ShawCor Ltd. Announces First Quarter 2009 Results



    (TSX: SCL.A, SCL.B)

    TORONTO, May 11 /CNW/ -

    
    Financial Summary
                                                  Three Months Ended Mar. 31
    (In thousands of Canadian dollars
     except per share amounts)                         2009          2008
                                                                   Restated
                                                                   (note 1)
    -------------------------------------------------------------------------
    Operating Results
    Revenue                                        $   307,464   $   293,357
    EBITDA (note 2)                                     66,671        54,291
    Operating income from continuing operations         50,434        40,919
    Income from continuing operations                   31,520        26,921
    Income (loss) from discontinued operations              21           (69)
    Net income                                          31,541        26,852

    Net income (loss) per share (Class A and B)
     - Basic
      Continuing operations                               0.45          0.38
      Discontinued operations                             0.00          0.00
      Total                                               0.45          0.38

    Net income (loss) per share (Class A and B)
     - Diluted
      Continuing operations                               0.45          0.37
      Discontinued operations                             0.00          0.00
      Total                                               0.45          0.37
    -------------------------------------------------------------------------
    Cash Flow
    Cash from (used in) operating activities            38,745       (11,568)
    Additions to property, plant and equipment          14,143        12,261
    -------------------------------------------------------------------------
    Financial Position
    Working capital                                    262,389       281,215
    Total assets                                     1,221,270     1,018,685
    Shareholders' equity per share (Class A and B)
     (note 3)                                      $     10.90   $      8.62
    -------------------------------------------------------------------------

    Note 1: Restated for change in accounting policy. Refer to note 1 to the
    interim consolidated financial statements for the three months ended
    March 31, 2009.

    Note 2: EBITDA is a non-GAAP measure calculated by adding back to income
    from continuing operations, the sum of interest (income)/expense, taxes
    and depreciation/amortization of property, plant and equipment and
    intangible assets. EBITDA does not have a standardized meaning prescribed
    by GAAP and is not necessarily comparable to similar measures prescribed
    by other companies. EBITDA is used by many analysts in the oil and gas
    industry as one of several important analytical tools. The following is
    the calculation of EBITDA for the periods presented above:

    Income from continuing operations                   31,520        26,921
    Add (deduct):
      Income taxes                                      17,251        14,340
      Interest (income) expense                          1,663            87
      Amortization of property, plant and equipment     15,142        12,943
      Amortization of intangible assets                  1,095             -
    -------------------------------------------------------------------------
    EBITDA                                              66,671        54,291
    -------------------------------------------------------------------------

    Note 3: Shareholders' equity per share is a non-GAAP measure calculated
    by dividing shareholders' equity by the number of Class A and Class B
    shares outstanding at the date of the balance sheet.
    

    ShawCor Ltd. ("ShawCor" or the "Company") is a growth-oriented, global
energy services company specializing in technology-based products and services
for the Pipeline and Pipe Services and the Petrochemical and Industrial
markets. The Company operates seven divisions with over seventy manufacturing,
sales and service facilities located around the world.
    Consolidated revenue from continuing operations for the first quarter of
2009 totaled $307.5 million, 4.8% higher than the first quarter of 2008, and
reflected increased revenue in the Pipeline and Pipe Services segment of the
Company primarily as a result of the impact of the weaker Canadian dollar on
the translation of the Company's U.S. dollar denominated revenue partially
offset by lower revenue from the Company's Petrochemical and Industrial
segment. During the first quarter of 2009, the Canadian dollar was 22.9%
weaker versus the U.S. dollar, on average, than in the first quarter of last
year. The weakening of Canadian dollar on the translation of foreign currency
operating results had a net favourable impact on revenue, income from
continuing operations and net income of approximately $26.9 million, $9.9
million and $8.3 million, respectively.
    Net income in the quarter totaled $31.5 million ($0.45 per diluted
share), compared to $26.9 million ($0.37 per diluted share) in the first
quarter of last year, with the improvement reflecting the increased revenue in
the quarter together with improved operating margins (operating income from
continuing operations divided by revenue from continuing operations).
Operating margins in the quarter improved 2.5 percentage points from the first
quarter of last year as a result of strong performance in the Pipeline and
Pipe Services segment where higher sales combined with lower fixed costs.
    The Company's backlog at March 31 2009 of $402.4 million, declined 11.7%
from the level at the beginning of the quarter as strong revenue exceeded new
order bookings. While the backlog may decline further in subsequent quarters,
bidding activity remains high and the Company continues to pursue several
large offshore pipe coating projects. These projects, if awarded to the
Company, could generate significant revenue growth in 2010 and beyond.
Overall, consolidated revenue in 2009 is expected to be slightly below the
record levels achieved in 2008; however, the Company expects that operating
margins in 2009 will meet or exceed those achieved in 2008 as a result of
several initiatives including programs to reduce costs and improve
efficiencies.

    MANAGEMENT'S DISCUSSION AND ANALYSIS

    The following is management's interim discussion and analysis of
operations and financial position and should be read in conjunction with the
Consolidated Financial Statements and Management's Discussion and Analysis
included in the Company's 2008 Annual Report.

    
    Revenue, Income from Operations and Net Income

    Consolidated Results

    -------------------------------------------------------------------------
    Three months ended                    Mar. 31     Dec. 31      Mar. 31
    (in thousands of Canadian dollars)     2009         2008         2008
                                                      Restated     Restated
                                                       (note)       (note)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations     307,464      433,853      293,357
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                             50,434       75,588       40,919
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                          16.4%        17.4%        13.9%
    -------------------------------------------------------------------------
    Note: restated for change in accounting policy - refer to note 1 to the
    interim consolidated financial statements for the three months ended
    March 31, 2009.
    

    Current Quarter versus Q1 2008
    Consolidated revenue from continuing operations for the first quarter of
2009 totaled $307.5 million, 4.8% higher than in the first quarter of 2008 due
to the impact of the weaker Canadian dollar which was partially offset by
market declines in the Petrochemical and Industrial segment. During the first
quarter of 2009, the Canadian dollar was, on average, 22.9% weaker compared
with the U.S. dollar, than in the first quarter of last year, which on
translating foreign currency operating results, favourably impacted revenue,
income from continuing operations and net income by approximately $26.9
million, $9.9 million and $8.3 million, respectively.
    Operating income from continuing operations totaled $50.4 million (16.4%
of revenue from continuing operations) in the first quarter, representing a
23.3% increase over $40.9 million (13.9% of revenue from continuing
operations) achieved in the first quarter of last year, with the improvement
reflecting the increased revenue in the period together with improved
operating margins in the Pipeline and Pipe Services segment.
    Net income in the quarter totaled $31.5 million ($0.45 per share,
diluted) compared to $26.9 million ($0.37 per share, diluted) in the first
quarter of 2008, with the improvement in earnings per share due to the higher
net income together with the benefit of the reduction in shares outstanding
due to the repurchase of 602 thousand Class A Subordinate Voting shares under
the Normal Course Issuer Bid over the preceding twelve months.

    Current Quarter versus Q4 2008
    Consolidated revenue from continuing operations in the first quarter of
2009 was 70.9% of the record level achieved in the prior quarter, and resulted
from reduced pipeline project activity in the Pipeline and Pipe Services
segment from the record level achieved in the prior quarter as well as a
continued deterioration in the industrial markets served by the Petrochemical
and Industrial segment.
    Operating income from continuing operations in the first quarter was
66.7% of the level achieved last quarter and reflected the impact of the lower
revenue together with a significant decrease in operating margins in the
Petrochemical and Industrial segment as a result of low factory utilization.
    Net income in the quarter decreased $25.1 million or $0.34 per share
diluted, from the record $56.6 million ($0.79 per share, diluted) in the
fourth quarter of 2008, in line with the lower operating income from
continuing operations generated during the quarter.
    ShawCor classifies its revenue and income from operations in two industry
segments: Pipeline and Pipe Services, and Petrochemical and Industrial.
Discussion of the operating results of each of these segments follows:

    
    Pipeline and Pipe Services

    -------------------------------------------------------------------------
    Three months ended                    Mar. 31     Dec. 31      Mar. 31
    (in thousands of Canadian dollars)     2009         2008         2008
                                                      Restated     Restated
                                                       (note)       (note)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations  $  279,951   $  401,768   $  255,794
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                         $   56,646   $   75,636   $   37,822
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                          20.2%        18.8%        14.8%
    -------------------------------------------------------------------------
    Note: restated for change in accounting policy - refer to note 1 to the
    interim consolidated financial statements for the three months ended
    March 31, 2009.
    

    Current Quarter versus Q1 2008
    In the Pipeline and Pipe Services segment, revenue in the first quarter
of 2009 totaled $280.0 million and was 9.4% higher than in the first quarter
of last year, driven by strong results at Canusa-CPS and Guardian and the
inclusion of $16.8 million in revenue from Flexpipe Systems which was acquired
on June 27, 2008. At Bredero Shaw, revenue in the first quarter of the year
was unchanged from the first quarter of 2008 with the favourable impact of the
weaker Canadian dollar on the translation of the division's mainly U.S.
dollar-based revenue as well as growth in the division's Asia Pacific region
offsetting a weakening of activity in the division's other regions. In the
Asia Pacific region, revenue in the first quarter increased by 60.7% over the
first quarter of the prior year as a result of the Pluto and Kumang Cluster
pipe coating projects executed at the region's plant in Kuantan, Malaysia. In
the America's region, revenue in the first quarter declined by 20.0% from the
first quarter of last year. Key factors impacting revenue included small
diameter pipe coating activity in Western Canada and the United States which
declined by 41% and 19% respectively, and lower volumes of Canadian and U.S.
transmission pipeline projects, partially offset by growth in Mexico. In the
Europe, Africa and Russia region, and in the Middle East region, revenue in
the quarter was 16.6% and 17.1% lower, respectively, than in the first quarter
of 2008, reflecting reduced pipe coating project activity in those regions.
    In the segment's other business units, revenue in the first quarter at
Canusa-CPS increased 24.8% from the first quarter of 2008, on very strong
project activity in markets outside of North America, while at Guardian,
revenue increased 37.1% over levels in the first quarter of last year as a
result of increased market share for Guardian's drill pipe inspection and
refurbishment services in Western Canada. Revenue at Shaw Pipeline Services in
the first quarter was 22.9% lower than in the same quarter of last year due to
lower offshore pipeline weld inspection activity partially offset by stronger
U.S. onshore activity.
    Operating income from continuing operations in the quarter for the
segment totaled $56.6 million (20.2% of revenue from continuing operations)
and increased 49.8% from the first quarter of 2008. The improvement resulted
from higher revenue combined with operating margins that increased 5.4
percentage points over the 14.8% achieved in the first quarter of last year, a
result of the favourable movement in the foreign currency to Canadian dollar
translation rate, improved manufacturing efficiencies associated with higher
factory utilization, and a $7 million reduction in fixed costs at Bredero
Shaw's Europe, Africa and Russia region.

    Current Quarter versus Q4 2008
    Revenue in the first quarter of the year in the Pipeline and Pipe
Services segment was 30.3% lower than the record levels achieved in the prior
quarter as a 35.7% increase at Canusa-CPS and a 1.2% increase at Guardian were
offset by quarter-over-quarter decreases at the other divisions in the
segment. Revenue in the quarter at Bredero Shaw decreased 35.6% from the
fourth quarter of last year as a result of lower small diameter pipe coating
volumes in North America and the impact of the winding down of several large
diameter pipe coating projects in the Middle East and Europe, Africa and
Russia regions. Revenue in the quarter at Shaw Pipeline Services decreased
45.3% from the prior quarter reflecting lower levels of offshore pipe girth
weld inspection activity while at Flexpipe Systems, revenue in the quarter
decreased 47.3% from the prior quarter, the result of lower demand for the
division's small diameter composite pipe systems due to lower drilling
activity in Western Canada and the United States and the build up of excessive
inventories of small diameter steel line pipe throughout North America.
    Operating income from continuing operations in the quarter was 25.1%
lower than the level achieved in the prior quarter as a result of the
reduction in revenue in the quarter partially offset by a quarter over quarter
1.4 percentage point improvement in operating margins. The first quarter
operating margin of 20.2%, compared to 18.8% in the fourth quarter of 2008,
was achieved despite the significant decrease in revenue with the improvement
attributable to increased pipe coating project contribution margins at Bredero
Shaw, the result of raw materials price reductions and improved manufacturing
efficiencies, together with lower fixed costs and a $6.8 million decrease in
property plant and equipment amortization expense.

    
    Petrochemical and Industrial

    -------------------------------------------------------------------------
    Three months ended                    Mar. 31      Dec. 31      Mar. 31
    (In thousands of Canadian dollars)     2009         2008         2008
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Revenue from continuing operations  $   29,318   $   33,001   $   38,137
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating income from continuing
     operations                         $      325   $    2,527   $    6,075
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Operating margin                           1.1%         7.7%        15.9%
    -------------------------------------------------------------------------
    

    Current Quarter versus Q1 2008
    In the Petrochemical and Industrial segment, revenue in the first quarter
of 2009 totaled $29.3 million and was 76.9% of the level in the first quarter
of last year, due to reduced business activity levels at both DSG-Canusa and
ShawFlex as a result of deteriorating conditions in industrial and automotive
markets in North America and Western Europe. Operating income from continuing
operations in the quarter for the segment totaled $325 thousand (1.1% of
revenue from continuing operations) compared to $6.1 million (15.9% of revenue
from continuing operations) in the first quarter of 2008 and reflected the
impact of the lower revenue in the period.

    Current Quarter versus Q4 2008
    Revenue for the segment in the quarter was 11.2% lower than the level in
the fourth quarter of last year reflecting the lower levels of business
activity in the quarter. Operating income in the quarter decreased $2.2
million from the prior quarter due to the impact of the decrease in revenue to
near break-even levels, partially offset by $1.1 million of fixed cost
reductions in the quarter.

    Financial and Corporate

    Financial and corporate costs consist of corporate office costs not
charged to the operating divisions and other non-operating items including
foreign exchange gains and losses on cash balances. Financial and corporate
costs for the quarter, before net foreign exchange gains of $1.4 million,
totaled $7.9 million compared to $6.1 million in the first quarter of last
year, before net foreign exchange gains of $3.1 million. The increase in
corporate costs reflects compensation and other costs associated with an
increase in personnel active in the deployment of the Company's improvement
programs.

    Interest Expense

    Net interest expense totaled $1.7 million in the quarter, compared to
interest expense of $87 thousand in the first quarter of 2008. The increase in
expense from the first quarter of 2008 was a result of lower average cash
balances due to the significant cash flows used in investing activities over
the preceding twelve months.

    Income Taxes

    Income tax expense related to continuing operations in the quarter was
$17.3 million, an effective rate of 35.4%, compared to $14.3 million or an
effective rate of 35.1% in the first quarter of last year and $17.5 million,
an effective rate of 23.8%, in the fourth quarter of 2008. The effective tax
rate in the quarter was higher than the Company's expected tax rate of 31.0%
as a result of foreign exchange capital losses for which the tax benefit was
not recognized, together with the impact of a $1.4 million increase to the
Company's income tax reserve relating to potential tax liabilities associated
with certain foreign jurisdictions.

    Cash Flow

    Cash provided by continuing operating activities in the quarter totaled
$38.7 million, compared to $76.8 million in the fourth quarter of 2008 and
cash used in continuing operating activities of $11.6 million in the first
quarter of 2008 with the changes reflecting the changes in income from
continuing operations as well as the movement in net working capital. During
the quarter, the change in non-cash working capital and foreign exchange was
an increase of $11.9 million primarily as a result of increased prepaid
project expenses and reduced taxes payable and deferred revenue.
    Cash used in continuing investing activities in the quarter totaled $14.0
million, compared to $29.1 million last quarter and $12.2 million in the first
quarter of 2008, and was comprised of capital expenditures of $14.1 million
partially offset by proceeds received on the disposal of property, plant and
equipment of $98 thousand. Major capital additions in the quarter included
$1.8 million to expand Guardian's drill pipe threading and machining capacity,
a $1.8 million capacity expansion at Flexpipe Systems, a $1.3 million
insulation pipe coating upgrade in Kuantan, Malaysia, and $1.4 million related
to DSG-Canusa's new facility in China.
    Cash used in continuing financing activities in the quarter totaled $18.7
million, compared to $50.4 million last quarter and $16.2 million in the first
quarter of 2008, and consisted of dividends paid to shareholders of $4.5
million and the repayment in bank indebtedness of $14.2 million.

    Other Comprehensive Income

    Other comprehensive income in the quarter totaled $7.3 million and was
comprised of an unrealized foreign currency translation gain, net of hedging
activities, resulting from the 0.8% weakening of the Canadian dollar versus
the U.S. dollar from the beginning of the quarter.

    Liquidity and Capitalization

    At March 31, 2009, the Company recorded a working capital ratio (the
ratio of current assets to current liabilities) of 1.85 to 1 compared to 1.65
to 1 at December 31, 2008. Operating working capital, excluding cash, cash
equivalents, bank indebtedness, the current portion of long-term debt, current
future taxes and working capital of discontinued operations, increased $13.4
million during the quarter to $194.2 million, reflecting increased prepaid
project expenses and lower taxes payable, and deferred revenue balances.

    Change in Accounting Policies

    The following are changes in the Company's accounting policies which came
into effect in the first quarter of 2009:

    a) Goodwill and Intangible Assets
    On January 1, 2009, the Company adopted CICA Handbook section 3064,
Goodwill and Intangible Assets. Also as of this date, as is required on
adoption of this section, the Company no longer applies Emerging Issues
Committee Abstract EIC-27, Revenues and Expenditures During the Pre-operating
Period. As required, this accounting standard has been adopted retrospectively
with restatement of prior year figures. The following adjustments were made to
the Company's consolidated financial statements as a result of adopting this
accounting standard:

    
    Change in Consolidated Balance Sheets:

                                                       As at        As at
    (in thousands of Canadian dollars)               Dec. 31,      Dec. 31,
                                                       2008          2007
    -------------------------------------------------------------------------
    Increase in inventories                        $     1,678   $     2,501
    Decrease in other assets                            (3,285)       (5,067)
    Increase in future taxes                               484           770
                                                   --------------------------
    Decrease in total assets                       $    (1,123)  $    (1,796)
                                                   --------------------------
                                                   --------------------------

    Future income taxes                            $         -   $         -
    Decrease in retained earnings                       (1,123)       (1,796)
                                                   --------------------------
                                                   --------------------------


    Change in Consolidated Statement of Income:

                                                          Three Months Ended
    (in thousands of Canadian dollars)                      March 31, 2008
    -------------------------------------------------------------------------
    Increase in cost of goods sold                                   $   300
    Decrease in income taxes                                             (90)
                                                          -------------------
    Increase in income from continuing operations                    $   210
                                                          -------------------
                                                          -------------------
    Increase in net income                                           $   210
                                                          -------------------
                                                          -------------------
    Earnings per share
    Basic
      Continuing operations                                          $  0.00
      Total                                                          $  0.00

    Diluted
      Continuing operations                                          $  0.00
      Total                                                          $  0.00
    

    The following is a description of the revised accounting policy adopted
by the Company as a result of implementing this accounting change:
    Costs incurred in the mobilization of project-specific plants for fixed
term projects are included in work-in-process inventories and are charged to
costs of goods sold on a percentage of completion basis. Such costs are to be
included in inventories only if incurred after the Company is awarded the
project and if directly related to the performance of the contract.

    b) Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities
    On January 1, 2009, the Company adopted EIC-173, Credit Risk and the Fair
Value of Financial Assets and Financial Liabilities. The adoption of this
accounting standard had no effect on the Company's consolidated financial
statements.

    International Financial Reporting Standards

    During 2008, the AcSB confirmed that publicly accountable enterprises,
including the Company, will be required to adopt International Financial
Reporting Standards ("IFRS") in place of GAAP for interim and annual reporting
purposes. The required changeover date is for fiscal years beginning on or
after January 1, 2011.
    The Company has commenced the process to transition to IFRS and has
developed a project plan, which was described in the Company's 2008 Annual
Report to Shareholders.
    The Company is currently engaged in the solution development phase of the
project, which involves the training of project team members and the
development of new IFRS accounting policies and implementation guidance. This
phase of the project is expected to be completed by the end of the fourth
quarter of 2009.
    During the implementation phase, the Company will execute the changes to
business processes, financial systems, accounting policies, disclosure
controls and internal controls over financial reporting that will be required
to implement IFRS. This phase of the project is expected to be completed by
the end of the second quarter of 2010.
    At this time, the impact on the Company's consolidated financial
statements is not reasonably determinable.

    Financial Instruments

    The following table sets out the notional amounts outstanding under
foreign exchange contracts, the average contractual exchange rates and the
settlement of these contracts as at March 31, 2009:

    
    Maturity                                                    Mar 31, 2009
    (in thousands)
    U.S. dollars sold for Canadian dollars
      Less than one year                                           US$12,000
      Weighted average rate                                           1.1099

      One year to two years                                         US$1,000
      Weighted average rate                                           1.2006

    Euros sold for U.S. dollars
      One year to two years                                       Euro 2,150
      Weighted average rate                                           1.4490
      Two year to three years                                     Euro 2,200
      Weighted average rate                                           1.4465
    

    At March 31, 2009, the Company had notional amounts of $23.3 million of
forward contracts outstanding (December 31, 2008 - $25.5 million) with the
fair value of the Company's net obligation from all foreign exchange forward
contracts totaling $1.0 million (December 31, 2008 - $1.5 million).

    Critical Accounting Estimates

    The preparation of the consolidated financial statements in conformity
with Canadian Generally Accepted Accounting Principles ("GAAP") requires
management to make estimates and assumptions that affect the amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenue and
expenses during the period. These estimates and assumptions are made with
management's best judgment given the information available at the time;
however, actual results could differ from the estimates. Critical estimates
used in preparing the consolidated financial statements were materially
unchanged during the quarter, as compared to those disclosed in the Company's
last annual Management's Discussion and Analysis contained in the Company's
2008 Annual Report.

    Risks and Uncertainties

    Operating in an international environment, servicing predominantly the
oil and gas industry, ShawCor faces a number of business risks and
uncertainties that could materially adversely affect the Company's
projections, businesses, results of operations and financial condition. There
were no material changes in the nature or magnitude of such business risks
during the quarter. A more complete outline of the risks and uncertainties
facing the Company are included in the annual Management's Discussion and
Analysis contained in the Company's 2008 Annual Report.

    Contractual Obligations

    There were no material changes to the Company's contractual obligations
during the quarter, other than those that would be expected in the ordinary
course of business.


    Summary of Quarterly Results

    The following is a summary of selected financial information for the nine
most recently completed quarters:

    
    (In thousands
     of Canadian
     dollars
     except per
     share
     amounts)        First       Second      Third       Fourth    Full Year
    -------------------------------------------------------------------------
    Revenue
     (Restated -
     see note
     below)
      2009        $  307,464  $        -  $        -  $        -  $        -
      2008           293,357     295,118     357,249     433,853   1,379,577
      2007           221,329     276,440     264,892     285,438   1,048,099

    Operating
     income from
     continuing
     operations
     (Restated -
     see note
     below)
      2009            50,434           -           -           -           -
      2008            40,919      27,189      52,315      75,588     196,011
      2007            27,074      39,764      52,149      43,081     162,068

    Income from
     continuing
     operations
     (Restated -
     see note
     below)
      2009            31,520           -           -           -           -
      2008            26,952      17,825      33,962      56,013     134,722
      2007            22,679      25,177      34,845      36,565     119,266

    Income (loss)
     from
     discontinued
     operations
     (Restated -
     see note
     below)
      2009                21           -           -           -           -
      2008               (69)     10,553         (82)        609      11,011
      2007               (55)        (48)        (59)    (30,300)    (30,462)

    Net income
     (Restated -
     see note
     below)
      2009            31,541           -           -           -           -
      2008            26,852      28,378      33,880      56,623     145,733
      2007            22,624      25,129      34,786       6,265      88,804

    Operating
     income from
     continuing
     operations
     per share
     (Classes A
     and B)
     (Restated -
     see note
     below)
    Basic
      2009              0.72           -           -           -           -
      2008              0.57        0.38        0.74        1.07        2.76
      2007              0.37        0.55        0.73        0.60        2.23

    Diluted
      2009              0.72           -           -           -           -
      2008              0.57        0.38        0.73        1.07        2.74
      2007              0.36        0.54        0.72        0.59        2.21

    Income from
     continuing
     operations
     per share
     (Classes A
     and B)
     (Restated -
     see note
     below)
    Basic
      2009              0.45           -           -           -           -
      2008              0.38        0.25        0.48        0.79        1.90
      2007              0.31        0.35        0.49        0.51        1.64

    Diluted
      2009              0.45           -           -           -           -
      2008              0.37        0.25        0.47        0.78        1.88
      2007              0.30        0.34        0.48        0.51        1.62

    Income
     (loss) from
     discontinued
     operations
     per share
     (Classes A
     and B)
     (Restated -
     see note
     below)
    Basic
      2009              0.00           -           -           -           -
      2008              0.00        0.15        0.00        0.01        0.16
      2007              0.00        0.00        0.00       (0.42)      (0.42)

    Diluted
      2009              0.00           -           -           -           -
      2008              0.00        0.15        0.00        0.01        0.15
      2007              0.00        0.00        0.00       (0.42)      (0.41)

    Net income
     per share
     (Classes A
     and B)
     (Restated -
     see note
     below)
    Basic
      2009              0.45           -           -           -           -
      2008              0.38        0.40        0.48        0.80        2.06
      2007              0.31        0.35        0.49        0.09        1.22

    Diluted
      2009              0.45           -           -           -           -
      2008              0.37        0.40        0.47        0.79        2.03
      2007              0.30        0.34        0.48        0.09        1.21

    Note: Quarterly revenue and operating income from continuing operations
    figures have been restated to reflect the change in accounting policy for
    deferred project costs adopted in Q1 2009. Refer to note 1 to the interim
    consolidated financial statements for the three months ended March 31,
    2009.
    

    The following are key factors affecting the comparability of quarterly
financial results.
    The Company's operations in the Pipeline and Pipe Services segment,
representing more than 90% of the Company's consolidated revenue, are largely
project-based. The nature and timing of projects can result in variability in
the Company's quarterly revenue and profitability. In addition, certain of the
Company's operations are subject to a degree of seasonality, particularly in
the Pipeline and Pipe Services market segment. The following are additional
key factors impacting the comparability of the quarterly information disclosed
above:

    
        The majority of the Company's revenue is transacted in currencies
        other than Canadian dollars, with a majority transacted in U.S.
        dollars. Changes in the rates of exchange between the Canadian dollar
        and other currencies could have a significant effect on the amount of
        this revenue when it is translated into Canadian dollars.
    

    Outstanding Share Capital

    As at April 30, 2009, the Company had 57,366,937 Class A Subordinate
Voting Shares ("Class A") outstanding and 13,060,209 Class B Multiple Voting
Shares ("Class B") outstanding. Each Class B share is convertible into a Class
A share at the option of the holder. In addition, as at April 30, 2009, the
Company had stock options outstanding to purchase up to 2,978,266 Class A
shares.

    Management's Health, Safety and Environmental Commitment

    The Company is committed to providing a safe and healthy workplace and
ensuring that all business activities are conducted in a manner that protects
the environment. This commitment includes designing and operating its plants
and individual processes in compliance with applicable government requirements
regulating the discharge of substances into the environment or otherwise
relating to the protection of the environment. The Company's program for
health, safety and environmental management is further described in the
Company's Annual Information Form under Health, Safety, and Environmental
Policy.

    Outlook

    The Company's consolidated order backlog at March 31, 2009, representing
the value of firm customer purchase orders expected to be completed within one
year, totaled $402.4 million, 11.7% lower than at the beginning of the
quarter, and reflected the completion of some large diameter pipe coating
projects in the quarter as well as the general softening in activity levels in
certain of the markets served by the Company. While the backlog may decline
further in subsequent quarters, bidding activity remains high and the Company
continues to pursue several large offshore pipe coating projects. These
projects, if awarded to the Company, could generate significant revenue growth
in 2010 and beyond.
    The Company's current outlook is for pipeline activity to decline
somewhat from the levels experienced in 2008 with full year 2009 consolidated
revenues for the Company expected to be slightly below the record levels
achieved in the prior year. However, the Company expects that operating
margins in 2009 will meet or exceed those achieved in 2008 as a result of
several initiatives including programs to reduce costs and improve
efficiencies.

    Forward Looking Information

    This document includes certain statements that reflect management's
expectations and objectives for ShawCor's future performance, opportunities
and growth which constitute forward-looking information under applicable
securities laws. Such statements, except to the extent that they contain
historical facts, are forward-looking and accordingly involve estimates,
assumptions, judgments and uncertainties. These statements may be identified
by the use of forward-looking terminology such as "may," "will," "should",
"anticipate," "expect", "believe", "predict", "estimate," "continue,"
"intend," "plan," and variations of these words or other similar expressions.
These statements are based on assumptions, estimates and analysis made by
ShawCor in light of its experience and perception of trends, current
conditions and expected developments as well as other factors believed to be
reasonable and relevant in the circumstances. Although ShawCor believes that
the expectations reflected in these forward-looking statements are based on
reasonable assumptions in light of currently available information, ShawCor
can give no assurance that such expectations will be achieved.
    Forward-looking statements involve known and unknown risks and
uncertainties that could cause actual results to differ materially from those
predicted, expressed or implied by the forward-looking statements. Significant
risks facing ShawCor include, but are not limited to: changes in global
economic activity and changes in energy supply and demand which impact on the
level of drilling activity and pipeline construction; political, economic and
other risks arising from ShawCor's international operations; compliance with
environmental, trade and other laws; liability claims; fluctuations in foreign
exchange rates; fluctuations in prices of raw materials, as well as other
risks and uncertainties.
    Other information relating to the Company, including its Annual
Information Form, is available on SEDAR at www.sedar.com.

    ShawCor will be hosting a Shareholder and Analyst conference call and
webcast on May 12, 2009 at 10:00 am ET to discuss the Company's first quarter
2009 financial results. Please visit our website at www.shawcor.com for future
details.

    
    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars except per share data)

    CONSOLIDATED STATEMENTS OF INCOME

                                                       Three Months Ended
                                                             March 31
                                                    -------------------------
                                                        2009         2008
                                                                    Restated
                                                                    - note 1
                                                    ------------ ------------
    Revenue                                         $   307,464  $   293,357
    Cost of goods sold                                  183,949      187,954
                                                    ------------ ------------

    Gross profit                                        123,515      105,403

    Selling, general and administrative expenses
     (notes 2 and 3)                                     55,865       53,008
    Amortization of property, plant and equipment        15,142       12,943
    Amortization of intangible assets                     1,095            -
    Foreign exchange losses (gains)                      (1,371)      (3,145)
    Research and development expenses                     2,350        1,678
                                                    ------------ ------------
    Operating income from continuing operations          50,434       40,919
    Interest income on short-term deposits                  235        1,452
    Interest expense on bank indebtedness                  (571)        (356)
    Interest expense on long-term debt                   (1,327)      (1,183)
                                                    ------------ ------------

    Income before income taxes and non-controlling
     interest                                            48,771       40,832
    Income taxes                                         17,251       14,340
                                                    ------------ ------------
    Income before non-controlling interest 	          31,520       26,492
    Non-controlling interest                                  -          429
                                                    ------------ ------------

    Income from continuing operations                    31,520       26,921
    Income (loss) from discontinued operations
     (note 4)                                                21          (69)
                                                    ------------ ------------

    Net income                                      $    31,541  $    26,852
                                                    ------------ ------------
                                                    ------------ ------------

    Earnings per shares, (note 19)
    Basic
      Continuing operations                         $      0.45  $      0.38
      Discontinued operations                                 -            -
                                                    ------------ ------------
      Total                                         $      0.45  $      0.38
                                                    ------------ ------------
                                                    ------------ ------------

    Diluted
      Continuing operations                         $      0.45  $      0.37
      Discontinued operations                                 -            -
                                                    ------------ ------------
      Total                                         $      0.45  $      0.37
                                                    ------------ ------------
                                                    ------------ ------------

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

    SEGMENTED INFORMATION                              Three Months Ended
                                                           March 31
                                                    -------------------------
                                                        2009         2008
                                                                    Restated
                                                                    - note 1
                                                    ------------ ------------
    Revenue
      Pipeline and Pipe Services                    $   279,951  $   255,794
      Petrochemical and Industrial                       29,318       38,137
      Intersegment Eliminations                          (1,805)        (574)
                                                    ------------ ------------
                                                    $   307,464  $   293,357
                                                    ------------ ------------
                                                    ------------ ------------

    Income (loss) from operations
      Pipeline and Pipe Services                    $    56,646  $    37,822
      Petrochemical and Industrial                          325        6,075
      Financial and Corporate                            (6,537)      (2,978)
                                                    ------------ ------------
                                                    $    50,434  $    40,919
                                                    ------------ ------------
                                                    ------------ ------------



    SHAWCOR  LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars)

    CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

                                                       Three Months Ended
                                                             March 31
                                                    -------------------------
                                                        2009         2008
                                                                    Restated
                                                                    - note 1
                                                    ------------ ------------

    Balance at beginning of period                  $   601,407  $   489,836
    Transitional adjustment (note 1)                          -       (1,796)
                                                    ------------ ------------
    Adjusted balance at beginning of year               601,407      488,040
    Net income                                           31,541       26,852
                                                    ------------ ------------
                                                        632,948      514,892


    Excess of purchase price paid over stated value
     of shares (note 11)                                      -      (11,235)
    Dividends declared                                   (4,500)      (4,015)
                                                    ------------ ------------
    Balance at end of period                        $   628,448  $   499,642
                                                    ------------ ------------
                                                    ------------ ------------

    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                       Three Months Ended
                                                             March 31
                                                    -------------------------
                                                        2009         2008
                                                                    Restated
                                                                    - note 1
                                                    ------------ ------------

    Net income                                      $    31,541  $    26,852
    Other comprehensive income (loss), net of
     income taxes:
      Unrealized gain on translating financial
       statements of self-sustaining foreign
       operations                                         7,886       22,103
      Loss on hedges of unrealized foreign currency
       translation                                         (727)      (3,278)
      Income tax benefit                                    124            -
                                                    ------------ ------------
    Unrealized foreign currency translation gain,
     net of hedging activites                             7,283       18,825
                                                    ------------ ------------
      Unrealized loss on available-for-sale
       financial assets arising during the period          (336)        (911)
      Unrealized loss on available-for-sale
       financial assets transferred to net income in
       the current period                                   336        1,498
      Income tax expense transferred to net income
       in the period                                          -          253
                                                    ------------ ------------
    Change in unrealized loss on available-for-sale
     financial assets                                         -          840
                                                    ------------ ------------
      Gain on derivatives designated as cash flow
       hedges in prior periods transferred to net
       income in the current period                           -       (1,508)
      Income tax expenses transferred to net income
       in the current period                                  -          512
                                                    ------------ ------------
    Change in loss on derivatives designated as cash
     flow hedges                                              -         (996)
                                                    ------------ ------------

    Other comprehensive income                            7,283       18,669
                                                    ------------ ------------

    Comprehensive income                            $    38,824  $    45,521
                                                    ------------ ------------
                                                    ------------ ------------



    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars)

    CONSOLIDATED STATEMENTS OF CASH FLOW

                                                       Three Months Ended
                                                             March 31
                                                        2009         2008
                                                                    Restated
                                                                    - note 1
                                                    ------------ ------------

    Operating activities:
      Income from continuing operations             $    31,520  $    26,921
      Items not requiring an outlay of cash:
        Amortization of property, plant and
         equipment                                       15,142       12,943
        Amortization of intangible assets                 1,095            -
        Amortization of transaction costs                   110          110
        Asset retirement obligation expense (note 10)     1,788        1,066
        Stock-based compensation (note 2)                   848          887
        Future income taxes                                 563       (3,734)
        Loss (gain) on disposal of property, plant
         and equipment                                      144           (9)
        Impairment of available-for-sale financial
         asset (note 7)                                     336        1,498
        Non-controlling interest in earnings of
         subsidiaries                                         -         (429)
      Settlement of asset retirement obligations
       (note 10)                                         (1,947)        (959)
      Change in employee future benefits                  1,085          766
      Change in non-cash working capital and foreign
       exchange                                         (11,939)     (50,629)
                                                    ------------ ------------
    Cash provided by (used in) continuing operating
     activities                                          38,745      (11,569)
                                                    ------------ ------------

    Investing activities:
      Purchases of property, plant and equipment        (14,143)     (12,261)
      Proceeds on disposal of property, plant and
       equipment                                             98           32
                                                    ------------ ------------
    Cash used in continuing investing activities        (14,045)     (12,229)
                                                    ------------ ------------

    Financing activities:
      Increase (decrease) in bank indebtedness          (14,247)           9
      Issue of shares (note 11)                              29          459
      Purchase of shares for cancellation                     -      (12,642)
      Dividends paid to shareholders                     (4,500)      (4,015)
                                                    ------------ ------------
    Cash used in continuing financing activities        (18,718)     (16,189)
                                                    ------------ ------------

    Foreign exchange on foreign cash and cash
     equivalents                                            521        5,718
                                                    ------------ ------------
    Net cash provided by (used in) continuing
     operations                                           6,503      (34,269)

    Net cash provided by (used in) discontinued
     operations (note 4)                                   (112)       1,260

    Cash and cash equivalents at beginning of period     78,932      175,017
                                                    ------------ ------------
    Cash and cash equivalents at end of period      $    85,323  $   142,008
                                                    ------------ ------------
                                                    ------------ ------------



    SHAWCOR LTD.
    INTERIM FINANCIAL INFORMATION (Unaudited)
    (in thousands of Canadian dollars)

    CONSOLIDATED BALANCE SHEETS

                                                      March 31   December 31
                                                        2009         2008
                                                                    Restated
                                                                    - Note 1
                                                    ------------ ------------
    Assets
    Current assets
      Cash and cash equivalents (note 5)            $    85,323  $    78,932
      Accounts receivable                               287,707      307,933
      Taxes receivable                                    9,488        9,261
      Inventories                                       153,588      152,284
      Prepaid expenses                                   18,399       14,635
      Derivative financial instruments                      338          523
      Current future income taxes                         3,002        3,532
      Current assets of discontinued operation
       (note 4)                                          12,354       12,256
                                                    ------------ ------------
                                                        570,199      579,356
    Property, plant and equipment, net                  306,539      307,735
    Goodwill                                            234,564      229,549
    Intangible assets (note 6)                           66,057       66,452
    Future income taxes                                  31,780       31,173
    Derivative financial instruments                        307            -
    Other assets (note 7)                                11,824       13,024
                                                    ------------ ------------
                                                    $ 1,221,270  $ 1,227,289
                                                    ------------ ------------
                                                    ------------ ------------

    Liabilities
    Current liabilities
      Bank indebtedness (note 8)                    $     1,171  $    15,418
      Accounts payable and accrued liabilities          173,775      193,675
      Taxes payable                                      51,390       53,405
      Derivative financial instruments                    1,623        2,049
      Deferred revenues                                  48,517       54,692
      Current portion of long-term debt                  30,914       30,672
      Current liabilities of discontinued operation
       (note 4)                                             420          455
                                                    ------------ ------------
                                                        307,810      350,366
    Long-term debt                                       61,150       60,554
    Future income taxes                                  74,789       73,939
    Derivative financial instruments                         33            -
    Other non-current liabilities (note 9)                9,835        9,978
                                                    ------------ ------------
                                                        453,617      494,837
                                                    ------------ ------------
    Shareholders' Equity
    Capital stock (note 11)                             202,111      202,073
    Contributed surplus (note 12)                        15,351       14,512
    Retained earnings                                   628,448      601,407
    Accumulated other comprehensive loss (note 13)      (78,257)     (85,540)
                                                    ------------ ------------
                                                        767,653      732,452
                                                    ------------ ------------
                                                    $ 1,221,270  $ 1,227,289
                                                    ------------ ------------
                                                    ------------ ------------


    ShawCor Ltd.

    Notes to the Consolidated Financial Statements (Unaudited)

    1.  Accounting policies

    The accompanying unaudited interim consolidated financial statements of
    ShawCor Ltd. (the "Company") have been prepared in accordance with
    Canadian generally accepted accounting principles ("GAAP") for the
    preparation of interim financial statements. They do not include all of
    the information and disclosures required by GAAP for annual consolidated
    financial statements. Except as noted below, these unaudited interim
    consolidated financial statements have been prepared in accordance with
    accounting policies outlined in the Company's audited consolidated
    financial statements for the year ended December 31, 2008. Accordingly,
    these interim consolidated financial statements should be read in
    conjunction with the Company's annual consolidated financial statements.

    a) Goodwill and Intangible Assets

    On January 1, 2009, the Company adopted CICA Handbook section 3064,
    Goodwill and Intangible Assets. Also as of this date, as is required on
    adoption of this section, the Company no longer applies Emerging Issues
    Committee Abstract EIC-27, Revenues and Expenditures During the
    Pre-operating Period. As required, this accounting standard has been
    adopted retrospectively with restatement of prior year figures. The
    following adjustments were made to the Company's consolidated financial
    statements as a result of adopting this accounting standard:

    Change in Consolidated Balance Sheets:

                                                       As at        As at
                                                     Dec. 31,     Dec. 31,
    (in thousands of Canadian dollars)                  2008         2007
    -------------------------------------------------------------------------
    Increase in inventories                         $     1,678  $     2,501
    Decrease in other assets                             (3,285)      (5,067)
    Increase in future taxes                                484          770
                                                    -------------------------
    Decrease in total assets                        $    (1,123) $    (1,796)
                                                    -------------------------
                                                    -------------------------

    Future income taxes                             $         -  $         -
    Decrease in retained earnings                        (1,123)      (1,796)
                                                    -------------------------
    Decrease in total liabilities and shareholders'
     equity                                         $    (1,123) $    (1,796)
                                                    -------------------------
                                                    -------------------------

    Change in Consolidated Statement of Income:

                                             Three Months Ended
    (in thousands of Canadian dollars)           March 31, 2008
    ------------------------------------------------------------
    Increase in cost of goods sold                  $       300
    Decrease in income taxes                                (90)
                                                    ------------
    Increase in income from continuing operations   $       210
                                                    ------------
                                                    ------------
    Increase in net income                          $       210
                                                    ------------
                                                    ------------
    Earnings per share
    Basic
      Continuing operations               	     $      0.00
      Total                                         $      0.00

    Diluted
      Continuing operations                         $      0.00
      Total                                         $      0.00

    The following is a description of the revised accounting policy adopted
    by the Company as a result of implementing this accounting change:

    Costs incurred in the mobilization of project-specific plants for fixed
    term projects are included in work-in-process inventories and are charged
    to costs of goods sold on a percentage of completion basis. Such costs
    are to be included in inventories only if incurred after the Company is
    awarded the project and if directly related to the performance of the
    contract.

    b) Credit Risk and the Fair Value of Financial Assets and Financial
       Liabilities

    On January 1, 2009, the Company adopted EIC-173, Credit Risk and the Fair
    Value of Financial Assets and Financial Liabilities. The adoption of this
    accounting standard had no effect on the Company's consolidated financial
    statements.

    2.  Stock-based compensation

    The Board of Directors approved the granting of 490,200 stock options on
    February 24, 2009 and 20,000 on March 12, 2009 under the 2001 Employee
    Plan. The total fair value of the stock options granted during the three
    months ended March 31, 2009 was $2.6 million and the weighted average
    fair value of the options was $5.58 (2008 - $10.57), calculated using the
    Black-Scholes pricing model with the following assumptions:

    -------------------------------------------------------------------------
                                                        2009         2008
    -------------------------------------------------------------------------
    Expected life of options ....................... 6.25 years   6.25 years
    -------------------------------------------------------------------------
    Expected stock price volatility ................     34.68%       29.30%
    -------------------------------------------------------------------------
    Expected dividend yield ........................      1.55%        0.75%
    -------------------------------------------------------------------------
    Risk-free interest rate ........................      2.38%        3.68%
    -------------------------------------------------------------------------

    The fair value of options granted under the 2001 Employee Plan will be
    amortized to compensation expense over the 5 year vesting period of
    options. The compensation cost from the continuing amortization of
    granted stock options for the three months ended March 31, 2009, included
    in selling, general and administrative expenses, is $848 thousand,
    (March 31, 2008 - $887 thousand).

    3.  Employee future benefits

    The Company's cost under both defined benefit and defined contribution
    arrangements included in selling, general and administrative expenses for
    the three months ended March 31, 2009 is $2.8 million (March 31, 2008 -
    $2.4 million).

    4.  Discontinued operations

    On November 2, 2004, the Company announced its decision to close the
    Mobile, Alabama pipe coating facility (the "Mobile Facility") and by
    December 31, 2005, operations at the Mobile Facility had ceased. The
    Company adopted discontinued operation accounting treatment for the
    Mobile Facility in 2005. The Mobile Facility was part of the Pipeline and
    Pipe Services market segment.

    The following table summarizes the financial results and cash flows from
    discontinued operations for the three months ended March 31, 2009 and
    2008 and the asset and liabilities as of those dates:

                                                  Three Months Ended Mar. 31
     (in thousands of Canadian dollars)                 2009         2008
    -------------------------------------------------------------------------

     Revenue                                        $         -  $         -
                                                    -------------------------

     Income (loss) from operations                           21          (69)
     Interest expense                                         -
                                                    -------------------------
     Income (loss) from discontinued operations
      before income taxes                                    21          (69)
     Income tax recovery                                      -            -
                                                    -------------------------
     Income (loss) from discontinued operations     $        21  $       (69)
                                                    -------------------------
                                                    -------------------------

     Cash flow used in operating activities         $      (112) $     1,260
     Cash flow from (used in) investing activities            -            -
                                                    -------------------------
     Cash flow used in operating activities         $      (112) $     1,260
                                                    -------------------------
                                                    -------------------------

     Current assets                                      12,354       17,029
     Property, plant and equipment, net                       -            -
     Current liabilities                                    420       53,318


    5.  Cash and cash equivalents

                                                      Mar. 31      Dec. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------

    Cash                                            $    85,323  $    78,932
    Cash equivalents                                          -            -
                                                    -------------------------
                                                    $    85,323  $    78,932
                                                    -------------------------
                                                    -------------------------

    6. Intangible assets

                                                      Mar. 31      Dec. 31
                                                        2009         2008
                                                                    Restated
    (in thousands of Canadian dollars)                              - note 1
    -------------------------------------------------------------------------

    Cost
    Intellectual property with limited life         $    57,576  $    57,576
    Intangible assets with limited life                   9,547        8,847
    Intangible assets with indefinite life                1,931        1,931
                                                    -------------------------
                                                    $    69,054  $    68,354
                                                    -------------------------

     Accumulated amortization                             2,997        1,902
                                                    -------------------------
                                                    $    66,057       66,452
                                                    -------------------------
                                                    -------------------------

    Intellectual property represents the costs of certain technology and
    know-how and patents obtained in acquisitions. Intangible assets include
    trademarks, brand names and customer relationships obtained in
    acquisitions.


    7.  Other assets

                                                      Mar. 31      Dec. 31
                                                        2009         2008
                                                                    Restated
    (in thousands of Canadian dollars)                              - note 1
    -------------------------------------------------------------------------

    Long-term investment                            $        24  $       360
    Long-term prepaid expenses                            5,806        5,931
    Accrued employee future benefit asset                 5,994        6,733
                                                    -------------------------
                                                    $    11,824  $    13,024
                                                    -------------------------
                                                    -------------------------

    Long-term investment at March 31, 2009 represents an investment in
    Garneau Inc., a Canadian-based, publicly traded pipe coating company. The
    Company has reviewed the 2008 financial performance of Garneau, as
    outlined in its public filings, and the protracted decline in its share
    price and has concluded that the decrease in fair value, based on quoted
    market prices, of the investment from original cost is other than
    temporary. The Company has recorded a charge to selling, general and
    administrative expenses, in the financial and corporate segment, during
    the three months ended March 31, 2009 of $336 thousand (March 31, 2008 -
    $1.5 million).

    8.  Bank indebtedness

    At March 31, 2009, the Company had total operating credit lines of
    $295.8 million (December 31, 2008 - $293.5 million), of which $79.9
    million has been drawn for various standby letters of credit for
    performance, bid and surety bonds (December 31, 2008 - $81.5 million) and
    bank indebtedness of $1.2 million (December 31, 2008 - $15.4), to yield
    unutilized credit facilities of $215.9 million (December 31, 2008 -
    $198.0 million), excluding the Company's proportionate share of the bank
    indebtedness of its joint venture, Arabian Pipecoating Company Limited.


    9.  Other non-current liabilities

                                                      Mar. 31      Dec. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------

    Non-current asset retirement obligations
     (note 10)                                      $     6,190  $     6,680
    Accrued employee future benefit obligations           3,645        3,298
                                                    -------------------------
                                                    $     9,835  $     9,978
                                                    -------------------------
                                                    -------------------------

    10. Assets retirement obligations

                                                  Three Months Ended Mar. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------
    Balance, at beginning of year                   $    22,606  $    14,082
    Liabilities settled in year                          (1,947)        (959)
    Liabilities incurred in year                            902            0
    Revisions to cash flow estimates                        597          888
    Accretion expense                                       289          178
    Translation of self-sustaining foreign
     operations                                             886          432
                                                    -------------------------
                                                    $    23,333  $    14,621
                                                    -------------------------
                                                    -------------------------

    Asset retirement obligations are included in the consolidated balance
    sheets as follows:

                                                      Mar. 31      Dec. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------

    Account payable and accrued liabilities         $    17,143  $    15,926
    Other non-current liabilities                         6,190        6,680
                                                    -------------------------
                                                    $    23,333  $    22,606
                                                    -------------------------
                                                    -------------------------

    The total undiscounted cash flows which are estimated to be required to
    settle all asset retirement obligations is $26.5 million (December 31,
    2008 - $24.0 million) and the credit-adjusted risk-free rates at which
    the estimated cash flows have been discounted range between 5.11% and
    7.0%.

    11.  Capital stock

    The following shares were outstanding as at March 31, 2009 and
    December 31, 2008:

    Captial Stock
    (in thousands of Canadian dollars except number of share information)
    -------------------------------------------------------------------------
                                                   Mar. 31 2009  Dec. 31 2008
    -------------------------------------------------------------------------

    Number of shares:  Class A
    Balance, begining of the period                  57,358,537   58,234,570
    Issued - stock options                                2,400      113,234
    Conversions Class B to Class A                            -       17,933
    Purchase - normal courseissuer bid                        -   (1,007,200)
    -------------------------------------------------------------------------
    Balance, end of the period                       57,360,937   57,358,537
    -------------------------------------------------------------------------
    Number of shares: Class B                        13,060,209   13,060,209
    -------------------------------------------------------------------------
    Total number of shares                           70,421,146   70,418,746
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Stated value:
    Balance, begining of the period                 $   201,070  $   202,248
    Issued - stock options                                   29        1,763
    Conversions Class B to Class A                            -            1
    Purchase - normal course issuer bid                       -       (3,518)
    Compensation cost on exercised options                    9          576
    -------------------------------------------------------------------------
    Balance, end of the period                          201,108      201,070
    -------------------------------------------------------------------------
    Stated value: Class B                                 1,003        1,003
    -------------------------------------------------------------------------
    Total stated value                              $   202,111  $   202,073
    -------------------------------------------------------------------------

    During the three months ended March 31, 2009, the Company repurchased and
    cancelled nil Class A Subordinated Voting Shares ("Class A shares")
    (March 31, 2008 - 405,000) under the terms of a Normal Course Issuer Bid
    ("NCIB"). The excess of cost over stated capital of the acquired shares,
    which for the three months ended March 31, 2009 totaled $nil (March 31,
    2008 - $11.2 million), was charged to retained earnings.

    12. Contributed surplus

                                                       Three Months Ended
                                                             Mar. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------

    Balance, beginning of period                    $    14,512  $    11,729
    Adjustment for stock-based compensation                   -            -
    Stock compensation expense (note 2)                     848          887
    Fair value of stock options exercised                    (9)        (201)
                                                    -------------------------
    Balance, end of period                          $    15,351  $    12,415
                                                    -------------------------
                                                    -------------------------

    13. Accumulated other comprehensive loss

                                                      Mar. 31      Dec. 31
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------

    Unrealized foreign currency translation losses,
     net of hedging activities                       $  (78,257) $   (85,540)
    Unrealized loss on available-for-sale financial
     asset                                                    -            -
    Gain on derivatives designated as cash flow
     hedges                                                   -            -
                                                    -------------------------
    Balance, at end of period                       $   (78,257) $   (85,540)
                                                    -------------------------
                                                    -------------------------

    14. Stock option plans

    A summary of the status of the Company's stock option plans and changes
    during the period are presented below:

    -------------------------------------------------------------------------
                              Mar. 31, 2009               Dec. 31, 2008
    -------------------------------------------------------------------------
                                        Weighted                    Weighted
                                         Average                     Average
                                        Exercise                    Exercise
                         Total Share       Price   Total Shares        Price
    -------------------------------------------------------------------------
    Balance outstanding,
     beginning of year     2,470,466       19.14      2,173,980        17.24
    -------------------------------------------------------------------------
    Granted                 510,200        15.58        428,600        30.03
    -------------------------------------------------------------------------
    Exercised                (2,400)       12.27       (113,234)       15.56
    -------------------------------------------------------------------------
    Forfeited                     -            -        (16,880)       19.24
    -------------------------------------------------------------------------
    Expired                       -            -         (2,000)       15.94
    -------------------------------------------------------------------------
    Balance outstanding,
     end of period        2,978,266        18.77      2,470,466        19.14
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                             Options Outstanding
    -------------------------------------------------------------------------
                                        Weighted average
                                               remaining
    Range of exercise    Outstanding at      contractual   Weighted average
    prices               March 31, 2009    life in years     exercise price
    -------------------------------------------------------------------------
    $10.00 to $15.00            472,566             4.28             $12.64
    -------------------------------------------------------------------------
    $15.01 to $20.00          1,691,300             6.55             $16.30
    -------------------------------------------------------------------------
    $20.01 to $25.00             40,000             6.16             $20.90
    -------------------------------------------------------------------------
    $25.01 to $30.00            744,400             8.29             $27.62
    -------------------------------------------------------------------------
    $30.01 to $35.00             30,000             8.76             $31.77
    -------------------------------------------------------------------------
                              2,978,266
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
                             Options Outstanding
    -------------------------------------------------------------------------
                                        Weighted average
                                               remaining
    Range of exercise    Outstanding at      contractual   Weighted average
    prices            Demember 31, 2008    life in years     exercise price
    -------------------------------------------------------------------------
    $10.00 to $15.00            474,966             4.41             $12.63
    -------------------------------------------------------------------------
    $15.01 to $20.00          1,181,100             5.41             $16.84
    -------------------------------------------------------------------------
    $20.01 to $25.00             40,000             6.50             $20.90
    -------------------------------------------------------------------------
    $25.01 to $30.00            744,400             8.54             $27.62
    -------------------------------------------------------------------------
    $30.01 to $35.00             30,000             9.01             $31.77
    -------------------------------------------------------------------------
                              2,470,466
    -------------------------------------------------------------------------

    15. Financial instruments and financial risk management

    a) Categories of Financial Assets and Financial Liabilities

    Under Canadian GAAP, financial instruments are classified into one of the
    following categories: held-for-trading, held-to-maturity investments,
    loans and receivables, available-for-sale financial assets, derivatives
    and other financial liabilities. The Company has classified its financial
    instruments as follows:

    -------------------------------------------------------------------------
                                                      Mar. 31,     Dec. 31,
    (in thousands of Canadian dollars)                  2009         2008
    -------------------------------------------------------------------------
    Financial assets:
    -------------------------------------------------------------------------
      Held for trading, measured at fair value
    -------------------------------------------------------------------------
        Cash                                        $    85,323  $    78,932
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Loans and receivables, recorded at amortized cost
    -------------------------------------------------------------------------
      Accounts receivable                               287,707      307,933
    -------------------------------------------------------------------------
      Taxes receivable                                    9,488        9,261
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Available for sale, measured at fair value
    -------------------------------------------------------------------------
      Long-term investments                                  24          360
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Derivatives, measured at fair value
    -------------------------------------------------------------------------
      Derivative financial instruments                   (1,011)      (1,526)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Financial liabilities:
    -------------------------------------------------------------------------
      Other liabilities, recorded at amortized cost:
    -------------------------------------------------------------------------
        Bank indebtedness                                 1,171       15,418
    -------------------------------------------------------------------------
        Accounts payable and accrued liabilities        173,775      193,675
    -------------------------------------------------------------------------
        Taxes payable                                    51,390       53,405
    -------------------------------------------------------------------------
        Current portion of long-term debt                30,914       30,672
    -------------------------------------------------------------------------
        Long-term debt                                   61,150       60,554
    -------------------------------------------------------------------------

    The Company has determined the estimated fair values of its financial
    instruments based on appropriate valuation methodologies; however,
    considerable judgment is required to develop these estimates. The fair
    values of the Company's financial instruments are not materially
    different from their carrying values. The Company's Senior Notes with a
    carrying value of $92.1 million (December 31, 2008 - $91.2 million) has a
    fair value estimated to be $91.8 million (December 31, 2008 - $90.9
    million), based on current interest rates for debt with similar terms and
    maturities.


    b) Foreign Exchange Forward Contracts and Other Hedging Arrangements

    The Company utilizes financial instruments to manage the risk associated
    with foreign exchange rates. The Company formally documents all
    relationships between hedging instruments and the hedge items, as well as
    its risk management objective and strategy for undertaking various hedge
    transactions.


    The following table sets out the notional amounts outstanding under
    foreign exchange contracts, the average contractual exchange rates and
    the settlement of these contracts as at March 31, 2009:

    -------------------------------------------------------------------------
    (in thousands)                                              Mar 31, 2009
    -------------------------------------------------------------------------
    U.S. dollars sold for Canadian dollars
    -------------------------------------------------------------------------
      Less than one year                                           US$12,000
    -------------------------------------------------------------------------
      Weighted average rate                                           1.1099
    -------------------------------------------------------------------------
      One year to two years                                         US$1,000
    -------------------------------------------------------------------------
      Weighted average rate                                           1.2006
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Euros sold for U.S. dollars
    -------------------------------------------------------------------------
      One year to two years                                       Euro 2,150
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4490
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
      Two year to three years                                     Euro 2,200
    -------------------------------------------------------------------------
      Weighted average rate                                           1.4465
    -------------------------------------------------------------------------

    At March 31, 2009, the Company had notional amounts of $23.3 million of
    forward contracts outstanding (December 31, 2008 - $25.5 million) with
    the fair value of the Company's net obligation from all foreign exchange
    forward contracts totaling $1.0 million (December 31, 2008 - $1.5
    million).

    c) Financial Risk Management

    The Company's operations expose it to a variety of financial risks
    including: market risk (including foreign exchange and interest rate
    risk), credit risk and liquidity risk. The Company's overall risk
    management program focuses on the unpredictability of financial markets
    and seeks to minimize potential adverse effects on the Company's
    financial position and financial performance. Risk management is the
    responsibility of Company management. Material risks are monitored and
    are regularly reported to the Board of Directors.

    Foreign exchange risk

    The majority of the Company's business is transacted outside of Canada
    through subsidiaries operating in several countries. The net investments
    in these subsidiaries as well as their revenue, operating expenses and
    non-operating expenses are based in foreign currencies. As a result, the
    Company's consolidated revenue, expenses and financial position, may be
    impacted by fluctuations in foreign exchange rates as these foreign
    currency items are translated into Canadian dollars. As of March 31,
    2009, fluctuations of +/- 5% in the Canadian dollar, relative to those
    foreign currencies, would impact the Company's consolidated revenue,
    operating income from continuing operations and income from continuing
    operations for the three months then ended by approximately $11.2
    million, $4.7 million and $4.4 million, respectively, prior to hedging
    activities. In addition, such fluctuations would impact the Company's
    consolidated total assets, consolidated total liabilities and
    consolidated total shareholders' equity by $73.1 million, $26.0 million
    and $47.1 million, respectively. The Company utilizes foreign exchange
    forward contracts to manage foreign exchange risk from its underlying
    customer contracts. The Company does not enter into foreign exchange
    contracts for speculative purposes.

    The Company's 5.11% Senior Notes and associated interest expense are
    denominated in U.S. dollars. Fluctuations in the exchange rate between
    the Canadian and U.S. dollar would impact the carrying value of the Notes
    in terms of Canadian dollars as well as the amount of interest expense
    when translated into Canadian dollars. Effective July 3, 2003, the
    Company designated the Senior Notes as a hedge of a portion of its net
    investment in the Company's U.S. dollar based operations. Gains and
    losses from the translation of this debt are not included in the income
    statement, but are shown in accumulated other comprehensive income. As of
    March 31, 2009, fluctuations of +/- 5% in the Canadian dollar, relative
    to the U.S. dollar, would impact the Company's accumulated other
    comprehensive income by $3.8 million for the three months then ended.

    The objective of the Company's foreign exchange risk management
    activities is to minimize transaction exposures associated with the
    Company's foreign currency-denominated cash streams and the resulting
    variability of the Company's earnings. The Company utilizes foreign
    exchange forward contracts to manage this foreign exchange risk. The
    Company does not enter into foreign exchange contracts for speculative
    purposes. With the exception of the Company's U.S. dollar based
    operations, the Company does not hedge translation exposures.

    Interest rate risk

    The following table summarizes the Company's exposure to interest rate
    risk at March 31, 2009:

    -------------------------------------------------------------------------
    (in thousands of Canadian dollars)             Fixed interest
                                                  rate maturing in
    -------------------------------------------------------------------------
                                      Floating    1 year   Greater
                                          rate   or less      than
                                                            1 year     Total
    -------------------------------------------------------------------------
    Financial assets
      Cash and cash equivalents....... $85,323         -         -   $85,323
    -------------------------------------------------------------------------
    Total............................. $85,323         -         -   $85,323
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average fixed rate of
     cash equivalents.................       -         -         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Financial liabilities
      Bank indebtedness............... $ 1,171         -         -   $ 1,171
    -------------------------------------------------------------------------
      Current portion of long-term
       debt...........................       -   $30,914         -   $30,914
    -------------------------------------------------------------------------
      Long-term debt..................       -         -   $61,150   $61,150
    -------------------------------------------------------------------------
    Total............................. $ 1,171   $30,914   $61,150   $93,235
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average fixed rate of
     debt.............................       -      5.11%     5.11%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    The Company's interest rate risk arises primarily from its floating rate
    bank indebtedness, and is not currently considered to be material.

    Credit risk
    Credit risk arises from cash and cash equivalents held with banks,
    forward foreign exchange contracts, as well as credit exposure of
    customers, including outstanding accounts receivable. The maximum credit
    risk is equal to the carrying value of the financial instruments.

    The objective of managing counter party credit risk is to prevent losses
    in financial assets. The Company is subject to considerable concentration
    of credit risk since the majority of its customers operate within the
    global energy industry and are therefore affected to a large extent by
    the same macroeconomic conditions and risks. The Company manages this
    credit risk by assessing the credit quality of all counter parties,
    taking into account their financial position, past experience and other
    factors. Management also establishes and regularly reviews credit limits
    of counter parties and monitors utilization of those credit limits on an
    ongoing basis.

    The carrying value of accounts receivable are reduced through the use of
    an allowance for doubtful accounts and the amount of the loss is
    recognized in the income statement with a charge to selling, general and
    administrative expenses.  When a receivable balance is considered to be
    uncollectible, it is written off against the allowance for doubtful
    accounts.  Subsequent recoveries of amounts previously written off are
    credited against selling, general and administrative expenses.

    The aging of trade accounts receivable and the balance of the allowance
    for doubtful accounts as of March 31, 2009 are as follows:


    (in thousands of Canadian dollars)                 Mar. 31,      Dec. 31,
                                                          2009          2008
    -----------------------------------------------------------  ------------
    Not past due                                   $   199,787   $   246,758
    Past due 1 to 30 days                               61,536        41,433
    Past due 31 to 60 days                              14,437        12,177
    Past due 61 to 90 days                               7,653         5,295
    Past due for more than 90 days                      11,301         8,507
                                                   ------------  ------------
    Total trade receivables                            294,714       314,170
    Less: allowance for doubtful accounts                7,007         6,237
                                                   ------------  ------------
    Net receivables                                $   287,707   $   307,933
                                                   ------------  ------------
                                                   ------------  ------------

    The following is an analysis of the change in the allowance for doubtful
    accounts for the three months ended March 31, 2009 and 2008:

                                                   Three Months Ended Mar. 31
    (in thousands of Canadian dollars)                 2009          2008
    -----------------------------------------------------------  ------------
    Balance, beginning of period                   $     6,237   $     4,165
    Bad debt expense                                     1,156         1,082
    Write-offs of bad debts                               (336)           (1)
    Recovery of previously written-off amounts              23             -
    Impact of change in foreign exchange rates             (73)           91
                                                   ------------  ------------
    Balance, end of period                         $     7,007   $     5,337
                                                   ------------  ------------
                                                   ------------  ------------

    Liquidity Risk
    The Company's objective in managing liquidity risk is to maintain
    sufficient, readily available cash reserves in order to meet its
    liquidity requirements at any point in time. The Company achieves this by
    maintaining sufficient cash and cash equivalents and through the
    availability of funding from committed credit facilities. As of March 31,
    2009, the Company has cash and cash equivalents totaling $85.3 million
    (December 31, 2008 - $78.9 million) and had unutilized lines of credit
    available to use of $215.9 million (December 31, 2008 - $198.0 million).
    The following are the contractual maturities of the Company's financial
    liabilities as of March 31, 2009:

    (in thousands
     of Canadian
     dollars)                   30 to     90 to             Greater
                  Less than        90       365      1 to      than
                    30 days      days      days   5 years   5 years     Total
    -------------------------------------------------------------------------
    Accounts
     payable and
     accrued
     liabilities   $ 76,133  $ 42,386  $ 38,113         -         -  $156,632

    Asset
     retirement
     obligations          -         -    17,143     1,918     7,397    26,458

    Bank
     indebtedness         -         -     1,171         -         -     1,171

    Long-term
     debt                 -         -    30,914    61,150         -    92,064

    Obligations
     under
     capital
     leases              43        86       258       691         -     1,078

    Interest
     on
     obligations
     under
     capital
     leases               5        10        31        85         -       131

    Interest on
     financial
     instruments        392       797     2,378     2,378         -     5,945

    Derivative
     financial
     instruments        225       470       928        33         -     1,656
                   ----------------------------------------------------------

    Total          $ 76,798  $ 43,749  $ 90,936  $ 66,255  $  7,397  $285,135
                   ----------------------------------------------------------
                   ----------------------------------------------------------

    16. Capital management

    The Company defines capital that it manages as the aggregate of its
    shareholders' equity and interest bearing debt. The Company's objectives
    when managing capital are to ensure that the Company will continue to
    operate as a going concern and continue to provide products and services
    to its customers, preserve its ability to finance expansion opportunities
    as they arise, and provide returns to its shareholders.

    As at March 31, 2009, total managed capital was $861.0 million (December
    31, 2008 - $839.2 million), comprised of shareholders equity of $767.7
    million (December 31, 2008 - $732.5 million), long-term debt of $61.2
    million (December 31, 2008 - $60.6 million), current portion of long-term
    debt of $30.9 million (December 31, 2008 - $30.7 million) and bank
    indebtedness of $1.2 million (December 31, 2008 - $15.4 million).

    The Company manages its capital structure and makes adjustments to it in
    light of changes in economic conditions, the risk characteristics of the
    underlying assets and business investment opportunities. To maintain or
    adjust the capital structure, the Company may attempt to issue or re-
    acquire shares, acquire or dispose of assets, or adjust the amount of
    cash, cash equivalents, bank indebtedness or long-term debt balances. The
    Company's capital is not subject to any capital requirements imposed by
    any regulators; however, it is limited by the terms of its credit
    facility and long-term debt agreements. Specifically, the Company is
    required to maintain a Fixed Charge Coverage Ratio (Earnings Before
    Interest, Taxes, Depreciation and Amortization ("EBITDA") divided by
    interest expense) of more than 2.5 to 1 and a debt to total
    capitalization ratio of less than 0.45 to one. The Company's capital
    structure at March 31, 2009 was within the parameters established by
    these agreements.


    17. Segmented information

    The Company classifies its operations into two general segments of the
    global energy industry: Pipeline and Pipe Services and Petrochemical and
    Industrial.  Revenue and income (loss) from operations for the three
    months and twelve months ended March 31, 2009 and 2008, and goodwill and
    total assets as of those dates by segment are as follows:

                                                  Three Months Ended Mar. 31
                                                       2009          2008
                                                                   Restated-
    (in thousands of Canadian dollars)                              note 1
    -------------------------------------------------------------------------
    Revenue
      Pipeline and Pipe Services                       279,951       255,794
      Petrochemical and Industrial                      29,318        38,137
      Intersegment Eliminations                         (1,805)         (574)
                                                   --------------------------
                                                       307,464       293,357
                                                   --------------------------
                                                   --------------------------

    Income (loss) from operations
      Pipeline and Pipe Services                        56,646        37,822
      Petrochemical and Industrial                         325         6,075
      Financial and Corporate                           (6,537)       (2,978)
                                                   --------------------------
                                                        50,434        40,919
                                                   --------------------------
                                                   --------------------------

    Goodwill
      Pipeline and Pipe Services                       214,915       148,889
      Petrochemical and Industrial                      19,649        18,653
                                                   --------------------------
                                                       234,564       167,542
                                                   --------------------------
                                                   --------------------------

    Total assets
      Pipeline and Pipe Services                     1,358,655     1,100,396
      Petrochemical and Industrial                      83,818        84,250
      Financial and Corporate                          823,032       812,796
      Elimination                                   (1,044,235)     (978,312)
                                                   --------------------------
                                                     1,221,270     1,019,130
                                                   --------------------------
                                                   --------------------------

    18. Joint venture operations

    The Company's joint venture operations have been accounted for through
    proportionate consolidation with the Company's share of each joint
    venture's assets, liabilities, revenue, expenses, net income and cash
    flows consolidated based on the Company's ownership position. The figures
    related to these joint ventures included in the Company's consolidated
    financial statements are summarized as follows:


                                                      Three Months Ended
    (in thousands of Canadian dollars)                      Mar. 31
    -------------------------------------------------------------------------
                                                       2009          2008
                                                   ------------  ------------
    Revenue                                        $    18,579   $    16,688
    Operating and other expenses                        13,806        14,159
    Net income before income taxes                       4,773         2,529
    Provision for taxes                                  1,055           401
                                                   ------------  ------------
    Net income                                     $     3,718   $     2,128
                                                   ------------  ------------
                                                   ------------  ------------

    Cash provided by (used in):
    Operating activities                           $     4,405   $     1,305
    Investing activities                                (1,181)       (2,172)
    Financing activities                                (1,745)       (2,872)

    Current assets                                      28,886        24,303
    Property, plant and equipment, net                  15,478        13,954
    Goodwill                                             4,469         4,805
    Current liabilities                                 11,824        17,590
    Long-term Liabilities                                1,402           733


    19. Earnings per share

    The weighted average number of common shares for the purpose of the
    earnings per share calculations was as follows:

                                                  Three Months Ended Mar. 31
                                                       2009          2008
                                                  ---------------------------
    Basic
      Class A                                       57,359,386    58,123,683
      Class B                                       13,060,209    13,078,142
                                                   ------------  ------------
    Total                                           70,419,595    71,201,825
                                                   ------------  ------------
                                                   ------------  ------------

    Dilutive effect of stock options
      Class A                                           71,805       753,691
      Class B                                                -             -
                                                   ------------  ------------
    Total                                               71,805       753,691
                                                   ------------  ------------
                                                   ------------  ------------

    Diluted
      Class A                                       57,431,191    58,877,374
      Class B                                       13,060,209    13,078,142
                                                   ------------  ------------
    Total                                           70,491,400    71,955,516
                                                   ------------  ------------
                                                   ------------  ------------
    20. Upcoming accounting changes

    On February 13, 2008, The Accounting Standards Board ("AcSB") confirmed
    that the use of International Financial Reporting Standards ("IFRS") will
    be required in Canada for publicly accountable profit-oriented
    enterprises for fiscal years beginning on or after January 1, 2011 and
    the Company will be required to report using IFRS beginning on this date.
    The Company has begun the process of evaluating the effect of and the
    planning for the transition to IFRS. The impact of the ultimate adoption
    of IFRS on the Company has not yet been finalized.

    In January 2009, the AcSB issued the following new Handbook sections:
    1582 - Business Combinations, 1601 - Consolidations, and 1602 - Non-
    Controlling Interests. These standards are effective January 1, 2011. The
    Company has not yet determined the impact of the adoption of these
    standards on its consolidated financial statements.

    21. Comparative figures

    Comparative figures have been reclassified from statements previously
    stated to conform to the presentation of the current year consolidated
    financial statements, and to show the effects of retrospective
    application of a new accounting policy (see note 1).
    





For further information:

For further information: Gary Love, Vice President, Finance and CFO,
Telephone: (416) 744-5818, e-mail: glove@shawcor.com, website:
www.shawcor.com

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