Stella-Jones reports 2Q net income of $20.8 million

Aug 10, 2012. /Lesprom Network/. Stella-Jones Inc. announced financial results for its 2Q ended June 30, 2012. Sales for the 2Q, ended June 30, 2012 totalled $203.9 million, an increase of $23.6 million, or 13.1%, over last year's sales of $180.3 million. The Russellville, Arkansas operating facility acquired from Thompson Industries, Inc. on December 7, 2011 contributed railway tie and industrial product sales of approximately $10.1 million, while the conversion effect from fluctuations in the value of the Canadian dollar, Stella-Jones' reporting currency, versus the U.S. dollar, increased the value of U.S. dollar denominated sales by about $5.5 million when compared with the previous year. Excluding these factors, sales increased approximately $8 million, or 4.4%, as the company said in the press release received by Lesprom Network. Operating income was $32.6 million or 16.0% of sales, compared with $27.6 million or 15.3% of sales last year. The increase in monetary terms mainly reflects higher business activity and the addition of the Russellville Facility, while the increase as a percentage of sales is mainly due to a better absorption of fixed costs resulting from higher business activity and from greater efficiency throughout the Company's plant network. Net income for the period increased 20.6% to $20.8 million or $1.30 per share, fully diluted, compared with $17.3 million or $1.08 per share, fully diluted, in the 2Q 2011. Cash flow from operating activities before changes in non-cash working capital components and interest and income tax paid rose 23.0% to $36 million. "Stella-Jones achieved another strong financial performance in the 2Q driven by robust demand for our core railway tie products," said Brian McManus, President and CEO. "More importantly, our ongoing efforts to enhance operating efficiency combined with tight controls on operating costs resulted in further margin improvements and significant increases in net income and cash flow." For the six-month period ended June 30, 2012, sales amounted to $362.7 million, up 16.7% from the same period a year earlier. The Russellville Facility contributed sales of $19.7 million, while the conversion effect from fluctuations in the value of the Canadian dollar, versus the U.S. dollar, increased the year-over-year value of U.S. dollar denominated sales by about $7 million. Excluding these factors, sales increased approximately $25.2 million, or 8.1%. Operating income was $56.7 million or 15.6% of sales, compared with $42.0 million or 13.5% of sales last year. Net income for the period reached $35.8 million or $2.24 per share, fully diluted, up 39.1% from $25.8 million or $1.61 per share, fully diluted, a year earlier. Cash flow from operating activities before changes in non-cash working capital components and interest and income tax paid rose 36.0% to $63.1 million. On August 9, 2012, the Board of Directors declared a quarterly dividend of $0.16 per common share payable on September 28, 2012 to shareholders of record as the close of business on September 4, 2012. 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, timbers and recycling services; and the continent's electrical utilities and telecommunications companies with utility poles.