Net Income Increased by 89% in the First Quarter of 2016

SAINT-GEORGES, QC, April 29, 2016 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month period ended April 2, 2016.

Highlights
-   46% increase in consolidated revenues compared to the first quarter in 2015
-   89% increase in net income compared to the first quarter in 2015

Periods ended April 2, 2016 and March 28, 2015			Three months
(in millions of $, except per share amounts) (unaudited)			2016			2015
Revenues		$	450.7		$	309.1
Selling and administrative expenses		$	30.9	6.9%	$	24.2		7.8%
Adjusted EBITDA^1		$	21.8	4.8%	$	17.7		5.7%
Net income^2		$	8.3	1.8%	$	4.4		1.4%
Net earnings per share^2 (basic and diluted)		$	0.18		$	0.10
Basic weighted average number of shares (in thousands of shares)			47,491			42,028
Net debt^1		$	196.3		$	200.4
1 Refer to the section entitled Non-IFRS measures.
2 Represents net income attributable to shareholders.

Results for the first quarter of 2016

Consolidated revenues for the first quarter of 2016 totaled $450.7M, which represents a $141.6M increase, compared to revenues of $309.1M for the same quarter in 2015. The increase is attributable to all of the Corporation's groups of products and services as well as the appreciation of the US dollar.

Selling and administrative expenses totaled $30.9M for the first quarter of 2016 compared to $24.2M in 2015. This variation is particularly attributable to the payroll increase in order to maintain sales growth along with the US dollar's rise against the Canadian dollar.

In the first quarter of 2016, Adjusted EBITDA amounted to $21.8M compared to $17.7M for the same period in 2015. The rise in the first quarter of 2016 can be mainly explained by a higher sales volume in all of the Corporation's groups of products and services, combined with an increase in gross margins for the joist and steel deck as well as structural steel activities. These items were partially offset by the compression of gross margins for the bridges' group and the increase in selling and administrative expenses.

In the first quarter of 2016, net income attributable to shareholders totaled $8.3M, or $0.18 per share, compared to $4.4M, or $0.10 per share, for the corresponding period in 2015. It should be noted that the basic weighted average number of shares increased by 5,463,648 shares, which resulted from the conversion of unsecured subordinated debentures into common shares during the last quarter of 2015.

Equity attributable to shareholders decreased by $19.8M to $604.5M. This variation is mainly due to the depreciation of the US dollar which generated an unrealized exchange loss of $23.2M resulting from the translation of foreign operations, mainly those of the U.S. subsidiaries, offset by a net income of $8.3M in the first quarter of 2016. At the end of the quarter, the carrying amount per share was $12.80 compared to $13.13 as at December 31, 2015.

As at April 2, 2016, the Corporation presented a strong financial position with a net debt of $196.3M and additional borrowing capacity of $122.3M. The ratio of net debt to equity attributable to shareholders was 0.32 as at April 2, 2016, identical to the ratio as at December 31, 2015.

Order backlog

The order backlog stood at $1,159M as at April 2, 2016, compared to $1,183M as at December 31, 2015, and $1,118M as at March 28, 2015.

Dividend

The Board of Directors approved a dividend of $0.04 per share payable on June 30, 2016 to shareholders of record on June 16, 2016.

Unsecured loan

On March 31, 2016, the Corporation finalized the set-up of an unsecured ten-year loan for an amount of $50M. The Corporation must comply with certain financial covenants under this loan agreement. The loan is repayable in one installment on maturity; however, an early repayment mechanism is available from the third year provided that certain conditions are met.

Repurchase of shares

Further to the press release issued on February 26, 2016, announcing that the Toronto Stock Exchange has accepted the Corporation's notice of intention to make a normal course issuer bid pursuant to which it may purchase, when deemed appropriate, through the facilities of and in accordance with the requirements of the TSX, up to 4,089,305 of its outstanding common shares, the Corporation announces that it may also repurchase shares through alternative trading systems, in accordance with the policies of the TSX and exemptions relating to normal course issuer bids as required under applicable securities laws. Common shares may be purchased from March 1^st, 2016 to February 28, 2017 inclusively, at the market price of the shares at the time of the purchase plus brokerage fees, or at any other price authorized under applicable rules.

During the first quarter of 2016, under the normal course issuer bid, the Corporation repurchased 316,700 common shares at an average price of $12.85 per share for a total amount of $4.1M. The acquired common shares have been cancelled.

About Canam Group Inc.

Canam Group specializes in designing integrated solutions and fabricating customized products for the North American construction industry. Each year, Canam Group takes part in an average of 10,000 building, structural steel and bridge projects, which can also include the supply of preconstruction and project management services. The Corporation operates 22 plants across North America and employs 4,300 people in Canada, the United States, Romania, India and Hong Kong. 

Conference call and presentation

Canam Group will hold a conference call with financial analysts and media representatives on Friday, April 29, 2016 at 1:15 p.m. EDT. The call can be accessed via webcast at canamgroupinc.com and newswire.ca.

Please note that the conference call will be accompanied by a complementary presentation in PDF format that can be downloaded from the Corporation's website at canamgroupinc.com. A replay of the conference call will be available until May 13, 2016 by dialing 1-800-408-3053 and entering access code 9218430, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) and net debt are not defined by International Financial Reporting Standards (IFRS) and cannot be formally presented in the consolidated financial statements. Even though Adjusted EBITDA and  net debt are non-IFRS measure, they are used by managers, analysts, investors and other financial stakeholders to assess the Corporation's operating performance and management from a financial and operational standpoint. Refer to the section entitled "Non-IFRS measures" of the Corporation's 2015 Annual Report for the definition of this indicator.

Caution regarding forward-looking statements

This press release may contain forward-looking statements, which include, but are not limited to, statements with respect to the Corporation's growth strategy, costs, financial position and financial results, economic and business outlook, prospects and trends of the Corporation's industry segment, expected growth in demand for products and services, the dates of expected or scheduled deliveries, orders and project execution in general, objectives, projects, targets, priorities, business strategy, and the expected impact of legislative and regulatory environment and legal proceedings. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe", "continue" or "maintain", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require the Corporation to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecasted results. While the Corporation considers its assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include in particular the risks and uncertainties described in the Corporation's 2015 Annual Report in the section entitled "Risks and Uncertainties". The forward-looking statements contained herein are made as of the date hereof and are subject to change thereafter, and the Corporation has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities regulations.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME
Periods ended April 2, 2016 and March 28, 2015
(in thousands of Canadian dollars, except per share amounts)			Three months
(unaudited)			2016		2015
Revenues		$	450,736	$	309,102
Cost of sales, excluding depreciation and amortization^(1)			396,312		267,090
Selling and administrative expenses			30,944		24,183
Profit sharing program			1,234		489
Depreciation of property, plant and equipment			6,975		6,218
Amortization of intangible assets			927		690
Other losses (gains) — net			207		(264)
Finance costs			2,497		3,921
Finance revenue			(151)		(186)
Share of loss of a joint venture and associates			311		141
Income before income tax			11,480		6,820
Tax expense (income)
	Current		5,001		1,788
	Deferred		(1,897)		594
			3,104		2,382
Net income		$	8,376	$	4 438
Net income attributable to:
	Shareholders	$	8,328	$	4,397
	Non-controlling interests		48		41
		$	8,376	$	4,438
Net earnings per share attributable to shareholders
	Basic	$	0.18	$	0.10
	Diluted	$	0.18	$	0.10
Weighted average number of common shares (in thousands of shares)
	Basic		47,491		42,028
	Diluted		47,522		42,075
Number of common shares outstanding (in thousands of shares)			47,215		42,055

^(1)	As at April 2, 2016 and March 28, 2015, the cost of sales, including depreciation and amortization, was $402,302 and $272,441 respectively.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Periods ended April 2, 2016 and March 28, 2015
(in thousands of Canadian dollars)			Three months
(unaudited)			2016			2015
Net income		$	8,376		$	4,438
Other comprehensive income (loss):
Items that will be reclassified subsequently to profit or loss:
	Change in unrealized gains (losses) on translating foreign operations		(23,229)			27,105
	Change in unrealized loss (gain) on translating debt designated as hedging item of the net investment in foreign operations		1,018			(1,737)
			(22,211)			25,368
Available-for-sale asset:
	Unrealized gains on available-for-sale financial assets arising during the period		195			- -
			195			- -
Other comprehensive income (loss)			(22,016)			25,368
Comprehensive income (loss)		$	(13,640)		$	29,806
Comprehensive income attributable to:
	Shareholders	$	(13,688)		$	29,794
	Non-controlling interests		48			12
		$	(13,640)		$	29,806

  

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars) (unaudited)	As at April 2, 2016		As at December 31, 2015
Assets
Current assets
Cash and cash equivalents	$	11,086	$	7,050
Accounts receivable		287,465		320,517
Costs and estimated profits in excess of billings		216,134		194,298
Inventories		146,801		166,833
Recoverable tax assets		478		1,573
Prepaid expenses and other assets		3,402		3,230
		665,366		693,501
Non-current assets
Investments		8,676		6,173
Interests in a joint venture and associates		39,063		39,370
Property, plant and equipment		341,035		348,391
Intangible assets		10,526		11,500
Goodwill		52,874		56,023
Deferred tax assets		5,781		4,007
Long-term receivables and other assets		5,597		5,564
Total assets	$	1,128,918	$	1,164,529
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	215,092	$	223,580
Billings in excess of costs and estimated profits		66,894		73,465
Current tax liabilities		4,598		4,156
Current portion of balance of purchase price of businesses		1,282		1,282
Current portion of long-term debt		41,300		43,083
		329,166		345,566
Non-current liabilities
Debt		166,114		164,356
Balance of purchase price of businesses		650		650
Provisions		18,435		19,485
Deferred tax liabilities		8,925		8,897
Other liabilities		1,086		1,208
Total liabilities		524,376		540,162
Equity
Share capital		238,445		239,777
Retained earnings		298,288		294,458
Other equity items		67,719		90,090
Total equity attributable to shareholders		604,452		624,325
Non-controlling interests		90		42
Total equity		604,542		624,367
Total equity and liabilities	$	1,128,918	$	1,164,529

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of Canadian dollars) (unaudited)		Employee benefits paid in equity instruments		Exchange differences resulting from the translation of foreign operations		Exchange difference resulting from the translation of the debt designated as hedging item		Available-for- sale financial assets		Debenture conversion options		Total other equity items		Share capital		Retained earnings		Total share capital attributable to shareholders		Non- controlling interests		Total equity
Balance as at January 1, 2015	$	2,235	$	29,451	$	(806)	$	2	$	5,758	$	36,640	$	168,162	$	252,386	$	457,188	$	36	$	457,224
Net income for the period		- -		- -		- -		- -		- -		- -		- -		4,397		4,397		41		4,438
Comprehensive income		- -		27,134		(1,737)		- -		- -		25,397		- -		- -		25,397		(29)		25,368
Dividends		- -		- -		- -		- -		- -		- -		- -		(1,670)		(1,670)		- -		(1,670)
Repurchase of shares		- -		- -		- -		- -		- -		- -		(105)		- -		(105)		- -		(105)
Excess of acquisition cost over carrying amount of acquired common shares		- –		- -		- -		- -		- -		- -		- -		(214)		(214)		- -		(214)
Shares acquired by employees		(238)		- -		- -		- -		- -		(238)		238		- -		- -		- -		- -
Issuance of shares upon the conversion of debentures		- -		- -		- -		- -		- -		- -		18		- -		18		- -		18
Exercise of options upon the conversion of debentures		- -		- -		- -		- -		(1)		(1)		1		- -		- -		- -		- -
Amortization of compensation costs related to the profit sharing program - stock ownership component		21		- -		- -		- -		- -		21		- -		- -		21		- -		21
Balance as at March 28, 2015	$	2,018	$	56,585	$	(2,543)	$	2	$	5,757	$	61,819	$	168,314	$	254,899	$	485,032	$	48	$	485,080
Balance as at January 1, 2016	$	2,082	$	92,088	$	(4,279)	$	199	$	- -	$	90,090	$	239,777	$	294,458	$	624,325	$	42	$	624,367
Net income for the period		- -		- -		- -		- -		- -		- -		- -		8,328		8,328		48		8,376
Comprehensive income		- -		(23,229)		1,018		195		- -		(22,016)		- -		- -		(22,016)		- -		(22,016)
Dividends		- -		- -		- -		- -		- -		- -		- -		(1,892)		(1,892)		- -		(1,892)
Repurchase of shares		- -		- -		- -		- -		- -		- -		(1,708)		- -		(1,708)		- -		(1,708)
Excess of acquisition cost over carrying amount of acquired common shares		- -		- -		- -		- -		- -		- -		- -		(2,606)		(2,606)		- -		(2,606)
Shares acquired by employees		(376)		- -		- -		- -		- -		(376)		376		- -		- -		- -		- -
Amortization of compensation costs related to the profit sharing program - stock ownership component		21		- -		- -		- -		- -		21		- -		- -		21		- -		21
Balance as at April 2, 2016	$	1,727	$	68,859	$	(3,261)	$	394	$	- -	$	67,719	$	238,445	$	298,288	$	604,452	$	90	$	604,542

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods ended April 2, 2016 and March 28, 2015
(in thousands of Canadian dollars)						Three months
(unaudited)						2016				2015
Cash flows from the following activities:
Operating activities				$		8,376		$		4,438
Net income
Adjustments:
Amortization of compensation costs related to the profit sharing program – stock ownership component						21				21
Loss on disposal of property, plant and equipment						6				23
Depreciation of property, plant and equipment						6,975				6,218
Amortization of intangible assets						927				690
Amortization of deferred financing expenses						103				126
Interest rate swaps						(65)				(26)
Imputed interest						188				654
Pension expense						(667)				(848)
Deferred tax expense (income)						(1,897)				594
Share of loss of a joint venture and associates						311				141
						14,278				12,031
Net change in non-cash operating working capital balances
Decrease in accounts receivable						19,683				59,616
Increase in costs and estimated profits in excess of billings						(30,755)				(21,665)
Decrease (increase) in inventories						13,680				(3,285)
Decrease in current tax assets						1,002				175
Increase in prepaid expenses and other assets						(331)				(1,345)
Increase (decrease) in accounts payable and accrued liabilities						4,579				(12,558)
Increase (decrease) in billings in excess of costs and estimated profits						(2,542)				2,271
Increase (decrease) in interest payable						(294)				1
Increase (decrease) in current tax liabilities						537				(2,690)
						5,559				20,520
Cash flows from operating activities						19,837				32,551
Financing activities
Repurchase of shares						(4,314)				(319)
Dividends						(3,782)				(1,669)
Increase in debt and bank loans						50,000				- -
Repayment of debt and bank loans						(44,060)				(28,883)
Issue expenses related to long-term debt						(378)				(97)
Increase in other liabilities						(17)				10
Cash flows from financing activities						(2,551)				(30,958)
Investing activities
Proceeds from sale of property, plant and equipment						90				386
Additions to property, plant and equipment						(11,120)				(4,884)
Additions to intangible assets						(379)				(242)
Acquisition of an investment						(2,308)				(150)
Decrease in receivables and other assets						- -				32
Cash flows from investing activities						(13,717)				(4,858)
Effects of changes in foreign exchange rate on cash and cash equivalents						467				141
Increase in cash and cash equivalents						4,036				(3,124)
Cash and cash equivalents – Beginning of period						7,050				8,261
Cash and cash equivalents – End of period				$		11,086		$		5,137
Supplementary information
	Interest paid			$		1,915		$		1,201
	Income taxes paid, net			$		4,441		$		4,297

SOURCE Canam Group Inc.

Media: François Bégin, Vice President, Communications, Canam Group Inc., 450-641-4000, 418-225-1355 (mobile phone),[email protected]; Investors: René Guizzetti, Vice President and Chief Financial Officer, Canam Group Inc., 450-641-4000, [email protected]