Canam Group's Net Income in the Second Quarter of 2015 More Than Doubled Compared to the Year-Earlier Quarter

SAINT-GEORGES, QC, le 6 août 2015 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month and six-month periods ended June 27, 2015.

Highlights

  • 33% increase in consolidated revenues compared to the second quarter of 2014
  • 68% increase in earnings before interest, tax, depreciation and amortization
    (Adjusted EBITDA) compared to the second quarter of 2014

 

Quarters ended June 27, 2015 and June 28, 2014

Three months

(in millions of $, except per share amounts)


2015



2014


Revenues

$

371.8


$

280.6


Selling and administrative expenses

$

26.0

7.0%

$

22.2

7.9%

Adjusted EBITDA1

$

26.8

7.2%

$

16.0

5.7%

Net income

$

10.0


$

4.5


Net earnings per share (basic and diluted)

$

0.24


$

0.11







Six months

(in millions of $, except per share amounts)


2015



2014


Revenues

$

680.9


$

519.9


Selling and administrative expenses

$

50.2

7.4%

$

44.0

8.5%

Adjusted EBITDA1

$

44.5

6.5%

$

25.7

5.0%

Net income

$

14.4


$

5.0


Net earnings per share (basic and diluted)

$

0.34


$

0.12


1 Refer to the section entitled Non-IFRS measure

 

Results for the second quarter and first six months of 2015
Consolidated revenues for the second quarter of 2015 totaled $371.8M, which represents a $91.2M or 33% increase, compared to revenues of $280.6M for the same quarter in 2014. Consolidated revenues after the first six months of fiscal 2015 totaled $680.9M, representing a $161M or 31% increase, compared to revenues of $519.9M for the corresponding period in 2014. The increases are attributable to all of the Corporation's groups of products and services, primarily structural steel and buildings, as well as to the favorable impact of the US dollar's rise against the Canadian dollar since the beginning of 2015.

Selling and administrative expenses totaled $26M, or 7% of revenues, in 2015 compared to $22.2M, or 7.9% of revenues, in 2014. After the first six months of fiscal 2015, selling and administrative expenses totaled $50.2M, or 7.4% of revenues, compared to $44M, or 8.5% of revenues, for the corresponding six-month period in 2014. These variations are mainly attributable to payroll increase in order to maintain sales growth, along with the strengthening of the US dollar against the Canadian dollar.

Adjusted EBITDA in the second quarter of 2015 amounted to $26.8M, or 7.2% of revenues, compared to $16M, or 5.7% of revenues, for the same quarter in 2014. For the six-month period ended June 27, 2015, Adjusted EBITDA totaled $44.5M, or 6.5% of revenues, compared to $25.7M, or 5% of revenues, for the same period in 2014. These increases in Adjusted EBITDA since the beginning of 2015 are mainly attributable to a higher sales volume combined with a rise in the Adjusted gross margins of building and structural steel activities in addition to the US dollar's rise against the Canadian dollar.

In the second quarter of 2015, net income attributable to shareholders totaled $10M, or $0.24 per share, compared to $4.5M, or $0.11 per share, for the corresponding period in 2014. After the first six months of fiscal 2015, net income totaled $14.4M, or $0.34 per share, compared to $5M, or $0.12 per share, for the same six-month period in 2014.

Maintain performance
"All business units were able to take advantage of the recovery in the US non-residential construction market and contributed to these good results for the fourth consecutive quarter," explains Marc Dutil, President and Chief Executive Officer of Canam Group. "We will continue to focus our attention on a disciplined execution in order to maintain our performance, productivity and the gradual improvement of our results."

Order backlog
The order backlog stood at $1,058M as at June 27, 2015, compared to $1,118M as at March 28, 2015 and $1,007M as at December 31, 2014. Note that the Champlain Bridge project is not included in the order backlog as the final contract was not signed as at the end of the second quarter.   

Dividend
The Board of Directors approved a dividend of $0.04 per share payable on September 30, 2015 to shareholders of record on September 14, 2015.

Acquisition of Dessin Cadmax
On August 1, 2015, the Corporation acquired Dessin Cadmax, which is located in Boisbriand, Quebec, and employs some thirty steel detailing specialists. Founded in 1984, Dessin Cadmax has taken part in numerous large-scale projects, including several in collaboration with Canam Group. This acquisition is in line with the Corporation's goal to enhance and integrate its product and service offering in the construction industry.

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 an average of 10,000 buildingstructural steel and bridge projects each year. The Corporation operates 22 plants across North America and employs over 4,100 people in Canada, the United States, Romania, India and Hong Kong.

Conference call, webcast and presentation

Canam Group will hold a conference call with financial analysts and media representatives on Thursday, August 6, 2015 at 9:00 a.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 August 20, 2015 by dialing 1-800-408-3053 and entering access code 5162459, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by International Financial Reporting Standards (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 2014 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 2014 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


Periods ended June 27, 2015 and June 28, 2014


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


Three months


Six months

(unaudited)


2015


2014


2015


2014

Revenues

$

371,815

$

280,616

$

680,917

$

519,919

Cost of sales, excluding depreciation and amortization(1)


315,835


241,558


582,925


449,224

Selling and administrative expenses


26,004


22,194


50,187


43,999

Profit sharing program


2,595


658


3,084


875

Depreciation of property, plant and equipment


6,236


5,845


12,454


11,440

Amortization of intangible assets


675


483


1,365


956

Other losses (gains) — net


596


295


332


(110)

Finance costs


3,865


3,693


7,786


7,189

Finance revenue


(169)


(280)


(355)


(518)

Share of loss of a joint venture and associates


601


39


742


321

Income before income tax


15,577


6,131


22,397


6,543

Tax expense










Current (recovered)


2,465


748


4,253


(589)


Deferred


3,133


882


3,727


2,081



5,598


1,630


7,980


1,492

Net income

$

9,979

$

4,501

$

14,417

$

5,051

Net income attributable to:










Shareholders

$

10,036

$

4,530

$

14,433

$

5,004


Non-controlling interests


(57)


(29)


(16)


47


$

9,979

$

4,501

$

14,417

$

5,051










Net earnings per share attributable to shareholders










Basic

$

0.24

$

0.11

$

0.34

$

0.12


Diluted

$

0.24

$

0.11

$

0.34

$

0.12










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










Basic


42,013


42,022


41,998


42,047


Diluted


42,055


42,078


42,040


42,103

Number of common shares outstanding (in thousands of shares)






42,055


42,078

(1) As at June 27, 2015 and June 28, 2014, the cost of sales, including depreciation and amortization, was $321,172 and $246,395, respectively, for the three-month period and $593,613 and $ 458,902, respectively, for the six-month period.

The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

NOTICE
The Corporation's independent auditors have not performed a review of the accompanying condensed interim consolidated financial statements.

 

Condensed Interim Consolidated

Statements of Comprehensive Income (Loss)


Periods ended June 27, 2015 and June 28, 2014


(in thousands of Canadian dollars)


Three months


Six months

(unaudited)


2015


2014


2015


2014

Net income

$

9,979

$

4,501

$

14,417

$

5,051

Other comprehensive income:









Items that will be reclassified subsequently to profit or loss










Change in unrealized gains (losses) on translating foreign operations


(7,803)


(10,331)


19,302


135


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


472


- -


(1,265)


- -



(7,331)


(10,331)


18,037


135

Available-for-sale asset:










Reclassified to statements of income


(2)


- -


(2)


- -

Other comprehensive income (loss)


(7,333)


(10,331)


18,035


135

Comprehensive income (loss)

$

2,646

$

(5,830)

$

32,452

$

5,186

Attributable to:










Shareholders

$

2,658

$

(5,804)

$

32,452

$

5,136


Non-controlling interests


(12)


(26)


- -


50


$

2,646

$

(5,830)

$

32,452

$

5,186


The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

 


Condensed Interim Consolidated Balance Sheets






(in thousands of Canadian dollars)
(unaudited)


As at
June 27,
2015


As at
December 31,
2014

Assets





Current assets





Cash and cash equivalents

$

5,270

$

8,261

Accounts receivable


267,289


276,691

Costs and estimated profits in excess of billings


166,177


126,590

Inventories


169,671


156,990

Recoverable tax assets


1,271


1,346

Prepaid expenses and other assets


6,371


5,619



616,049


575,497

Non-current assets





Investments


4,742


4,593

Interests in a joint venture and associates


40,172


40,919

Property, plant and equipment


317,204


308,362

Intangible assets


10,562


10,811

Goodwill


47,820


45,097

Deferred tax assets


7,306


10,128

Long-term receivables and other assets


6,262


7,428

Total assets

$

1,050,117

$

1,002,835

Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

199,255

$

183,937

Billings in excess of costs and estimated profits


80,143


74,366

Current tax liabilities


1,882


4,943

Current portion of long-term debt


18,403


17,659

Convertible debentures


68,174


67,137



367,857


348,042

Non-current liabilities





Debt


175,518


175,585

Provisions


7,748


7,417

Deferred tax liabilities


7,453


7,477

Other liabilities


5,455


7,090

Total liabilities


564,031


545,611

Equity





Share capital


168,314


168,162

Retained earnings


263,273


252,386

Other equity items


54,463


36,640

Total equity attributable to shareholders


486,050


457,188

Non-controlling interests


36


36

Total equity


486,086


457,224

Total equity and liabilities

$

1,050,117

$

1,002,835


The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 


 

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


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, 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 period


- -


- -


- -


- -


- -


- -


- -


5,004


5,004


47


5,051

Comprehensive income


- -


132


- -


- -


- -


132


- -


- -


132


3


135

Dividends


- -


- -


- -


- -


- -


- -


- -


(3,322)


(3,322)


- -


(3,322)

Shares acquired by employees


(26)


- -


- -


- -


- -


(26)


26


- -


- -


- -


- -

Issuance of shares upon the conversion of debentures


- -


- -


- -


- -


- -


- -


59


- -


59


- -


59

Exercise of options upon the conversion of debentures


- -


- -


- -


- -


(5)


(5)


5


- -


- -


- -


- -

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


103


- -


- -


- -


- -


103


- -


- -


103


- -


103

Balance as at June 28, 2014

$

2,190

$

5,137

$

- -

$

2

$

5,759

$

13,088

$

168,147

$

232,399

$

413,634

$

234

$

413,868

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 period


- -


- -


- -


- -


- -


- -


- -


14,433


14,433


(16)


14,417

Comprehensive income


- -


19,286


(1,265)


(2)


- -


18,019


- -


- -


18,019


16


18,035

Dividends


- -


- -


- -


- -


- -


- -


- -


(3,332)


(3,332)


- -


(3,332)

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


- -


- -


- -


- -


- -


- -


18


- -


18


- -


18

Exercise of options upon the conversion of debentures


- -


- -


- -


- -


(1)


(1)


1


- -


- -


- -


- -

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


43


- -


- -


- -


- -


43


- -


- -


43


- -


43

Balance as at June 27, 2015

$

2,040

$

48,737

$

(2,071)

$

- -

$

5,757

$

54,463

$

168,314

$

263,273

$

486,050

$

36

$

486,086


The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

Condensed Interim Consolidated

Statements of Cash Flows


Periods ended June 27, 2015 and June 28, 2014


(in thousands of Canadian dollars)


Three months

Six months

(unaudited)


2015


2014

2015


2014

Cash flows from the following activities:









Operating activities









Net income

$

9,979

$

4,501

$

14,417

$

5,051

Adjustments:










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


22


20


43


 

103


Gain on disposal of an investment


(5)


- -


(5)


- -


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


(25)


(37)


(2)


73


Depreciation of property, plant and equipment


6,236


5,845


12,454


11,440


Amortization of intangible assets


675


483


1,365


956


Amortization of deferred financing expenses


127


95


253


188


Provisions


- -


(5)


- -


99


Interest rate swaps


(103)


(29)


(129)


(97)


Imputed interest


657


547


1,311


1,081


Pension expense


(734)


(630)


(1,582)


(1,334)


Deferred tax expense


3,133


882


3,727


2,081


Share of loss of a joint venture and associates


601


39


742


321




20,563


11,711


32,594


19,962

Net change in non-cash operating working capital balances









Decrease (increase) in accounts receivable


(39,546)


(36,333)


20,070


(6,256)

Increase in costs and estimated profits in excess of billings


(12,520)


(12,646)


(34,185)


(26,387)

Increase in inventories


(3,620)


(11,628)


(6,905)


(27,098)

Decrease (increase) in current tax assets


(17)


(1,868)


158


(1,868)

Decrease (increase) in prepaid expenses and other assets


884


1,545


(461)


(668)

Increase (decrease) in accounts payable and accrued liabilities


19,027


9,269


6,469


(4,653)

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


(10)


13,996


2,261


9,105

Increase (decrease) in interest payable


(5)


(1,194)


(4)


192

Decrease in current tax liabilities


(414)


(493)


(3,104)


(7,592)



(36,221)


(39,352)


(15,701)


(65,225)

Cash flows from operating activities


(15,658)


(27,641)


16,893


(45,263)

Financing activities









Repurchase of shares


- -


- -


(319)


- -

Dividends


- -


- -


(1,669)


(3,322)

Increase in debt and bank loans


29,049


38,972


29,049


67,928

Repayment of debt and bank loans


(6,506)


(3,714)


(35,389)


(6,425)

Issue expenses related to long-term debt


(7)


- -


(104)


- -

Increase in other liabilities


10


8


20


16

Cash flows from financing activities


22,546


35,266


(8,412)


58,197

Investing activities









Proceeds from sale of property, plant and equipment


31


77


417


119

Additions to property, plant and equipment


(6,862)


(7,315)


(11,746)


(10,946)

Additions to intangible assets


(401)


(792)


(643)


(1,129)

Acquisition of interests in an associate


- -


(1,000)


- -


(1,000)

Proceeds from disposal of an investment


1


- -


1


- -

Acquisition of an investment


- -


- -


(150)


- -

Distributions received


- -


- -


- -


156

Decrease in receivables and other assets


87


4


119


182

Acquisition of business assets


- -


(1,136)


- -


(1,136)

Cash flows from investing activities


(7,144)


(10,162)


(12,002)


(13,754)

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


389


(1,557)


530


(1,372)

Net change in cash and cash equivalents


133


(4,094)


(2,991)


(2,192)










Cash and cash equivalents – Beginning of period


5,137


6,592


8,261


4,690

Cash and cash equivalents – End of period

$

5,270

$

2,498

$

5,270

$

2,498

Supplementary information










Interest paid

$

3,441

$

4,000

$

4,642

$

5,253


Income taxes paid, net

$

2,797

$

3,083

$

7,094

$

8,938











The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

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@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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