Stella-Jones Inc. announced financial results for its 1Q ended March 31, 2017. Sales reached $396.9 million, versus $421 million last year. Acquisitions contributed sales of approximately $22.8 million, while the conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones’ reporting currency, versus the U.S. dollar, had a negative impact of $11.3 million on the value of U.S. dollar denominated sales. Excluding these factors, sales decreased approximately $35.5 million, or 8.4%.
Operating income stood at $40.8 million, or 10.3% of sales, compared with $54.6 million, or 13.0% of sales in the 1Q of the previous year. The decrease in absolute dollars essentially reflects lower business activity, as explained above, and the effect of currency translation, partially offset by the contribution from acquisitions.
Net income for the 1Q 2017 was $25.9 million, or $0.37 per diluted share, down from $35 million, or $0.51 per diluted share, in the 1Q 2016.
“As anticipated, results for the 1Q 2017 reflected both lower sales volume and weaker pricing in the railway tie category. Utility poles showed improved performance, reflecting sales synergies directly related to Stella-Jones’ expansion in the southeastern United States over the past two years. During the quarter, our new treating facility in Cameron, Wisconsin became fully operational, providing us with additional capacity to service the utility pole market,” said Brian McManus, President and CEO.
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.
