GLV Inc. Announces Growth in Revenues and Enhanced Profitability for the First Quarter



    
    - Net earnings of $2.1 M or $0.08 per share (basic and diluted), up by
      $1.8 M over the previous year's combined carve-out normalized net
      earnings;
    - 26.2% increase in consolidated revenues, to which both groups
      contributed;
    - Consolidated EBITDA of $7.3 M, up 60.3% over the previous year's
      combined carve-out normalized EBITDA;
    - Record order backlog of $354.1 M as at June 30, 2008;
    - Good financial position to support the Company's ongoing development.
    

    MONTREAL, Aug. 7 /CNW Telbec/ - (All amounts are in Canadian dollars
unless otherwise indicated.) GLV Inc. ("GLV" or the "Company"), which is
holding its first Annual General Meeting of Shareholders this morning in
Montréal, announces financial results in line with management's expectations
for the three-month period ended June 30, 2008, being the first quarter of
fiscal 2009. Keeping pace with previous quarters, this period was highlighted
by solid organic growth in both groups' revenues and by a further increase in
GLV's order backlog. The quarter also yielded an improvement in the Company's
profitability, essentially driven by the Pulp and Paper Group. It should be
pointed out that GLV's consolidated results for this period are compared, in
relation to the corresponding three-month period ended June 30, 2007, with the
combined carve-out results of the businesses retained by GLV pursuant to the
arrangement closed on August 10, 2007 (the "Arrangement").

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

    GLV achieved first-quarter consolidated revenues of $145.5 M, up 26.2%
over the combined carve-out revenues recorded in the same period of the
previous year. Excluding the $5.6 M unfavourable impact of currency
fluctuations, revenues grew by 31.1% at constant exchange rates, due mostly to
organic growth. The Company posted consolidated earnings before amortization,
financial expenses and income taxes, or EBITDA, of $7.3 M. No non-recurring
items were recognized during this period. Excluding the $0.5 M unfavourable
impact of currency fluctuations, consolidated EBITDA improved by 70.8% over
the combined carve-out normalized EBITDA(1) of $4.6 M recorded last year. This
performance is attributable to the Pulp and Paper Group, which more than
doubled its operating profitability.
    GLV thus closed the first quarter with consolidated net earnings of
$2.1 M or $0.08 per share (basic and diluted), compared with combined
carve-out normalized net earnings(3) of $0.3 M or $0.01 per share the previous
year.
    As at June 30, 2008, GLV's order backlog stood at $354.1 M, an increase
of approximately 3% (at constant exchange rates) over March 31, 2008, and of
close to 9% over June 30, 2007. This growth is attributable to the Water
Treatment Group. In addition, GLV benefited from a good financial position,
with a total net debt to invested capital ratio of 25.3% and available sources
of financing of $96.1 M to carry on its expansion projects.

    Water Treatment Group: Results and Outlook
    ------------------------------------------

    At constant exchange rates, the Water Treatment Group's first-quarter
revenues grew by 29.2%, driven by a 24.4% organic growth and the additional
contribution of the Australian company AJM Environmental Services ("AJM"),
acquired on March 7, 2008. This new unit is performing according to
expectations and is contributing to the group's objective of building its
presence and technological offering in targeted niches of the industrial
segment, including food and beverage processing. The Water Treatment Group
thus recorded 36% of its revenues in the industrial segment during the first
quarter of fiscal 2009, compared with 26% in the first quarter of 2008 and 29%
for the last fiscal year as a whole. In addition, AJM's contribution coupled
with internal development contributed to more than triple the group's revenues
in the dynamic Asia-Pacific region. In addition, the group achieved a solid
performance in the U.S. municipal market.
    The group's EBITDA decreased by 10.9% (at constant exchange rates) from
last year's normalized EBITDA, whereas its profit margin declined from 5.6% in
the first quarter of fiscal 2008 to 4.0% this year. This result was
anticipated and is due primarily to the pressure exerted on its gross margin
by some lower-margin contracts that are to be finalized by the Salt Lake City
Division (Utah). As part of its recent restructuring, this division refocused
its market development efforts on stronger value-added contracts yielding
higher profit margins, and which better reflect the quality of the Water
Treatment Group's technological portfolio. This shift is progressing according
to expectations. In addition, the group set up new resources worldwide to
support its organic growth and the efficient execution of its order backlog.
These additional expenses will be absorbed by the revenue growth foreseen in
upcoming quarters. Management believes that the Water Treatment Group's
profitability should improve in the second half of the fiscal year,
considering its expected revenue growth and the savings and synergies stemming
from the restructuring of its North American operations, the benefits of which
will start to materialize more clearly.
    As at June 30, 2008, the Water Treatment Group's order backlog stood at
an all-time high of $200.4 M. At constant exchange rates, it was up by
approximately 9% over March 31, 2008 and by 16% over June 30, 2007. During the
next quarters, in light of the current economic context that could prompt some
customers to postpone part of their investments, management believes that
there could be a certain slowdown in the municipal market in the United
Kingdom, as well as a minor slowdown in the municipal market in the United
States, but mostly for new capital projects. However, demand in the United
States remains good for the refurbishing of municipal systems, one of Eimco
Water Technologies' strengths. "Our Water Treatment Group will nonetheless
continue to grow, as it will continue to gradually build its industrial
customer base - notably in the energy and food and beverage processing
segments - and to increase its presence in geographic markets where the demand
for water treatment solutions is growing," indicated Richard Verreault,
President and Chief Operating Officer of GLV and President of the Water
Treatment Group in interim.

    Pulp and Paper Group: Results and Outlook
    -----------------------------------------

    At constant exchange rates, the Pulp and Paper Group's first-quarter
revenues grew by 32.9%, due exclusively to organic growth. This increase is
largely attributable to the chemical pulping niche, as well as to the group's
aftermarket business, which it is currently developing in all its geographic
markets. Growth was particularly strong in Europe. The group's EBITDA amounted
to $7.2 M, up 152% at constant exchange rates over the normalized EBITDA of
$3.0 M posted in the same period of the previous year. Its profit margin thus
rose from 5.1% to 9.5%. This solid performance can be explained by three
factors: (1) the significant revenues recognized during the quarter,
consistent with the execution schedule of certain large contracts; (2) the
strengthening of its international manufacturing outsourcing network,
especially in India and China; and (3) the increasing contribution of the
technology centre in Karlstad (Sweden), which was in a start-up phase last
year whereas it is fully operational today.
    The Pulp and Paper Group's order backlog stood at $142.9 M as at June 30,
2008, down by approximately 5% from March 31, 2008 and June 30, 2007 (at
constant exchange rates), due mainly to the large-scale contract execution
schedule. The group is continuing to post a good volume of new orders,
particularly in the chemical pulp and filters segments and in the aftermarket.
However, GLV is witnessing a certain slowdown in the Chinese market which,
according to management, should not have a material impact on the Pulp and
Paper Group. In general, management believes that this group should maintain a
solid performance throughout fiscal 2009.

    Consolidated Financial Objectives
    ---------------------------------

    Based on the current order backlog and market conditions, GLV expects
that its consolidated revenues will amount to between $570 M and $600 M for
the fiscal year ending March 31, 2009, which is consistent with the objective
stated in early June 2008. Management also looks forward to an increase in
profitability, especially in the second half of the fiscal year, thanks
notably to the improvements made last year to the Water Treatment Group's
global organization and North American operations, the contribution of AJM and
the strengthening of the international outsourcing networks. "We also remain
on the lookout for opportunities to acquire complementary businesses and
technologies, mainly for our Water Treatment Group," concluded Richard
Verreault.

    Upcoming Change in Ticker Symbols on TSX
    ----------------------------------------

    Effective August 21, 2008, GLV's Class A subordinate voting shares and
Class B multiple voting shares will trade on the TSX under the new ticker
symbols GLV.A and GLV.B respectively. The current symbols are LVG.A and LVG.B.

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

    GLV Inc. is a leading global provider of technological solutions used in
water treatment and pulp and paper production. Its Water Treatment Group (also
known worldwide as "Eimco Water Technologies") specializes in the design and
international marketing of solutions 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
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. Its 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. GLV is
present in some 30 countries and has close to 1,700 employees.

    -------------------------------------------------------------------------
    The Interim Management's Report for the first quarter ended June 30,
    2008, along with the interim financial statements and accompanying
    notes, are filed effective today on SEDAR's website (www.sedar.com) and
    the Company's website (www.glv.com).
    -------------------------------------------------------------------------


    
    Consolidated and Segmented Results, Cash Flows and Balance Sheet
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                Variance
    (in thousands of $, except                                      2008
     percentages, per share               Three-month periods     versus
     data and number of shares)                 ended June 30,      2007
    -------------------------------------------------------------------------
                                             2008        2007           %
    -------------------------------------------------------------------------
    Revenues:
      Water Treatment                      66,553      54,677       21.7%
      Pulp and Paper                       75,581      57,917       30.5%
      Other and eliminations                3,356       2,674       25.5%
    -------------------------------------------------------------------------
    Total                                 145,490     115,268       26.2%
    -------------------------------------------------------------------------
    Gross margin                           33,048      24,686       33.9%
    Selling and administrative expenses    25,737      20,070       28.2%
    EBITDA                                  7,311       3,719       96.6%
    Arrangement-related costs:
      Water Treatment                           -          29          -
      Pulp and Paper                            -       1,388          -
      Other and eliminations                    -        (520)         -
    -------------------------------------------------------------------------
    Total                                       -         897          -
    -------------------------------------------------------------------------
    (Gain) loss on disposal of property,
     plant and equipment and other assets:
      Water Treatment                           -         (66)         -
      Pulp and Paper                            -           9          -
      Other and eliminations                    -           2          -
    -------------------------------------------------------------------------
    Total                                       -         (55)         -
    -------------------------------------------------------------------------
    Normalized EBITDA(1):
      Water Treatment                       2,665       3,077      (13.4%)
      Pulp and Paper                        7,209       2,978      142.1%
      Other and eliminations               (2,563)     (1,494)      71.6%
    -------------------------------------------------------------------------
    Total                                   7,311       4,561       60.3%
    -------------------------------------------------------------------------
    Depreciation and amortization:
      Water Treatment                       1,571       1,393       12.8%
      Pulp and Paper                          755         752        0.4%
      Other and eliminations                  745         719        3.6%
    -------------------------------------------------------------------------
    Total                                   3,071       2,864        7.2%
    -------------------------------------------------------------------------
    Normalized EBIT(2):
      Water Treatment                       1,094       1,684      (35.0%)
      Pulp and Paper                        6,454       2,226      189.9%
      Other and eliminations               (3,308)     (2,213)      49.5%
    -------------------------------------------------------------------------
    Total                                   4,240       1,697      149.9%
    -------------------------------------------------------------------------
    Financial expenses                      1,480       1,269       16.6%
    Income taxes                              655         164      299.4%
      Effective tax rate                     23.7%      (39.6%)     63.3% pts
    -------------------------------------------------------------------------
    Net earnings (loss)                     2,105        (578)    (464.2%)
      per share (basic and diluted)(*)       0.08       (0.02)         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Normalized net earnings(3)              2,105         326      545.7%
      per share (basic and diluted)(*)       0.08        0.01          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average number of
     participating shares outstanding
     (in thousands)
      basic and diluted                    26,403      25,389        4.0%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Profit margins as a percentage of
     revenues:
      Gross margin                           22.7%       21.4%         -
      Normalized EBITDA                       5.0%        4.0%         -
      Normalized EBIT                         2.9%        1.5%         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Free cash flow(4)                       4,462       1,487          -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                          June 30,   March 31,   June 30,
    Order backlogs:                          2008        2008       2007
    -------------------------------------------------------------------------
      Water Treatment                     200,397     185,639    178,205
      Pulp and Paper                      142,949     152,454    143,276
      Other and eliminations               10,772       9,903      3,768
    -------------------------------------------------------------------------
    Total                                 354,118     347,996    325,249
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (*) Net earnings (loss) per share and normalized net earnings per share
        as of June 30, 2007 were calculated using the participating shares
        outstanding immediately after the completion of the Arrangement.


    (1) Earnings before amortization, financial expenses, income taxes, non-
        recurring costs directly related to the Arrangement, restructuring
        costs and gains or losses on disposal of property, plant and
        equipment and other assets.
    (2) Earnings before financial expenses, income taxes, non-recurring costs
        directly related to the Arrangement, restructuring costs and gains or
        losses on disposal of property, plant and equipment and other assets.
    (3) Earnings before non-recurring costs directly related to the
        Arrangement, restructuring costs and gains or losses on disposal of
        property, plant and equipment and other assets (net of related income
        taxes).
    (4) Cash flows from operating activities excluding net changes in non-
        cash balances related to the operations, less business acquisitions
        (net of business disposals).
    (5) 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 Management's
        Report filed on SEDAR and on the Company's website (www.glv.com) as
        at June 5, 2008.
    (6) Certain statements that describe GLV Inc.'s objectives, projections,
        estimates, expectations or forecasts may constitute forward-looking
        statements within the meaning of securities legislation. GLV's
        management would like to point out that, by their very nature,
        forward-looking statements involve a number of risks and
        uncertainties such that the Company's actual and future results could
        differ materially from those indicated. Factors of uncertainty and
        risk that might result in such differences include trends in the
        demand for the Company's products and cost of its raw materials,
        fluctuations in the value of various currencies, pressures exerted on
        prices by the competition, compliance with environmental legislation
        and general changes in economic conditions. There can be no assurance
        as to the materialization of the results, performance or achievements
        as expressed in or underlying the forward-looking statements. Unless
        required to do so pursuant to applicable securities legislation,
        GLV'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.


    -------------------------------------------------------------------------
                   INFORMATION SESSION and CONFERENCE CALL
                     FOR FINANCIAL ANALYSTS AND INVESTORS
                       ON RESULTS FOR THE FIRST QUARTER
                             ENDED JUNE 30, 2008

           Thursday, August 7, 2008, from 9:30 a.m. to 10:30 a.m.
                     Matisse Room, Sofitel Montréal Hotel
                        (1155 Sherbrooke Street West)

    Those unable to attend the information session may participate therein by
means of a conference call by dialing 1-866-250-4910 a few minutes before the
start of the information session. A recording of the session and the
conference call will also be available Thursday, August 7 from 11:30 a.m.
until midnight, August 14, by dialing: 1-877-289-8525 access code: 21279282#.

    THE AUDIO RECORDING OF THE INFORMATION SESSION / CONFERENCE CALL WILL
              ALSO BE AVAILABLE ON GLV'S WEBSITE (www.glv.com).

    After the information session, members of the financial community are
cordially invited to attend the Annual General Meeting of Shareholders
scheduled at 10:30 a.m. in the Pablo Picasso Room of the Sofitel Montréal
Hotel.
    -------------------------------------------------------------------------
    




For further information:

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

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