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Press release from CNW Group

Taiga improves its operating profits in fiscal 2012

Thursday, June 21, 2012

Taiga improves its operating profits in fiscal 201219:53 EDT Thursday, June 21, 2012BURNABY, BC, June 21, 2012 /CNW/ - Taiga Building Products Ltd. ("Taiga" or the "Company") today reported fourth quarter and March 31, 2012 fiscal year financial results.The Company's results are presented in accordance with International Financial Reporting Standards ("IFRS") and comparative information for the corresponding 2011 results has been restated accordingly.Fiscal Year 2012 Earnings ResultsEBITDA for the year ended March 31, 2012 was $34.6 million compared to $33.4 million last year.Gross margin for the fiscal year ended March 31, 2012 increased to $95.8 million from $88.7 million in the previous year. Gross margin percentage for the year improved to 9.9% compared to 9.0% in the previous year. During the first quarter, fiscal year 2011, gross margin percentage was impacted by a sharp decline in lumber and panel commodity prices. Commodity price weakness continued throughout fiscal year 2011.Net earnings for the year ended March 31, 2012 were $3.7 million compared to $4.0 million last year. Pre-tax net earnings results were impacted by one-time charges of $2.1 million.  Operating costs increases included compensation of $2.6 million, distribution and warehousing of $1.0 million and interest expense of $1.0 million.The Company's consolidated net sales for the year ended March 31, 2012 were $971.6 million compared to $981.8 million over the last fiscal year. The 1% decrease in sales was largely due to weak first quarter performance, notably poor spring weather and low commodity prices. The decrease was partially offset by stronger fourth quarter sales performance attributable to very mild winter conditions in the eastern half of Canada. Fourth quarter conditions have led to improved lumber and panels prices heading into fiscal year 2013.Fourth Quarter Ended March 31, 2012 Earnings ResultsEBITDA for the fourth quarter March 31, 2012 was $6.2 million compared to $4.7 million in the same quarter last year.Gross margin for the fourth quarter was $22.6 million compared to $17.6 million in the same quarter last year. Taiga's gross margin percentage for the quarter ended March 31, 2012 was 9.9% compared to 8.5% for the same period last year. The increases were due to an improved commodity pricing environment and a $1.5 million reversal of product costs over-accrued during fiscal year 2012.Net loss for the fourth quarter was $1.5 million compared to a loss of $2.0 million in the same quarter last year. Pre-tax net loss results were impacted by one-time charges of $1.3 million.  Operating costs included increased variable compensation of $3.5 million during the quarter.Sales for the fourth quarter increased by $21.3 million or 10.4% to $227.0 million compared to $205.7 million in the same quarter last year. Taiga experienced healthy demand for its product offering as retailers began restocking for the spring building season earlier in the quarter compared to last year.DividendIn light of the continuing economic uncertainty and cautious residential housing sentiment in Canada, the Board of Directors has decided not to declare and pay the first instalment payment of its semi-annual dividend policy with respect to the 2012 fiscal year's net earnings.  The decision regarding the second instalment payment with respect to the 2012 fiscal year's net earnings will be announced in early January 2013.Condensed Consolidated Statement of EarningsFor the Fiscal Year Ended(in thousands of Canadian dollars, except for per share amounts)  March 31,   2012$ 2011$Sales               971,625              981,777Gross margin   95,811  88,655Distribution expense   18,603  17,464Selling and administration expense   46,441  42,233Finance expense   6,984  6,352Subordinated debt interest expense   16,385  16,064Other expense (income)   161  (683)Earnings before income taxes   7,237  7,225Provision for income taxes   3,513  3,224Net earnings   3,724  4,001Net earnings per share(1)   0.11  0.12EBITDA(2)   34,555  33,448The following is the reconciliation of net earnings to EBITDA:  March 31, (in thousands of Canadian dollars) 2012$2011$Net earnings 3,7244,001Income taxes 3,5133,224Finance and subordinated debt interest expense 23,36922,416Amortization 3,9493,807EBITDA 34,55533,448    For the Three Months Ended(in thousands of Canadian dollars, except for per share amounts)     March 31,    2012$ 2011$Sales               $226,977              $205,717Gross margin   22,552  17,566Distribution expense   4,816  4,756Selling and administration expense   12,179  8,863Finance expense   1,938  1,956Subordinated debt interest expense   4,337  4,016Other expense   394  273Loss before income taxes   (1,112)  (2,298)Provision for (recovery of) income taxes   381  (295)Net loss   (1,493)  (2,003)Net loss per share(1)   (0.05)  (0.06)EBITDA(2)   6,151  4,652The following is the reconciliation of net earnings to EBITDA:  Three Months EndedMarch 31,  (in thousands of Canadian dollars) 2012$2011$Net loss (1,493)(2,003)Income taxes 381(295)Finance and subordinated debt interest expense 6,2755,972Amortization 988978EBITDA 6,1514,652Notes:(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, 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.The foregoing selected financial information is qualified in its entirety by and should be read in conjunction with, our audited consolidated financial statements for the fiscal year ended March 31, 2012 and accompanying notes and management's discussion and analysis which will be available shortly on Sedar at www.sedar.com.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. Examples of such forward looking statements within this press release include statements relating to: our anticipated results of operations, including cost reduction savings; our expectations regarding market conditions; the sufficiency of our cash requirements and our ability to remain in compliance with our debt covenants. 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 risks 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.For further information: For further information regarding Taiga please contact:  Tom Stefan CFO & Vice President, Finance and Administration Phone: 604-438-1471 Fax:     604-439-4242 Mark Schneidereit Manager, Corporate Planning Phone:  604-438-1471 Fax:  604-439-4242