SOUND FINANCIAL POSITION
As at December 31, 2012, the Company's financial position remained healthy with total debt of $363.6 million, including the increased draw-down of $152.6 million on the committed revolving credit facility to partially finance the acquisition of McFarland. At that same date, the ratio of total debt to total capitalization was 0.44:1, versus 0.35:1 twelve months earlier.
Reflecting the acquisition of McFarland, working capital stood at $444.8 million as at December 31, 2012, up from $273.2 million a year earlier. Excluding McFarland, accounts receivable declined as a result of lower business activity in the fourth quarter of 2012, compared with the same period in 2011, while inventories increased following a planned increase of air-dried wood, both to improve future treating cycles and meet anticipated sales growth.
QUARTERLY DIVIDEND OF $0.20 PER SHARE
On March 21, 2013, the Board of Directors declared a quarterly dividend of $0.20 per common share payable on April 30, 2013 to shareholders of record at the close of business on April 2, 2013.
"We continue to expect healthy demand for our core products in 2013. North American railroad operators continue to upgrade and expand their infrastructure to maintain optimal efficiency, while demand is expected to hold in the utility pole market. In the short-term, our main priority is to integrate the McFarland operations and benefit from greater market penetration, synergies and additional operating efficiencies from a larger network. We will also focus on cash flow generation in order to reduce debt, invest in initiatives that further enhance our network and maintain an optimal dividend policy to the benefit of our shareholders," concluded Mr. McManus.
Stella-Jones will hold a conference call to discuss these results on Friday, March 22, 2013, at 10:00 AM Eastern Time. Interested parties can join the call by dialling 647-427-7450 (Toronto or overseas) or 1-888-231-8191 (elsewhere in North America). Parties unable to call in at this time may access a tape recording of the meeting by calling 1-855-859-2056 and entering the passcode 90531951. This tape recording will be available on Friday, March 22, 2013 as of 1:00 PM Eastern Time until 11:59 PM Eastern Time on Friday, March 29, 2013.
NON-IFRS FINANCIAL MEASURES
Operating income and cash flow from operations are financial measures not prescribed by IFRS and are not likely to be comparable to similar measures presented by other issuers. Management considers these measures to be useful information to assist knowledgeable investors in evaluating the cash generating capabilities of the Company.
Stella-Jones Inc. (TSX: SJ) 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. Stella-Jones also provides industrial products and services for construction and marine applications, as well as residential lumber to retailers and wholesalers for outdoor applications. The Company's common shares are listed on the Toronto Stock Exchange.
Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such factors may include, without excluding other considerations, fluctuations in quarterly results, evolution in customer demand for the Company's products and services, the impact of price pressures exerted by competitors, the ability of the Company to raise the capital required for acquisitions, and general market trends or economic changes. As a result, readers are advised that actual results may differ from expected results.
Note to readers: Complete unaudited fourth-quarter and year-end financial statements are available on Stella-Jones' website at www.stella-jones.com
Eric Vachon, CPA, CA
Senior Vice-President and Chief Financial Officer
Tel.: (514) 940-3903
Martin Goulet, CFA
Tel.: (514) 731-0000
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