Canam Group posts net earnings of $12.1 million for the second quarter



    BOUCHERVILLE, QC, Aug. 6 /CNW Telbec/ - Construction product manufacturer
Canam Group Inc. (TSX: CAM) today reported net earnings of $12.1 million, or
$0.25 per share, for the second quarter ended June 28, 2008, compared with
$13.3 million, or $0.27 per share, for the corresponding period in 2007.
Consolidated sales totaled $196.4 million versus $218.9 million for the same
year-earlier quarter.
    Net earnings for the six months ended June 28, 2008 amounted to
$19.7 million, or $0.40 per share, compared with $19.6 million, or $0.40 per
share, for the same period in 2007. Consolidated sales reached $362.4 million
in contrast to $380 million a year ago. The finished product inventory as at
June 28, 2008 was worth $51.1 million, up $12.6 million from the amount
recorded as at December 31, 2007.
    While the heavy steel and infrastructure construction market remains
strong in North America, commercial and industrial construction activity is
stable in Canada, but is showing signs of slowing down in the United States,
according to Canam Group president and chief operating officer Marc Dutil. The
company's 21.7% gross margin for the second quarter was a reflection of its
good performance, despite a slight drop in sales primarily as a result of
reduced on-site deliveries to certain regions in the April-June period and the
impact of a weakening U.S. economy. Gross margin was 19.9% for the same
quarter in 2007.
    As at June 28, 2008, Canam Group had a healthy balance sheet, with
$384.6 million in shareholders' equity and $74.9 million in net debt,
translating into a net debt-to-equity ratio of 0.19. EBITDA for the first six
months of 2008 was $38.5 million or 10.6% of sales, compared with
$47.4 million or 12.5% of sales for the same period last year.
    Canam Group's order backlog rose 21% to $352 million as at June 28, 2008,
from $291 million as at March 29, 2008.
    The board of directors approved a quarterly dividend of $0.04 per common
share payable on September 30, 2008 to shareholders of record on September 16,
2008.

    Canam Group is an industrial company operating 12 plants specialized in
the design and fabrication of construction products and solutions. The company
employs more than 3,000 people in Canada, the United States, Romania and
India, and has partnerships with companies in Mexico, France, Saudi Arabia,
the United Arab Emirates, Russia and China.

    Conference call
    ---------------

    Canam Group will hold a conference call with financial analysts and media
at 9 a.m. on Wednesday, August 6, 2008. The call will be broadcast live via
the Internet at www.canamgroup.ws and www.cnw.ca. An archived conference call
recording will be available at 1-800-408-3053 (access code 3266396) until
August 22, 2008.


    
                     Consolidated Statements of Earnings

    Periods ended June 28, 2008
     and June 30, 2007
     (in thousands of dollars,
     except per share amounts)
     (unaudited)                        3 months               6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Sales                      $ 196,384   $ 218,912   $ 362,400   $ 380,019
    -------------------------------------------------------------------------
    Cost of sales                153,706     175,349     284,353     300,146
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Gross profit                  42,678      43,563      78,047      79,873
    -------------------------------------------------------------------------
    Selling and administrative
     expenses                     19,597      18,478      39,572      38,404
    -------------------------------------------------------------------------
    Profit sharing and
     continuous improvement
     programs                      1,372       1,452       2,394       1,920
    -------------------------------------------------------------------------
    Exchange gain                   (345)     (4,023)     (1,457)     (4,510)
    -------------------------------------------------------------------------
    Interest income                 (121)       (297)       (271)       (676)
    -------------------------------------------------------------------------
    Increase in the redemption
     value of an investment in
     a related company              (462)       (470)       (913)       (935)
    -------------------------------------------------------------------------
    Loss (gain) on disposal of
     property, plant and
     equipment, and on
     property, plant and
     equipment held for sale          97        (258)         28        (251)
    -------------------------------------------------------------------------
    Gain on disposal of
     investments                       -      (1,260)          -      (1,448)
    -------------------------------------------------------------------------
    Impairment of property,
     plant and equipment held
     for sale                          -           -         177           -
                              -----------------------------------------------
    -------------------------------------------------------------------------
                                  22,540      29,941      38,517      47,369
    -------------------------------------------------------------------------
    Depreciation of property,
     plant and equipment           3,860       3,628       7,614       7,332
    -------------------------------------------------------------------------
    Amortization of intangible
     assets                          461         360         926         814
    -------------------------------------------------------------------------
    Financial expenses             1,657       1,830       2,937       3,516
    -------------------------------------------------------------------------
    Impairment of the
     investment in a variable
     interest entity located
     in Mexico                         -       1,815           -       1,959
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Earnings before income
     tax expense and
     undermentioned items         16,562      22,308      27,040      33,748
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Income tax expense
      Current                      4,851       7,393       8,253      12,015
      Future                        (308)      1,335        (245)      1,646
                              -----------------------------------------------
    -------------------------------------------------------------------------
                                   4,543       8,728       8,008      13,661
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Earnings before
     undermentioned items         12,019      13,580      19,032      20,087
    -------------------------------------------------------------------------
    Share in earnings of
     companies subject to
     significant influence           137         257         639         253
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Net earnings from
     continuing operations        12,156      13,837      19,671      20,340
    -------------------------------------------------------------------------
    Net earnings (net loss)
     from discontinued
     operations                      (99)       (555)         19        (704)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Net earnings               $  12,057   $  13,282   $  19,690   $  19,636
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings (net loss)
     per share
    Basic:
      From continuing
       operations              $    0.25   $    0.28   $    0.40   $    0.41
      From discontinued
       operations                      -       (0.01)          -       (0.01)
                              -----------------------------------------------
                              -----------------------------------------------
      Total                    $    0.25   $    0.27   $    0.40   $    0.40
                              -----------------------------------------------
                              -----------------------------------------------
    Diluted:
      From continuing
       operations              $    0.24   $    0.28   $    0.40   $    0.41
      From discontinued
       operations                      -       (0.01)          -       (0.01)
                              -----------------------------------------------
                              -----------------------------------------------
      Total                    $    0.24   $    0.27   $    0.40   $    0.40
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number
     of shares (in thousands
     of shares)
      Basic                       49,115      48,894      49,110      48,880
      Diluted                     49,581      49,386      49,573      49,357
    -------------------------------------------------------------------------
    Number of common shares
     outstanding                                          49,428      48,793
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



               Consolidated Statements of Comprehensive Income

    Periods ended June 28, 2008
     and June 30, 2007
     (in thousands of dollars)
     (unaudited)                        3 months                6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings               $  12,057   $  13,282   $  19,690   $  19,636
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Other comprehensive
     income, net of income
     taxes:
      Unrealized gains
       (losses) on translating
       financial statements of
       self-sustaining foreign
       operations              $    (734)  $ (10,522)  $   3,635   $ (12,038)
      Reclassification in
       earnings related to the
       reduction in the net
       investment in a
       self-sustaining foreign
       operation                       -       1,815           -       1,959
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Unrealized foreign
     currency translation
     gains (losses)            $    (734)  $  (8,707)  $   3,635   $ (10,079)
                              -----------------------------------------------
    -------------------------------------------------------------------------
      Unrealized losses on
       available-for-sale
       financial assets
       arising during the
       period                  $     (61)  $     (89)  $      (8)  $    (136)
    Reclassification in
     earnings                          -           -           -         (64)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Change in unrealized gains
     and losses on available-
     for-sale financial
     assets                    $     (61)  $     (89)  $      (8)  $    (200)
                              -----------------------------------------------
    -------------------------------------------------------------------------
      Gains on derivatives
       designated as cash
       flow hedges             $       -   $   1,302   $       -   $   1,425
      Reclassification in
       earnings of gains on
       derivatives designated
       as cash flow hedges
       on sales                     (402)          -        (816)          -
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Change in gains on
     derivatives designated
     as cash flow hedges       $    (402)  $   1,302   $    (816)  $   1,425
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Other comprehensive
     income                    $  (1,197)  $  (7 494)  $   2,811   $  (8,854)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Comprehensive income       $  10,860   $   5,788   $  22,501   $  10,782
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                 Consolidated Statements of Retained Earnings

    Periods ended June 28, 2008
     and June 30, 2007
     (in thousands of dollars)
     (unaudited)                        3 months                6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Opening balance            $ 206,079   $ 165,231   $ 200,421   $ 160,840
    -------------------------------------------------------------------------
    Net earnings                  12,057      13,282      19,690      19,636
    -------------------------------------------------------------------------
    Dividends                     (1,975)     (1,964)     (3,950)     (3,927)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Closing balance            $ 216,161   $ 176,549   $ 216,161   $ 176,549
    -------------------------------------------------------------------------



                         Consolidated Balance Sheets

                                                           As at       As at
                                                         June 28,   December
                                                            2008    31, 2007
    (in thousands of dollars)                         (unaudited)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Assets
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Current assets
      Cash                                             $   9,488   $  11,221
      Accounts receivable                                155,134     156,334
      Inventories                                        199,726     130,388
      Unrealized asset on foreign currency forward
       contracts                                               -         192
      Income taxes recoverable                             5,224         923
      Future income tax assets                             4,542       3,955
      Prepaid expenses and other assets                    4,269       4,583
      Current assets of discontinued operations            3,261       3,821
                                                      -----------------------
                                                      -----------------------
      Total current assets                               381,644     311,417
                                                      -----------------------
    -------------------------------------------------------------------------
    Investments                                           74,921      73,238
    -------------------------------------------------------------------------
    Property, plant and equipment                        171,641     168,077
    -------------------------------------------------------------------------
    Property, plant and equipment held for sale            1,754       5,613
    -------------------------------------------------------------------------
    Intangible assets                                      2,496       2,802
    -------------------------------------------------------------------------
    Goodwill                                                 312         312
    -------------------------------------------------------------------------
    Future income tax assets                               2,587       2,602
    -------------------------------------------------------------------------
    Other assets                                           5,669       5,799
    -------------------------------------------------------------------------
    Long-term assets of discontinued operations           13,755      15,237
                                                      -----------------------
    -------------------------------------------------------------------------
                                                       $ 654,779   $ 585,097
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Current liabilities
      Bank loans                                       $   7,717   $   5,220
      Accounts payable and accrued liabilities           166,758     116,556
      Unrealized liability on foreign currency forward
       contracts                                               6           -
      Income taxes payable                                    92       7,797
      Future income tax liabilities                          307         376
      Current portion of long-term debt                    5,198       3,962
      Current liabilities of discontinued operations       2,198       2,448
                                                      -----------------------
                                                      -----------------------
      Total current liabilities                          182,276     136,359
                                                      -----------------------
    -------------------------------------------------------------------------
    Long-term debt                                        71,521      65,027
    -------------------------------------------------------------------------
    Deferred credits                                       4,583       4,577
    -------------------------------------------------------------------------
    Future income tax liabilities                          8,816       8,409
    -------------------------------------------------------------------------
    Long-term liabilities of discontinued operations       3,028       3,835
                                                      -----------------------
    -------------------------------------------------------------------------
                                                         270,224     218,207
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Shareholders' Equity
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Share capital                                        194,949     196,611
    -------------------------------------------------------------------------
    Retained earnings                                    216,161     200,421
    -------------------------------------------------------------------------
    Contributed surplus                                    3,616       2,840
    -------------------------------------------------------------------------
    Accumulated other comprehensive income               (30,171)    (32,982)
                                                      -----------------------
    -------------------------------------------------------------------------
                                                         384,555     366,890
                                                      -----------------------
    -------------------------------------------------------------------------
                                                       $ 654,779   $ 585,097
                                                      -----------------------
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                    Consolidated Statements of Cash Flows

    Periods ended June 28, 2008
     and June 30, 2007
     (in thousands of dollars)
     (unaudited)                        3 months                6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flows from the
     following activities:
    Operating activities
    -------------------------------------------------------------------------
    Net earnings from
     continuing operations     $  12,156   $  13,837   $  19,671   $  20,340
    -------------------------------------------------------------------------
    Items not affecting cash
      Depreciation of property,
       plant and equipment         3,860       3,628       7,614       7,332
      Amortization of
       intangible assets             461         360         926         814
      Amortization of deferred
       financing expenses             60          95         126         201
      Future income tax expense     (308)      1,335        (245)      1,646
      Loss (gain) on disposal
       of property, plant and
       equipment and on
       property, plant and
       equipment held for sale        97        (258)         28        (251)
      Gain on foreign currency
       forward contracts            (350)     (2,616)       (618)     (3,544)
      Gain on disposal of
       investments                     -      (1,260)          -      (1,448)
      Impairment of the
       investment in a variable
       interest entity located
       in Mexico                       -       1,815           -       1,959
      Pension expense                (98)       (210)       (290)       (366)
      Compensation cost
       related to stock
       options                         4          10           7          20
      Amortization of
       compensation costs
       related to the profit
       sharing program - stock
       ownership component           389         225         779         450
      Increase in the
       redemption value of an
       investment in a related
       company                      (462)       (470)       (913)       (935)
      Impairment of property,
       plant and equipment held
       for sale                        -           -         177           -
      Share in earnings of
       companies subject to
       significant influence        (137)       (257)       (639)       (253)
                              -----------------------------------------------
                              -----------------------------------------------
                                  15,672      16,234      26,623      25,965
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net change in non-cash
     operating working capital
     items
      Decrease (increase) in
       accounts receivable       (10,226)    (35,393)      3,827     (22,224)
      Increase in inventories    (49,517)    (13,842)    (68,794)    (35,038)
      Decrease (increase) in
       income taxes recoverable   (1,688)         16      (4,260)          8
      Decrease (increase) in
       prepaid expenses and
       other assets                  584      (2,069)        275        (166)
      Increase in accounts
       payable and accrued
       liabilities                24,564      26,685      48,391      32,159
      Increase (decrease) in
       interest payable               40          (8)         26          (2)
      Decrease in income taxes
       payable                       (62)     (1,585)     (7,732)     (1,649)
                              -----------------------------------------------
                              -----------------------------------------------
                                 (36,305)    (26,196)    (28,267)    (26,912)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Cash flows from continuing
     operating activities        (20,633)     (9,962)     (1,644)       (947)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financing activities
    -------------------------------------------------------------------------
    Shares purchased in
     employees' name on the
     secondary market                  -           -      (1,970)     (1,445)
    -------------------------------------------------------------------------
    Proceeds from issuance of
     shares                          275          55         298         246
    -------------------------------------------------------------------------
    Dividends                     (1,975)     (1,964)     (3,950)     (3,927)
    -------------------------------------------------------------------------
    Increase in long-term debt
     and bank loans               18,542      29,979      19,229      31,566
    -------------------------------------------------------------------------
    Repayment of long-term
     debt and bank loans          (4,555)       (803)     (7,650)     (9,204)
    -------------------------------------------------------------------------
    Issue expenses related to
     long-term debt                  (12)       (108)        (50)       (126)
    -------------------------------------------------------------------------
    Deferred credits                (210)        110         308         117
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Cash flows from continuing
     financing activities         12,065      27,269       6,215      17,227
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Investing activities
    -------------------------------------------------------------------------
    Proceeds from sale of
     property, plant and
     equipment                       549       3,186       1,578       3,193
    -------------------------------------------------------------------------
    Proceeds from sale of
     property, plant and
     equipment held for sale       3,238           -       3,797           -
    -------------------------------------------------------------------------
    Additions to property,
     plant and equipment          (6,864)     (4,917)    (11,947)     (7,641)
    -------------------------------------------------------------------------
    Additions to intangible
     assets                         (354)       (239)       (532)       (617)
    -------------------------------------------------------------------------
    Acquisition of investments      (220)         (5)       (220)     (2,311)
    -------------------------------------------------------------------------
    Proceeds from disposal of
     investments                       -           -           -         168
    -------------------------------------------------------------------------
    Distribution from a company
     subject to significant
     influence                        56           -          56           -
    -------------------------------------------------------------------------
    Decrease in long-term
     receivables                     196         115          284        339
    -------------------------------------------------------------------------
    Increase in long-term
     receivables                    (254)     (2,732)        (269)    (2,740)
    -------------------------------------------------------------------------
    Business acquisitions, net
     of cash acquired                  -      (5,303)           -     (5,403)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Cash flows from continuing
     investing activities         (3,653)     (9,895)      (7,253)   (15,012)
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Effect of changes in
     foreign exchange rate
     on cash                        (159)      1,084         (163)     1,051
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Net change in cash from
     continuing operations       (12,380)      8,496       (2,845)     2,319
    -------------------------------------------------------------------------
    Cash flows from
     discontinued operations
    Operating activities             410       1,851          362      4,105
    Investing activities             600          63          750        289
                              -----------------------------------------------
    -------------------------------------------------------------------------
                                   1,010       1,914        1,112      4,394
    -------------------------------------------------------------------------
    Cash, beginning of period     20,858       5,280       11,221      8,977
                              -----------------------------------------------
    -------------------------------------------------------------------------
    Cash, end of period        $   9,488   $  15,690   $    9,488  $  15,690
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary information
    Interest paid              $   1,378   $   1,577   $   2,600   $   3,134
    Income taxes paid, net     $   5,666   $   5,954   $  18,795   $  10,577
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Jasmin Gosselin, Vice President,
Communications, (450) 641-4000, jasmin.gosselin@canamgroup.ws;
www.canamgroup.ws


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