Stella-Jones Inc. announced financial results for its 4Q and fiscal year ended December 31, 2017. 4Q 2017 sales amounted to $377.4 million, representing an increase of 10.4% from $341.7 million a year ago, as the company said in the press release received by Lesprom Network.
Operating income totalled $29 million, or 7.7% of sales, in the 4Q 2017, versus $28.2 million, or 8.2% of sales, last year. The increase in absolute dollars reflects higher business activity, while the decrease as a percentage of sales is mainly attributable to the sales mix within each product category and softer pricing in certain regions.
4Q 2017 net income was $51.1 million, or $0.74 per diluted share, up from $18.5 million, or $0.27 per diluted share, in the prior year. The increase reflects the aforementioned tax benefit.
FY 2017 sales reached $1.89 billion, up 2.6% from last year’s sales of $1.84 billion. FY 2017 operating income was $207.4 million, or 11.0% of sales, compared with $233.2 million, or 12.7% of sales, in 2016. The decrease as a percentage of sales is mainly attributable to lower selling prices for railway ties, a less favourable geographical mix in the utility pole category and increased untreated lumber costs in the residential lumber category. These factors were partially offset by a reduction in selling and administrative expenses, as well as favourable year-over-year variations in certain provisions and in foreign exchange gains and losses.
Net income for 2017 increased 9.1% to $167.9 million, or $2.42 per diluted share, up from $153.9 million, or $2.22 per diluted share, in 2016. The year-over-year increase reflects a one-off non-cash tax benefit of $30 million recorded in the 4Q resulting from the remeasurement of deferred tax liabilities following a reduction in the U.S. top federal corporate income tax rate.
Stella-Jones Inc. 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.
