Stella-Jones Inc. announced financial results for its 3Q ended September 30, 2019. Sales reached $626.6 million, down $3.4 million, versus sales of $630 million for the corresponding period last year. The currency conversion effect had a positive impact of $2.8 million, as the company said in the press release received by Lesprom Network.
3Q operating income was $78.6 million, or 12.6% of sales, compared with $67.9 million, or 10.8% of sales, last year. The increase versus last year is explained by improved pricing and better operational efficiencies. In addition, lower lumber costs, which are passed through in a timely manner to customers via lower selling prices, have contributed to decreased cost of sales but have also driven margins up as a percentage of sales.
Net income reached $53.7 million, or $0.78 per diluted share, versus net income of $45.8 million, or $0.66 per diluted share, last year.
Éric Vachon, President and CEO of Stella Jones, said: “We are pleased with our 3Q results, which saw sales in our utility pole, railway tie and industrial product categories increase due to a combination of higher pricing and increased volume. 3Q sales increased year-over-year when adjusting for the impact of lower lumber costs, which are primarily a pass-through to customers. Our sales were negatively impacted by $20.2 million in the logs and lumber product category due to these lower lumber costs and sales in the residential lumber product category also declined for this reason, but were partially offset by higher volumes. Profitability increased, driven by improved pricing, lower lumber costs, a positive product mix and improved operational efficiencies.”
Stella-Jones Inc. is a leading producer and marketer of pressure treated wood products.