Canam Group: Net Income Increases by 28% in the Fourth Quarter of 2014

SAINT-GEORGES, QC, Feb. 26, 2015 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the periods ended December 31, 2014.

Highlights

  • 36.2% increase in consolidated revenues for the fourth quarter of 2014 as compared with the same quarter in 2013
  • 28% increase in net income attributable to shareholders for the fourth quarter of 2014 as compared with the same quarter in 2013
  • 70% increase in the backlog of orders compared with December 31, 2013, for a record amount of $1,007M

Quarters ended

Twelve months ended

(in millions of $, except per share amounts)

December 31,
2014

December 31,
2013

December 31,
2014

December 31,
2013

Revenues

$

383.6

$

281.6

$

1,232.8

$

1,028.2

Adjusted EBITDA1

$

28.2

$

20.3

$

78.6

$

75.9

Net income attributable to shareholders

$

13.8

$

10.8

$

29.3

$

31.2

Net income per share attributable to shareholders (basic and diluted)

$

0.33

$

0.26

$

0.70

$

0.74

1

Refer to the section entitled "Non-IFRS measure" in the present press release

 

"The results reflect the attention paid to operations and our discipline in selecting projects," explains Marc Dutil, President and Chief Executive Officer. "In addition to achieving the best quarterly sales ever, we have called all of our people back to work and created new jobs, wrapping up the year with some 350 more colleagues throughout our network."

Results for the fourth quarter of 2014
Consolidated revenues for the fourth quarter of 2014 totaled $383.6M, representing a $102M or 36.2% increase, as compared with revenues of $281.6M for the same quarter in 2013. The increase is mainly attributable to joist and steel deck, heavy structural steel and light structural steel activities.

In the fourth quarter of 2014, selling and administrative expenses totaled $24.6M, or 6.4% of revenues, compared to $25.3M, or 9% of revenues in 2013. This variation is explained by the decrease in legal and related fees, partially offset by an increase in salary charges to maintain sales growth.

Adjusted EBITDA in the fourth quarter of 2014 amounted to $28.2M, or 7.3% of revenues, as compared with an Adjusted EBITDA of $20.3M, or 7.2% of revenues, for the same quarter of 2013. This variation is mainly attributable to the increase in sales volume, partially offset by the decrease in the Adjusted gross margin, which itself resulted from the lower margins for bridge activities and a change in the relative weight of the various activities in the global results of 2014 compared to 2013. These elements were partially offset by the improved Adjusted gross margins of joist and steel deck activities in the United States.

In the fourth quarter of 2014, net income attributable to shareholders totaled $13.8M, or $0.33 per share, as compared with $10.8M, or $0.26 per share, for the same period in 2013.

Results for fiscal year 2014
In 2014, revenues reached $1,232.8M compared to $1,028.2M in 2013, representing a $204.6M or 19.9% increase. The upsurge in revenues is attributable to all of the Corporation's activities.

In fiscal 2014, net income attributable to shareholders amounted to $29.3M, or $0.70 per share, compared to $31.2M, or $0.74 per share, for the previous fiscal year. The decrease is attributable to difficult weather conditions during the first four months of the year in northeastern North America, the compression of the Adjusted gross margins of joist and steel deck activities in Canada and of bridge activities, and a change in the relative weight of the various activities in the global results of 2014 compared to 2013.

Backlog of orders
The backlog of orders stood at $1,007M as at December 31, 2014, compared to $909M as at September 27, 2014 and $592M as at December 31, 2013.

Dividend
The Board of Directors approved a quarterly dividend of $0.04 per common share payable on March 31, 2015 to shareholders of record on March 17, 2015.

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 close to 10,000 buildingstructural steel and bridge projects each year. The Corporation operates 22 plants across North America and employs over 3,900 people in Canada, the United States, Romania, India and Hong Kong.

Conference call and presentation
Canam Group will hold a conference call with financial analysts and media representatives on Thursday, February 26, 2015 at 9:00 a.m. EST.

Please note that the conference call will be accompanied by a complementary presentation in PDF format that will be available on the Corporation's website at www.canamgroupinc.com. A replay of the conference call will be available until March 12, 2015 by dialing 1-800-408-3053 and entering access code 6183702, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS and cannot be formally presented in the consolidated financial statements. Even though Adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors and other financial stakeholders to assess the Corporation's performance and management from a financial and operational standpoint. Refer to the section entitled "Non-IFRS measures" of the Corporation's 2013 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 2013 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




Periods and years ended December 31







Three-month periods

Years

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


2014


2013


2014


2013

Revenues

$

383,641

$

281,611

$

1,232,809

$

1,028,235

Cost of sales, excluding depreciation and amortization(1)


327,153


234,682


1,056,905


859,360

Selling and administrative expenses


24,601


25,308


91,456


89,811

Profit sharing program


3,982


1,546


6,459


5,205

Depreciation of property, plant and equipment


5,342


5,771


22,668


22,098

Amortization of intangible assets


669


432


2,226


1,608

Other gains — net


(170)


(246)


(887)


(2,075)

Finance costs


4,108


3,884


15,125


14,842

Finance revenue


(204)


(244)


(955)


(1,227)

Share of loss (income) of a joint venture and associates


282


221


866


(274)

Income before income tax


17,878


10,257


38,946


38,887

Tax expense (income)










Current


6,782


4,309


9,166


11,257


Deferred


(2,617)


(4,877)


595


(3,581)



(4,165)


(568)


9,761


7,676

Net income

$

13,713

$

10,825

$

29,185

$

31,211










Net income attributable to:










Shareholders

$

13,828

$

10,825

$

29,318

$

31,211


Non-controlling interests


(115)


- -


(133)


- -


$

13,713

$

10,825

$

29,185

$

31,211










Net earnings per share attributable to shareholders










Basic

$

0.33

$

0.26

$

0.70

$

0.74


Diluted

$

0.33

$

0.26

$

0.70

$

0.74










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










Basic


42,029


41,982


42,054


41,983


Diluted


42,079


42,073


42,105


42,074

Number of common shares outstanding (in thousands of shares)






42,079


42,073

 

 (1)

As at December 31, 2014 and 2013, the cost of sales, including depreciation and amortization, totaled $332,298 and $239,610, respectively, for the three-month periods, and $1,076,639 and $878,378, respectively, for the years.

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME





Periods and years ended December 31









Three-month periods

Years

(in thousands of Canadian dollars)


2014


2013


2014


2013

Net income

$

13,713

$

10,825

$

29,185

$

31,211

Other comprehensive income:









Items that will be reclassified subsequently to profit or loss










Change in unrealized gains on translating foreign operations


11,952


9,707


24,431


16,946


Change in unrealized losses on translating debts designated as hedging items of the net investment in foreign operations


(806)


- -


(806)


- -



11,146


9,707


23,625


16,946

Available-for-sale assets:










Unrealized gains on available-for-sale assets arising during the periods and years


- -


- -


- -


41


Reclassified to statements of income


- -


- -


- -


(867)


Tax income


- -


- -


- -


137



- -


- -


- -


(689)



11,146


9,707


23,625


16,257

Items not to be reclassified to profit or loss









Defined benefit plans:










Actuarial gains (losses) of the defined benefit plans


(1,343)


5,508


(1,343)


5,508


Tax income (expense)


352


(1,452)


352


(1,452)



(991)


4,056


(991)


4,056

Other comprehensive income


10,155


13,763


22,634


20,313

Comprehensive income

$

23,868

$

24,588

$

51,819

$

51,524

Attributable to:










Shareholders

$

23,996

$

24,588

$

51,967

$

51,524


Non-controlling interests


(128)


- -


(148)


- -


$

23,868

$

24,588

$

51,819

$

51,524

 

CONSOLIDATED BALANCE SHEETS




 

(in thousands of Canadian dollars)

As at
December 31,
2014

As at
December 31,
2013






Assets





Current assets





Cash and cash equivalents

$

8,261

$

4,690

Accounts receivable


276,691


217,004

Costs and estimated profits in excess of billings


126,590


82,977

Inventories


156,990


110,993

Recoverable tax assets


1,346


264

Prepaid expenses and other assets


5,619


3,762



575,497


419,690






Non-current assets





Investments


4,593


4,699

Interests in a joint venture and associates


40,919


41,390

Property, plant and equipment


308,362


293,856

Intangible assets


10,811


9,760

Goodwill


45,097


41,417

Deferred tax assets


10,128


11,957

Long-term receivables and other assets


7,428


10,971

Total assets

$

1,002,835

$

833,740






Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

183,937

$

146,040

Billings in excess of costs and estimated profits


74,366


39,869

Current tax liabilities


4,943


8,119

Current portion of long-term debt


17,659


13,000

Convertible debentures


67,137


- -



348,042


207,028

Non-current liabilities





Debt


175,585


124,025

Convertible debentures


- -


65,442

Provisions


7,417


6,816

Deferred tax liabilities


7,477


9,922

Other liabilities


7,090


8,849

Total liabilities


545,611


422,082






Equity





Share capital


168,162


168,057

Retained earnings


252,386


230,717

Other equity items


36,640


12,884

Total equity attributable to shareholders


457,188


411,658

Non-controlling interests


36


- -

Total equity


457,224


411,658

Total equity and liabilities

$

1,002,835

$

833,740

 

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
differences
resulting
from
the
translation
of debts
designated
as
hedging
items

 

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 year


- -


- -


- -


- -


- -


- -


- -


31,211


31,211


- -


31,211

Comprehensive income


- -


16,946


- -


(689)


- -


16,257


- -


4,056


20,313


- -


20,313

Dividends


- -


- -


- -


- -


- -


- -


- -


(1,682)


(1,682)


- -


(1,682)

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


321


- -


- -


- -


- -


321


- -


- -


321


- -


321

Balance as at December 31, 2013

$

2,113

$

5,005

$

- -

$

2

$

5,764

$

12,884

$

168,057

$

230,717

$

411,658

$

- -

$

411,658

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 year


- -


- -


- -


- -


- -


- -


- -


29,318


29,318


(133)


29,185

Comprehensive income


- -


24,446


(806)


- -


- -


23,640


- -


(991)


22,649


(15)


22,634

Dividends


- -


- -


- -


- -


- -


- -


- -


(6,658)


(6,658)


- -


(6,658)

Shares acquired by employees


(26)


- -


- -


- -


- -


(26)


26


- -


- -


- -


- -

Issuance of shares upon the  conversion of debentures


- -


- -


- -


- -


- -


- -


73


- -


73


- -


73

Exercise of options upon the  conversion of debentures


- -


- -


- -


- -


(6)


(6)


6


- -


- -


- -


- -

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


148


- -


- -


- -


- -


148


- -


- -


148


- -


148

Balance as at December 31, 2014

$

2,235

$

29,451

$

(806)

$

2

$

5,758

$

36,640

$

168,162

$

252,386

$

457,188

$

36

$

457,224

 

CONSOLIDATED STATEMENTS OF CASH FLOWS




Periods and years ended December 31







Three-month periods

Years

(in thousands of Canadian dollars)

2014

2013

2014

2013

Cash flows from the following activities:









Operating activities









Net income

$

13,713

$

10,825

$

29,185

$

31,211

Adjustments:










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


21


80


148


321


Loss on revaluation of balances of purchase price of businesses


- -


35


- -


100


Gain on disposal of investments


- -


- -


- -


(867)


Loss in decline in value of an investment


200


- -


200


431


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


101


35


178


(36)


Gain on revaluation of property, plant and equipment


- -


(299)


- -


(1,242)


Depreciation of property, plant and equipment


5,342


5,771


22,668


22,098


Amortization of intangible assets


669


432


2,226


1,608


Amortization of deferred financing expenses


119


312


419


560


Provisions


66


1,968


164


4,660


Interest rate swaps


(39)


(98)


(260)


(464)


Imputed interest


642


523


2,337


2,218


Pension expense


(803)


(456)


(2,838)


(2,801)


Deferred tax expense (income)


(2,617)


(4,877)


595


(3,581)


Share of loss (income) of joint ventures and associates


282


221


866


(274)



17,696


14,472


55,888


53,942

Net change in non-cash operating working capital items









Decrease (increase) in accounts receivable


(5,913)


25,596


(48,140)


(2,155)

Increase in costs and estimated profits in excess of billings


(2,095)


(977)


(38,608)


(12,252)

Decrease (increase) in inventories


9,994


3,156


(39,845)


9,832

Decrease (increase) in current tax assets


1,002


(17)


(1,061)


(134)

Decrease (increase) in prepaid expenses and other assets


403


(498)


(1,586)


(557)

Increase (decrease) in accounts payable and accrued liabilities


(10,920)


(10,726)


27,916


22,542

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


7,321


(8,539)


31,570


5,062

Decrease in interest payable


(1,220)


(1,339)


(11)


(298)

Increase (decrease) in current tax liabilities


4,423


2,637


(3,214)


1,159



2,995


9,293


(72,979)


22,899

Cash flows from operating activities


20,691


23,765


(17,091)


76,841

Financing activities









Shares purchased by a trust in employees' name on the secondary market


- -


- -


- -


(651)

Repurchase of shares


- -


- -


- -


(39)

Dividends


(1,669)


- -


(4,991)


- -

Increase in debt and bank loans


16,249


5,911


131,482


13,831

Repayment of debt and bank loans


(30,204)


(31,741)


(82,058)


(67,506)

Repayment of balances of purchase price of businesses


- -


- -


- -


(9,558)

Issue expenses related to debt


- -


(346)


(1,164)


(542)

Decrease in other liabilities


(106)


(57)


(82)


(57)

Cash flows from financing activities


(15,730)


(26,233)


43,187


(64,522)

Investing activities









Proceeds from sale of property, plant and equipment


229


226


353


596

Additions to property, plant and equipment


(7,192)


(5,121)


(22,780)


(17,429)

Additions to intangible assets


(284)


(288)


(1,830)


(1,431)

Acquisition of investments


- -


- -


(1,000)


- -

Proceeds from disposal of investments


- -


- -


- -


4,585

Distributions received


- -


- -


156


- -

Decrease in receivables and other assets


109


213


1,146


6,615

Increase in receivables and other assets


- -


- -


(10)


(27)

Business acquisitions, net of cash acquired


- -


(720)


(1,136)


(7,773)

Cash flows from investing activities


(7,138)


(5,690)


(25,101)


(14,864)

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


2,143


(38)


2,576


448

Net change in cash


(34)


(8,196)


3,571


(2,097)










Cash and cash equivalents – Beginning of periods and years


8,295


12,886


4,690


6,787

Cash and cash equivalents – End of periods and years

$

8,261

$

4,690

$

8,261

$

4,690

Supplementary information










Interest paid

$

3,822

$

3,723

$

10,668

$

10,052


Income taxes paid, net

$

320

$

1,560

$

12,522

$

10,269

 

 

  

SOURCE Canam Group Inc.

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


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