Richelieu further increases its earnings and closes another acquisition in the third quarter



    
    -------------------------------------------------------------------------
          Third quarter and first nine months ended August 31, 2008
          ---------------------------------------------------------

    - Net earnings amounted to $9.6 million, up 5.8%, or $0.42 per share for
      the third quarter. They totalled $25.4 million, up 6.9%, or $1.11 per
      share for the first nine months of 2008.
    - Excellent financial position - the interest-bearing debt/equity ratio
      stood at 3.3% and working capital at $130.5 million, for a current
      ratio of 3.7:1.
    - Since the beginning of the year, Richelieu has paid $5.5 million in
      shareholder dividends and purchased 490,700 common shares under its
      normal course issuer bid, for a cash consideration of $9.3 million.
    - Acquisition of a distributor in British Columbia closed on July 28,
      2008.
    -------------------------------------------------------------------------

    TSX: RCH
    --------
    

    MONTREAL, Oct. 2 /CNW Telbec/ - Richelieu announces its results for the
third quarter ended August 31, 2008, which represents its 51st consecutive
quarter of net earnings growth over the comparable periods of previous years.
Third-quarter net earnings grew by 5.8% to $9.6 million, whereas sales
totalled $111.8 million, remaining relatively stable compared with the same
period of 2007 - these results were achieved despite a generally more
difficult economy and the unfavourable impact of the exchange rate on U.S.
dollar sales converted into Canadian dollars. For the first nine months of the
year, net earnings totalled $25.4 million, up 6.9%, on sales of
$322.7 million. Cash flows continued to increase and the financial position
further improved - as at August 31, 2008, Richelieu had a working capital of
$130.5 million, cash of $13.3 million and no debt after deducting cash.
    Acquisition - On July 28, 2008, the Company closed its second acquisition
this year by purchasing the principal net assets of Acroma Sales Ltd., a
distributor of wood finishing products operating two centres in British
Columbia that will be integrated with Richelieu's Vancouver and Kelowna
distribution centres. This acquisition enables it to expand its offering of
finishing products in the strong Western Canadian market, to integrate a
dynamic and profitable company while optimizing its assets, and to increase
its sales by approximately $3 million on an annual basis.
    Next dividend payment - At its meeting on October 2, 2008, the Board of
Directors approved the payment of a quarterly dividend of $0.08 per share.
This dividend is payable on October 30, 2008 to shareholders of record as at
October 16, 2008.

    OPERATING RESULTS FOR THE THIRD QUARTER AND FIRST NINE MONTHS ENDED
    AUGUST 31, 2008 COMPARED WITH THE THIRD QUARTER AND FIRST NINE MONTHS
    ENDED AUGUST 31, 2007

    Third-quarter consolidated sales totalled $111.8 million, remaining
relatively stable compared with the third quarter of 2007 when they stood at
$111.9 million. This slight decline is due to a 0.8% negative internal growth,
partially offset by a 0.7% growth from the acquisition of the distributors Top
Supplies (North Carolina) and Acroma (B.C.) on April 7, 2008 and July 28, 2008
respectively - Acroma specializes in the distribution of wood finishing
products. Operations in the United States posted a slowdown due to more
difficult economic conditions; in addition, the erosion of the exchange rate
on U.S. dollar sales converted into Canadian dollars represented a
$0.7 million decrease in sales. Were it not for the impact of the exchange
rate, the period's consolidated sales would have posted a slight growth.
    Sales to manufacturers amounted to $92.1 million, down by $2.6 million or
2.8% from the same quarter of 2007, caused by the aforementioned factors and
less favourable export conditions for Canadian manufacturers. Conversely,
sales to hardware retailers and renovation superstores, recorded mostly in
Canada, grew by $2.5 million or 14.6% to $19.7 million in the third quarter of
2008.
    In Canada, sales totalled $91.9 million, up 1.2% over the third quarter
of 2007; this increase is due to the internal growth achieved in the
residential and commercial woodworking market and the hardware retailers
market including renovation superstores as well as Acroma's contribution for
one month. Sales in Canada accounted for 82.2% of the quarter's consolidated
sales. As previously indicated, sales in the United States decreased to
US$19.3 million, down by US$0.5 million or 2.8% from the corresponding quarter
of 2007. This decline is due to a 5% negative internal growth, partially
offset by a 2.2% growth-by-acquisition stemming from the contribution of Top
Supplies. Considering the exchange rate, sales in the United States amounted
to CA$19.9 million, compared with CA$21.1 million for the third quarter of
2007. They accounted for 17.8% of the quarter's consolidated sales.

    
    Sales
    (in thousands of $)

                         3 months                      9 months
    Periods ended                       Change                        Change
     August 31         2008      2007     (%)        2008      2007     (%)
    -------------------------------------------------------------------------
    Canada           91,932    90,836    + 1.2    266,524   260,736    + 2.2
    United States
     (CA$)           19,867    21,085    - 5.8     56,202    62,025    - 9.4
     (US$)           19,337    19,884    - 2.8     55,490    55,726    - 0.4
    Average
     exchange rate   1.0274    1.0604              1.0128    1.1131
    -------------------------------------------------------------------------
    Consolidated
     sales          111,799   111,921    - 0.1    322,726    322,761     0.0
    -------------------------------------------------------------------------


    For the first nine months, consolidated sales totalled $322.7 million,
remaining relatively stable compared with the corresponding period of 2007.
Sales in the United States were slowed down by the economic conditions that
have prevailed for several months; in addition, the erosion of the exchange
rate on U.S. sales converted into Canadian dollars represented a $5.6 million
decrease in sales for the first nine months of the year. Were it not for the
impact of the exchange rate, the period's consolidated sales would have
increased by 1.7%.
    Sales to manufacturers amounted to $265.5 million, down by 1.3% or
$3.5 million from the comparable period of 2007, due to the factors mentioned
for the third quarter. Sales to hardware retailers including renovation
superstores increased by $3.4 million or 6.4% to $57.2 million.
    For the first nine months of the year, sales in Canada totalled
$266.5 million, an increase of $5.8 million or 2.2%, of which 1.9% came from
internal growth and 0.3% from the acquisition of Sasco and Acroma. This growth
was achieved in the manufacturers and hardware retailers markets including
renovation superstores. Sales in Canada accounted for 82.6% of consolidated
sales for the first nine months of 2008. In the United States, sales amounted
to US$55.5 million, a slight decrease of US$0.2 million or 0.4% stemming from
a 4.1% negative internal growth, partially offset by a 3.6%
growth-by-acquisition representing the contributions of Village Square and Top
Supplies. Considering the exchange rate, sales stood at CA$56.2 million,
compared with CA$62.0 million for the first nine months of the previous year.
They accounted for 17.4% of the period's consolidated sales.


    Consolidated EBITDA and EBITDA margin
    (in thousands of $)

                         3 months                      9 months
    Periods ended                       Change                        Change
     August 31         2008      2007     (%)        2008       2007    (%)
    -------------------------------------------------------------------------
    Sales           111,799   111,921    - 0.1    322,726    322,761     0.0
    EBITDA           15,811    15,513    + 1.9     41,359     40,768   + 1.4
    EBITDA
     margin (%)        14.1      13.9                12.8       12.6
    -------------------------------------------------------------------------


    Third-quarter earnings before income taxes, interest, amortization and
non-controlling interest (EBITDA) stood at $15.8 million, up 1.9% over the
corresponding quarter of 2007. The gross profit and EBITDA margins improved
overall in comparison with the third quarter of the previous year when the
Company had incurred development costs in the retailers market that had
temporarily impacted its profit margins. The EBITDA margin improved to 14.1%
for the third quarter of 2008, up from 13.9% for the third quarter of 2007,
positively affected by the U.S. exchange rate. Nevertheless, this improvement
was somewhat curbed in the third quarter of 2008 by a temporary increase in
operating costs arising from the relocation and merger of two major
distribution centres and the relocation of another centre to enhance
operational efficiency and to lower operating costs.
    Interest was negative for the third quarter, due to the reduction by
almost half in interest-bearing debt from the third quarter of 2007 and
positive bank balances. Amortization of capital assets increased by
approximately $0.2 million, whereas amortization of intangible assets
decreased by $54,000.
    Income taxes decreased by $0.1 million to $4.7 million, due to the
reduction in the Canadian tax rate effective January 1, 2008.
    For the first nine months, earnings before income taxes, interest,
amortization and non-controlling interest (EBITDA) stood at $41.4 million, up
1.4% over the comparable period of 2007. The gross profit and EBITDA margins
improved overall compared with the same period of 2007, due primarily to the
fact that they benefited from relatively stable exchange rates in relation to
the previous year; the EBITDA margin thus increased to 12.8% from 12.6% in
2007. Nevertheless, this improvement was somewhat curbed by a temporary
increase in operating costs arising from the relocation and merger of two
major distribution centres and the relocation of another centre to enhance
operational efficiency and to lower operating costs.
    Interest decreased by approximately $0.7 million, reflecting the major
reduction in interest-bearing debt since the beginning of the year.
Amortization of capital and intangible assets increased by some $0.4 million
and $27,000 respectively.
    Income taxes amounted to $11.8 million, down by about $0.8 million due to
the aforementioned reduction in the Canadian tax rate.


    Consolidated net earnings
    (in thousands of $)

                         3 months                      9 months
    Periods ended                       Change                        Change
     August 31         2008      2007      (%)       2008       2007     (%)
    -------------------------------------------------------------------------
    EBITDA           15,811    15,513    + 1.9     41,359     40,768   + 1.4
    Amortization of
     capital and
     intangible
     assets           1,368     1,256               3,908      3,453
    Interest            (19)      184                 106        767
    Income taxes      4,728     4,855              11,821     12,609
    Non-controlling
     interest            95       108                 157        205
    -------------------------------------------------------------------------
    Net earnings      9,639     9,110    + 5.8     25,367     23,734   + 6.9
    Net profit
     margin (%)         8.6       8.1                 7.9        7.4
    -------------------------------------------------------------------------
    Comprehensive
     income          12,099     9,244   + 30.9     27,592     23,605  + 16.9
    -------------------------------------------------------------------------


    Third-quarter net earnings grew by 5.8% to $9.6 million. The net profit
margin improved to 8.6% of consolidated sales, compared with 8.1% for the
third quarter of 2007. This increase is due to the improvement in gross profit
and EBITDA margins and the reduction in interest and income taxes. Earnings
per share amounted to $0.42 (basic and diluted), up 7.7%, whereas the number
of shares outstanding decreased by close to 1% over the past three months.
    Comprehensive income totalled $12.1 million, on account of a latent
foreign exchange gain of $2.3 million on translation of the financial
statements of the subsidiary in the United States (changed from integrated to
self-sustaining foreign operations on September 1st 2007).
    For the first nine months, net earnings amounted to $25.4 million, up 6.9%
over the same period of 2007. The net profit margin improved to 7.9% of
consolidated sales, up from 7.4% for the first nine months of 2007. As
previously indicated, this increase is due to the improvement in gross profit
and EBITDA margins and the reduction in interest and income taxes. Earnings
per share grew by approximately 8% to $1.11 (basic and diluted), compared with
$1.03 (basic) and $1.02 (diluted) for the first nine months of 2007, whereas
the number of shares outstanding decreased by 2% over the past nine months.
    Comprehensive income totalled $27.6 million, on account of a latent
foreign exchange gain of $2.0 million on translation of the financial
statements of the subsidiary in the United States.


    SUMMARY OF QUARTERLY FINANCIAL RESULTS (Unaudited)
    (in thousands of $, except per-share amounts)

    Quarters                         1           2            3            4
    -------------------------------------------------------------------------
    2008
         - Sales                96,082     114,845      111,799
         - EBITDA               10,569      14,980       15,811
         - Net earnings          6,628       9,100        9,639
           basic per share        0.29        0.40         0.42
           per share diluted      0.29        0.40         0.42
    2007
         - Sales                94,509     116,331      111,921      113,396
         - EBITDA               10,470      14,784       15,513       16,333
         - Net earnings          5,973       8,651        9,110       10,220
           basic per share        0.26        0.37         0.39         0.44
           diluted per share      0.26        0.37         0.39         0.44
    2006
         - Sales                82,862     102,604       96,221      103,944
         - EBITDA                9,060      14,128       14,353       15,517
         - Net earnings          5,360       8,627        8,779        9,165
           basic per share        0.23        0.37         0.38         0.40
           diluted per share      0.23        0.37         0.38         0.39


    Quarterly variations in earnings - The first quarter ending February 28 or
29 is generally the year's weakest for Richelieu in light of the smaller
number of business days due to the end-of-year holiday period and a wintertime
slowdown in renovation and construction work. The third quarter ending August
31 also includes a smaller number of business days due to the summer holidays,
which can be reflected in the period's financial results. The second and
fourth quarters respectively ending May 31 and November 30 generally represent
the year's most active periods.

    FINANCIAL POSITION

    Analysis of principal cash flows for the third quarter and first nine
    months ended August 31, 2008

    Change in cash and cash equivalents and capital resources
    (in thousands of $)

                         3 months                      9 months
    Periods ended
     August 31         2008      2007                2008       2007
    -------------------------------------------------------------------------
    Cash flows
     provided by
    (used for):
      Operating
       activities    14,587     9,939              26,653     15,981
      Financing
       activities    (4,964)   (1,708)            (14,802)    (5,093)
      Investing
       activities    (2,834)     (874)             (6,325)    (7,903)
      Effect of
       exchange rate
       fluctuations     101         -                (106)         -
    -------------------------------------------------------------------------
    Net change in
     cash and cash
     equivalents      6,890     7,357               5,420      2,985
    Cash and cash
     equivalents,
     beginning of
     period           6,409     2,592               7,879      6,964
    Cash and cash
     equivalents,
     end of period   13,299     9,949              13,299      9,949
    -------------------------------------------------------------------------
    Working
     capital        130,453   119,991             130,453    119,991
    Renewable line
     of credit       26,000    26,000              26,000     26,000
    -------------------------------------------------------------------------


    Third-quarter operating activities provided cash flows (before net change
in non-cash working capital balances related to operations) of $11.4 million
or $0.50 per share, up from compared with $10.7 million or $0.46 per share for
the third quarter of 2007, mainly reflecting the growth in net earnings. Net
change in non-cash working capital balances related to operations represented
a cash inflow of $3.2 million, as opposed to a cash outflow of $0.8 million
for the third quarter of 2007. Consequently, operating activities provided
cash flows of $14.6 million, up from $9.9 million for the third quarter of
2007.
    Financing activities used cash flows of $5.0 million, compared with
$1.7 million for the third quarter of 2007. Richelieu paid $1.8 million in
shareholder dividends, up from $1.6 million for the third quarter of 2007;
this rise reflects the dividend rate increases announced on January 31 and
March 27, 2008. In addition, during the third quarter, 165,900 common shares
were redeemed for a cash consideration of $3.2 million for cancellation
purposes under the Company's normal course issuer bid, whereas no shares were
purchased in the third quarter of the previous year.
    Investing activities used cash flows of $2.8 million, compared with
$0.9 million in the third quarter of the previous year. During the third
quarter of 2008, the Company invested $2.0 million in the relocation and
merger of two major distribution centres and the relocation of another centre,
the design and manufacture of displays for the retailers market, and the
purchase of manufacturing equipment and various capital assets, including the
improvement of business premises. In addition, Richelieu invested $0.8 million
to acquire the principal net assets of the distributor Acroma.
    For the first nine months, cash flows from operating activities (before
net change in non-cash working capital balances related to operations)
increased by 9.4% to $30.3 million or $1.32 per share, up from $27.7 million
or $1.19 per share for the first nine months of 2007, mainly reflecting the
growth in net earnings. Net change in non-cash working capital balances
related to operations represented a cash outflow of $3.6 million, compared
with a cash outflow of $11.7 million for the same period of 2007.
Consequently, operating activities provide cash flows of $26.7 million, up
from $16.0 million for the first nine months of 2007.
    Financing activities used cash flows of $14.8 million, compared with
$5.1 million for the same period of 2007. The Company paid $5.5 million in
shareholder dividends, up from $4.8 million for the first nine months of 2007;
this rise reflects the dividend rate increases announced on January 31 and
March 27, 2008. In addition, the Company purchased 490,700 common shares for a
consideration of $9.3 million under its normal course issuer bid, whereas no
shares were purchased in the first nine months of 2007.
    Investing activities used cash flows of $6.3 million, compared with
$7.9 million in the same period of 2007. In the first nine months of the year,
the Company invested $5.3 million in the relocation and merger of two major
distribution centres and the relocation of another centre, the design and
manufacture of displays for the retailers market, and the purchase of
manufacturing equipment and various capital assets, including the improvement
of business premises. In addition, Richelieu invested $1.1 million to acquire
the principal net assets of Top Supplies and Acroma.

    Sources of financing

    As at August 31, 2008, cash and cash equivalents totalled $13.3 million,
up from $9.9 million at the end of the corresponding period of 2007. The
Company posted an excellent working capital of $130.5 million for a current
ratio of 3.7:1, compared with $120.0 million and a 3.4:1 ratio as at
August 31, 2007.
    Richelieu estimates that it has the capital resources needed to fulfill
its commitments and respect its ongoing obligations. Its cash flows from
operating activities should suffice for the funding requirements arising from
its growth strategy and its financing and investing activities planned for the
year. Furthermore, Richelieu has an authorized line of credit of
$26.0 million, renewable annually and bearing interest at the bank's prime
rate, as well as easy access to other outside financing if necessary.
    The expectation set forth above consists of forward-looking information
based on the assumption that economic conditions and exchange rate will not
deteriorate significantly, operating expenses will not increase considerably,
deliveries will be sufficient to fulfill the Company's requirements and no
unusual events will entail additional capital expenditures. This expectation
also remains subject to the risks identified under "Risk Management" on page
38 of the Company's 2007 Annual Report.


    Balance sheet analysis

    Summary balance sheet

    As at August 31                                         2008        2007
    (in thousands of $)
    -------------------------------------------------------------------------
    Current assets                                       178,059     169,527
    Long-term assets                                      97,213      97,766
    -------------------------------------------------------------------------
    Total                                                275,272     267,293
    -------------------------------------------------------------------------
    Current liabilities                                   47,606      49,536
    Long-term liabilities                                  4,784      11,505
    Shareholders' equity                                 222,882     206,252
    -------------------------------------------------------------------------
    Total                                                275,272     267,293
    -------------------------------------------------------------------------


    Assets

    As at August 31, 2008, total assets amounted to $275.3 million, up from
$267.3 million a year earlier, an increase of 3.0%. Current assets grew by
5.0% or $8.5 million, due primarily to a $3.4 million growth in cash and cash
equivalents and a $7.2 million rise in inventories related to acquisitions,
the new distribution centre located in Barrie, Ontario, the innovations
introduced over the past 12 months, the medium and long-term agreements signed
with major Canadian renovation chains and to meet future demand.


    Total interest-bearing debt

    As at August 31                                         2008        2007
    (in thousands of $)
    -------------------------------------------------------------------------
    Current portion of long-term debt                      7,019       6,491
    Long-term debt                                           319       7,136
    -------------------------------------------------------------------------
    Total                                                  7,338      13,627
    -------------------------------------------------------------------------
    less cash and cash equivalents                        13,299       9,949
    Total debt net of cash                                (5,961)      3,678
    -------------------------------------------------------------------------


    Richelieu has reduced its total interest-bearing debt by almost half over
the past 12 months, bringing it to $7.3 million as at August 31, 2008. After
deducting cash and cash equivalents, the Company had a total debt-free cash
situation and a surplus of $6.0 million as at August 31, 2008. Richelieu
remains in a healthy and solid financial position, with low indebtedness and
substantial cash flows generated every year, enabling it to pursue its growth
and expansion, particularly through the acquisition of companies specializing
in its business sector.
    Shareholders' equity totalled $222.9 million as at August 31, 2008, up
from $206.3 million a year earlier, a growth of 8.1% reflecting the increases
of $19.6 million in retained earnings which amounted to $206.5 million as at
August 31, 2008, and of $1.0 million in contributed surplus, less accumulated
comprehensive income of $4.0 million. As at August 31, 2008, the book value
per share was $9.85, up from $8.93 as at August 31, 2007, an increase of
10.3%. The total interest-bearing debt/equity ratio stood at 3.3%, compared
with 6.6% a year earlier.
    As at August 31, 2008, Richelieu's share capital consisted of 22,638,737
common shares (23,100,737 common shares as at November 30, 2007) due to the
issue of 28,700 common shares under the share option plan and the purchase of
490,700 common shares for cancellation purposes, and 768,300 options
(640,000 options as at November 30, 2007) were outstanding.

    OUTLOOK

    "During the fourth quarter ending November 30, 2008, we will remain
focused on our two-tiered development strategy: increasing our market share to
drive internal growth in the United States and Canada, and completing
acquisitions insofar as the opportunities are fully consistent with our
objectives of operating profitability and creation of value," indicated
Richard Lord, President and Chief Executive Officer.

    PROFILE as at August 31, 2008

    Richelieu Hardware Ltd. is a leading North American distributor, importer
and manufacturer of specialty hardware and complementary products. Its
products are targeted to an extensive customer base of kitchen and bathroom
cabinet, furniture, and window and door manufacturers plus the residential and
commercial woodworking industry, as well as a large customer base of hardware
retailers, including renovation superstores. Richelieu offers customers a
broad mix of high-end products sourced from manufacturers around the world.
Its product selection consists of close to 55,000 different items targeted to
a base of over 38,000 customers who are served by 49 centres in North
America - 31 distribution centres across Canada, 16 in the United States and
two manufacturing plants in Canada, specifically Cedan Industries Inc. which
specializes in the manufacture of a wide variety of veneer sheets and
edgebanding products, and Menuiserie des Pins Ltée which manufactures
components for the window and door industry, a broad selection of mouldings,
and various types of tackboards and whiteboards.

    Notes to readers - Richelieu uses earnings before income taxes, interest,
amortization and non-controlling interest ("EBITDA") because this measure
enables management to assess the Company's operational performance. This
measure is a widely accepted financial indicator of a company's ability to
service and incur debt. However, EBITDA should not be considered by an
investor as an alternative to operating income or net earnings, an indicator
of operating performance or cash flows, or as a measure of liquidity. Because
EBITDA is not a standardized measurement as prescribed by GAAP, it may not be
comparable to the EBITDA of other companies. Certain statements set forth in
this press release, such as statements about the growth outlook, constitute
forward-looking statements. In some cases, these statements are identified by
the use of terms such as "may", "could", "might", "intend", "should",
"expect", "project", "plan", "believe", "estimate" or the negative form of
these expressions or other comparable variants. These statements are based on
the information available at the time they are written, on assumptions made by
management and on the expectations of management, acting in good faith,
regarding future events, including those relating to economic conditions,
fluctuations in exchange rates and operating expenses, and the absence of
unusual events entailing supplementary expenditures. Although management
considers these assumptions and expectations reasonable based on the
information available at the time they are written, they could proved
inaccurate. Forward-looking statements are also subject, by their very nature,
to known and unknown risks and uncertainties such as those related to the
industry, acquisitions, labour relations, credit, key officers, supply,
product liability, and other factors set forth in the Management's Report
included in the Company's Annual Report as well as its Annual Information
Form, which are available on the System for Electronic Document Analysis and
Retrieval (SEDAR) website at www.sedar.com. Richelieu's actual results could
differ materially from those indicated or underlying these forward-looking
statements. The reader is therefore recommended not to unduly rely on these
forward-looking statements. Forward-looking statements do not reflect the
potential impact of special items, any business combination or any other
transaction that may be announced or occur subsequent to the date hereof.
Richelieu undertakes no obligation to update or revise the forward-looking
statements to account for new events or new circumstances, except where
provided for by applicable legislation.

       CONFERENCE CALL ON OCTOBER 2, 2008 AT 2:30 P.M. (EASTERN TIME)
       --------------------------------------------------------------

    Financial analysts and investors interested in participating in the
conference call on Richelieu's results to be held at 2:30 p.m. on October 2,
2008 can dial 1-800-733-7560 a few minutes before the start of the call. For
those unable to participate, a taped rebroadcast will be available as of
4:30 p.m. on October 2, 2008 until midnight on October 9, 2008, by dialing
1-877-289-8525, access code: 21283655#. Members of the media are invited to
listen in.


    Consolidated statements of earnings (unaudited)
    (in thousands of dollars, except per-share amounts)

                                 For the nine months    For the three months
                                    ended August 31,       ended August 31,
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
                                       $           $           $           $

    Sales                        322,726     322,761     111,799     111,921
    Cost of sales, warehouse,
     selling and administrative
     expenses                    281,367     281,993      95,988      96,408
    -------------------------------------------------------------------------
    Earnings before the
     following                    41,359      40,768      15,811      15,513

    Interest on short-term
     debt, net                      (131)         30         (87)        (54)
    Interest on long-term debt       237         737          68         238
    Amortization of capital
     assets                        3,182       2,754       1,124         958
    Amortization of intangible
     assets                          726         699         244         298
    -------------------------------------------------------------------------
    Earnings before income
     taxes and non-controlling
     interest                     37,345      36,548      14,462      14,073
    Income taxes                  11,821      12,609       4,728       4,855
    -------------------------------------------------------------------------
    Earnings before
     non-controlling interest     25,524      23,939       9,734       9,218
    Non-controlling interest         157         205          95         108
    -------------------------------------------------------------------------
    Net earnings                  25,367      23,734       9,639       9,110
    -------------------------------------------------------------------------

    Earnings per share
      Basic                         1.11        1.03        0.42        0.39
      Diluted                       1.11        1.02        0.42        0.39



    Consolidated statements retained earnings (unaudited)
    (in thousands of dollars)

                                 For the nine months    For the three months
                                   ended August 31,        ended August 31,
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
                                       $           $           $           $

    Balance, beginning of
     period                      195,511     168,020     201,682     179,412
    Net earnings                  25,367      23,734       9,639       9,110
    -------------------------------------------------------------------------
                                 220,878     191,754     211,321     188,522
    Dividends                     (5,496)     (4,847)     (1,824)     (1,615)
    Premium on redemption
     of common shares
     for cancellation             (8 909)          -      (3,024)          -
    -------------------------------------------------------------------------
    Balance, end of period       206,473     186,907     201,473     186,907
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated statements of comprehensive income (unaudited)
    (in thousands of dollars)

                                 For the nine months    For the three months
                                   ended August 31,        ended August 31,
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
                                       $           $           $           $

    Net earnings                  25,367      23,734       9,639       9,110

    Other comprehensive income:
    Change in fair value of
     derivatives designated as
     cash flow hedges net of
     income taxes                    192        (129)        162         134
    Exchange loss due to
     translation adjustment of
     net investment in
     self-sustaining
     foreign operation             2,033           -       2,298           -
    -------------------------------------------------------------------------
                                   2,225        (129)      2,460         134
    -------------------------------------------------------------------------
    Comprehensive income          27,592      23,695      12,099       9,244
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    Consolidated statements of cash flows (unaudited)
    (in thousands of dollars)

                                 For the nine months    For the three months
                                   ended August 31,        ended August 31,
    -------------------------------------------------------------------------
                                    2008        2007        2008        2007
    -------------------------------------------------------------------------
                                       $           $           $           $

    OPERATING ACTIVITIES
    Net earnings                  25,367      23,734       9,639       9,110
    Non-cash items
      Amortization of capital
       assets                      3,182       2,754       1,124         958
      Amortization of intangible
       assets                        726         699         244         298
      Future income taxes             50         140          59          79
      Foreign exchange gain on
       debt on US dollars              -        (518)          -         (64)
      Non-controlling interest       157         205          95         108
      Stock-based compensation
       expense                       791         655         266         236
    -------------------------------------------------------------------------
                                  30,273      27,669      11,427      10,725
    Net change in non-cash
     working capital balances
     related to operations        (3,620)    (11,688)      3,160        (786)
    -------------------------------------------------------------------------
                                  26,653      15,981      14,587       9,939
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Repayment of long-term debt     (206)       (501)          -        (198)
    Dividends paid                (5,496)     (4,847)     (1,824)     (1,617)
    Issue of common shares           189         255          12         107
    Redemption of common shares
     for cancellation             (9,289)          -      (5,152)          -
    -------------------------------------------------------------------------
                                 (14,802)     (5,093)     (4,964)     (1,708)
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Business acquisitions         (1,050)     (4,611)       (808)        (12)
    Additions to capital assets   (5,275)     (3,292)     (2,026)       (862)
    -------------------------------------------------------------------------
                                  (6,325)     (7,903)     (2,834)       (874)
    -------------------------------------------------------------------------

    Effect of exchange rate
     fluctuations on cash
     and cash equivalents           (160)          -         101           -
    -------------------------------------------------------------------------
    Net change in cash and
     cash equivalents              5,420       2,985       6,890       7,357
    Cash and cash equivalents,
     beginning of period           7,879       6,964       6,409       2,592
    -------------------------------------------------------------------------
    Cash and cash equivalents,
     end of period                13,299       9,949      13,299       9,949
    -------------------------------------------------------------------------

    Supplemental information:
      Income taxes paid           13,271      14,680       4,071       3,721
      Interest paid                  144       1,332           1         580



    Consolidated balance sheets (unaudited)
    (in thousands of dollars)

                                             As at        As at        As at
                                         August 31,   August 31, November 30,
                                              2008         2007         2007
    -------------------------------------------------------------------------
                                                 $            $            $
    ASSETS
    Current assets
    Cash and cash equivalents               13,299        9,949        7,879
    Accounts receivable                     57,263       59,800       60,976
    Income taxes receivable                    370            -            -
    Inventories                            105,869       98,678       95,971
    Prepaid expenses                         1,258        1,100          732
    -------------------------------------------------------------------------
                                           178,059      169,527      165,558
    -------------------------------------------------------------------------

    Capital assets                          21,979       19,088       19,774
    Intangible assets                       13,145       14,504       12,974
    Goodwill                                62,089       64,174       60,472
    -------------------------------------------------------------------------
                                           275,272      267,293      258,778
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities
    Accounts payable and accrued
     liabilities                            40,587       42,849       37,371
    Income taxes payable                         -          196        1,081
    Current portion of long term debt        7,019        6,491        6,111
    -------------------------------------------------------------------------
                                            47,606       49,536       44,563
    -------------------------------------------------------------------------

    Long-term debt                             319        7,136          860
    Future income taxes                      1,800        1,982        1,751
    Non-controlling interest                 2,665        2,387        2,508
    -------------------------------------------------------------------------
                                            51,390       61,041       49,862
    -------------------------------------------------------------------------

    Shareholders' equity
    Capital stock                           17,608       17,725       17,800
    Contributed surplus                      2,773        1,749        1,982
    Retained earnings                      206,473      186,907      195,511
    Accumulated other comprehensive
     income                                 (3,972)        (129)      (6,197)
    -------------------------------------------------------------------------
                                           222,882      206,252      209,096
    -------------------------------------------------------------------------
                                           275,272      267,293      258,778
    -------------------------------------------------------------------------
    




For further information:

For further information: Richard Lord, President and Chief Executive
Officer; Alain Giasson, Vice-President and Chief Financial Officer, (514)
336-4144; www.richelieu.com


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