Canam Group Posts a Third Quarter Net Income of $10M and Reinstates Quarterly Dividend

BOUCHERVILLE, QC, Oct. 23, 2013 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced a net income of $10M, or $0.24 per share, for the third quarter of 2013 compared with a net income of $6.5M, or $0.15 per share, for the corresponding period in 2012. Consolidated sales for the third quarter of 2013 totaled $285M compared with $226.9M for the year-earlier period.

For the first nine months of 2013, net income totaled $20.4M, or $0.49 per share, compared with a net income of $9.6M, or $0.23 per share, for the same period in 2012. Consolidated sales for the first nine months of the year increased by 12%, from $666.9M in 2012 to $746.6M in 2013.

The growth in net income for the third quarter of 2013 as compared with the corresponding period in 2012 is mainly attributable to the increase in light structural steel revenues combined with improved profit margins in the Corporation's three groups of products and services, i.e. buildings, structural steel and bridges.

Net debt, excluding convertible debentures, totaled $147.6M, which represents a $31.6M decrease compared with December 31, 2012. As at September 28, 2013, the net debt, excluding convertible debentures, to equity ratio was 0.38 compared to 0.49 as at December 31, 2012 and 0.63 as at December 31, 2011.

As at September 28, 2013, the backlog of orders stood at $636M compared to $619M as at June 29, 2013. "Both the volume and quality of the orders constitute encouraging signs," explained Marc Dutil, President and Chief Executive Officer. "Our backlog reflects the gradual improvement seen in the heavy structural steel market."

Reinstatement of dividend
The Board of Directors approved a quarterly dividend of $0.04 per common share payable on January 3, 2014 to shareholders of record on December 15, 2013. "We are pleased to reinstate the payment of a dividend that had been suspended in 2011," continued Marc Dutil. "Conditions are now in place to pay a dividend without sacrificing our ability to continue investing and take advantage of timely opportunities."

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 the following activity sectors: buildingsstructural steel and bridges. The Corporation operates 21 plants across North America and employs 3,500 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, October 23, 2013 at 4:45 p.m. EDT. A podcast will be available at www.canamgroupinc.com and www.newswire.ca. A replay of the conference call will be available until November 6, 2013 by dialing 1-800-408-3053 and entering access code 1650511, followed by the pound key (#).


CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars, except per share amounts)   Three months   Nine months
(unaudited)   2013   2012   2013   2012
Revenues $ 285,022 $ 226,894 $ 746,624 $ 666,929
Cost of sales, excluding depreciation and amortization(1)   238,422   190,630   624,678   573,522
Selling and administrative expenses   21,180   18,859   64,503   59,877
Profit sharing program   2,123   802   3,659   1,160
Depreciation of property, plant and equipment   5,550   5,138   16,327   15,690
Amortization of intangible assets   398   384   1,176   1,092
Other losses (gains) — net   (42)   229   (1,829)   (4,455)
Finance costs   3,638   4,070   10,958   12,847
Finance revenue   (366)   (352)   (983)   (1,761)
Share of income of joint ventures and associates   (155)   72   (495)   (348)
Income before income tax   14,274   7,062   28,630   9,305
Tax expense (income)                
  Current   4,106   1,721   6,948   3,332
  Deferred   180   (1,131)   1,296   (3,676)
    4,286   590   8,244   (344)
Net income $ 9,988 $ 6,472 $ 20,386 $ 9,649
                 
Net earnings per share                
  Basic $ 0.24 $ 0.15 $ 0.49 $ 0.23
  Diluted $ 0.24 $ 0.15 $ 0.49 $ 0.23
                 
Weighted average number of common shares (in thousands of shares)                
  Basic   41,972   42,013   41,968   42,737
  Diluted   42,079   42,096   42,075   42,820
Number of common shares outstanding (in thousands of shares)           42,073   42,079

(1) As at September 28, 2013 and September 29, 2012, the cost of sales, including depreciation and amortization, totaled $243,143 and $195,042 respectively, for the three-month period and $638,767 and $586,913 respectively, for the nine-month period.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars)   Three months   Nine months
(unaudited)   2013   2012   2013   2012
Net income $ 9,988 $ 6,472 $ 20,386 $ 9,649
Other comprehensive income (loss):                
  Items that will be reclassified subsequently to profit or loss                
  Change in unrealized gains (losses) on translating foreign operations   (3,958)   (8,588)   7,239   (8,912)
                 
  Available-for-sale assets:                
      Unrealized gains on available-for-sale financial assets   arising during the period   - -   16   41   63
      Realized gains reclassified to statements of income   - -   - -   (867)   (274)
      Tax income (expense)   - -   (1)   137   28
    - -   15   (689)   (183)
Other comprehensive income (loss)   (3,958)   (8,573)   6,550   (9,095)
Comprehensive income $ 6,030 $ (2,101) $ 26,936 $ 554

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars)
(unaudited)
As at
September 28,
2013
  As at
December 31,
2012
Assets          
Current assets          
Cash and cash equivalents $ 12,886   $ 6,787
Accounts receivable   318,374     273,383
Inventories   112,088     113,217
Recoverable tax assets   242     122
Prepaid expenses and other assets   3,184     3,040
    446,774     396,549
Property, plant and equipment classified as held for sale   1,518     1,466
    448,292     398,015
Non-current assets          
Investments   4,197     6,036
Ownership interests in joint ventures and associates   41,606     44,316
Property, plant and equipment   287,861     282,556
Intangible assets   9,696     9,563
Goodwill   38,088     38,088
Deferred tax assets   6,880     7,897
Long-term receivables and other assets   11,442     17,656
Total assets $ 848,062   $ 804,127
Liabilities          
Current liabilities          
Accounts payable and accrued liabilities $ 203,317   $ 148,202
Current tax liabilities   5,472     6,942
Current portion of long-term debt   12,612     10,382
Current portion of balances of purchase price of businesses   - -     8,988
    221,401     174,514
Non-current liabilities          
Debt   147,921     175,605
Convertible debentures   64,775     63,446
Provisions   1,848     2,156
Deferred tax liabilities   8,494     8,629
Other liabilities   14,951     17,592
Total liabilities   459,390     441,942
Equity          
Share capital   168,057     168,529
Retained earnings   217,518     197,148
Other equity items   3,097     (3,492)
Total equity   388,672     362,185
Total equity and liabilities $ 848,062   $ 804,127

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
equity
Balance as at January 1, 2012 $ 2,928 $ (6,408) $ 840 $ 5,764 $ 3,124 $ 172,869 $ 184,774 $ 360,767
Net income for the period   - -   - -   - -   - -   - -   - -   9,649   9,649
Comprehensive loss   - -   (8,912)   (183)   - -   (9,095)   - -   - -   (9,095)
Shares acquired by employees   (1,160)   - -   - -   - -   (1,160)   1,160   - -   - -
Repurchase of shares   - -   - -   - -   - -   - -   (5,500)   - -   (5,500)
Excess of acquisition cost over carrying amount of acquired common shares   - -   - -   - -   - -   - -   - -   (1,341)   (1,341)
Amortization of compensation costs related to the profit sharing program - stock ownership component   170   - -   - -   - -   170   - -   - -   170
Balance as at September 29, 2012 $ 1,938 $ (15,320) $ 657 $ 5,764 $ (6,961) $ 168,529 $ 193,082 $ 354,650
Balance as at January 1, 2013 $ 1,994 $ (11,941) $ 691 $ 5,764 $ (3,492) $ 168,529 $ 197,148 $ 362,185
Net income for the period   - -   - -   - -   - -   - -   - -   20,386   20,386
Comprehensive income   - -   7,239   (689)   - -   6,550   - -   - -   6,550
Shares purchased by a trust in employees' name on the secondary market   - -   - -   - -   - -   - -   (651)   - -   (651)
Shares acquired by employees   (202)   - -   - -   - -   (202)   202   - -   - -
Repurchase of shares   - -   - -   - -   - -   - -   (23)   - -   (23)
Excess of acquisition cost over carrying amount of acquired common shares   - -   - -   - -   - -   - -   - -   (16)   (16)
Amortization of compensation costs related to the profit sharing program - stock ownership component   241   - -   - -   - -   241   - -   - -   241
Balance as at September 28, 2013 $ 2,033 $ (4,702) $ 2 $ 5,764 $ 3,097 $ 168,057 $ 217,518 $ 388,672

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars)   Three months   Nine months
(unaudited)   2013   2012   2013   2012
Cash flows from the following activities:                
Operating activities                
Net income $ 9,988 $ 6,472 $ 20,386 $ 9,649
Adjustments:                
  Amortization of compensation costs related to the profit sharing program - stock ownership component   82   57   241   170
  Loss on revaluation of balances of purchase price of businesses   - -   - -   65   - -  
  Gain on disposal of investments   - -   - -   (867)   (2,361)
  Loss on decline in value of an investment   - -   - -   431   - -  
  Loss (gain) on disposal of property, plant and equipment   36   (19)   (71)   (24)
  Gain on revaluation of property, plant and equipment   - -   - -   (943)   - -
  Depreciation of property, plant and equipment   5,550   5,138   16,327   15,690
  Amortization of intangible assets   398   384   1,176   1,092
  Amortization of deferred financing expenses   83   74   248   196
  Provisions   (2)   106   (308)   22
  Interest rate swaps   (31)   11   (366)   47
  Imputed interest   551   564   1,695   1,780
  Pension expense   (737)   (641)   (2,345)   (2,241)
  Deferred tax expense (income)   180   (1,131)   1,296   (3,676)
  Share of income of joint ventures and associates   (155)   72   (495)   (348)
    15,943   11,087   36,470   19,996
Net change in non-cash operating working capital balances                  
Decrease (increase) in accounts receivable   (5,507)   1,888   (37,484)   19,997
Decrease (increase) in inventories   188   (4,413)   6,676   7,706
Decrease (increase) in current tax assets   (99)   1,703   (117)   16,237
Decrease (increase) in prepaid expenses and other assets   1,434   167   (59)   318
Increase (decrease) in accounts payable and accrued liabilities   19,888   (3,097)   49,366   (6,519)
Increase (decrease) in interest payable   1,132   (150)   1,041   (160)
Increase (decrease) in current tax liabilities   3,184   860   (1,478)   924
    20,220   (3,042)   17,945   38,503
Cash flows from operating activities   36,163   8,045   54,415   58,499
Financing activities                  
Shares purchased by a trust in employees' name on the secondary market   - -   - -   (651)   - -
Repurchase of shares   - -   (129)   (39)   (6,841)
Increase in debt and bank loans   2,959   4,372   7,920   4,951
Repayment of debt and bank loans   (24,333)   (7,347)   (35,765)   (47,328)
Repayment of balances of purchase price of businesses   (6,232)   (245)   (9,558)   (6,929)
Issue expenses related to long-term debt   (166)   (257)   (196)   (257)
Increase in other liabilities   - -   8   - -   63
Cash flows from financing activities   (27,772)   (3,598)   (38,289)   (56,341)
Investing activities                  
Proceeds from sale of property, plant and equipment   192   221   370   234
Additions to property, plant and equipment   (4,583)   (2,745)   (12,308)   (5,243)
Additions to intangible assets   (200)   (808)   (1,143)   (899)
Acquisition of investments   - -   (149)   - -   (2,769)
Proceeds from disposal of investments   - -   - -   2,743   5,172
Distributions received   503   - -   503   265
Decrease in receivables and other assets   5,911   1,198   6,402   2,294
Increase in long-term receivables   - -   - -   (27)   - -
Acquisition of business assets   (3,467)   - -   (7,053)   - -
Cash flows from investing activities   (1,644)   (2,283)   (10,513)   (946)
Effects of changes in foreign exchange rate on cash and cash equivalents   180   (693)   486   (1,093)
Net change in cash   6,927   1,471   6,099   119
                   
Cash and cash equivalents - Beginning of period   5,959   6,016   6,787   7,368
Cash and cash equivalents - End of period $ 12,886 $ 7,487 $ 12,886 $ 7,487
Supplementary information                  
  Interest paid $ 374 $ 1,367 $ 6,329 $ 5,823
  Income taxes paid (recovered), net $ 1,149 $ (641) $ 8,709 $ (13,606)

 

SOURCE: Canam Group Inc.

For further information:

François Bégin
Vice President, Communications
Canam Group Inc.
Telephone: 450-641-4000 / 418-225-1355 (cel.)
Email: francois.begin@canamgroupinc.com


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