CANAM GROUP REPORTS NET EARNINGS OF $2.1M FOR THE THIRD QUARTER OF 2010
BOUCHERVILLE, QC, Oct. 27 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced net earnings of $2.1M, or $0.05 per share, for the third quarter of 2010, compared with $4.4M, or $0.10 per share, for the same quarter in 2009. Consolidated sales for the quarter rose 46% to $211.9M versus $144.7M for the year-earlier quarter.
For the first nine-month period of 2010, the company's net loss was $0.9M, or $0.02 per share, compared to $15M, or $0.33 per share, for the corresponding period in 2009. Consolidated sales for the first nine months of 2010 totaled $502.9M, up 5.6% from $476.2M last year.
President and chief operating officer Marc Dutil said that the growth in third quarter sales resulted from a higher volume of structural steel construction projects and the acquisition of FabSouth earlier this year. The company has a solid backlog of $513M despite a persisting slowdown in commercial and industrial construction, primarily in the United States, which exerts strong pressure on the margins.
On October 21, Canam Group completed a $69-million public offering of convertible debentures bearing interest at 6.25% and maturing on October 31, 2015. The company also signed letters of commitment with lenders for a new revolving credit facility and non-revolving loan totaling $118M.
Canam Group's order backlog as at September 25, 2010 stood at $513M, up from $392M as at September 26, 2009.
The board of directors approved the payment of a quarterly dividend of $0.04 per share on December 31, 2010 to shareholders of record on December 17, 2010.
About Canam Group Inc.
Canam Group is a leader in the design and fabrication of construction products and solutions and a leading provider of design-build and building information modeling (BIM) services. The company operates more than 25 manufacturing plants and engineering offices in Canada, the United States, Romania, India and China, and has partnerships with companies in Saudi Arabia, the United Arab Emirates and China.
Conference call
Canam Group will hold a conference call with financial analysts and media representatives on Wednesday, October 27, 2010 at 9:00 a.m. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until November 10, 2010 by dialing 1-800-408-3053 and entering access code 7502286, followed by the pound key (#).
Interim Consolidated Statements of Earnings | |||||||||
Periods ended September 25, 2010 and September 26, 2009 | |||||||||
(in thousands of dollars, except per share amounts) (unaudited) | 3 months | 9 months | |||||||
2010 | 2009 | 2010 | 2009 | ||||||
Sales | $ | 211,883 | $ | 144,722 | $ | 502,886 | $ | 476,165 | |
Cost of sales | 182,934 | 116,476 | 434,904 | 382,917 | |||||
Gross profit | 28,949 | 28,246 | 67,982 | 93,248 | |||||
Selling and administrative expenses | 19,675 | 17,000 | 56,383 | 52,361 | |||||
Profit sharing programs | 266 | 654 | 774 | 1,818 | |||||
Exchange loss (gain) | 214 | (716) | 464 | (998) | |||||
Gain on disposal of investments | (439) | - - | (448) | (209) | |||||
Loss (gain) on disposal of property, plant and equipment | 166 | 101 | (140) | 16 | |||||
9,067 | 11,207 | 10,949 | 40,260 | ||||||
Depreciation of property, plant and equipment | 4,889 | 4,186 | 14,145 | 12,197 | |||||
Amortization of intangible assets | 631 | 316 | 2,847 | 1,038 | |||||
Financial expenses | 1,542 | 453 | 3,198 | 1,584 | |||||
Gain on revaluation of investments | - - | - - | (3,888) | - - | |||||
Earnings (loss) before income tax expense and undermentioned items | 2,005 | 6,252 | (5,353) | 25,441 | |||||
Income tax expense (recovery) | |||||||||
Current | 1,786 | 2,102 | 2,220 | 8,418 | |||||
Future | (1,804) | (58) | (6,743) | 95 | |||||
(18) | 2,044 | (4,523) | 8,513 | ||||||
Earnings (loss) before undermentioned items | 2,023 | 4,208 | (830) | 16,928 | |||||
Share in earnings (loss) of companies subject to significant influence | 57 | 47 | (93) | (850) | |||||
Net earnings (net loss) from continuing operations | 2,080 | 4,255 | (923) | 16,078 | |||||
Net earnings (net loss) from discontinued operations | - - | 173 | 60 | (1,051) | |||||
Net earnings (net loss) | $ | 2,080 | $ | 4,428 | $ | (863) | $ | 15,027 | |
Net earnings (net loss) per share | |||||||||
Basic: | |||||||||
From continuing operations | $ | 0.05 | $ | 0.09 | $ | (0.02) | $ | 0.36 | |
From discontinued operations | - - | 0.01 | - - | (0.03) | |||||
Total | $ | 0.05 | $ | 0.10 | $ | (0.02) | $ | 0.33 | |
Diluted: | |||||||||
From continuing operations | $ | 0.05 | $ | 0.09 | $ | (0.02) | $ | 0.35 | |
From discontinued operations | - - | 0.01 | - - | (0.02) | |||||
Total | $ | 0.05 | $ | 0.10 | $ | (0.02) | $ | 0.33 | |
Weighted average number of common shares (in thousands of shares) |
|||||||||
Basic | 45,156 | 44,988 | 45,155 | 45,001 | |||||
Diluted | 45,388 | 45,377 | 45,404 | 45,388 | |||||
Number of common shares outstanding | 45,366 | 45,368 |
Interim Consolidated Statements of Comprehensive Income (loss) | |||||||||
Periods ended September 25, 2010 and September 26, 2009 | |||||||||
(in thousands of dollars) (unaudited) | 3 months | 9 months | |||||||
2010 | 2009 | 2010 | 2009 | ||||||
Net earnings (net loss) | $ | 2,080 | $ | 4,428 | $ | (863) | $ | 15,027 | |
Other comprehensive loss: | |||||||||
Change in unrealized gains and losses on translating financial statements of self-sustaining foreign operations | $ | (979) | $ | (8,602) | $ | (3,417) | $ | (18,031) | |
Unrealized gains on available-for-sale financial assets arising during the period | $ | 834 | $ | 26 | $ | 758 | $ | 555 | |
Reclassification in earnings | (421) | - - | (421) | - - | |||||
Income tax expense | (72) | (5) | (58) | (104) | |||||
Change in unrealized gains and losses on available-for-sale financial assets | $ | 341 | $ | 21 | $ | 279 | $ | 451 | |
Other comprehensive loss | $ | (638) | $ | (8,581) | $ | (3,138) | $ | (17,580) | |
Comprehensive income (loss) | $ | 1,442 | $ | (4,153) | $ | (4,001) | $ | (2,553) |
Interim Consolidated Statements of Retained Earnings | ||||||||
Periods ended September 25, 2010 and September 26, 2009 | ||||||||
(in thousands of dollars) (unaudited) | 3 months | 9 months | ||||||
2010 | 2009 | 2010 | 2009 | |||||
Opening balance | $ | 237,399 | $ | 238,208 | $ | 244,029 | $ | 232,208 |
Net earnings (net loss) | 2,080 | 4,428 | (863) | 15,027 | ||||
Dividends | (1,739) | (1,816) | (5,368) | (5,447) | ||||
Excess of acquisition cost over carrying value of acquired common shares | - - | - - | (58) | (968) | ||||
Closing balance | $ | 237,740 | $ | 240,820 | $ | 237,740 | $ | 240,820 |
Interim Consolidated Balance Sheets | |||||
|
As at September 25, 2010 |
As at December 31, 2009 |
|||
(in thousands of dollars) | (unaudited) | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 24,381 | $ | 67,393 | |
Accounts receivable | 196,825 | 99,594 | |||
Inventories | 155,099 | 104,540 | |||
Income taxes recoverable | 210 | 6,701 | |||
Future income tax assets | 9,188 | 1,008 | |||
Prepaid expenses and other assets | 3,984 | 3,484 | |||
Current assets of discontinued operations | - - | 1,230 | |||
Total current assets | 389,687 | 283,950 | |||
Investments | 48,833 | 63,503 | |||
Property, plant and equipment | 246,468 | 184,851 | |||
Property, plant and equipment held for sale | 1,511 | 1,549 | |||
Intangible assets | 12,593 | 1,127 | |||
Goodwill | 52,284 | 150 | |||
Future income tax assets | 219 | 363 | |||
Long-term receivables and other assets | 22,874 | 21,942 | |||
Long-term assets of discontinued operations | - - | 8,618 | |||
$ | 774,469 | $ | 566,053 | ||
Liabilities | |||||
Current liabilities | |||||
Bank loans | $ | 23,703 | $ | - - | |
Accounts payable and accrued liabilities | 178,220 | 77,112 | |||
Income taxes payable | 68 | 635 | |||
Future income tax liabilities | 170 | 876 | |||
Current portion of long-term debt | 5,984 | 5,477 | |||
Current portion of the balance of purchase price of subsidiaries |
10,070 | - - | |||
Current liabilities of discontinued operations | - - | 1,495 | |||
Total current liabilities | 218,215 | 85,595 | |||
Long-term debt | 125,717 | 62,212 | |||
Balance of purchase price of subsidiaries | 22,196 | - - | |||
Deferred credits | 5,119 | 4,749 | |||
Future income tax liabilities | 11,322 | 11,296 | |||
Long-term liabilities of discontinued operations | - - | 1,604 | |||
382,569 | 165,456 | ||||
Shareholders' Equity | |||||
Share capital | 179,102 | 178,024 | |||
Retained earnings | 237,740 | 244,029 | |||
Contributed surplus | 4,514 | 4,862 | |||
Accumulated other comprehensive loss | (29,456) | (26,318) | |||
391,900 | 400,597 | ||||
$ | 774,469 | $ | 566,053 |
Interim Consolidated Statements of Cash Flows | |||||||||
Periods ended September 25, 2010 and September 26, 2009 | |||||||||
(in thousands of dollars) (unaudited) | 3 months | 9 months | |||||||
2010 | 2009 | 2010 | 2009 | ||||||
Cash flows from the following activities: | |||||||||
Operating activities | |||||||||
Net earnings (net loss) from continuing operations | $ | 2,080 | $ | 4,255 | $ | (923) | $ | 16,078 | |
Items not affecting cash and cash equivalents | |||||||||
Amortization of compensation costs related to the profit sharing program - stock ownership component | 347 | 433 | 1,038 | 1,349 | |||||
Unrealized loss (gain) on foreign currency forward contracts | - - | 211 | - - | (1,322) | |||||
Gain on revaluation of investments | - - | - - | (3,888) | - - | |||||
Gain on disposal of investments | (439) | - - | (448) | (209) | |||||
Loss (gain) on disposal of property, plant and equipment | 166 | 101 | (140) | 16 | |||||
Depreciation of property, plant and equipment | 4,889 | 4,186 | 14,145 | 12,197 | |||||
Amortization of intangible assets | 631 | 316 | 2,847 | 1,038 | |||||
Amortization of deferred financing expenses | 62 | 52 | 179 | 160 | |||||
Pension expense | 106 | 82 | 180 | (24) | |||||
Future income tax expense | (1,804) | (58) | (6,743) | 95 | |||||
Share in loss (earnings) of companies subject to significant influence | (57) | (47) | 93 | 850 | |||||
5,981 | 9,531 | 6,340 | 30,228 | ||||||
Net change in non-cash operating working capital items | |||||||||
Decrease (increase) in accounts receivable | (36,224) | 4,082 | (50,045) | 28,670 | |||||
Decrease (increase) in inventories | (6,708) | 13,663 | (34,645) | 46,817 | |||||
Decrease (increase) in income taxes recoverable | 5,312 | (359) | 5,060 | 1,566 | |||||
Decrease (increase) in prepaid expenses and other assets | 214 | (124) | 623 | 3,407 | |||||
Increase (decrease) in accounts payable and accrued liabilities | 33,511 | (4,491) | 42,930 | (25,245) | |||||
Increase in interest payable | 558 | 204 | 1,144 | 185 | |||||
Increase (decrease) in income taxes payable | (301) | 2,385 | (778) | 2,338 | |||||
(3,638) | 15,360 | (35,711) | 57,738 | ||||||
Cash flows from continuing operating activities | 2,343 | 24,891 | (29,371) | 87,966 | |||||
Financing activities | |||||||||
Shares purchased by a trust in employees' name on the secondary market | - - | - - | (364) | (1,871) | |||||
Repurchase of shares | - - | - - | (127) | (2,122) | |||||
Proceeds from issuance of shares | - - | - - | 125 | 47 | |||||
Dividends | (1,764) | - - | (3,578) | (3,631) | |||||
Increase in long-term debt and bank loans | 20,724 | 3,297 | 74,751 | 11,977 | |||||
Repayment of long-term debt and bank loans | (1,020) | (880) | (4,369) | (19,724) | |||||
Deferred credits | (589) | - - | (1,255) | (235) | |||||
Cash flows from continuing financing activities | 17,351 | 2,417 | 65,183 | (15,559) | |||||
Investing activities | |||||||||
Proceeds from sale of property, plant and equipment | 73 | - - | 580 | 392 | |||||
Additions to property, plant and equipment | (10,560) | (4,663) | (27,600) | (17,062) | |||||
Additions to intangible assets | (144) | (86) | (329) | (416) | |||||
Acquisition of investments | - - | - - | (120) | (4,593) | |||||
Proceeds from disposal of investments | 1,500 | - - | 1,503 | 1,144 | |||||
Distribution from a company subject to significant influence | - - | - - | - - | 300 | |||||
Decrease in long-term receivables | 2,868 | 826 | 4,583 | 2,500 | |||||
Increase in long-term receivables | (67) | (1,631) | (135) | (4,290) | |||||
Repayment of balance of purchase price of subsidiaries | (2,630) | - - | (2,630) | - - | |||||
Business acquisitions, net of cash acquired | (15,601) | - - | (54,285) | - - | |||||
Cash flows from continuing investing activities | (24,561) | (5,554) | (78,433) | (22,025) | |||||
Effect of changes in foreign exchange rate on cash and cash equivalents | 138 | (128) | (589) | (439) | |||||
Net change in cash and cash equivalents from continuing operations | (4,729) | 21,626 | (43,210) | 49,943 | |||||
Cash flows from discontinued operations | |||||||||
Operating activities | - - | 610 | 184 | 641 | |||||
Investing activities | - - | 93 | 14 | 378 | |||||
- - | 703 | 198 | 1,019 | ||||||
Cash and cash equivalents, beginning of period | 29,110 | 44,252 | 67,393 | 15,619 | |||||
Cash and cash equivalents, end of period | $ | 24,381 | $ | 66,581 | $ | 24,381 | $ | 66,581 | |
Supplementary information | |||||||||
Interest paid | $ | 1,127 | $ | 669 | $ | 3,212 | $ | 2,717 | |
Income taxes paid (recovered), net | $ | (3,966) | $ | (1,341) | $ | (3,261) | $ | 3,699 |
For further information:
Jasmin Gosselin | |
Vice President, Communications | |
Tel.: 450-641-4000 | |
Email: | [email protected] |
www.canamgroup.ws |
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