Norwall Group Inc. reports results for the fourth quarter and year ended December 29, 2006



    BRAMPTON, ON, March 16 /CNW/ - Norwall Group Inc., one of North America's
largest manufacturers of residential wallcovering, announced the Corporation's
fourth quarter results today. The ongoing decline of the wallpaper industry
and the strong Canadian dollar continued to have a negative impact on our
results.
    The net loss for the three months ended December 29, 2006 was $225,000 on
net sales of $9,147,000 compared to a net loss of $1,013,000 on net sales of
$10,576,000 for the same period in 2005. The basic and diluted loss per common
share was $0.03 for the fourth quarter of 2006, compared to a loss of $0.16
per common share for the same quarter of 2005.
    The loss for the year ended December 29, 2006 was $1,933,000 on net sales
of $40,969,000, compared to a net loss of $3,897,000 on net sales of
$45,113,000 in the prior year. The loss included restructuring costs of
$510,000 (2005 - $1,266,000). The basic and diluted loss per common share for
the year ended 2006 was $0.30 compared to a loss of $0.60 per common share for
the similar period in 2005.
    We reduced our loss year over year by $1,964,000 which is a positive
direction. We are now focusing our efforts on improving sales and continuing
our cost containment efforts. The Corporation significantly improved our year
over year cash flow from operations by $3,982,000 for the year ended
December 29, 2006.
    Overall the corporation reduced its total debt by $2,243,000 to
$6,581,000 (2005 - $8,824,000)and had positive EBITDA before severance of
$1,296,000.

    Norwall Group (TSX:NGI) manufactures quality residential wallpapers and
borders and distributes them to thousands of home centres, specialty stores
and mass merchants in Canada and through its wholly-owned operating
subsidiary, Patton Wallcoverings, in the United States.

    This Press Release contains forward-looking statements reflecting
management's current expectations regarding future results of operations,
economic performance, financial conditions, and achievements of the
Corporation. Actual results may differ materially from those in such
statements. The Corporation wishes to caution the reader that those important
factors described elsewhere in the commentary could affect the Corporation's
actual results and could cause such results to materially differ from those
expressed in any forward-looking statement made by, or on behalf of, the
Corporation.


    
                             NORWALL GROUP INC.
                    Consolidated Statements of Operations
         (In thousands of Canadian dollars, except per share amounts)

                                  FOR THE THREE MONTHS    FOR THE YEAR ENDED
                                          ENDED
                                  --------------------- ---------------------
                                   December   December   December   December
                                   29, 2006   30, 2005   29, 2006   30, 2005
                                  unaudited  unaudited  unaudited    audited
                                  --------------------- ---------------------
    Sales                             9,147     10,576     40,969     45,113
    Cost of goods sold                6,967      8,088     30,251     35,137
                                  --------------------- ---------------------
    Gross profit                      2,180      2,488     10,718      9,976
    Selling, general and
     administrative expenses          2,717      3,362     12,958     14,010
                                  --------------------- ---------------------
    Loss before the undernoted         (537)      (874)    (2,240)    (4,034)
    Severance and termination
     costs                               85        476        510      1,266
                                  --------------------- ---------------------
    Loss from operations before
     the following items               (622)    (1,350)    (2,750)    (5,300)
    Foreign exchange loss (gain)       (230)       111        (17)       104
    Interest expense                     91        110        435        398
                                  --------------------- ---------------------
    Loss before income taxes           (483)    (1,571)    (3,168)    (5,802)
    Recovery of income taxes           (258)      (558)    (1,235)    (1,905)
                                  --------------------- ---------------------
    Net loss for the period            (225)    (1,013)    (1,933)    (3,897)
                                  --------------------- ---------------------
    Basic and diluted loss per
     common share                     (0.03)     (0.16)     (0.30)     (0.60)
                                  --------------------- ---------------------
    Weighted and average
     number of common shares
     outstanding                  6,486,393  6,489,936  6,486,393  6,489,936
                                  --------------------- ---------------------

    EBITA is not a recognized measure under Canadian generally accepted
    accounting principles (GAAP). Investors should be cautioned, however,
    that EBITA should not be construed as an alternative to net income (loss)
    determined in accordance with GAAP as an indicator of the Corporation's
    performance or to cash flows from operating, investing and financing
    activities as a measure of liquidity and cash flows. The Corporation's
    method of calculating EBITA may differ from other companies and,
    accordingly, EBITA may not be comparable to measures used by other
    companies. EBITDA is calculated as earnings before income taxes,
    depreciation, amortization and severance.



                              NORWALL GROUP INC
                         CONSOLIDATED BALANCE SHEETS
                     (in thousands of Canadian dollars)

                                                   December 29,  December 30,
                                                          2006          2005
                                                             $             $
                                                    (unaudited)

    Assets
    Current assets
    Cash                                                    29            51
    Accounts receivable                                  8,476         9,224
    Income taxes recoverable                               456         1,874
    Inventories                                          9,776         9,957
    Merchandising supplies                                 882         1,097
    Prepaid expenses and other                             622         2,014
                                                  ---------------------------
                                                        20,241        24,217
    Property, plant and equipment                       18,882        21,234
    Other assets                                            78           107
    Future income taxes                                  2,943         3,267
    Goodwill                                             1,693         1,693
                                                  ---------------------------
                                                        43,837        50,518
                                                  ---------------------------
                                                  ---------------------------

    Liabilities
    Current liabilities
    Demand loan                                          1,091         3,044
    Accounts payable and accrued liabilities             4,666         5,245
    Current portion of long-term debt                      306           290
                                                  ---------------------------
                                                         6,063         8,579
    Long-term debt                                       5,184         5,490
    Future income taxes                                  1,581         3,501
                                                  ---------------------------
                                                        12,828        17,570
                                                  ---------------------------
    Shareholders' Equity
    Share capital                                       32,336        32,342
    Foreign currency translation adjustment                (97)          (97)
    Retained earnings (deficit)                         (1,230)          703
                                                  ---------------------------
                                                        31,009        32,948
                                                  ---------------------------
                                                        43,837        50,518
                                                  ---------------------------
    

    %SEDAR: 00002584E




For further information:

For further information: contact: (905) 791-2700; James J. Patton,
President and Chief Executive Officer, jpatton@norwallgroup.com; Edward
Diochon, Vice President of Finance, ediochon@norwallgroup.com

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NORWALL GROUP INC.

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