Net Income Increased by 89% in the First Quarter of 2016

SAINT-GEORGES, QC, April 29, 2016 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month period ended April 2, 2016.

Highlights
-   46% increase in consolidated revenues compared to the first quarter in 2015
-   89% increase in net income compared to the first quarter in 2015

 

Periods ended April 2, 2016 and March 28, 2015

                   Three months



(in millions of $, except per share amounts) (unaudited)



2016



2015



Revenues


$

450.7


$

309.1



Selling and administrative expenses


$

30.9

6.9%

$

24.2


7.8%

Adjusted EBITDA1


$

21.8

4.8%

$

17.7


5.7%

Net income2


$

8.3

1.8%

$

4.4


1.4%

Net earnings per share2 (basic and diluted)


$

0.18


$

0.10



Basic weighted average number of shares
(in thousands of shares)



47,491



42,028



Net debt1


$

196.3


$

200.4



1 Refer to the section entitled Non-IFRS measures.





2 Represents net income attributable to shareholders.





 

Results for the first quarter of 2016

Consolidated revenues for the first quarter of 2016 totaled $450.7M, which represents a $141.6M increase, compared to revenues of $309.1M for the same quarter in 2015. The increase is attributable to all of the Corporation's groups of products and services as well as the appreciation of the US dollar.

Selling and administrative expenses totaled $30.9M for the first quarter of 2016 compared to $24.2M in 2015. This variation is particularly attributable to the payroll increase in order to maintain sales growth along with the US dollar's rise against the Canadian dollar.

In the first quarter of 2016, Adjusted EBITDA amounted to $21.8M compared to $17.7M for the same period in 2015. The rise in the first quarter of 2016 can be mainly explained by a higher sales volume in all of the Corporation's groups of products and services, combined with an increase in gross margins for the joist and steel deck as well as structural steel activities. These items were partially offset by the compression of gross margins for the bridges' group and the increase in selling and administrative expenses.

In the first quarter of 2016, net income attributable to shareholders totaled $8.3M, or $0.18 per share, compared to $4.4M, or $0.10 per share, for the corresponding period in 2015. It should be noted that the basic weighted average number of shares increased by 5,463,648 shares, which resulted from the conversion of unsecured subordinated debentures into common shares during the last quarter of 2015.

Equity attributable to shareholders decreased by $19.8M to $604.5M. This variation is mainly due to the depreciation of the US dollar which generated an unrealized exchange loss of $23.2M resulting from the translation of foreign operations, mainly those of the U.S. subsidiaries, offset by a net income of $8.3M in the first quarter of 2016. At the end of the quarter, the carrying amount per share was $12.80 compared to $13.13 as at December 31, 2015.

As at April 2, 2016, the Corporation presented a strong financial position with a net debt of $196.3M and additional borrowing capacity of $122.3M. The ratio of net debt to equity attributable to shareholders was 0.32 as at April 2, 2016, identical to the ratio as at December 31, 2015.

Order backlog

The order backlog stood at $1,159M as at April 2, 2016, compared to $1,183M as at December 31, 2015, and $1,118M as at March 28, 2015.

Dividend

The Board of Directors approved a dividend of $0.04 per share payable on June 30, 2016 to shareholders of record on June 16, 2016.

Unsecured loan

On March 31, 2016, the Corporation finalized the set-up of an unsecured ten-year loan for an amount of $50M. The Corporation must comply with certain financial covenants under this loan agreement. The loan is repayable in one installment on maturity; however, an early repayment mechanism is available from the third year provided that certain conditions are met.

Repurchase of shares

Further to the press release issued on February 26, 2016, announcing that the Toronto Stock Exchange has accepted the Corporation's notice of intention to make a normal course issuer bid pursuant to which it may purchase, when deemed appropriate, through the facilities of and in accordance with the requirements of the TSX, up to 4,089,305 of its outstanding common shares, the Corporation announces that it may also repurchase shares through alternative trading systems, in accordance with the policies of the TSX and exemptions relating to normal course issuer bids as required under applicable securities laws. Common shares may be purchased from March 1st, 2016 to February 28, 2017 inclusively, at the market price of the shares at the time of the purchase plus brokerage fees, or at any other price authorized under applicable rules.

During the first quarter of 2016, under the normal course issuer bid, the Corporation repurchased 316,700 common shares at an average price of $12.85 per share for a total amount of $4.1M. The acquired common shares have been cancelled.

About Canam Group Inc.

Canam Group specializes in designing integrated solutions and fabricating customized products for the North American construction industry. Each year, Canam Group takes part in an average of 10,000 buildingstructural steel and bridge projects, which can also include the supply of preconstruction and project management services. The Corporation operates 22 plants across North America and employs 4,300 people in Canada, the United States, Romania, India and Hong Kong. 

Conference call and presentation

Canam Group will hold a conference call with financial analysts and media representatives on Friday, April 29, 2016 at 1:15 p.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 May 13, 2016 by dialing 1-800-408-3053 and entering access code 9218430, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) and net debt are not defined by International Financial Reporting Standards (IFRS) and cannot be formally presented in the consolidated financial statements. Even though Adjusted EBITDA and  net debt are non-IFRS measure, they are used by managers, analysts, investors and other financial stakeholders to assess the Corporation's operating performance and management from a financial and operational standpoint. Refer to the section entitled "Non-IFRS measures" of the Corporation's 2015 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 2015 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 April 2, 2016 and March 28, 2015


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


Three months

(unaudited)


2016


2015

Revenues

$

450,736

$

309,102

Cost of sales, excluding depreciation and amortization(1)


396,312


267,090

Selling and administrative expenses


30,944


24,183

Profit sharing program


1,234


489

Depreciation of property, plant and equipment


6,975


6,218

Amortization of intangible assets


927


690

Other losses (gains) — net


207


(264)

Finance costs


2,497


3,921

Finance revenue


(151)


(186)

Share of loss of a joint venture and associates


311


141

Income before income tax


11,480


6,820

Tax expense (income)






Current


5,001


1,788


Deferred


(1,897)


594



3,104


2,382

Net income

$

8,376

$

4 438






Net income attributable to:






Shareholders

$

8,328

$

4,397


Non-controlling interests


48


41


$

8,376

$

4,438






Net earnings per share attributable to shareholders






Basic

$

0.18

$

0.10


Diluted

$

0.18

$

0.10






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






Basic


47,491


42,028


Diluted


47,522


42,075

Number of common shares outstanding (in thousands of shares)


47,215


42,055

(1)

As at April 2, 2016 and March 28, 2015, the cost of sales, including depreciation and amortization, was $402,302 and $272,441 respectively.

 



CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)






Periods ended April 2, 2016 and March 28, 2015






(in thousands of Canadian dollars)


Three months

(unaudited)


2016


2015

Net income

$

8,376

$

4,438

Other comprehensive income (loss):





Items that will be reclassified subsequently to profit or loss:






Change in unrealized gains (losses) on translating foreign operations


(23,229)


27,105


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


1,018


(1,737)



(22,211)


25,368

Available-for-sale asset:






Unrealized gains on available-for-sale financial assets arising during the period


195


- -



195


- -

Other comprehensive income (loss)


(22,016)


25,368

Comprehensive income (loss)

$

(13,640)

$

29,806






Comprehensive income attributable to:






Shareholders

$

(13,688)

$

29,794


Non-controlling interests


48


12


$

(13,640)

$

29,806

  

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS


(in thousands of Canadian dollars)

(unaudited)

As at
April 2,
2016

As at
December 31,
2015






Assets





Current assets





Cash and cash equivalents

$

11,086

$

7,050

Accounts receivable


287,465


320,517

Costs and estimated profits in excess of billings


216,134


194,298

Inventories


146,801


166,833

Recoverable tax assets


478


1,573

Prepaid expenses and other assets


3,402


3,230



665,366


693,501

Non-current assets





Investments


8,676


6,173

Interests in a joint venture and associates


39,063


39,370

Property, plant and equipment


341,035


348,391

Intangible assets


10,526


11,500

Goodwill


52,874


56,023

Deferred tax assets


5,781


4,007

Long-term receivables and other assets


5,597


5,564

Total assets

$

1,128,918

$

1,164,529






Liabilities





Current liabilities





Accounts payable and accrued liabilities

$

215,092

$

223,580

Billings in excess of costs and estimated profits


66,894


73,465

Current tax liabilities


4,598


4,156

Current portion of balance of purchase price of businesses


1,282


1,282

Current portion of long-term debt


41,300


43,083



329,166


345,566

Non-current liabilities





Debt


166,114


164,356

Balance of purchase price of businesses


650


650

Provisions


18,435


19,485

Deferred tax liabilities


8,925


8,897

Other liabilities


1,086


1,208

Total liabilities


524,376


540,162






Equity





Share capital


238,445


239,777

Retained earnings


298,288


294,458

Other equity items


67,719


90,090

Total equity attributable to shareholders


604,452


624,325

Non-controlling interests


90


42

Total equity


604,542


624,367

Total equity and liabilities

$

1,128,918

$

1,164,529

 

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, 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


- -


- -


- -


- -


- -


- -


- -


4,397


4,397


41


4,438

Comprehensive income


- -


27,134


(1,737)


- -


- -


25,397


- -


- -


25,397


(29)


25,368

Dividends


- -


- -


- -


- -


- -


- -


- -


(1,670)


(1,670)


- -


(1,670)

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


21


- -


- -


- -


- -


21


- -


- -


21


- -


21

Balance as at March 28, 2015

$

2,018

$

56,585

$

(2,543)

$

2

$

5,757

$

61,819

$

168,314

$

254,899

$

485,032

$

48

$

485,080

Balance as at January 1, 2016

$

2,082

$

92,088

$

(4,279)

$

199

$

- -

$

90,090

$

239,777

$

294,458

$

624,325

$

42

$

624,367

Net income for the period


- -


- -


- -


- -


- -


- -


- -


8,328


8,328


48


8,376

Comprehensive income


- -


(23,229)


1,018


195


- -


(22,016)


- -


- -


(22,016)


- -


(22,016)

Dividends


- -


- -


- -


- -


- -


- -


- -


(1,892)


(1,892)


- -


(1,892)

Repurchase of shares


- -


- -


- -


- -


- -


- -


(1,708)


- -


(1,708)


- -


(1,708)

Excess of acquisition cost over carrying amount of acquired common shares


- -


- -


- -


- -


- -


- -


- -


(2,606)


(2,606)


- -


(2,606)

Shares acquired by employees


(376)


- -


- -


- -


- -


(376)


376


- -


- -


- -


- -

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


21


- -


- -


- -


- -


21


- -


- -


21


- -


21

Balance as at April 2, 2016

$

1,727

$

68,859

$

(3,261)

$

394

$

- -

$

67,719

$

238,445

$

298,288

$

604,452

$

90

$

604,542

 

 


CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS












Periods ended April 2, 2016 and March 28, 2015










(in thousands of Canadian dollars)



Three months

(unaudited)



2016


2015

Cash flows from the following activities:






Operating activities


$

8,376

$

4,438

Net income






Adjustments:






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



21


 

21

Loss on disposal of property, plant and equipment



6


23

Depreciation of property, plant and equipment



6,975


6,218

Amortization of intangible assets



927


690

Amortization of deferred financing expenses



103


126

Interest rate swaps



(65)


(26)

Imputed interest



188


654

Pension expense



(667)


(848)

Deferred tax expense (income)



(1,897)


594

Share of loss of a joint venture and associates



311


141




14,278


12,031

Net change in non-cash operating working capital balances






Decrease in accounts receivable



19,683


59,616

Increase in costs and estimated profits in excess of billings



(30,755)


(21,665)

Decrease (increase) in inventories



13,680


(3,285)

Decrease in current tax assets



1,002


175

Increase in prepaid expenses and other assets



(331)


(1,345)

Increase (decrease) in accounts payable and accrued liabilities



4,579


(12,558)

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



 

(2,542)


 

2,271

Increase (decrease) in interest payable



(294)


1

Increase (decrease) in current tax liabilities



537


(2,690)




5,559


20,520

Cash flows from operating activities



19,837


32,551

Financing activities






Repurchase of shares



(4,314)


(319)

Dividends



(3,782)


(1,669)

Increase in debt and bank loans



50,000


- -

Repayment of debt and bank loans



(44,060)


(28,883)

Issue expenses related to long-term debt



(378)


(97)

Increase in other liabilities



(17)


10

Cash flows from financing activities



(2,551)


(30,958)

Investing activities






Proceeds from sale of property, plant and equipment



90


386

Additions to property, plant and equipment



(11,120)


(4,884)

Additions to intangible assets



(379)


(242)

Acquisition of an investment



(2,308)


(150)

Decrease in receivables and other assets



- -


32

Cash flows from investing activities



(13,717)


(4,858)

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



467


141

Increase in cash and cash equivalents



4,036


(3,124)







Cash and cash equivalents – Beginning of period



7,050


8,261

Cash and cash equivalents – End of period


$

11,086

$

5,137

Supplementary information







Interest paid


$

1,915

$

1,201


Income taxes paid, net


$

4,441

$

4,297

 

SOURCE Canam Group Inc.

For further information: Media: François Bégin, Vice President, Communications, Canam Group Inc., 450-641-4000, 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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