Stella-Jones: Stella-Jones Announces Fourth Quarter and Year-End Results

Annual sales of $3,469 million, up 5% vs the prior yearOperating income of $503 millionEBITDA(1) of $633 million, or 18.2% margin(1)EPS of $5.66, compared to $5.62 in 2023 Strong operating cash flow of $408 millionIncreasing quarterly dividend by 11% to $0.31 per shareReaffirms 2023-2025 financial objectivesMONTREAL, Feb. 27, 2025 (GLOBE NEWSWIRE) -- Stella-Jones Inc. (TSX:SJ) ("Stella-Jones" or the "Company") today announced financial results for its fourth quarter and year ended December 31, 2024."We concluded another year of sales and EBITDA growth, reflecting the enduring strength of our business and unwavering customer-centric approach," said Eric Vachon, President and Chief Executive Officer of Stella-Jones. "We achieved solid results in our infrastructure product categories, even in the face of softer market demand for utility poles. We acquired new customers, maintained our expanded EBITDA margin of over 18%, and delivered strong operating cashflows. Given our conviction in the long-term fundamentals of our business, we have also increased the quarterly dividend for the 21st consecutive year.""As we turn to 2025, we remain confident in the growth prospects of our current infrastructure business, supported by the accelerated need to strengthen North America's aging electrical grid, and the opportunities in railway ties to drive increased profitability. We also look to build even stronger customer relationships by expanding our offering to our infrastructure customers. As we drive forward, we will continue to focus on optimizing our operating model and generating a healthy EBITDA margin. With our strong cash flow-generating business and disciplined capital allocation strategy, we are confident that our actions will continue to enhance shareholder value."Financial Highlights (in millions of Canadian dollars, except ratios and per share data)Three-month periodsended December 31, Yearsended December 31, 2024 2023 2024 2023 Sales730 688 3,469 3,319 Gross profit(1)138 137 724 688 Gross profit margin(1)18.9% 19.9% 20.9% 20.7% Operating income81 89 503 499 Operating income margin(1)11.1% 12.9% 14.5% 15.0% EBITDA(1)115 120 633 608 EBITDA margin(1)15.8% 17.4% 18.2% 18.3% Net income52 56 319 326 Earnings per share ("EPS") - basic and diluted0.93 0.98 5.66 5.62 Weighted average shares outstanding (basic, in '000s)55,966 57,076 56,403 57,963 Net debt-to-EBITDA(1) 2.6x 2.6x (1) These indicated terms have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the section entitled "Non-GAAP and Other Financial Measures" of this press release for an explanation of the non-GAAP and other financial measures used and presented by the Company and a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.FOURTH QUARTER RESULTSSales for the fourth quarter of 2024 amounted to $730 million, up 6% from sales of $688 million for the same period in 2023. Excluding the currency conversion of $14 million, pressure-treated wood sales rose $31 million, or 5% due to higher railway ties sales attributable to an increase in Class 1 volumes and improved residential lumber sales, while utility poles sales were relatively unchanged. Lower logs and lumber sales were driven by a decrease in log sales activity, compared to the fourth quarter last year.Pressure-treated wood products:Utility poles (53% of Q4-24 sales): Utility poles sales totaled $385 million in the fourth quarter of 2024, compared to sales of $383 million in the corresponding period last year. Excluding the currency conversion effect, sales decreased by 2%, due to lower volumes from non-contract business, offset in large part by favourable price adjustments to cover increased costs.Railway ties (26% of Q4-24 sales): Sales of railway ties amounted to $193 million, compared to $165 million in the same period last year. Excluding the currency conversion effect, railway ties sales rose 15%, largely explained by the timing of Class 1 shipments. For the year, Class 1 volumes increased modestly when compared to 2023.Residential lumber (13% of Q4-24 sales): Residential lumber sales totaled $93 million, up from $82 million of sales generated in the same period in 2023, reflecting a 12% organic sales growth. The increase in residential lumber sales stemmed from favourable pricing attributable to the increase in the market price of lumber, as well as higher sales volumes, when compared to the same period last year.Industrial products (4% of Q4-24 sales): Industrial products sales amounted to $31 million, up from $27 million last year. The organic sales growth of 11% was mainly attributable to higher sales for railway bridges and crossings.Logs and lumber:Logs and lumber (4% of Q4-24 sales): Logs and lumber sales totaled $28 million, down 10% compared to the same period last year.Gross profit was $138 million in the fourth quarter of 2024, relatively unchanged compared to the gross profit of $137 million in the fourth quarter of 2023. As a percentage of sales, gross profit decreased from 19.9% in the fourth quarter of 2023 to 18.9% in the fourth quarter of 2024 due to a less favourable sales mix.Net income for the period amounted to $52 million, or $0.93 per share, compared with $56 million, or $0.98 per share, in the corresponding period of 2023.2024 RESULTSSales for the year ended December 31, 2024 reached $3,469 million, up 5%, versus sales of $3,319 million in 2023. Excluding the contribution from the acquisition of the Baldwin assets of $25 million and the currency conversion effect of $36 million, pressure-treated wood sales rose $110 million, or 3%. Infrastructure sales, namely utility poles, railway ties and industrial products, grew organically by $144 million or 6%, while residential lumber sales decreased by $34 million. Favourable pricing across all the infrastructure product categories and higher railway ties volumes were partially offset by lower volumes for utility poles and residential lumber. The decrease in logs and lumber sales compared to last year was largely attributable to less logs sales.Pressure-treated wood products:Utility poles (49% of 2024 sales): Utility poles sales increased to $1,705 million in 2024, compared to sales of $1,571 million in 2023. Excluding the contribution from the acquisition of assets of Baldwin in July 2023 and the currency conversion effect, utility poles sales increased by $88 million, or 6%, driven by sales price adjustments to cover increased costs. This increase was offset in part by lower volumes when compared to last year. Incremental multi-year commitments were secured from new and existing customers but volumes were impacted by the slower pace of purchases and a deferral in the execution of projects by utilities, largely influenced by economic factors, including inflation and utilities' supply chain constraints, as well as timing of utilities' rate-based funding.Railway ties (26% of 2024 sales): Railway ties sales were $890 million in 2024, compared to sales of $828 million in 2023. Excluding the currency conversion effect, railway ties sales increased $51 million, or 6%. The increase was attributable to higher volumes, mainly for non-Class 1 business due to the replenished level of railway ties inventory, as well as improved pricing, when compared to last year.Residential lumber (18% of 2024 sales): Sales in the residential lumber category decreased to the lower end of the Company's $600 to $650 million target range for this product category, at $614 million in 2024, compared to sales of $645 million in 2023. Excluding the currency conversion effect, residential lumber sales decreased $34 million, or 5%, all explained by lower sales volumes due to softer consumer demand. The average market price of lumber remained relatively unchanged in 2024 when compared to 2023.Industrial products (4% of 2024 sales): Industrial products sales were $154 million in 2024 compared to sales of $148 million in 2023. Excluding the currency conversion effect, industrial product sales increased five million dollars, or 3%, mainly driven by higher sales for railway bridges and crossings.Logs and lumber:Logs and lumber (3% of 2024 sales): Sales in the logs and lumber product category were $106 million in 2024, down from $127 million in 2023. The decrease in sales was explained by less logs sales activity.Gross profit increased to $724 million in 2024, compared to $688 million in 2023, representing a margin of 20.9% and 20.7% respectively. Similarly, EBITDA increased to $633 million in 2024 compared to $608 million in 2023, largely due to the sales growth of the Company's infrastructure product categories. EBITDA margin remained relatively unchanged at 18.2% in 2024, compared to 18.3% in 2023.Net income in 2024 was $319 million, compared to net income of $326 million in 2023. Despite the lower net income, earnings per share in 2024 was higher at $5.66 versus $5.62 in 2023 due to the continued repurchase of shares through the Company's normal course issuer bids.LIQUIDITY AND CAPITAL RESOURCES During the year ended December 31, 2024, Stella-Jones used the cash generated from operations ...Full story available on Benzinga.com