In This Article:
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Revenue: $915 million in Q3, a decrease of 4% year-over-year.
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Operating Income: $130 million for the quarter.
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EBITDA: $162 million in Q3, with a margin of 17.7%.
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Year-to-Date Revenue: $2.7 billion, up 4%.
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Year-to-Date EBITDA: $518 million, with a margin of 18.9%.
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Utility Pole Sales: $448 million, up $10 million, despite a 6% decrease in volume.
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Railway Tie Sales: Decreased by $25 million due to lower volume.
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Residential Lumber Sales: Decreased 5% to $191 million.
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Operating Cash Flow: $186 million in Q3, $301 million year-to-date.
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Inventory: $1.6 billion at the end of the quarter, higher than anticipated.
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Shareholder Returns: $112 million returned through dividends and share repurchases in the first nine months.
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Net Debt-to-EBITDA Ratio: 2.5 times as of September 30.
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Bond Offering: $400 million for seven years at a rate of 4.3%.
Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Stella-Jones Inc (STLJF) reported a solid EBITDA margin of 17.7% for the third quarter, exceeding their profitability objective.
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The company has expanded its EBITDA margin by over 300 basis points since 2022, with a target to sustain an expanded margin of over 17%.
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Stella-Jones Inc (STLJF) generated strong operating cash flows of $186 million during the quarter, contributing to a year-to-date operating cash flow of $301 million.
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The company has a strong financial position with almost $750 million of available capital following a successful $400 million bond offering.
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Stella-Jones Inc (STLJF) is actively pursuing acquisitions as a cornerstone of its growth strategy, leveraging its infrastructure customer base and North American footprint.
Negative Points
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Third quarter sales decreased by 4% year-over-year, driven by lower volumes across all product categories.
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Utility pole sales volumes were down 6% compared to the previous year, attributed to a slowdown in project-based activity.
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Railway tie sales decreased by $25 million due to lower volumes and the timing of shipments.
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Residential lumber sales decreased by 5% due to lower volumes, despite stable pricing.
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The company adjusted its three-year sales target to approximately $3.6 billion by 2025, down from the previous target of above $3.6 billion.
Q & A Highlights
Q: Can you provide additional color on the updated consolidated guidance for the pole and tie segments? A: Eric Vachon, President and CEO, explained that the sales target for 2025 has been adjusted to $3.6 billion. Utility pole sales growth is expected to align with industry growth of 6% to 7%, while railway ties will maintain low single-digit growth. The adjustment reflects slower project demand and cautious order confirmations from long-term customers.