Continental Building Products Reports Third Quarter 2018 Results
HERNDON, Va.--(BUSINESS WIRE)--Nov 8, 2018--Continental Building Products, Inc. (NYSE: CBPX) (the “Company”), a leading manufacturer of gypsum wallboard and complementary finishing products, announced today results for the third quarter ended September 30, 2018.
Highlights of Third Quarter 2018 as Compared to Third Quarter 2017Earnings per share increased 75.9% to $0.51 Net income increased 69.0% to $18.6 million EBITDA 1 increased 21.4% to $38.6 million Net sales increased 12.6% to $131.2 million Gross margin increased to 28.1% compared to 24.5% Deployed $7.3 million in capital investments Deployed $2.9 million to repurchase 76,600 shares of common stock
“We executed strong operational and financial results in the quarter with a 76% increase in earnings per share and significant operating cash flow driven by higher net sales and our highly efficient low cost operations,” stated Jay Bachmann, President and Chief Executive Officer. “We achieved a 21% increase in EBITDA and a 360 basis point improvement in gross margin, marking the fifth straight quarter that we have expanded gross margin. This overall improvement reflects our relentless focus on our Bison Way continuous improvement effort as our associates work together to streamline our operations and elevate our service to customers. We are especially pleased to deliver these results against a backdrop of continuing inflationary pressures in freight, labor and raw materials.”
Mr. Bachmann continued, “We remain focused on deploying our strong cash flow to improve our operations and cost position through investments in high-return capital projects while continuing to repurchase shares as a key avenue to return value to share owners. We are excited about the rewards to come from reinvesting in our people and our business and inspired by the commitment and hard work of everyone in the Company to ensure we deliver exceptional value to our customers.”
Third Quarter 2018 Results vs. Third Quarter 2017
Net sales were up 12.6% to $131.2 million for the third quarter 2018, compared to $116.5 million in the prior year quarter, primarily due to a 7.3% increase in average mill net price on wallboard sales and a 4.7% increase in wallboard volumes. Wallboard sales volumes increased to 674 million square feet (MMSF), compared to 644 MMSF in the prior year quarter, attributable to strong demand in the Company’s markets.
Operating income was $27.0 million, compared to $19.7 million in the prior year quarter. This increase was primarily attributable to higher net sales which more than offset an increase in input costs per unit. SG&A expense was $10.0 million compared to $8.9 million in the prior year quarter, or 7.6% of net sales in both periods.
Interest expense decreased 14.7% to $2.5 million, compared to $3.0 million in the prior year quarter, reflecting higher investment income and capitalized interest, partially offset by the rise in LIBOR.
Net income for the third quarter 2018 increased 69.0% to $18.6 million, or $0.51 per share, compared to $11.0 million, or $0.29 per share, in the prior year quarter. The $7.6 million increase in net income was primarily a result of the increase in net sales and the decrease in provision for income taxes under the new federal and state tax rates effective for 2018.
Balance Sheet and Cash Flow
As of September 30, 2018, the Company had a cash balance of $105.5 million and total outstanding borrowing under the term loan agreement of $269.5 million. During the third quarter 2018, the Company generated cash flows from operations of $31.3 million and deployed $7.3 million in capital investments.
During the third quarter 2018, the Company repurchased 76,600 shares of its common stock under its expanded repurchase program for an aggregate purchase price of $2.9 million, representing 0.2% of its outstanding shares as of December 31, 2017. As of September 30, 2018, against the program, the Company has repurchased $130.7 million of common stock at an average price of $22.47 per share and had a remaining capacity of $169.3 million for future repurchases.
Forward-Looking Outlook for the Full Year 2018SG&A is expected to be in the range of $39 - $40 million. Cost of goods sold inflation per unit compared to the prior year is expected to be in the range of 3.5% - 4% which is at the higher end of the previous range of 3% - 4%. We expect to partly offset this inflation by approximately $5 million of savings from high return capital projects. Total capital expenditures are expected to be in the range of $28 - $31 million Maintenance capital spending is expected to be in the range of $14 - $15 millionHigh-return capital spending is expected to be in the range of $14 - $16 million Depreciation and amortization is expected to be in the range of $44 - $45 million which is at the higher end of the previous range of $43 - $45 million Effective tax rate is expected to be in the range of 21% - 22%
Investor Conference Webcast and Conference Call
The Company will host a webcast and conference call on Thursday, November 8, 2018 at 5:00 p.m. Eastern Time to review third quarter 2018 financial results, discuss recent events and conduct a question-and-answer period. The live webcast will be available on the Investor Relations section of the Company’s website at www.continental-bp.com. To participate in the call, please dial (877) 407-0789 (domestic) or (201) 689-8562 (international). A replay of the conference call will be available through December 8, 2018, by dialing (844) 512-2921 (domestic) or (412) 317-6671 (international) and entering the pass code number 13683730.
About Continental Building Products
Continental Building Products is a leading North American manufacturer of gypsum wallboard and complementary finishing products. The Company is headquartered in Herndon, Virginia with operations serving the residential, commercial and repair and remodel construction markets primarily in the eastern United States and eastern Canada. For additional information, visit www.continental-bp.com.
This press release contains forward-looking statements. Forward-looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on historical information available at the time the statements are made and are based on management’s reasonable belief or expectations with respect to future events, and are subject to risks and uncertainties, many of which are beyond the Company’s control, that could cause actual performance or results to differ materially from the belief or expectations expressed in or suggested by the forward-looking statements. Forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to update any forward-looking statement to reflect future events, developments or otherwise, except as may be required by applicable law. Investors are referred to the Company’s filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q for additional information regarding the risks and uncertainties that may cause actual results to differ materially from those expressed in any forward-looking statement.
Reconciliation of Non-GAAP Measures
EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share have been presented in this press release as supplemental measures of financial performance that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (“GAAP”). This release presents EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share as supplemental performance measures because management believes that they facilitate a comparative assessment of the Company’s operating performance relative to its performance based on results under GAAP while isolating the effects of some items that vary from period to period without any correlation to core operating performance and eliminate certain charges that management believes do not reflect the Company’s operations and underlying operational performance. Furthermore, the Company’s Board of Directors’ compensation committee uses EBITDA to evaluate management’s compensation. Management also believes that EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are useful to investors because they allow investors to view the business through the eyes of management and the Board of Directors, facilitating comparison of results across historical periods.
EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share may not be comparable to similarly titled measures of other companies because other companies may not calculate EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share in the same manner. EBITDA, EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per Share are not measurements of the Company’s financial performance under GAAP and should not be considered in isolation or as alternatives to net income or earnings per share determined in accordance with GAAP or any other financial statement data presented as indicators of financial performance or liquidity, each as calculated and presented in accordance with GAAP.
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CONTACT: Continental Building Products, Inc.
Tel.: (703) 480-3980
KEYWORD: UNITED STATES NORTH AMERICA VIRGINIA
INDUSTRY KEYWORD: BUILDING SYSTEMS ENERGY COAL HOME GOODS MANUFACTURING PACKAGING OTHER MANUFACTURING NATURAL RESOURCES FOREST PRODUCTS MINING/MINERALS ARCHITECTURE INTERIOR DESIGN LANDSCAPE URBAN PLANNING RETAIL CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE RESIDENTIAL BUILDING & REAL ESTATE OTHER CONSTRUCTION & PROPERTY
SOURCE: Continental Building Products, Inc.
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PUB: 11/08/2018 04:05 PM/DISC: 11/08/2018 04:05 PM