CANAM GROUP: 2010 SALES UP 20% TO $751M

BOUCHERVILLE, QC, Feb. 15 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), a leading construction product fabricator, closed its last financial year ended December 31, 2010 with consolidated sales totaling $751.3 million, up 20% from $625.8 million in 2009. The company posted net earnings of $0.1 million, or $0 per share, compared with $20.4 million, or $0.45 per share, last year.

Fourth-quarter net earnings amounted to $0.8 million, or $0.02 per share, against $5.1 million, or $0.11 per share, for the corresponding quarter in 2009. Consolidated sales for the quarter increased 66%, from $149.7 million in 2009 to $248.4 million in 2010.

Marc Dutil, Canam Group president and chief operating officer, stated that this growth in sales stems primarily from the acquisition of FabSouth in February 2010 whereas the contraction of gross margins reflects the downturn in non-residential construction across North America. Despite a very difficult economic environment, Mr. Dutil is pleased that the company has attained its goal to weather the recession with a strong balance sheet and make the right acquisitions at the right price, while maintaining jobs and profitability in anticipation of the economic recovery.

The gross profit for 2010 amounted to $94.3 million and gross margin stood at 12.5% of sales compared to 19.4% at the end of the previous year. EBITDA went from $49 million at the close of 2009 to $14.8 million one year later. The company's net debt stood at $97.6 million versus $0.3 million a year ago. Shareholders' equity was $406.6 million.

As at December 31, 2010, Canam Group's order backlog totaled $485 million compared to $460 million a year ago.

The board of directors approved the payment of a quarterly dividend of $0.04 per common share on March 31, 2011 to shareholders of record on March 17, 2011.

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 at 9 a.m. on Tuesday, February 15, 2011. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until March 1, 2011, by dialing 1-800-408-3053 and entering access code 1634675, followed by the pound key (#).

 
Consolidated Statements of Earnings

Periods ended December 31
               
(in thousands of dollars, except per share amounts) 3 months   12 months
    2010   2009
(restated)
  2010   2009
(restated)
Sales  $ 248,436    $ 149,678    $ 751,322    $ 625,843
Cost of sales   222,162   121,204   657,066   504,121
Gross profit   26,274   28,474   94,256   121,722
Selling and administrative expenses   21,649   19,399   78,032   71,760
Profit sharing programs   884   1,111   1,658   2,929
Exchange loss (gain)   (386)   (1,155)   78   (2,153)
Gain on disposal of investments   - -   (110)   (448)   (319)
Loss on disposal of property, plant and equipment   154   457   125   402
Impairment of property, plant and equipment held for sale   - -   132   - -   132
    3,973   8,640   14,811   48,971
Depreciation of property, plant and equipment   4,873   4,368   18,678   16,285
Amortization of intangible assets   1,124   256   3,971   1,294
Financial expenses   3,262   458   6,460   2,042
Gain (loss) on revaluation of investment   78   - -   (3,810)   - -
Gain on business acquisition   (7,464)   - -   (7,464)   - -
Earnings (loss) before income tax expense and undermentioned item   2,100   3,558   (3,024)   29,350
Income tax expense (recovery)                
  Current   (1,762)   (4,392)   458   4,026
  Future   2,918   3,044   (3,798)   3,207
    1,156   (1,348)   (3,340)   7,233
Earnings before undermentioned items   944   4,906   316   22,117
Share in earnings (loss) of companies subject to significant influence   (189)   149   (282)   (701)
Net earnings from continuing operations   755   5,055   34   21,416
Net earnings (net loss) from discontinued operations   - -   67   60   (984)
Net earnings $ 755 $ 5,122 $ 94 $ 20,432
Net earnings (net loss) per share                
Basic:                
  From continuing operations $ 0.02 $ 0.11 $ 0 $ 0.47
  From discontinued operations   - -   - -   0   (0.02)
  Total $ 0.02 $ 0.11 $ 0 $ 0.45
Diluted:                
  From continuing operations $ 0.02 $ 0.11 $ 0 $ 0.47
  From discontinued operations   - -   - -   0   (0.02)
  Total $ 0.02 $ 0.11 $ 0 $ 0.45
Weighted average number of common shares              
  (in thousands of shares)                
  Basic   45,208   45,047   45,207   45,057
  Diluted   45,394   45,385   45,396   45,385
Number of common shares outstanding           45,366   45,368

 
Consolidated Statements of Comprehensive Income

Periods ended December 31
(in thousands of dollars) 3 months 12 months
    2010   2009
(restated)
  2010   2009
(restated)
Net earnings  $ 755    $ 5,122    $ 94    $ 20,432
Other comprehensive income (loss):              
  Change in unrealized losses on translating financial statements of self-sustaining foreign operations $ (7,293) $ (6,136) $ (10,838) $ (25,391)
  Unrealized gains (losses) on available-for-sale financial assets arising during the year $ 81 $ (157) $ 839 $ 398
  Reclassification in earnings   - -   - -   (421)   - -
  Income tax expense (recovery)   (12)   24   (70)   (80)
  Change in unrealized gains and losses on available-for-sale financial assets $ 69 $ (133) $ 348 $ 318
                   
Other comprehensive loss $ (7,224) $ (6,269) $ (10,490) $ (25,073)
                   
Comprehensive loss $ (6,469) $ (1,147) $ (10,396) $ (4,641)

 
Consolidated Statements of Retained Earnings

Periods ended December 31
(in thousands of dollars) 3 months 12 months
    2010   2009
(restated)
  2010   2009
(restated)
Opening balance - As previously reported  $ 237,740    $ 240,820    $ 244,029    $ 232,208
  Change in accounting policies   18,366   18,065   18,164   17,782
Opening balance - As restated   256,106   258,885   262,193   249,990
Net earnings   755   5,122   94   20,432
Dividends   (1,789)   (1,814)   (7,157)   (7,261)
Excess of acquisition cost over carrying value of acquired common shares   - -   - -   (58)   (968)
Closing balance $ 255,072 $ 262,193 $ 255,072 $ 262,193

 
Consolidated Balance Sheets

As at December 31
(in thousands of dollars) 2010 2009
(restated)
Assets        
Current assets        
     Cash and cash equivalents  $ 15,968    $ 67,393
     Short-term investment pledged as collateral   9,946   - -
     Accounts receivable   202,963   99,594
     Inventories   139,941   104,540
     Income taxes recoverable   4,092   6,701
     Future income tax assets   2,126   1,008
     Prepaid expenses and other assets   4,170   3,484
     Current assets of discontinued operations   - -   1,230
     Total current assets   379,206   283,950
Investments   48,063   63,503
Property, plant and equipment   280,293   209,204
Property, plant and equipment held for sale   1,465   1,549
Intangible assets   11,242   1,127
Goodwill   49,582   150
Future income tax assets   9,192   363
Long-term receivables and other assets   24,500   21,942
Long-term assets of discontinued operations   - -   8,618
  $ 803,543 $ 590,406
Liabilities        
Current liabilities        
     Bank loans $ 8,729 $ - -
     Accounts payable and accrued liabilities   149,206   77,112
     Income taxes payable   56   635
     Future income tax liabilities   409   876
     Current portion of long-term debt   8,943   5,477
     Current portion of balance of purchase price of business   10,043   - -
     Current liabilities of discontinued operations   - -   1,495
     Total current liabilities   177,386   85,595
Long-term debt   105,850   62,212
Balance of purchase price of business   24,173   - -
Convertible debentures   60,408   - -
Deferred credits   4,254   4,749
Future income tax liabilities   24,915   18,918
Long-term liabilities of discontinued operations   - -   1,604
    396,986   173,078
Shareholders' Equity        
Share capital   179,102   178,024
Retained earnings   255,072   262,193
Debenture conversion options   5,764   - -
Contributed surplus   4,859   4,862
Accumulated other comprehensive loss   (38,240)   (27,751)
    406,557   417,328
  $ 803,543 $ 590,406

 
Consolidated Statements of Cash Flows

Periods ended December 31
(in thousands of dollars)   3 months   12 months
    2010   2009
(restated)
  2010   2009
(restated)
Cash flows from the following activities:                
Operating activities                
Net earnings from continuing operations  $ 755    $ 5,055    $ 34    $ 21,416
Items not affecting cash and cash equivalents                
  Amortization of compensation costs related to the profit sharing program - stock ownership component   345   431   1,383   1,780
  Unrealized loss (gain) on foreign currency forward contracts   - -   579   - -   (743)
  Gain on reevaluation of investments   78   - -   (3,810)   - -
  Gain on a business acquisition   (7,464)   - -   (7,464)   - -
  Gain on disposal of investments   - -   (110)   (448)   (319)
  Impairment of property, plant and equipment held for sale   - -   132   - -   132
  Loss on disposal of property, plant and equipment   154   457   125   402
  Depreciation of property, plant and equipment   4,873   4,368   18,678   16,285
  Amortization of intangible assets   1,124   256   3,971   1,294
  Amortization of deferred financing expenses   55   54   234   214
  Implicit interest on convertible debentures and balance of purchase price businesses   2,021   - -   2,021   - -
  Interest swaps   279   - -   279   - -
  Pension expense   (107)   (298)   73   (322)
  Future income tax expense   2,918   3,044   (3,798)   3,207
  Share in loss of companies subject to significant influence   189   (149)   282   701
    5,220   13,819   11,560   44,047
Net change in non-cash operating working capital items                
  Increase in short-term investment pledged as collateral   (9,946)   - -   (9,946)   - -
  Decrease (increase) in accounts receivable   (8,792)   17,935   (58,837)   46,605
  Decrease (increase) in inventories   14,084   15,362   (20,561)   62,179
  Decrease (increase) in income taxes recoverable   (4,083)   (3,180)   977   (1,614)
  Decrease (increase) in prepaid expenses and other assets   (225)   (718)   398   2,689
  Increase (decrease) in accounts payable and accrued liabilities   (25,742)   (15,683)   17,188   (40,928)
  Increase (decrease) in interest payable   (228)   (211)   916   (26)
  Increase (decrease) in income taxes payable   410   (1,920)   (368)   418
    (34,522)   11,585   (70,233)   69,323
Cash flows from continuing operating activities   (29,302)   25,404   (58,673)   113,370
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   (3,579)   (3,630)   (7,157)   (7,261)
Increase in long-term debt and bank loans   38,116   - -   112,867   11,977
Repayment of long-term debt and bank loans   (62,865)   (6,679)   (67,234)   (26,403)
Repayment of balance of purchase price of business   (2,587)   - -   (5,217)   - -
Convertible debentures issuance   66,240   - -   66,240   - -
Issue expenses related to long-term debt and convertible debentures   (618)   - -   (618)   - -
Deferred credits   (1,245)   (2)   (2,500)   (237)
Cash flows from continuing financing activities   33,462   (10,311)   96,015   (25,870)
Investing activities                
Proceeds from sale of property, plant and equipment   (115)   531   465   923
Additions to property, plant and equipment   (11,534)   (10,729)   (39,134)   (27,791)
Additions to intangible assets   (89)   (51)   (418)   (467)
Acquisition of investments   - -   (16,111)   (120)   (20,704)
Proceeds from disposal of investments   - -   2,428   1,503   3,572
Distribution from companies subject to significant influence   379   167   379   467
Decrease in long-term receivables   624   6,307   5,207   8,807
Increase in long-term receivables   (41)   (93)   (176)   (4,383)
Business acquisitions, net of cash acquired   146   - -   (54,139)   - -
Cash flows from continuing investing activities   (10,630)   (17,551)   (86,433)   (39,576)
Effect of changes in foreign exchange rate on cash and cash equivalents   (1,943)   296   (2,532)   (143)
Net change in cash and cash equivalents from continuing operations   (8,413)   (2,162)   (51,623)   47,781
Cash flows from discontinued operations                
  Operating activities   - -   2,957   184   3,598
  Investing activities   - -   17   14   395
    - -   2,974   198   3,993
Cash, beginning of year   24,381   66,581   67,393   15,619
Cash and cash equivalents, end of year $ 15,968 $ 67,393 $ 15,968 $ 67,393
Supplementary information                
  Interest paid $ 1,933 $ 1,177 $ 5,145 $ 3,894
  Income taxes paid (recovered), net $ 1,553 $ (428) $ (1,708) $ 3,271

SOURCE CANAM GROUP INC.

For further information:

Jasmin Gosselin    
Vice President, Communications
Tel.: 450-641-4000
Email:  jasmin.gosselin@canamgroup.ws
www.canamgroup.ws

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