CVTech Group Inc. announces net earnings of $555,000 for the 2nd quarter of 2008



    DRUMMONDVILLE, QC, Aug. 12 /CNW Telbec/ - CVTech Group Inc. ("CVTech" or
the "Corporation") (TSX: CVT) announces revenues of $30.4 million and net
earnings of $555,000 for the 2nd quarter ended June 30, 2008.

    RESULTS OF OPERATIONS

    In spite of a challenging economical environment, the Corporation has
generated revenues of $30.4 million and net earnings of $555,000 compared with
revenues of $34.1 million and net earnings of $1.6 million for the same
quarter in 2007.
    In the continuously variable transmissions ("CVT") and related products'
segment, revenues for the 2nd quarter ended June 30, 2008 increased about 5%
to $5.9 million as compared to $5.6 million for the same quarter in 2007, and
the net loss now amounts to $147,000 compared to $382,000 for the same quarter
in 2007, which represents a decrease of 62%. As for the electricity segment,
revenues amount to $24.4 million and net earnings to $702,000 compared to
revenues of $28.4 million and net earnings of $2 million for the same quarter
in 2007. The decrease of profitability in the electricity segment during the
2nd quarter of 2008 compared to the same quarter in 2007 is due to the decline
of revenues from electricity transmission contracts as well as by the rise of
fuel related costs. The said costs amounted to $844,000 for the 2nd quarter
ended June 30, 2008 compared to $544,000 for the same quarter in 2007, which
represent an increase of 55%. In the electricity segment, the bases
established for the preparation of a quotation often prove to be different
when the contract is being performed. In this instance, certain unforseeable
factors have affected unfavourably the profitability of the projects of the
2nd quarter of 2008. The net earnings of the 2nd quarter of 2008 were also
affected by the fact that an important portion of the earnings before income
comes from Thiro USA Inc. ("Thiro USA") whose US corporate income taxe rate is
higher than the Canadian corporate income taxe rate.
    The following tables summarize certain financial data relating to the
operating results of CVTech and should be read in conjunction with the
financial statements and associated notes available on the SEDAR database
(www.sedar.com). Unless otherwise indicated, all monetary amounts are
expressed in Canadian dollars.

    
    Selected quarterly financial information

    Statement of Earnings

                                   Three months Ended      Six months Ended
                                         June 30                June 30
    -------------------------------------------------------------------------
    (in thousands of dollars,
     except per share data)         2008        2007        2008        2007
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       $           $           $           $
    Revenues                      30,384      34,078      67,422      67,762

    Earnings before income
     taxes                         1,038       2,504       4,269       5,825
    -------------------------------------------------------------------------

    Net Earnings                     555       1,626       2,451       3,743

    Income Tax Expense               483         878       1,818       2,082

    Net Interest Expenses            545         635       1,051       1,198

    Depreciation and
     Amortization                  1,241       1,195       2,391       2,323
    -------------------------------------------------------------------------

    EBITDA (1)                     2,824       4,334       7,711       9,346

    Basic and diluted Net
     Earnings per share             0.01        0.03        0.04        0.07

    Basic weighted average
     number of shares
     outstanding
     (in thousands)               55,108      50,862      55,010      50,796

    Diluted weighted average
     number of shares
     outstanding
     (in thousands)               57,752      52,504      57,551      52,246

    -------------------------------------------------------------------------
    Shares outstanding as
     at June 30
     (in thousands)               55,399      50,866      55,399      50,866
    -------------------------------------------------------------------------

    (1) EBITDA (Earnings before interest, taxes, depreciation and
        amortization) represent a measure that has no standardized meaning
        prescribed by Canadian generally accepted accounting principles; it
        is therefore considered to be a non-GAAP measure which may not be
        comparable to similar measures presented by other issuers. This
        measure is described and presented in this press release in order to
        provide additionnal information regarding the corporation's liquidity
        and ability to generate funds to finance its operations.

    Balance Sheet Data

                                     As at June 30         As at December 31
    -------------------------------------------------------------------------
    (in thousands of dollars)       2008        2007        2006        2005
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                       $           $           $           $
    Cash and cash equivalents     11,566      10,887       2,291       1,686

    Total assets                  76,404      76,664      72,049      50,245

    Bank loans                       185           -       7,122       2,788

    Convertible Debentures         3,108       3,607       2,599           -

    Long-term liabilities
     (including current
     portion)                     22,135      22,152      20,699      15,536

    Shareholders' Equity          34,271      31,894      23,081      20,708
    -------------------------------------------------------------------------
    

    OVERVIEW

    CVTech is a management corporation. Its subsidiary, Thiro ltée ("Thiro")
provides services for the construction and maintenance of electrical
transmission and distribution lines. Thiro has two indirect subsidiaries:
Thiro USA and J.J.L. Déboisement inc. ("J.J.L."). Thiro USA, like Thiro,
provides services for the construction and maintenance of electrical
transmission and distribution lines. J.J.L. specializes in vegetation control
on rights-of-way for transmission and distribution lines. Other subsidiaries
design, manufacture and sell CVT. The subsidiary CVTech-AAB inc. specializes
in the rebuilding of crankshafts, the reconditioning of cylinders and in the
distribution of engine parts.
    CVTech is the owner of the trademarks and CVTech R&D inc. holds the
intellectual property on products which are part of its technological
solutions.
    CVTech currently has a staff of approximately 607 employees comprising
165 employees in the CVT systems and related products segments and
442 employees in the electricity segment.

    FORWARD-LOOKING STATEMENTS

    The present document may contain forward-looking statements that reflect
the current expectations of management with regard to future events. These
forward-looking statements depend on a certain number of factors and are
subject to risks and uncertainties. The actual results could differ from those
anticipated. Management undertakes no obligation to update or revise the said
forward-looking statements on receipt of new information or subsequent to
future events other than the ones required by law.

    For further information with regard to CVTech, the reader is invited to
consult the SEDAR database and the Corporation's Website at:
www.groupecvtech.com.




For further information:

For further information: André Laramée, MBA, President and CEO, CVTech
Group Inc., (819) 477-3232; Mario Trahan, CMA, Chief Financial Officer, CVTech
Group Inc., (819) 477-3232

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