GBO Achieves a Net Profit During the Third Quarter and Strengthens its Presence in Ontario and Quebec



    
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    - GBO's sales increase by 10% in Canada, while sales in the United States
      continue to be affected by the real estate market crisis and the strong
      Canadian dollar.

    - The Company posts a third-quarter net profit of $0.4 million and closes
      the first nine months of fiscal 2008 at the breakeven point, compared
      with a year-to-date net loss of $0.8 million for the first nine months
      of the previous year (excluding the unusual gain).

    - GBO soon to launch a new line of products resistant to hurricanes and
      other impacts.
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    MONTREAL, Jan. 14 /CNW Telbec/ - (Note: All amounts are in Canadian
dollars.) GBO INC. ("GBO" or "the Company"; ticker symbol GBO/TSX),
manufacturer of "Bonneville" windows and doors, today disclosed its financial
results for the third quarter of fiscal 2008. Sales for the three-month period
ended November 30, 2007 declined by 3.8% to $17.1 million. Part of this
decrease is attributable to the rise in the Canadian dollar in relation to the
U.S. dollar, which had a negative impact of $0.5 million on sales. In
addition, exports to the United States continue to be affected by unfavourable
economic conditions in the U.S. real estate market, due mainly to the mortgage
loans crisis. Consequently, U.S. sales decreased by $1.9 million or 33.7%
(decrease of $1.4 million or 25.6% at a constant exchange rate) to stand at
$3.7 million. According to management, this situation is mostly related to
economic conditions, since GBO has retained its customers in its key markets
in the United States. During the third quarter, Canadian sales posted strong
growth of 10.0% to reach $13.4 million, reflecting an increase in the
Company's market share in Quebec and Ontario. This performance is largely
attributable to the business initiatives taken since the beginning of the
fiscal year, including the launch of new products, improvements to existing
products and the reinforcement of the sales organization. Despite lower sales,
GBO recorded earnings before depreciation, amortization, financial expenses
and income taxes (or "EBITDA") of $1.2 million during the third quarter of
fiscal year 2008, up 77.2% over $0.7 million for the same quarter of the
previous year. This improvement stems from the overall operational
optimization program implemented in recent quarters, which has enabled GBO to
substantially lower its breakeven point. The Company therefore closed the
third quarter with net earnings of $0.4 million or $0.01 per share, compared
with $0.1 million or $0.00 per share in the same period last year.
    During the first nine months of fiscal 2008, GBO's sales declined by
$4.0 million or 7.8% ($3.3 million or 6.4% decrease at a constant exchange
rate) to $47.2 million. Besides the unfavourable impact of currency
fluctuations, this decline is mainly attributable to the difficult economic
conditions prevailing in the U.S. real estate market, and to a weak market
demand during the first quarter due to the harsh weather conditions that
affected Eastern Canada and the Northeastern United States. Year-to-date
Canadian sales were comparable to those of the first nine months of the
previous year, standing at $35.2 million. Exports to the United States
declined by $4.0 million or 24.9% ($3.3 million or 20.5% decrease at a
constant exchange rate) due to the aforementioned factors. Nonetheless,
year-to-date consolidated EBITDA grew by $1.1 million or 130.8% to reach
$1.9 million, due to the overall improvement in the Company's operational
efficiency. Furthermore, total depreciation, amortization and financial
expenses decreased by $0.2 million. The Company therefore closed the first
nine months of fiscal 2008 at the breakeven point, posting a net result of
$0.0 million or $0.00 per share compared with net earnings of $3.6 million or
$0.11 per share (basic and diluted) in the same period last year, including an
unusual gain (net of related taxes) of $4.4 million or $0.14 per share.
Excluding the unusual gain, GBO would have incurred a net loss of $0.8 million
or $0.03 per share for the first nine months of fiscal 2007.

    Outlook
    -------

    "We are very satisfied with the results of the optimization measures
carried out over the past quarters to lower our breakeven point, which should
allow GBO to end fiscal 2008 with an improvement in its financial results over
the previous year. However, the Company's annual sales are expected to be
lower than in fiscal 2007 due to the slowdown in the U.S. real estate market,
the unfavourable exchange rate and the extreme weather conditions that
affected building activity in the northeast of the continent during the months
of February, March and April 2007," indicated Dennis Wood, Interim President
and Chief Executive Officer. Besides continuously strengthening its business
processes and profitability, GBO's primary objective for the coming quarters
will be to increase its sales volume, while reducing its exposure to seasonal
fluctuations in its key markets. "To that end, we will continue to develop and
to bring new products to market. For instance, we will shortly launch a line
of certified hurricane-resistant windows, which should enable GBO to diversify
its geographic markets by expanding its presence on the North American East
Coast. Given their security features, these impact-resistant products will
also bring added value to our customers in the various territories we serve.
In addition, we will continue to provide customers with comprehensive business
solutions, including a one-stop shop for premium-quality energy-efficient and
high-security products, outstanding after-sales service, one of the best
warranty programs in the industry and effective promotional programs endorsed
by the excellent reputation of the "Bonneville" brand," concluded Mr. Wood.

    Profile
    -------

    Founded in 1946, GBO Inc. is one of the leading window and door
manufacturers in Eastern Canada. The Company, which employs approximately
500 people, designs, develops, manufactures, markets and distributes an
extensive selection of high-end energy-efficient window arrangements sold
primarily under the "Bonneville" and "Polar" brands. This selection includes
wooden and polyvinyl chloride (PVC) windows, as well as hybrid models made of
wood or PVC and aluminum. GBO also offers exterior doors, primarily for
high-end market niches. The Company sells its windows and doors to the home
improvement and construction markets in Quebec, Ontario, the Maritimes and the
Northeastern United States. GBO mainly serves independent building material
distributors, distributors specializing in windows, doors and millwork,
certain retailers, as well as construction and renovation contractors.

    The statements set forth in this press release that describe GBO's
objectives, projections, estimates, expectations or forecasts may constitute
forward-looking statements within the meaning of securities legislation. GBO
would like to point out that, by their very nature, forward-looking statements
involve a number of risks and uncertainties such that actual results or the
measures it adopts could therefore differ materially from those indicated or
underlying these forward-looking statements, or could have an impact on the
degree of realization of a particular projection. There can be no assurance as
to the materialization of the results, performance or achievements as
expressed or implied by the forward-looking statements. Unless required to do
so pursuant to applicable securities legislation, GBO's 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.


    
    GBO INC.
    CONSOLIDATED EARNINGS
    Period ended November 30,
    (unaudited)(in thousands of dollars, except per share amounts)

                                  Three months             Nine months
                            ----------------------  -----------------------
                                 2007        2006        2007        2006
                            ----------  ----------  ----------  ----------
                                    $           $           $           $

    Sales                      17,127      17,796      47,170      51,156

    Cost of sales and
     operating expenses        15,901      17,104      45,287      50,340
                            ----------  ----------  ----------  ----------

    Operating income before
     the following items        1,226         692       1,883         816
                            ----------  ----------  ----------  ----------

    Depreciation of fixed
     assets                       411         379       1,184       1,100
    Amortization of
     intangible assets             10          74          55         220
    Amortization of deferred
     charges                        -          16          16          47
    Interest on long-term
     debt                           2           4           7         122
    Other financial expenses      210          35         622         561
                            ----------  ----------  ----------  ----------

                                  633         508       1,884       2,050

                             - - - - -   - - - - -   - - - - -   - - - - -

    Earnings (loss) before
     unusual item and income
     taxes                        593         184          (1)     (1,234)

    Unusual item                    -           -           -       5,686
                            ----------  ----------  ----------  ----------

    Earnings (loss) before
     income taxes                 593         184          (1)      4,452

    Future income taxes           190          59           -         844
                            ----------  ----------  ----------  ----------

    Net earnings (net loss)       403         125          (1)      3,608 (1)
                            ----------  ----------  ----------  ----------
                            ----------  ----------  ----------  ----------

    Earnings (loss) per
     share and diluted
     earnings (loss) per
     share                       0.01        0.00       (0.00)       0.11
                            ----------  ----------  ----------  ----------
                            ----------  ----------  ----------  ----------

    Weighted average number
     of common shares
     outstanding           32,676,569  32,676,569  32,676,569  32,676,569

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    (1) On May 2, 2006, and effective March 1, 2006, the Company sold all the
        assets and liabilities of the Multiver Division, which yielded an
        unusual gain of $5.7 million before taxes, being the equivalent of
        close to $4.4 million or $0.14 per share net of related taxes



    GBO INC.
    CONSOLIDATED BALANCE SHEET

    (in thousands of dollars)
                                     November 30, 2007   February 28, 2007
                                    ------------------  ------------------
                                                     $                  $
    ASSETS                                  (unaudited)

    Current assets
      Cash                                         334              1,120
      Accounts receivable                        7,089              4,515
      Income taxes receivable                      104                102
      Inventories                                5,023              4,455
      Prepaid expenses and other                   155                418
      Current portion of note
       receivable                                  528                600
                                    ------------------  ------------------
                                                13,233             11,210

    Note receivable                              1,768              2,812
    Fixed assets                                15,479             15,620
    Fixed assets held for sale                     880                910
    Intangible assets                              272                328
    Future income taxes                          2,855              2,578
    Deferred charges                                 -                 16
                                    ------------------  ------------------
                                                34,487             33,474
                                    ------------------  ------------------
                                    ------------------  ------------------

    LIABILITIES

    Current liabilities
      Bank loans                                 3,565              3,260
      Accounts payable                           7,652              6,322
      Instalments on long-term debt                 83                 69
                                    ------------------  ------------------
                                                11,300              9,651

    Long-term debt                                  16                 81
                                    ------------------  ------------------
                                                11,316              9,732
                                    ------------------  ------------------

    SHAREHOLDER'S EQUITY

    Capital stock                               44 526             44,526
    Contributed surplus                            428                411
    Deficit                                    (21,783)           (21,195)
                                    ------------------  ------------------

                                                23,171             23,742
                                    ------------------  ------------------

                                                34,487             33,474
                                    ------------------  ------------------
                                    ------------------  ------------------
    




For further information:

For further information: Dennis Wood, Interim President and Chief
Executive Officer, (418) 387-7723; Source: GBO Inc.

Organization Profile

GBO INC.

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