Stella-Jones Inc. announced financial results for its 4Q and fiscal year ended December 31, 2018. Sales for the 4Q 2018 amounted to $432.8 million, up 14.7% from sales of $377.4 million for the same period in 2017, as the company said in the press release received by Lesprom Network.
Gross profit amounted to $67 million, or 15.5% of sales, in the 4Q 2018, versus $53.5 million, or 14.2% of sales, in the 4Q 2017. The increase as a percentage of sales mainly reflects better year-over-year overhead absorption driven by greater production activity while product margins were comparable to the previous year.
Operating income totalled $31.8 million, or 7.4% of sales, in the 4Q 2018, versus $29 million, or 7.7% of sales, last year and was impacted by a non-cash loss of $7.9 million related to the markto-market fair value of diesel and petroleum derivative commodity contracts.
4Q 2018 net income for the period reached $20.6 million, or $0.30 per diluted share, compared with $51.1 million, or $0.74 per diluted share, in the prior year.
Sales for the year ended December 31, 2018 reached $2,123.9 million, up 12.6% versus last year’s sales of $1,886.1 million.
FY 2018 operating income was $206.3 million, or 9.7% of sales, compared with $207.4 million, or 11% of sales, in 2017. While operating income in absolute dollars is in line with last year, it is lower on a percentage of sales basis.
Net income for 2018 decreased 18% to $137.6 million, or $1.98 per diluted share, down from $167.9 million, or $2.42 per diluted share, in 2017.
“We finished the year with very solid results. Sales for the quarter increased 14.7% to $432.8 million and EBITDA increased 10% to $41.8 million, despite a $7.9 million non-cash mark-to-market loss on derivative commodity contracts. For the year, sales amounted to $2.1 billion and increased in all product categories, driven by a combination of sales price increases, market demand and acquisitions. Our EBITDA was up marginally for the year, while our net income was down primarily due to a one-off non-cash tax benefit resulting from the U.S. tax reform in 2017. Stella-Jones remains in a very healthy financial position and today announced a dividend increase, for the fifteenth consecutive year.”
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.