYS-CON's 18th International Cloud Expo, which will take place on June 7–9, 2016, at the Javits Center in New York City, NY, and the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Commvault is a leading provider of data protection and information management...
Feb. 13, 2016 12:45 PM EST Reads: 477
SYS-CON Events announced today that Interoute, owner-operator of one of Europe's largest networks and a global cloud services platform, has been named “Bronze Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2015 at the Javits Center in New York, New York. Interoute is the owner-operator of one of Europe's largest networks and a global cloud services platform which encompasses 12 data centers, 14 virtual data centers and 31 colocation centers, with connections to 195 ad...
Feb. 13, 2016 12:00 PM EST Reads: 454