Canam Group Posts $281M in Revenues and $4.5M in Net Income in the Second Quarter

BOUCHERVILLE, QC, Aug. 6, 2014 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), specialized in the design and fabrication of construction products, reported a net income of $4.5M, or $0.11 per share, in the second quarter of 2014, compared with $7.4M, or $0.18 per share, for the corresponding period in 2013. Consolidated revenues in the second quarter of 2014 increased by 11.4% to $281M compared with $252M for the year-earlier quarter.

After the first six months of fiscal 2014, net income totaled $5M, or $0.12 per share, compared with $10.4M, or $0.25 per share, during the same period in 2013. Consolidated revenues during the first half of 2014 stood at $520M compared with $462M for the corresponding six-month period in 2013.

As at June 28, 2014, Canam Group's backlog of orders reached another record level of $857M compared with $793M as at March 29, 2014 and $619M at the end of the second quarter of 2013.

The results in the second quarter of 2014 compared with 2013 reflect the lower gross margins in most markets for the first four months of 2014, which could not be offset by the increase in the gross margin observed in May and June.

"However, our results at the end of the quarter allowed us to build positive momentum that appears to be confirmed by the increase in the backlog of orders," explained President and Chief Executive Officer Marc Dutil. "This reflects the strength of our markets, particularly in the United States."

Dividend

The Board of Directors approved a quarterly dividend of $0.04 per share payable on September 30, 2014 to shareholders of record on September 16, 2014.

About Canam Group Inc.

Canam Group is the largest fabricator of steel components in North America. Specialized in designing construction solutions and fabricating customized products since 1961, Canam Group takes part in an average of 10,000 construction projects each year in three groups of products and services: buildingsstructural steel and bridges. The Corporation operates 21 plants across North America and employs 3,600 people in Canada, the United States, Romania, India and Hong Kong.

Conference call

Canam Group will hold a conference call with financial analysts and media representatives on Wednesday, August 6, 2014 at 4:30 p.m. EDT. A podcast will be available at www.canamgroupinc.com and www.cnw.ca. A replay of the conference call will be available until August 22, 2014 by dialing 1-800-408-3053 and entering access code 2682182, followed by the pound key (#).

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME
Periods ended June 28, 2014 and June 29, 2013

(in thousands of Canadian dollars, except per share amounts)   Three months   Six months  
(unaudited)     2014   2013   2014   2013  
Revenues $ 280,616 $ 251,850 $ 519,919 $ 461,602  
Cost of sales, excluding depreciation and amortization(1)   241,558   209,787   449,224   386,256  
Selling and administrative expenses   22,194   23,215   43,999   43,323  
Profit sharing program   658   1,286   875   1,536  
Depreciation of property, plant and equipment   5,845   5,471   11,440   10,777  
Amortization of intangible assets   483   401   956   778  
Other losses (gains) — net   295   (1,668)   (110)   (1,787)  
Finance costs   3,693   3,571   7,189   7,320  
Finance revenue   (280)   (311)   (518)   (617)  
Share of loss (income) of a joint venture and associates   39   (36)   321   (340)  
Income before income tax   6,131   10,134   6,543   14,356  
Tax expense (income)                  
  Current   748   1,725   (589)   2,842  
  Deferred   882   984   2,081   1,116  
    1,630   2,709   1,492   3,958  
Net income $ 4,501 $ 7,425 $ 5,051 $ 10,398  
Net income attributable to:                  
  Shareholders $ 4,530 $ 7,425 $ 5,004 $ 10,398  
  Non-controlling interests   (29)   - -   47   - -  
  $ 4,501 $ 7,425 $ 5,051 $ 10,398  
                   
Net earnings per share attributable to shareholders                  
  Basic $ 0.11 $ 0.18 $ 0.12 $ 0.25  
  Diluted $ 0.11 $ 0.18 $ 0.12 $ 0.25  
                     
Weighted average number of common shares (in thousands of shares)                  
  Basic   42,022   41,957   42,047   41,953  
  Diluted   42,078   42,088   42,103   42,084  
Number of common shares outstanding (in thousands of shares)           42,078   42,073  
(1)  As at June 28, 2014 and June 29, 2013, the cost of sales, including depreciation and amortization, totaled
$246,395 and $214,442, respectively, for the three-month period and $458,902 and $395,624, respectively,
for the six-month period.

NOTICE
The Corporation's independent auditors have not performed a review of the accompanying condensed interim consolidated financial statements.


CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Periods ended June 28, 2014 and June 29, 2013

(in thousands of Canadian dollars)   Three months   Six months  
(unaudited)   2014   2013   2014   2013
Net income $ 4,501 $ 7,425 $ 5,051 $ 10,398
Other comprehensive income (loss):                
Items that will be reclassified subsequently to profit or loss                
  Change in unrealized gains (losses) on translating foreign operations   (10,331)   7,134   135   11,198
Available-for-sale assets:                
  Unrealized gains on available-for-sale financial assets arising during the period   - -   14   - -   41
  Reclassified to statements of income   - -   (828)   - -   (867)
  Tax income   - -   135   - -   137
    - -   (679)   - -   (689)
Other comprehensive income (loss)   (10,331)   6,455   135   10,509
Comprehensive income (loss) $ (5,830) $ 13,880 $ 5,186 $ 20,907
Attributable to:                
  Shareholders $ (5,804) $ 13,880 $ 5,136 $ 20,907
  Non-controlling interests   (26)   - -   50   - -
  $ (5,830) $ 13,880 $ 5,186 $ 20,907



CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars)
(unaudited)
  As at
June 28,
2014
  As at
December 31,
2013
Assets            
Current assets            
Cash and cash equivalents $ 2,498   $ 4,690  
Accounts receivable   333,910     299,981  
Inventories   138,250     110,993  
Recoverable tax assets   2,133     264  
Prepaid expenses and other assets   4,437     3,762  
    481,228     419,690  
Property, plant and equipment classified as held for sale   1,571     1,567  
    482,799     421,257  
Non-current assets            
Investments   4,699     4,699  
Interests in a joint venture and associates   41,669     41,390  
Property, plant and equipment   293,707     292,289  
Intangible assets   10,720     9,760  
Goodwill   41,513     41,417  
Deferred tax assets   10,007     11,957  
Long-term receivables and other assets   9,019     10,971  
Total assets $ 894,133   $ 833,740  
Liabilities            
Current liabilities            
Accounts payable and accrued liabilities $ 190,861   $ 185,909  
Current tax liabilities   529     8,119  
Current portion of long-term debt   13,477     13,000  
    204,867     207,028  
Non-current liabilities            
Debt   184,902     124,025  
Convertible debentures   66,143     65,442  
Provisions   6,929     6,816  
Deferred tax liabilities   9,988     9,922  
Other liabilities   7,436     8,849  
Total liabilities   480,265     422,082  
Equity            
Share capital   168,147     168,057  
Retained earnings   232,399     230,717  
Other equity items   13,088     12,884  
Total equity attributable to shareholders   413,634     411,658  
Non-controlling interests   234     - -  
Total equity   413,868     411,658  
Total equity and liabilities $ 894,133   $ 833,740  



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
  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, 2013 $ 1,994 $ (11,941) $ 691 $ 5,764 $ (3,492) $ 168,529 $ 197,148 $ 362,185 $ - - $ 362,185
Net income for the period   - -   - -   - -   - -   - -   - -   10,398   10,398   - -   10,398
Comprehensive income   - -   11,198   (689)   - -   10,509   - -   - -   10,509   - -   10,509
Shares purchased by a trust in employees' name on the secondary market   - -   - -   - -   - -   - -   (651)   - -   (651)   - -   (651)
Shares acquired by employees   (202)   - -   - -   - -   (202)   202   - -   - -   - -   - -
Repurchase of shares   - -   - -   - -   - -   - -   (23)   - -   (23)   - -   (23)
Excess of acquisition cost over carrying amount of acquired common shares   - -   - -   - -   - -   - -   - -   (16)   (16)   - -   (16)
Amortization of compensation costs related to the profit sharing program - stock ownership component   159   - -   - -   - -   159   - -   - -   159   - -   159
Balance as at June 29, 2013 $ 1,951 $ (743) $ 2 $ 5,764 $ 6,974 $ 168,057 $ 207,530 $ 382,561 $ - - $ 382,561
Balance as at January 1, 2014 $ 2,113 $ 5,005 $ 2 $ 5,764 $ 12,884 $ 168,057 $ 230,717 $ 411,658 $ - - $ 411,658
Investment in a subsidiary by a non-controlling interest   - -   - -   - -   - -   - -   - -   - -   - -   184   184
Net income for the period   - -   - -   - -   - -   - -   - -   5,004   5,004   47   5,051
Comprehensive income   - -   132   - -   - -   132   - -   - -   132   3   135
Dividends   - -   - -   - -   - -   - -   - -   (3,322)   (3,322)   - -   (3,322)
Shares acquired by employees   (26)   - -   - -   - -   (26)   26   - -   - -   - -   - -
Issuance of shares upon the conversion of debentures   - -   - -   - -   - -   - -   59   - -   59   - -   59
Exercise of options upon the conversion of debentures   - -   - -   - -   (5)   (5)   5   - -   - -   - -   - -
Amortization of compensation costs related to the profit sharing program - stock ownership component   103   - -   - -   - -   103   - -   - -   103   - -   103
Balance as at June 28, 2014 $ 2,190 $ 5,137 $ 2 $ 5,759 $ 13,088 $ 168,147 $ 232,399 $ 413,634 $ 234 $ 413,868




CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods ended June 28, 2014 and June 29, 2013

(in thousands of Canadian dollars)   Three months   Six months  
(unaudited)     2014   2013 2014   2013    
Cash flows from the following activities:                    
Operating activities                  
Net income $ 4,501 $ 7,425 $ 5,051 $ 10,398  
Adjustments:                  
  Amortization of compensation costs related to the profit sharing program - stock ownership component   20   80   103   159  
  Loss on revaluation of balances of purchase price of businesses   - -   - -   - -   65  
  Gain on disposal of investments   - -   (828)   - -   (867)  
  Loss on decline in value of an investment   - -   431   - -   431  
  Loss (gain) on disposal of property, plant and equipment   (37)   (110)   73   (107)  
  Gain on revaluation of property, plant and equipment   - -   (943)   - -   (943)  
  Depreciation of property, plant and equipment   5,845   5,471   11,440   10,777  
  Amortization of intangible assets   483   401   956   778  
  Amortization of deferred financing expenses   95   83   188   165  
  Provisions   (5)   (298)   99   (306)  
  Interest rate swaps   (29)   (243)   (97)   (335)  
  Imputed interest   547   555   1,081   1,144  
  Pension expense   (630)   (804)   (1,334)   (1,608)  
  Deferred tax expense   882   984   2,081   1,116  
  Share of loss (income) of a joint venture and associates   39   (36)   321   (340)  
    11,711   12,168   19,962   20,527  
Net change in non-cash operating working capital balances                  
Increase in accounts receivable   (48,979)   (29,226)   (32,643)   (31,977)  
Decrease (increase) in inventories   (11,628)   5,508   (27,098)   6,488  
Increase in current tax assets   (1,868)   (18)   (1,868)   (18)  
Decrease (increase) in prepaid expenses and other assets   1,545   659   (668)   (1,493)  
Increase in accounts payable and accrued liabilities   23,265   24,281   4,452   29,478  
Increase (decrease) in interest payable   (1,194)   (1,227)   192   (91)  
Decrease in current tax liabilities   (493)   (524)   (7,592)   (4,662)  
    (39,352)   (547)   (65,225)   (2,275)  
Cash flows from operating activities   (27,641)   11,621   (45,263)   18,252  
Financing activities                  
Shares purchased by a trust in employees' name on the secondary market   - -   - -   - -   (651)  
Repurchase of shares   - -   - -   - -   (39)  
Dividends   - -   - -   (3,322)   - -  
Increase in debt and bank loans   38,972   2,811   67,928   4,961  
Repayment of debt and bank loans   (3,714)   (6,102)   (6,425)   (11,432)  
Repayment of balances of purchase price of businesses   - -   - -   - -   (3,326)  
Issue expenses related to long-term debt   - -   (30)   - -   (30)  
Increase in other liabilities   8   - -   16   - -  
Cash flows from financing activities   35,266   (3,321)   58,197   (10,517)  
Investing activities                  
Proceeds from sale of property, plant and equipment   77   131   119   178  
Additions to property, plant and equipment   (7,315)   (4,908)   (10,946)   (7,725)  
Additions to intangible assets   (792)   (288)   (1,129)   (943)  
Acquisition of an interest in an associate   (1,000)   - -   (1,000)   - -  
Proceeds from disposal of investments   - -   2,406   - -   2,743  
Distributions received   - -   - -   156   - -  
Decrease in receivables and other assets   4   152   182   491  
Increase in long-term receivables   - -   (27)   - -   (27)  
Acquisition of business assets   (1,136)   (3,586)   (1,136)   (3,586)  
Cash flows from investing activities   (10,162)   (6,120)   (13,754)   (8,869)  
Effects of changes in foreign exchange rate on cash and cash equivalents   (1,557)   138   (1,372)   306  
Net change in cash and cash equivalents   (4,094)   2,318   (2,192)   (828)  
                   
Cash and cash equivalents - Beginning of period   6,592   3,641   4,690   6,787  
Cash and cash equivalents - End of period $ 2,498 $ 5,959 $ 2,498 $ 5,959  
Supplementary information                  
  Interest paid $ 4,000 $ 4,500 $ 5,253 $ 5,955  
  Income taxes paid, net $ 3,083 $ 2,292 $ 8,938 $ 7,560  

  

 

SOURCE Canam Group Inc.

For further information:

François Bégin
Vice President, Communications
Canam Group Inc.
Telephone: 450-641-4000 / 1-866-506-4000
Email: francois.begin@canamgroupinc.com