Canam Group Announces its 2017 First Quarter Results

SAINT-GEORGES, QC, April 28, 2017 /CNW/ - Canam Group Inc. (TSX:CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month period ended April 1, 2017.

 

Periods ended April 1, 2017 and April 2, 2016


                 Three months

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


2017




2016




Revenues

$

463.5



$

450.7




Selling and administrative expenses

$

31.4


6.8%

$

30.9


6.9

%

Adjusted EBITDA1

$

10.3


2.2%

$

22.0


4.9

%

Net income (net loss)2

$

(1.6)



$

8.3




Net earnings per share2 (basic and diluted)

$

(0.04)



$

0.18














1 Refer to the section entitled Non-IFRS measures.

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

 

Results for the first quarter of 2017

Consolidated revenues for the first quarter of 2017 totalled $463.5M, compared to $450.7M for the same quarter in 2016.

Selling and administrative expenses represented 6.8% of first-quarter revenues in 2017, or $31.4M, compared to 6.9% of revenues in 2016, or $30.9M.

The adjusted EBITDA in the first quarter of 2017 amounted to $10.3M or 2.2% of revenues, as compared with an adjusted EBITDA of $22.0M or 4.9% of revenues for the same quarter in 2016. The decrease is attributable to the compression of gross margins for some of the Corporation's activities.

The net loss attributable to shareholders totalled $1.6M, or $0.04 per share, in the first quarter of 2017, compared to a net income of $8.3M, or $0.18 per share, in 2016.

Pressure on gross margins

"The first-quarter results are affected by cost overruns on U.S. bridge projects and  heavy structural steel projects as well as a weaker Canadian non-residential construction market, which has put pressure on the margins," explained Marc Dutil, President and CEO. "The problematic U. S. bridge projects will be completed during the second quarter. Sales of joist and steel deck have grown in the United States, but the pressure on profit margins has remained strong."

Order backlog

The order backlog stood at $1,041M as at April 1, 2017, compared to $1,139M as at December 31, 2016.

Dividend

Due to the transaction announced yesterday, the Board of Directors took the decision to suspend dividend payouts.

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, project management, and erection 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 Friday, April 28, 2017, 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 12, 2017, by dialing 1-800-408-3053 and entering access code 6329610, 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 2016 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 2016 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 (LOSS)


Periods ended April 1, 2017 and April 2, 2016


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

Three months

(unaudited)


2017


2016

Revenues

$

463,451

$

450,736

Cost of sales, excluding depreciation and amortization(1)


420,728


396,312

Selling and administrative expenses


31,365


30,944

Profit sharing program


526


1,234

Depreciation of property, plant and equipment


8,250


6,975

Amortization of intangible assets


859


927

Other net losses


511


207

Finance costs


3,305


2,497

Finance revenue


(109)


(151)

Share of loss of a joint venture and associates


6


311

Income (loss) before income tax


(1,990)


11,480

Income tax expense (recovery)






Current


(964)


5,001


Deferred


520


(1,897)



(444)


3,104

Net income (loss)

$

(1,546)

$

8,376






Net income (loss) attributable to:






Shareholders

$

(1,646)

$

8,328


Non-controlling interests


100


48


$

(1,546)

$

8,376






Net earnings per share attributable to shareholders






Basic

$

(0.04)

$

0.18


Diluted

$

(0.04)

$

0.18






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






Basic


45,289


47,491


Diluted


45,289


47,522

Number of common shares outstanding (in thousands of shares)


45,362


47,215



(1)

As at April 1, 2017 and April 2, 2016, the cost of sales, including depreciation and amortization, was $427,772 and $402,302, respectively.

 

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE LOSS


Periods ended April 1, 2017 and April 2, 2016



(in thousands of Canadian dollars)

Three months

(unaudited)


2017


2016

Net income (loss)

$

(1,546)

$

8,376

Other comprehensive loss:





Items that will be reclassified subsequently to profit or loss:






Change in unrealized losses on translating foreign operations


(3,633)


(23,229)


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


117


1,018



(3,516)


(22,211)

Available-for-sale asset:






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


(384)


195



(384)


195

Other comprehensive loss


(3,900)


(22,016)

Comprehensive loss

$

(5,446)

$

(13,640)






Comprehensive loss attributable to:





Shareholders

$

(5,497)

$

(13,688)

Non-controlling interests


51


48


$

(5,446)

$

(13,640)


 

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS





(in thousands of Canadian dollars)

(unaudited)

As at
April 1,
2017

As at
December 31,
2016

Assets





Current assets





Cash and cash equivalents

$

6,803

$

13,567

Accounts receivable


321,845


318,149

Costs and estimated profits in excess of billings


262,145


259,363

Inventories


145,620


144,601

Recoverable tax assets


1,581


212

Prepaid expenses and other assets


5,310


5,038



743,304


740,930

Non-current assets





Investments


10,174


9,936

Interests in a joint venture and associates


37,758


37,823

Property, plant and equipment


367,856


374,849

Intangible assets


15,583


16,300

Goodwill


55,792


56,285

Deferred tax assets


32,632


33,410

Long-term receivables and other assets


3,364


3,782

Total assets

$

1,266,463

$

1,273,315






Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

266,719

$

272,339

Billings in excess of costs and estimated profits


86,535


87,066

Current tax liabilities


1,047


6,476

Current portion of balance of purchase price of businesses


646


646

Provisions


8,059


8,137

Current portion of long-term debt


24,675


25,204



387,681


399,868

Non-current liabilities





Debt


297,446


284,446

Balance of purchase price of businesses


1,431


1,442

Provisions


11,028


11,131

Deferred tax liabilities


6,204


6,148

Other liabilities


2,141


2,560

Total liabilities


705,931


705,595






Equity





Share capital


229,268


229,035

Retained earnings


252,868


256,277

Other equity items


72,970


77,033

Total equity attributable to shareholders


555,106


562,345

Non-controlling interests


5,426


5,375

Total equity


560,532


567,720

Total equity and liabilities

$

1,266,463

$

1,273,315

 

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

Total other
equity items

Share capital

Retained earnings

Total share capital attributable to shareholders

Non-controlling interests

Total equity

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 loss


- -


(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

Balance as at January 1, 2017

$

1,791

$

78,878

$

(3,646)

$

10

$

77,033

$

229,035

$

256,277

$

562,345

$

5,375

$

567,720

Purchase obligation


- -


- -


- -


- -


- -


- -


43


43


- -


43

Net loss for the period


- -


- -


- -


- -


- -


- -


(1,646)


(1,646)


100


(1,546)

Comprehensive loss


- -


(3,584)


117


(384)


(3,851)


- -


- -


(3,851)


(49)


(3,900)

Dividends


- -


- -


- -


- -


- -


- -


(1,806)


(1,806)


- -


(1,806)

Shares acquired by employees


(233)


- -


- -


- -


(233)


233


- -


- -


- -


- -

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


21


- -


- -


- -


21


- -


- -


21


- -


21

Balance as at April 1, 2017

$

1,579

$

75,294

$

(3,529)

$

(374)

$

72,970

$

229,268

$

252,868

$

555,106

$

5,426

$

560,532

 

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS


Periods ended April 1, 2017 and April 2, 2016


(in thousands of Canadian dollars)


Three months

(unaudited)

2017


2016

Cash flows from the following activities:





Operating activities





Net income (loss)

$

(1,546)

$

8,376

Adjustments:






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


21


21


Loss on disposal of property, plant and equipment


9


6


Depreciation of property, plant and equipment


8,250


6,975


Amortization of intangible assets


859


927


Amortization of deferred financing expenses


113


103


Interest rate swaps


16


(65)


Imputed interest


98


188


Pension expense


(560)


(667)


Deferred tax expense (income)


520


(1,897)


Share of loss of a joint venture and associates


6


311



7,786


14,278

Net change in non-cash operating working capital balances





Decrease (increase) in accounts receivable


(5,228)


19,683

Increase in costs and estimated profits in excess of billings


(4,982)


(30,755)

Decrease (increase) in inventories


(1,792)


13,680

Decrease (increase) in current tax assets


(1,385)


1,002

Increase in prepaid expenses and other assets


(308)


(331)

Increase (decrease) in accounts payable and accrued liabilities


(52)


4,579

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


91


(2,542)

Decrease in interest payable


(905)


(294)

Increase (decrease) in current tax liabilities


(5,405)


537



(19,966)


5,559

Cash flows from operating activities


(12,180)


19,837

Financing activities





Repurchase of shares


- -


(4,314)

Dividends


(3,609)


(3,782)

Increase in debt and bank loans


25,617


50,000

Repayment of debt and bank loans


(12,201)


(44,060)

Issue expenses related to debt


(188)


(378)

Increase in other liabilities


- -


(17)

Cash flows from financing activities


9,619


(2,551)

Investing activities





Proceeds from sale of property, plant and equipment


17


90

Additions to property, plant and equipment


(3,168)


(11,120)

Additions to intangible assets


(259)


(379)

Acquisition of an investment


(621)


(2,308)

Proceeds from disposal of an investment


60


- -

Increase in receivables and other assets


(85)


- -

Decrease in receivables and other assets


43


- -

Cash flows from investing activities


(4,013)


(13,717)

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


(190)


467

Net change in cash and cash equivalents


(6,764)


4,036






Cash and cash equivalents – Beginning of period


13,567


7,050

Cash and cash equivalents – End of period

$

6,803

$

11,086

Supplementary information






Interest paid

$

2,910

$

1,915


Income taxes paid, net

$

5,829

$

4,441

 

SOURCE Canam Group Inc.

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


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