First-Quarter Results for GLV Inc.



    
    Improved profitability for the Water Treatment Group over last year,
    while Pulp and Paper Group's results still affected by the global
    economic slowdown.

    -------------------------------------------------------------------------
    - Consolidated revenues of $113.3 M, posting a 22.1% decrease (26.9% at
      constant exchange rates) from the same quarter of the previous year,
      primarily attributable to the Pulp and Paper Group;
    - Gross margin representing 24.0% of revenues versus 22.7% last year,
      this improvement being attributable to the Water Treatment Group's
      increased profitability resulting mainly from its stronger focus on
      higher value-added contracts, efficient contract execution and growth
      in its aftermarket business;
    - Non-recurring expenses of $0.4 M associated primarily with a
      restructuring of the Pulp and Paper Group's operations in the United
      Kingdom in response to difficult market conditions;
    - 72.6% increase in the Water Treatment Group's normalized EBITDA(1), but
      71.6% decrease in the Pulp and Paper Group's normalized EBITDA(1),
      resulting in a 48.9% decline in consolidated normalized EBITDA(1) which
      amounted to $3.7 M;
    - Consolidated normalized EBITDA margin of 3.3% (vs. 5.0% the previous
      year), of which a 7.2% margin (vs. 4.0%) for the Water Treatment Group
      and a 4.4% margin (vs. 9.5%) for the Pulp and Paper Group;
    - Consolidated normalized net earnings(3) of $1.1 M or $0.04 per share
      (basic and diluted), compared with $2.1 M or $0.08 per share (basic and
      diluted) the previous year;
    - Free cash flows of $1.3 M or $0.05 per share;
    - Order backlog of $244.5 M as at June 30, 2009, down 7.3% (at constant
      exchange rates) from March 31, 2009, primarily attributable to the Pulp
      and Paper Group;
    - GLV benefits from a healthy financial position, its total net debt
      ratio being almost nil giving effect to the $36.2 M net proceeds from
      the share offering closed on July 2, 2009.
    -------------------------------------------------------------------------
    

    MONTREAL, Aug. 7 /CNW Telbec/ - (All amounts are in Canadian dollars
unless otherwise indicated.) GLV Inc. ("GLV" or the "Company"; ticker symbols
GLV.A, GLV.B / TSX) announces results in line with management's expectations
for the first quarter of fiscal 2010, being the three-month period ended June
30, 2009. Keeping pace with prior quarters, the Water Treatment Group improved
its profitability compared with the previous year while pursuing its market
development strategy. The Pulp and Paper Group saw its performance affected,
as expected, by the sharp slowdown in the global pulp and paper industry,
which prompted GLV to implement further restructuring measures in order to
adapt its cost structure to the challenging economic environment.

    
    Consolidated Results
    --------------------
    

    GLV's revenues totalled $113.3 M, down 22.1% (26.9% at constant exchange
rates) from the same quarter of the previous year. This decrease is primarily
attributable to the sharp drop in new infrastructure investments by the Pulp
and Paper Group's global customer base.
    Although the gross margin in dollars declined as a result of the lower
revenues, the gross margin as a percentage of revenues improved from 22.7%
last year to 24.0% this year, due mainly to the sustained improvement in the
profitability of the Water Treatment Group's U.S. operations over the past few
quarters, subsequent to the changes brought to the Salt Lake City division's
strategic focus and operating management. In addition, the Water Treatment
Group's gross margin also benefited from a significant growth in its
aftermarket business.
    Total selling and administrative expenses decreased by $2.3 M or 8.9% as
a result of the cost-reduction measures implemented in fiscal 2009 to achieve
annual savings of close to $8.5 M, of which $2.5 M in the Water Treatment
Group and approximately $6.0 M in the Pulp and Paper Group. The additional
measures implemented in this group during the first quarter of 2010 will yield
further recurring savings of some $1.5 M annually.
    GLV recorded non-recurring items of $0.4 M, substantially all of which
consisted of costs incurred to restructure part of the Pulp and Paper Group's
business. Excluding non-recurring items, first-quarter normalized EBITDA(1)
amounted to $3.7 M., compared with $7.3 M the previous year. The normalized
EBITDA margin as a percentage of revenues stood at 3.3% versus 5.0% the
previous year. The decline in profitability is attributable to the difficult
conditions affecting the Pulp and Paper Group, as the Water Treatment Group
conversely posted a significant increase in its EBITDA and EBITDA margin over
the same quarter of the previous fiscal year.
    GLV closed the quarter with net earnings of $0.8 M or $0.03 per share
(basic and diluted), compared with $2.1 M or $0.08 per share (basic and
diluted) in the same quarter of the previous year. Excluding non-recurring
items (net of related taxes), normalized net earnings(3) amounted to $1.1 M or
$0.04 per share, compared with $2.1 M or $0.08 per share the previous year.

    
    Results and Outlook for the Water Treatment Group
    -------------------------------------------------

    This group's revenues amounted to $63.8 M, down 8.8% at constant exchange
rates. Management estimates that this decline is not attributable to either a
weakening of demand in the global water treatment solutions market, or to a
decrease in the group's market share. It can be explained by the two key
factors described below.

    - In the municipal segment, the group's revenues were affected the delays
      in the start-up of new water treatment infrastructure projects in the
      United States, where the implementation of the federal administration's
      economic stimulus plan is leading some municipalities to defer their
      investments. The municipal infrastructure upgrading and improvement
      market, however. is currently posting a good level of activity, due in
      part to the earmarked stimulus funds. Eimco Water Technologies is
      positioned to take advantage of such activity, given its recognized
      technologies, special expertise in this field and large installed
      equipment base. In Europe, although demand remains weak in England, the
      team dedicated to the marketing of integrated municipal solutions,
      which was created during the last fiscal year, has landed certain
      large-scale contracts in Ireland and Eastern Europe in recent months.
      In addition, Eimco Water Technologies is currently witnessing a
      significant increase in calls for tender in Eastern Europe. It should
      also be noted that the new technologies recently integrated by the
      Water Treatment Group - such as the LM(TM) Mixer advanced digester
      sludge mixing technology and the municipal and industrial wastewater
      sludge dewatering technology using electro-osmosis acquired in April
      2009 - are being well received in the municipal market and have led to
      the first large-scale contracts.

    - In the industrial segment, revenues associated with water intake
      screening solutions for power stations posted a decrease that
      management deems temporary, as it is the consequence of a slowdown in
      new order bookings during the third quarter of fiscal 2009. The pace of
      new order bookings has picked up as of the fourth quarter of the last
      fiscal year. In this market niche, the group nevertheless achieved a
      good first-quarter performance in the United States, and increased its
      aftermarket revenues worldwide. It also increased its business in the
      food and beverage processing industry in the Asia-Pacific region and
      achieved an initial breakthrough in Europe subsequent to the recent
      expansion of the sales force and geographic distribution network for
      the technologies designed for this market niche.
    

    The Water Treatment Group's normalized EBITDA(1) increased by $1.9 M or
72.6% to $4.6 M. The normalized EBITDA margin thus improved from 4.0% in the
first quarter of fiscal 2009 to 7.2% in the same period this year. This is
primarily attributable to an increase in the gross margin resulting from the
growth in its aftermarket business and the major restructuring carried out by
the Salt Lake City (Utah) division at the end of fiscal 2008, in order to
refocus its business on higher value-added contracts, optimize its project
management and lower its costs. Consistent with management's expectations, the
benefits of this restructuring started to materialize in the second half of
fiscal 2009. Furthermore, the recurring savings generated by the
cost-optimization measures implemented in 2009 compensated for the additional
selling and administrative expenses associated with the business acquired at
the beginning of fiscal 2010 and the new GW&E joint venture set up in January
2009. For information purposes, the Water Treatment Group's normalized EBITDA
margin stood at 7.2% for the 12-month period ended June 30, 2009, versus 3.7%
for the equivalent 12-month period ended June 30, 2008, and 6.5% for the
fiscal year ended March 31, 2009.
    GLV's management is confident as to the Water Treatment Group's outlook
for fiscal 2010, considering this industry's potential worldwide and the
progress achieved by this group in recent quarters to optimize its business
model and develop its presence in its key target markets, especially the
municipal market in the United States and Eastern Europe, the global market
for water intake screening solutions for power stations and desalination
plants, and the food and beverage processing industry in the Asia-Pacific
region, Europe and North America. As at June 30, 2009, the Water Treatment
Group's order backlog stood at $179.5 M. At constant exchange rates, it
reflected a slight decline of 3.3% from March 31, 2009 and a 15.5% decrease
from June 30, 2008. These changes are primarily attributable to the
aforementioned delays encountered in the start up of new municipal
infrastructure projects in the U.S. market. Management nonetheless expects
that this group will continue to increase its presence and revenues in 2010.
GLV is also on the lookout for opportunities to integrate other technologies
in order to complete its Water Treatment Group's offering, particularly in the
area of process water treatment. In terms of profitability, GLV's management
estimates that the favourable trend in the Water Treatment Group's normalized
EBITDA margin since mid-2009 should continue due, among other factors, to the
recurring savings of approximately $2.5 M achieved in 2009 and its ongoing
optimization efforts.

    
    Results and Outlook for the Pulp and Paper Group
    ------------------------------------------------
    

    This group's revenues decreased by 38.3% (43.0% decrease at constant
exchange rates) to $46.7 M in the first quarter. This decline, which mainly
affected the sale of new equipment, reflects the significant and rapid
degradation of conditions in the global pulp and paper industry since the
winter of 2008-2009. In light of this context, additional streamlining
measures were implemented within the Pulp and Paper Group, including the
closure of an operating centre in England. These measures resulted in the
recognition of non-recurring restructuring expenses of $0.4 M in first-quarter
results, but will yield recurring savings of more than $1.5 M annually.
Excluding the restructuring costs, the group's normalized EBITDA(1) decreased
by 71.6% to $2.0 M. The normalized EBITDA margin thus slipped from 9.5% last
year to 4.4% this year. Despite this decline attributable to the economic
context, management estimates that the cost-reduction measures implemented in
2009 enabled this group to maintain profitable operations. For information
purposes, the group's normalized EBITDA margin stood at 8.7% for the 12-month
period ended June 30, 2009, versus 7.2% for the equivalent 12-month period
ended June 30, 2008, and 9.6% for the fiscal year ended March 31, 2009.
    As at June 30, 2009, the Pulp and Paper Group's order backlog stood at
$58.0 M. At constant exchange rates, it reflected decreases of 18.2% from
March 31, 2009 and 59.1% from June 30, 2008. GLV's management continues to
believe that the first half of fiscal 2010 will be difficult for the Pulp and
Paper Group due to global economic conditions. However, some positive signs
have emerged in the global pulp and paper market in recent months, including a
strengthening of pulp prices and an increase in the number of inquiries and
calls for tender by the group's international customer base. Management is
therefore confident that order bookings will pick up in the second half of
fiscal 2010, which should enable the Pulp and Paper Group to return to a level
of profitability in line with its objectives by fiscal 2011. In this regard,
it should also be pointed out that the cost-reduction measures implemented in
2009 and at the beginning of fiscal 2010 should yield recurring savings of
more than $7.5 M annually. GLV's ongoing development of an assembly centre in
India should also contribute to further improve its operating profitability.

    
    Overall Outlook for GLV
    -----------------------
    

    As at June 30, 2009, GLV's order backlog stood at $244.5 M, compared with
$272.7 M as at March 31, 2009 and $354.1 M as at June 30, 2008. These changes
are primarily attributable to the significant slowdown in the global pulp and
paper industry. In light of the groups' order backlogs and the current volume
of new order bookings, GLV's management maintains the forecasts stated in June
2009, upon disclosure of the fiscal 2009 financial results, to the effect that
the Water Treatment Group should deliver a good performance in 2010, whereas
the first half of the fiscal year will be difficult for the Pulp and Paper
Group, whose results should improve in the second half of the year once
overall conditions in the global pulp and paper market start to gradually turn
around. For fiscal 2010 as a whole, GLV expects to achieve consolidated
revenues of $500 M to $550 M. However, should the Canadian dollar continue to
appreciate against the U.S. dollar as has been the case since the spring of
2009, revenues could tend towards the low side of this range. The measures the
two groups have taken in recent quarters to optimize their operations and
adjust their cost structure to their market situation should yield recurring
savings of close to $10 M annually, of which approximately $2.5 M in the Water
Treatment Group and more than $7.5 M in the Pulp and Paper Group.
    GLV's management intends to continue closely monitoring global economic
conditions and will promptly react by implementing additional cost-reduction
measures, if deemed appropriate based on its reading of market trends. It
should be pointed out in this regard that GLV's manufacturing outsourcing
strategy provides it with the flexibility to rapidly adjust its cost structure
to the market reality. Furthermore, GLV has tightened its liquidity and risk
management, particularly in regard to its project-related credit risks.
    Finally, GLV benefits from a healthy financial position, especially since
the Company's current loans are being used almost exclusively to finance its
working capital. The $36.2 M net proceeds from the share offering completed on
July 2, 2009 and the recent amendment to its principal financing agreement
have further strengthened GLV's balance sheet. For information purposes,
giving effect to these transactions, the total net debt ratio was almost nil
as at June 30, 2009, whereas the Company benefited from unused sources of
financing of $201.0 M. This positions GLV favourably not only to continue
weathering the global recession and to finance its ongoing working capital
requirements, but also to take advantage of acquisition opportunities in its
key markets that the current economic context could create. The Company is
actively seeking acquisition opportunities in the water treatment sector.

    
    Annual General Meeting of Shareholders
    --------------------------------------
    

    GLV wishes to advise its shareholders and the financial community that
the Company's Annual General Meeting of Shareholders will be held on
Wednesday, September 30, 2009, at 10:30 a.m. at the Montreal Sofitel Hotel,
Pablo Picasso Room, 1155, Sherbrooke Street West, Montreal.

    
    About GLV Inc.
    --------------
    

    GLV is a leading global provider of technological solutions used in water
treatment, recycling and purification, as well as in pulp and paper
production. The Water Treatment Group (also known worldwide as "Eimco Water
Technologies") specializes in the design and international marketing of
solutions and high-performance, economical and eco-friendly processes for the
treatment and recycling of municipal and industrial wastewater and water used
in various industrial processes. It also offers water intake screening
solutions for power stations, refineries and desalination plants. With its
extensive technological portfolio, the group is positioned to provide
comprehensive solutions for the filtration, clarification, treatment and
purification of water that will either be returned into the environment, or be
re-used in various industrial processes or for domestic purposes. The Pulp and
Paper Group specializes in the design and global marketing of equipment and
systems used in various stages of pulp and paper production, notably chemical
pulping, pulp preparation and sheet formation and finishing. This group ranks
among the foremost players in its industry and is a recognized leader in
rebuilding, upgrading and optimization services for existing equipment, as
well as the sale of spare parts. It also stands apart for the superior
performance of several of its key products and technologies, notably in terms
of energy savings. GLV is present in some 30 countries and has approximately
1,600 employees.

    
    -------------------------------------------------------------------------
    The Interim Management's Report for the three-month period ended June 30,
    2009, along with the interim consolidated financial statements
    (unaudited) and accompanying notes, are being filed today on SEDAR's
    website (www.sedar.com) and the Company's website (www.glv.com).
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
             CONFERENCE CALL WITH INVESTORS ON FINANCIAL RESULTS
                     FOR THE FIRST QUARTER OF FISCAL 2010

            Friday, August 7, 2009, at 10:00 a.m. (Montreal Time)

    To participate in the conference call, please dial 1-866-250-4892 a few
    minutes before the start of the call. For those unable to participate, a
    taped re-broadcast will be available starting Friday, August 7, 2009 from
    noon until midnight, Friday, August 14, 2009, by dialing 1-877-289-8525;
    access code 21312147#. THE CONFERENCE CALL (AUDIO) AND A
    POWER POINT PRESENTATION WILL BE AVAILABLE AT WWW.GLV.COM. Members of the
    media are invited to listen in.
    -------------------------------------------------------------------------


    Consolidated and Segmented Results, Cash Flows and Balance Sheet
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                  Change
    (in thousands of $, except                  Three months        2009
     percentages, per share data                       ended      versus
     and number of shares)                           June 30,       2008
    -------------------------------------------------------------------------
                                            2009        2008           %
    -------------------------------------------------------------------------
    Revenues:
      Water Treatment                     63,797      66,553        (4.1%)
      Pulp and Paper                      46,661      75,581       (38.3%)
      Other and eliminations               2,877       3,356       (14.3%)
    -------------------------------------------------------------------------
    Total                                113,335     145,490       (22.1%)
    -------------------------------------------------------------------------
    Gross margin                          27,170      33,048       (17.8%)
    Selling and administrative
     expenses                             23,436      25,737        (8.9%)
    EBITDA                                 3,326       7,311       (54.5%)
    Restructuring costs
      Water Treatment                         16           -           -
      Pulp and Paper                         392           -           -
      Other and eliminations                   -           -           -
    -------------------------------------------------------------------------
    Total                                    408           -           -
    -------------------------------------------------------------------------
    Normalized EBITDA(1):
      Water Treatment                      4,600       2,665        72.6%
      Pulp and Paper                       2,045       7,209       (71.6%)
      Other and eliminations              (2,911)     (2,563)       13.6%
    -------------------------------------------------------------------------
    Total                                  3,734       7,311       (48.9%)
    -------------------------------------------------------------------------
    Depreciation and amortization:
      Water Treatment                        963       1,571       (38.7%)
      Pulp and Paper                         829         755         9.8%
      Other and eliminations               1,325         745        77.9%
    -------------------------------------------------------------------------
    Total                                  3,117       3,071         1.5%
    -------------------------------------------------------------------------
    Normalized EBIT(2):
      Water Treatment                      3,637       1,094       232.4%
      Pulp and Paper                       1,216       6,454       (81.2%)
      Other and eliminations              (4,236)     (3,308)       28.1%
    -------------------------------------------------------------------------
    Total                                    617       4,240       (85.4%)
    -------------------------------------------------------------------------
    Financial expenses                      (793)      1,480           -
    Income taxes                             204         655       (68.9%)
      Effective tax rate                    20.4%       23.7%       -3.3% pts
    -------------------------------------------------------------------------
    Net earnings (loss)                      798       2,105       (62.1%)
      per share (basic and diluted)         0.03        0.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Normalized net earnings(3)             1,124       2,105       (46.6%)
      per share (basic and diluted)         0.04        0.08
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number
     of participating shares
     outstanding (in thousands):
      basic and diluted                   26,544      26,403         0.5%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Margins as a percentage
     of revenues:
      Gross margin                          24.0%       22.7%
      Normalized EBITDA                      3.3%        5.0%
      Normalized EBIT                        0.5%        2.9%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Free cash flow(4)                      1,336       5,038
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Order backlogs:                      June 30,   March 31,    June 30,
                                            2009        2009        2008
    -------------------------------------------------------------------------
      Water Treatment                    179,501     191,640     200,397
      Pulp and Paper                      57,980      74,157     142,949
      Manufacturing Unit                   6,983       6,882      10,772
    -------------------------------------------------------------------------
    Total                                244,464     272,679     354,118
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    (1) According to the reporting periods, earnings before depreciation and
        amortization, financial expenses, income taxes and items recorded
        outside the normal course of business, including restructuring costs.
    (2) According to the reporting periods, earnings before financial
        expenses, income taxes and items recorded outside the normal course
        of business, including restructuring costs.
    (3) According to the reporting periods, net earnings before items
        recorded outside the normal course of business, including
        restructuring costs (less related taxes).
    (4) Cash flows from operating activities excluding net changes in non-
        cash balances related to operations, less property, plant and
        equipment acquisitions (net of disposals).

    EBITDA, EBIT, normalized net earnings and free cash flows are not
performance measures consistent with Canadian generally accepted accounting
principles ("GAAP"). The information regarding measures not consistent with
Canadian GAAP is contained in the Company's Management's Report filed on SEDAR
and on the Company's website (www.glv.com) effective today.

    -------------------------------------------------------------------------
    Notice Regarding Forward-Looking Statements:
    

    Certain statements included in this press release may constitute, within
the meaning of applicable securities legislation, forward-looking statements
relating to the Company's future growth trends, operating results and
performance. Forward-looking statements concern analyses and other information
based on forecasted future results and the estimate of amounts that cannot yet
be determined. These may be observations concerning, among others, strategies,
expectations, objectives, projections, estimates, predictions, planned
activities or future actions. Forward-looking statements are recognized by the
use of terms such as "forecast", "project" "could", "plan", "aim", "estimate"
and other similar terms, possibly used in the future or conditional, notably
in regard to certain assumptions. The purpose of the forward-looking
statements included herein is to assist the reader in understanding the nature
and the importance of the changes and trends, as well as the risks and
uncertainties associated with the Company's operations and financial position,
and may not be appropriate for other purposes.
    The Company's management would like to point out that forward-looking
statements involve a number of risks and uncertainties such that the Company's
actual and future results could differ materially from the conclusions,
assumptions or projections reflected in these forward-looking statements.
Factors of uncertainty and risk that might result in such material differences
include trends in the demand for the Company's products and services and cost
of its raw materials, fluctuations in the value of various currencies,
tightening of credit markets, pressures exerted on prices by the competition
and general changes in economic conditions. The Company cautions readers that
the foregoing list of risk factors is not exhaustive. Although the Company
believes these assumptions to be reasonable and appropriate based on the
information in its possession, there can be no assurance as to the
materialization of the results, performance or achievements as expressed in or
underlying the forward-looking statements. In addition, unless otherwise
indicated, the forward-looking statements included in this Interim
Management's Report were set forth at the date hereof, and unless required to
do so pursuant to applicable securities legislation, management assumes no
obligation as to the updating or revision of the forward-looking statements as
a result of new information, future events or other changes.
    For further information about the various factors that might affect the
Company's future results, the reader is referred to the Company's filings with
Canadian securities regulatory authorities, including the "Risk Management"
section of this Interim Management's Report for the three-month period ended
June 30, 2009 and Section V, "Risk Management" of the Management's Report for
the fiscal year ended March 31, 2009, available on the websites of SEDAR
(www.sedar.com) and GLV Inc. (www.glv.com).
    -------------------------------------------------------------------------




For further information:

For further information: Marc Barbeau, CA, Executive Vice-President and
Chief Financial Officer, (514) 284-2224, courrier@glv.com, www.glv.com

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