Canam Group Announces its 2016 Fourth Quarter Results

SAINT-GEORGES, QC, Feb. 16, 2017 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month period and fiscal year ended December 31, 2016.

 

Periods ended December 31





Three months

(in millions of $, except per-share amounts)


2016



2015


Revenues

$

486.5


$

493.8


Selling and administrative expenses

$

30.0

6.2%

$

30.9

6.3%

Adjusted EBITDA1

$

9.5

1.9%

$

34.0

6.9%

Net income (net loss)2

$

(2.0)


$

17.8


Net earnings per share2 (basic and diluted)

$

(0.04)


$

0.39









Fiscal years ended December 31


Fiscal years

(in millions of $, except per-share amounts)


2016



2015


Revenues

$

1,856.9


$

1,606.9


Selling and administrative expenses

$

122.8

6.6%

$

108.4

6.7%

Adjusted EBITDA1

$

21.3

1.1%

$

112.0

7.0%

Net income (net loss)2

$

(13.3)


$

46.8


Net earnings per share2 (basic and diluted)








Basic

$

(0.28)


$

1.09



Diluted

$

(0.28)


$

1.08



1 Refer to the section entitled Non-IFRS measures.

2 Represents net income (net loss) attributable to shareholders.

 

Results for the fourth quarter of 2016

Consolidated revenues for the fourth quarter of 2016 totalled $486.5M, compared to $493.8M for the same quarter in 2015.

Selling and administrative expenses represented 6.2% of fourth-quarter revenues in 2016, or $30M, compared to 6.3% of revenues in 2015, or $30.9M. This variation is particularly attributable to the payroll decrease resulting from the refocusing of the heavy structural steel business approach begun in the third quarter of 2016.

The adjusted EBITDA in the fourth quarter of 2016 amounted to $9.5M or 1.9% of revenues, as compared with an adjusted EBITDA of $34M or 6.9% of revenues for the same quarter of 2015. The decrease is attributable to the compression of gross margins in certain Corporation's groups of products and services.

In the fourth quarter of 2016, the net loss attributable to shareholders totaled $2M, or $0.04 per share, compared to a net income of $17.8M, or $0.39 per share, in 2015.

Results for fiscal year 2016

In 2016, revenues totaled $1,856.9M, compared to $1,606.9M in 2015, representing an increase of $250M, or 15.6%. This increase is attributable to all of the Corporation's activities, but primarily to bridge products and services. Sales made in US dollars benefited from the devaluation of the Canadian dollar compared to the US dollar.

The net loss attributable to shareholders in the 2016 fiscal year represented $13.3M, or $0.28 per basic share, compared to a net income of $46.8M, or $1.09 per basic share, for the previous year. The loss is mainly attributable to the recording of an after-tax allowance of $32M in the second quarter of 2016 due to significant additional costs for a heavy structural steel project, and to the unfavorable impact of bridge projects in the United States.

Refocusing of the Corporation's activities

  • Heavy structural steel
    Following the revision of its approach to the heavy structural steel market begun last July, the Corporation announced that it will no longer act as a structural steel contractor for complex, large‑scale projects. Accordingly, in the future, it will participate in structural steel projects that present a reasonable level of risk given the size of the Corporation and the nature of its primary activities. This will allow for a more predictable evolution of profits.

    After reducing its estimation and project management workforce last summer, the Corporation completed its reorganization over the last few weeks. The new team has a mandate to maximize the use of the structural steel manufacturing capacity at the St. Gédéon de Beauce plant.
  • Bridge activities in the United States
    In light of the challenges encountered with bridge projects in the United States over the last year, the Corporation decided to thoroughly review all of its US activities in the bridge sector, taking into consideration all the options that would enable the Corporation to meet its profitability objectives.

Pressure on gross margins

"The 2016 results reflect a non-residential construction market that slowed down in Canada but was very active in the United States, without relieving the pressure on the margins," explained Marc Dutil, President and CEO. "But our results are affected by negative margins on bridge projects in the United States and in particular by the allowance taken in the second quarter for a heavy structural steel project. We are continuing discussions with the client to resolve the issue of additional costs, and we are confident that we will reach an agreement."

Order backlog

The order backlog stood at $1,139M as at December 31, 2016, compared to $1,183M as at December 31, 2015.

Dividend

The Board of Directors approved the payment of a dividend of $0.04 per share payable on March 31, 2017, to shareholders of record on March 17, 2017.

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 23 plants across North America and employs close to 4,650 people in Canada, the United States, Romania and India.

Conference call, webcast and presentation

Canam Group will hold a conference call with financial analysts and media representatives on Thursday, February 16, 2017, at 9:00 a.m. EST. 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 March 2, 2017, by dialing 1-800-408-3053 and entering access code 3495498, followed by the pound key (#).

Non-IFRS measures

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 measures, 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.

 


CONSOLIDATED STATEMENTS OF INCOME (LOSS)















Periods and years ended December 31










Three-month periods


Years

(in thousands of Canadian dollars, except per share amounts)


2016


2015


2016


2015

Revenues

$

486,542

$

493,797

$

1,856,858

$

1,606,855

Cost of sales, excluding depreciation and amortization(1)


448,109


425,371


1,709,362


1,377,066

Selling and administrative expenses


29,990


30,867


122,774


108,358

Profit sharing program


756


4,308


5,557


11,287

Depreciation of property, plant and equipment


8,605


6,601


30,295


25,660

Amortization of intangible assets


895


866


3,674


2,943

Other net gains


(1,763)


(741)


(2,174)


(1,857)

Finance costs


2,772


2,599


11,150


14,433

Finance revenue


(151)


(148)


(701)


(667)

Share of loss of a joint venture and associates


114


447


1,219


1,536

Earnings (loss) before income tax


(2,785)


23,627


(24,298)


68,096

Tax expense (income)










Current


8,369


6,351


19,871


13,554


Deferred


(9,511)


(439)


(31,872)


7,787



(1,142)


5,912


(12,001)


21,341

Net income (loss)

$

(1,643)

$

17,715

$

(12,297)

$

46,755










Net income (loss) attributable to:










Shareholders

$

(2,014)

$

17,791

$

(13,290)

$

46,765


Non-controlling interests


371


(76)


993


(10)


$

(1,643)

$

17,715

$

(12,297)

$

46,755










Net earnings (loss) per share attributable to shareholders










Basic

$

(0.04)

$

0.39

$

(0.28)

$

1.09


Diluted

$

(0.04)

$

0.39

$

(0.28)

$

1.08










Weighted average number of common shares (in thousands of shares)










Basic


45,726


46,075


46,673


43,074


Diluted


45,726


46,106


46,673


43,106

Number of common shares outstanding (in thousands of shares)






45,362


47,551


(1)

As at December 31, 2016 and 2015, the cost of sales, including depreciation and amortization, was $456,180 and $431,096 respectively, for the three-month periods and $1,735,735 and $1,399,158 respectively, for the years.

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)


Periods and years ended December 31



Three-month periods


Years

(in thousands of Canadian dollars)


2016


2015


2016


2015

Net income (loss)

$

(1,643)

$

17,715

$

(12,297)

$

46,755

Other comprehensive income (loss):









Items that will be reclassified subsequently to profit or loss:










Change in unrealized gains (losses) on translating foreign operations


7,452


14,731


(13,116)


62,653


Change in unrealized gain (loss) on translating debt designated as hedging item of the net investment in foreign operations


(294)


(689)


633


(3,473)



7,158


14,042


(12,483)


59,180

Available-for-sale asset:










Unrealized gains (losses) on available-for-sale financial assets
arising during the period


37


172


(189)


199


Reclassified to statements of income


- -


- -


- -


(2)



37


172


(189)


197



7,195


14,214


(12,672)


59,377

Items that will not be reclassified subsequently to profit or loss:









Defined benefit plans:










Actuarial gains (losses) of the defined benefit plans


(1,943)


2,948


(1,943)


2,948


Tax income (expense)


530


(780)


530


(780)



(1,413)


2,168


(1,413)


2,168

Other comprehensive income (loss)


5,782


16,382


(14,085)


61,545

Comprehensive income (loss)

$

4,139

$

34,097

$

(26,382)

$

108,300










Comprehensive income (loss) attributable to:










Shareholders

$

3,679

$

34,173

$

(27,469)

$

108,294


Non-controlling interests


460


(76)


1,087


6


$

4,139

$

34,097

$

(26,382)

$

108,300










 


CONSOLIDATED BALANCE SHEETS






(in thousands of Canadian dollars)


As at
December 31,
2016


As at
December 31,
2015


Assets

Current assets

Cash and cash equivalents

$

13,567

$

7,050

Accounts receivable


318,149


320,517

Costs and estimated profits in excess of billings


259,363


194,298

Inventories


144,601


166,833

Recoverable tax assets


212


1,573

Prepaid expenses and other assets


5,038


3,230



740,930


693,501

Non-current assets





Investments


9,936


6,173

Interests in a joint venture and associates


37,823


39,370

Property, plant and equipment


374,849


348,391

Intangible assets


16,300


11,500

Goodwill


56,285


56,023

Deferred tax assets


33,410


4,007

Long-term receivables and other assets


3,782


5,564

Total assets

$

1,273,315

$

1,164,529






Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

272,339

$

223,580

Billings in excess of costs and estimated profits


87,066


73,465

Current tax liabilities


6,476


4,156

Current portion of balance of purchase price of businesses


646


1,282

Provision


8,137


- -

Current portion of debt


25,204


43,083



399,868


345,566

Non-current liabilities





Debt


284,446


164,356

Balance of purchase price of businesses


1,442


650

Provisions


11,131


19,485

Deferred tax liabilities


6,148


8,897

Other liabilities


2,560


1,208

Total liabilities


705,595


540,162






Equity





Share capital


229,035


239,777

Retained earnings


256,277


294,458

Other equity items


77,033


90,090

Total equity attributable to shareholders


562,345


624,325

Non-controlling interests


5,375


42

Total equity


567,720


624,367

Total equity and liabilities

$

1,273,315

$

1,164,529

 


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
























(in thousands of Canadian dollars)


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 year


- -


- -


- -


- -


- -


- -


- -


46,765


46,765


(10)


46,755

Comprehensive income


- -


62,637


(3,473)


197


- -


59,361


- -


2,168


61,529


16


61,545

Dividends


- -


- -


- -


- -


- -


- -


- -


(6,894)


(6,894)


- -


(6,894)

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


- -


- -


- -


- -


- -


- -


65,971


- -


65,971


- -


65,971

Exercise of options upon the conversion of debentures


- -


- -


- -


- -


(5,511)


(5,511)


5,511


- -


- -


- -


- -

Unexercised debenture conversion options


- -


- -


- -


- -


(247)


(247)


- -


247


- -


- -


- -

Amortization of compensation costs related to the profit sharing program - stock ownership component


85


- -


- -


- -


- -


85


- -


- -


85


- -


85

Balance as at December 31, 2015

$

2,082

$

92,088

$

(4,279)

$

199

$

- -

$

90,090

$

239,777

$

294,458

$

624,325

$

42

$

624,367

Balance as at January 1, 2016

$

2,082

$

92,088

$

(4,279)

$

199

$

- -

$

90,090

$

239,777

$

294,458

$

624,325

$

42

$

624,367

Investment in subsidiaries by non-controlling interests


- -


- -


- -


- -


- -


- -


- -


- -


- -


4,246


4,246

Purchase obligation


- -


- -


- -


- -


- -


- -


- -


(4,507)


(4,507)


- -


(4,507)

Net loss for the year


- -


- -


- -


- -


- -


- -


- -


(13,290)


(13,290)


993


(12,297)

Comprehensive loss


- -


(13,210)


633


(189)


- -


(12,766)


- -


(1,413)


(14,179)


94


(14,085)

Dividends


- -


- -


- -


- -


- -


- -


- -


(7,415)


(7,415)


- -


(7,415)

Repurchase of shares


- -


- -


- -


- -


- -


- -


(11,118)


- -


(11,118)


- -


(11,118)

Excess of acquisition cost over carrying amount of acquired common shares


- -


- -


- -


- -


- -


- -


- -


(11,556)


(11,556)


- -


(11,556)

Shares acquired by employees


(376)


- -


- -


- -


- -


(376)


376


- -


- -


- -


- -

Amortization of compensation costs related to the profit sharing program - stock ownership component


85


- -


- -


- -


- -


85


- -


- -


85


- -


85

Balance as at December 31, 2016

$

1,791

$

78,878

$

(3,646)

$

10

$

- -

$

77,033

$

229,035

$

256,277

$

562,345

$

5,375

$

567,720

 

CONSOLIDATED STATEMENTS OF CASH FLOWS


Periods and years ended December 31




Three-month periods


Years

(in thousands of Canadian dollars)


2016


2015


2016


2015

Cash flows from the following activities:









Operating activities









Net income (loss)

$

(1,643)

$

17,715

$

(12,297)

$

46,755

Adjustments:










Amortization of compensation costs related to the profit sharing program – stock ownership component


21


21


85


85


Gain on disposal of an investment


- -


- -


- -


(5)


Loss (gain) on disposal of property, plant and equipment and intangible assets


123


(163)


(134)


(190)


Depreciation of property, plant and equipment


8,605


6,601


30,295


25,660


Amortization of intangible assets


895


866


3,674


2,943


Amortization of deferred financing expenses


101


338


401


699


Provisions


67


10,834


517


10,834


Interest rate swaps


(216)


(139)


(428)


(297)


Imputed interest


(195)


390


340


2,365


Pension plans


391


(683)


(1,370)


(2,982)


Deferred tax expense (income)


(9,511)


(439)


(31,872)


7,787


Share of loss of a joint venture and associates


114


447


1,219


1,536



(1,248)


35,788


(9,570)


95,190

Net change in non-cash operating working capital balances









Decrease (increase) in accounts receivable


3,147


3,321


18,303


(9,679)

Decrease (increase) in costs and estimated profits in excess of billings


9,615


1,497


68,365


(50,768)

Decrease in inventories


3,744


13,740


20,466


8,269

Decrease (increase) in current tax assets


2,370


(58)


2,713


33

Decrease (increase) in prepaid expenses and other assets


(261)


1,276


(1,828)


3,472

Increase (decrease) in accounts payable and accrued liabilities


(11,371)


(177)


33,300


17,665

Increase (decrease) in billings in excess of costs and estimated profits


(15,209)


(20,292)


9,756


(11,926)

Increase (decrease) in interest payable


659


(2,598)


632


(680)

Increase (decrease) in current tax liabilities


3,582


3,004


2,350


(924)



(3,724)


(287)


17,327


(44,538)

Cash flows from (used in) operating activities


(4,972)


35,501


7,757


50,652

Financing activities









Repurchase of shares


(11,834)


- -


(22,674)


(319)

Dividends


- -


(1,671)


(7,500)


(6,681)

Increase in debt and bank loans


64,596


14,068


223,241


75,704

Repayment of debt and bank loans


(32,722)


(35,838)


(134,908)


(81,658)

Repayment of debentures


- -


(2,956)


- -


(2,956)

Repayment of balances of purchase price of businesses


- -


(959)


(1,207)


(959)

Issue expenses related to debt


(277)


(71)


(729)


(212)

Increase in other liabilities


113


117


96


148

Cash flows from (used in) financing activities


19,876


(27,310)


56,319


(16,933)

Investing activities









Proceeds from sale of property, plant and equipment and intangible assets


245


1,534


1,094


2,005

Additions to property, plant and equipment


(9,553)


(11,695)


(43,060)


(30,368)

Additions to intangible assets


(576)


(732)


(1,679)


(1,695)

Acquisition of an investment


(117)


(830)


(4,217)


(1,429)

Proceeds from disposal of an investment in an associate


99


- -


330


- -

Proceeds from disposal of an investment


- -


- -


- -


48

Distributions received


- -


- -


264


- -

Decrease (increase) in receivables and other assets


15


61


212


212

Increase in long-term receivables


(54)


(14)


(176)


(258)

Acquisition of business assets, net of cash and cash equivalents


1,363


(5)


(8,533)


(6,196)

Cash flows used in investing activities


(8,578)


(11,681)


(55,765)


(37,681)

Effects of changes in foreign exchange rate
on cash and cash equivalents


(1,788)


982


(1,794)


2,751

Net change in cash and cash equivalents


4,538


(2,508)


6,517


(1,211)










Cash and cash equivalents – Beginning of period


9,029


9,558


7,050


8,261

Cash and cash equivalents – End of period

$

13,567

$

7,050

$

13,567

$

7,050

Supplementary information










Interest paid

$

1,523

$

1,260

$

7,272

$

7,241


Income taxes paid, net

$

3,573

$

3,405

$

14,909

$

14,261

 

SOURCE Canam Group Inc.

For further information: Media: François Bégin, Vice President, Communications, Canam Group Inc., 418-228-8031 / 418-225-1355 (mobile phone), francois.begin@groupecanam.com; Investors: René Guizzetti, Vice President and Chief Financial Officer, Canam Group Inc., 450-641-4000, rene.guizzetti@groupecanam.com


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