The Churchill Corporation Reports Record Fourth Quarter and Year-end Results



    Quarterly Revenue and Earnings Records

    EDMONTON, March 14 /CNW/ - The Churchill Corporation (TSX: CUQ) today
announced record financial results for its fourth quarter ended December 31,
2007.

    
    Consolidated Financial Highlights

    -------------------------------------------------------------------------
                                           Three months ended
                                              December 31
                          ---------------------------------------------------
    ($ millions, except                                     $            %
     per share amounts)          2007         2006       Change       Change
    -------------------------------------------------------------------------

    Contract Revenue           $191.5       $152.4        $39.1          26%
    Contract Income              22.4         16.7          5.7          34%
    EBITDA(1)                    13.0          6.7          6.3          94%
    Earnings before Tax          11.7          5.9          5.8          98%
    Net Earnings                  8.2          3.7          4.5         122%
      Per Share - Basic         $0.46        $0.21        $0.25         119%
    Work-in-hand(2)             713.8        493.9        219.9          45%
    Backlog(3)               $1,365.9     $1,103.5       $262.4          24%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                          Twelve months ended
                                              December 31
                          ---------------------------------------------------
    ($ millions, except                                     $            %
    per share amounts)           2007         2006       Change       Change
    -------------------------------------------------------------------------

    Contract Revenue           $736.1       $531.3       $204.8          39%
    Contract Income              69.6         51.2         18.4          36%
    EBITDA(1)                    35.1         16.3         18.8         115%
    Earnings before Tax          30.8         12.7         18.1         143%
    Net Earnings                 21.1          8.1         13.0         161%
      Per Share - Basic         $1.19        $0.46        $0.73         159%
    Work-in-hand(2)             713.8        493.9        219.9          45%
    Backlog(3)               $1,365.9     $1,103.5       $262.4          24%
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (1)(2)(3) Refer to the "Terminology" section for further details.
    

    The Corporation posted fourth quarter contract revenue of $191.5 million
and net earnings of $8.2 million, or $0.46 per basic common share. These
results compare to contract revenue of $152.4 million and net earnings of
$3.7 million, or $0.21 per basic common share, for the fourth quarter of 2006.
    "Our fourth quarter and full year results were our best ever," said
Chairman and Interim Chief Executive Officer, Peter Adams. "We are pleased to
have generated $736.1 million of revenue for the year and $21.1 million of net
earnings. Year-over-year, our revenue grew 39%, EBITDA increased 115%,
earnings before tax climbed 143% and net earnings were up 161%."
    "Strong demand and solid execution on infrastructure and industrial
projects by all four of our operating companies enabled us to make significant
revenue and profit gains during 2007. Our work-in-hand balance remains at near
record levels and the market opportunities for new work remain substantial."
    "Churchill ended the year with $108.1 million of cash, $47.9 million of
working capital and only $10.7 million of long-term debt obligations," said
Daryl Sands, Churchill's CFO. "We are looking forward to continued strong
project execution and financial results in 2008."

    FOURTH QUARTER RESULTS

    For the fourth quarter of 2007, consolidated contract revenue was
$191.5 million, which was $39.1 million or 26% higher than the same period in
2006. This higher level of revenue on a year-over-year basis was a result of
continued strength in our building construction segment.
    Contract income increased from $16.7 million in the fourth quarter of
2006 to $22.4 million in the fourth quarter of 2007 as stronger margins in our
building construction, industrial electrical and industrial general
contracting segments improved overall performance.
    Indirect and administrative expenses amounted to $11.0 million in the
quarter, compared to $10.3 million in the comparable period of 2006,
reflecting increased expenses associated with higher revenue, a larger
employee base and incremental compensation for performance.
    Earnings before interest, taxes, depreciation and amortization in the
quarter were $13.0 million, compared to $6.7 million in the fourth quarter of
2006. Earnings before tax in Q4 2007 increased 98% to $11.7 million, compared
to $5.9 million reported in Q4 2006. Significantly, all of the operating
companies were profitable in the fourth quarter of 2007. The Corporation's
consolidated net earnings for the three months ended December 31, 2007 were
$8.2 million compared to net earnings of $3.7 million in 2006.
    New contract awards of $170.9 million were booked in the current quarter,
which compares with $176.6 million in Q4 2006. Total new contract awards of
$956.1 million were recorded in 2007.
    Stuart Olson's revenue for the three months ended December 31, 2007, was
$142.6 million, an increase of 64% compared to $87.1 million for the same
period in 2006. Contract income in the fourth quarter increased to
$14.2 million compared to $8.3 million in the prior year. Earnings before tax
increased 115% to $9.9 million in the fourth quarter of 2007 from $4.6 million
in the corresponding quarter of 2006. The increase in earnings before tax was
primarily the result of higher revenue, strong project execution and cost
containment.
    Triton's revenue for the fourth quarter of 2007 was $13.1 million,
$1.9 million greater than in the same quarter of 2006. Contract income was up
171% to $1.9 million from $0.7 million year-over-year. Triton's earnings
before tax during the quarter were $0.5 million compared to a loss before tax
of $0.9 million in 2006. Operational improvements resulting in stronger
contract income margins generated higher earnings before tax during the fourth
quarter of 2007 as compared to 2006.
    Combined revenue from our insulation companies, Fuller Austin and
Northern Industrial, was $13.8 million or $3.4 million lower than the fourth
quarter of 2006. The revenue decrease was from slower insulation contracting
activity in the company's geographic markets. Q4 2007 contract income margin
was 16.3% compared to 20.7% in the prior year. Although there was a slight
reduction in contract income margin during the fourth quarter compared to the
prior year, the margin was still excellent. The reductions in volume and
contract income margin percentage during the quarter resulted in a decline in
earnings before tax to $1.1 million, as compared to $2.0 million for the prior
year period.
    As expected, activity levels at Laird were reduced from the third quarter
of 2007, yet Laird did generate $22.0 million of revenue in the quarter, which
compares to the $36.9 million of contract revenue generated in Q4 2006. The
fourth quarter of 2006 was impacted by the acceleration of work schedules on
certain of Laird's projects in the Fort McMurray oil sands region. Contract
income was unchanged at $3.9 million in the fourth quarter of 2007, compared
to $3.9 million in Q4 2006. Laird reported earnings before tax of
$1.8 million, comparable to its earnings before tax of $2.1 million in 2006.
Laird's Q4 2007 earnings included a $0.7 million pre-tax benefit associated
with the favourable resolution of outstanding change orders and reserves
carried forward from prior years.

    CONSOLIDATED ANNUAL RESULTS

    Consolidated contract revenues were $736.1 million in 2007, an increase
of $204.8 million or 39% from consolidated contract revenues of $531.3 million
for 2006. This $204.8 million increase in consolidated revenue was the result
of a $233.5 million increase in Stuart Olson revenue and a $7.0 million
increase in Laird revenue, partially offset by a decrease of $10.3 million in
Triton revenue and a $25.4 million contraction in IHI revenue.
    Contract income increased 36% from $51.2 million in 2006 to $69.6 million
in 2007. This $18.4 million increase resulted from greater overall volumes.
Consolidated contract income margin percentage was 9.5% compared to 9.6% in
2006.
    Indirect and administrative expenses of $38.1 million were incurred
during 2007, compared to $36.1 million in 2006. The increase of $2.0 million
was primarily attributable to increased project management and compensation
expenses related to the increased activity levels.
    EBITDA increased by $18.8 million, or 115%, to $35.1 million during 2007,
as compared to $16.3 million for the year ended December 31, 2006. Churchill
achieved consolidated net earnings of $21.1 million ($1.19 basic earnings per
common share) during 2007 as compared to $8.1 million of net earnings ($0.46
basic earnings per common share) in 2006.
    Work-in-hand at December 31, 2007, was $713.8 million, 45% or
$219.9 million higher than the same time last year. The work-in-hand levels in
all of our segments are greater than at the beginning of 2007. On a segmented
basis, there was an increase in the buildings segment of $159.2 million, an
increase in the industrial general contracting segment of $31.8 million, an
increase in the insulation contracting segment of $20.8 million and an
increase in the electrical contracting segment of $8.1 million.

    Buildings
    ---------
    For the year ended December 31, 2007, Stuart Olson's revenue increased by
$233.5 million to $524.7 million, compared to $291.2 million in the prior
year. This increase in revenue was due to higher levels of activity,
particularly from the Alberta branches. Stuart Olson was active during the
year on projects ranging from educational and healthcare facilities, to civic
infrastructure and commercial buildings.
    Contract income in 2007 increased 90% to $40.3 million from
$21.2 million. Contract income margin percentage increased to 7.7% in 2007 as
compared to 7.3% in 2006. This was and continues to be indicative of the
strength of the company's brand, stakeholder engagement model and ability to
effectively manage construction costs.
    Earnings before tax from the buildings segment were $24.4 million in
2007, compared to $8.9 million in 2006. This 174% improvement in earnings was
a result of the significant increase in overall contract volume, greater
contract income margin and controlled spending growth in indirect and
administrative expenses.
    Stuart Olson finished the year with $581.2 million of work-in-hand, after
entering the year with work-in-hand of $422.0 million. During 2007 the company
secured a further $683.9 million of contracts, and executed and took into
revenue $524.7 million. At December 31, 2007, Stuart Olson's backlog amounted
to $1.2 billion, compared to $1.0 billion in the prior year. The company's
backlog grew substantially in 2007 as a result of new contracts to build
institutional buildings, educational and healthcare infrastructure, commercial
food distribution facilities and civic recreational facilities in Alberta and
British Columbia.

    Industrial General Contracting
    ------------------------------
    Triton's revenue for the year ended December 31, 2007, was $42.1 million,
declining 20% from $52.4 million for the year ended December 31, 2006.
Revenues from the construction and maintenance divisions were lower during
2007 while fabrication revenue was unchanged from the prior year.
    Contract income margin for 2007 was 13.8%, up from 11.5% during 2006.
This margin increase is notable given that the 2006 contract income margin
percentage benefited from the reversal in 2006 of $3.3 million of loss
provisions booked in 2005. Excluding these recoveries, Triton's contract
income margin for 2006 would have been 5.2%. Changes made in all areas of the
operations in regards to project estimation and execution were important
contributors to this significant improvement.
    Triton incurred a loss before tax of $0.1 million for the year ended 2007
compared to a loss before tax of $1.3 million for the year ended December 31,
2006. Improved operations and margin expansion sufficiently offset the impact
of reduced activity levels.
    Triton entered the year with $13.2 million of work-in-hand. For the year
ended December 31, 2007, the company secured a further $73.9 million of
contracts, and executed $42.1 million of contractual work. Triton secured 76%
more work in 2007 than it did in 2006. As a result, the company has
$45.1 million of work-in-hand to carry over into 2008. At December 31, 2007,
Triton's backlog amounted to $50.5 million compared to $22.7 million in 2006.

    Industrial Insulation Contracting
    ---------------------------------
    Industrial Insulation Contracting operates under three business units -
Fuller Austin, Northern Industrial Insulation and Lakehead Insulation - all
providing insulation related contracting services for capital projects and
maintenance work. Lakehead is a wholly-owned subsidiary of Fuller Austin.
    Revenue for the year ended December 31, 2007, decreased to $52.3 million,
compared to $77.7 million for the year ended December 31, 2006. This year's
revenue decline was primarily the result of reduced insulation and siding
activity in all of the company's markets. Additionally, activity levels during
2006 benefited from the completion of an upgrader project and an ethanol
facility for two key clients.
    Contract income decreased to $9.7 million from $11.4 million for the
comparable period. The lower volume of activity allowed IHI to utilize its
most experienced crews for the work undertaken and to exceed its forecasted
contract income margin percentage range, of 15.5% to 16.5% during 2007, by
actually generating margins of 18.6%.
    Earnings before tax decreased by $1.2 million to $4.9 million for the
year ended December 31, 2007, compared to earnings before tax of $6.1 million
for 2006. The primary reason for the reduction in earnings was the reduced
volume of work performed. Confirming IHI's strong operating efficiency was
that the company's pre-tax margin increased from 7.9% in 2006 to 9.4% during
fiscal 2007.
    Industrial Insulation Contracting began 2007 with work-in-hand of
$15.0 million and ended 2007 with work-in-hand of $35.8 million. For the year
ended December 31, 2007, they secured a further $73.1 million of contracts,
and executed $52.3 million of contracts. Notably, the insulation segment
secured 11% more work in 2007 than it obtained in 2006. Backlog at December
31, 2007 was $46.7 million compared to $24.2 million at December 31, 2006.

    Industrial Electrical Contracting
    ---------------------------------
    Laird generated record revenue and earnings in 2007. Company revenue
increased by $7.0 million to $117.1 million, compared to $110.1 million
reported for 2006. Laird's strategy to diversify its customer base has been
very important to its recent success. By focusing on the needs of its key
clients, Laird has been able to demonstrate its value as a reliable, efficient
and quality electrical and instrumentation contractor. The result of Laird's
strong performance has been the award of increased scope on many of the
projects it has undertaken.
    Contract income increased from $11.6 million in 2006 to $13.2 million in
2007, due to the higher volume of activity and the net effect resulting from
the closeout of contractual conditions. Contract income margin percentage was
slightly higher at 11.3% as compared to 10.5% in 2006.
    Laird achieved earnings before tax of $6.6 million for the year ended
December 31, 2007, compared to earnings before tax of $5.3 million in 2006.
The increase in earnings is a result of higher contract income, over and above
the additional administrative expenses required to manage this increased level
of activity.
    Laird ended 2007 with work-in-hand of $51.7 million, compared to
$43.6 million at the end of 2006. New contract awards of $125.2 million were
secured in the current year compared to $95.0 million in 2006, a 32% increase
year-over-year. Laird's backlog equaled its work-in-hand at the end of 2007
and 2006 reporting periods.

    Corporate and Other
    -------------------
    In 2007, the Corporate and Other segment incurred $4.9 million of
indirect and administrative expenses compared to $6.3 million of indirect and
administrative expenses in 2006. The net reduction of $1.4 million consisted
of a $0.3 million increase in overhead expenses offset by an increase of
$1.7 million in net interest and sundry income as a result of the
Corporation's improved working capital and financial position.

    CASH FLOW, FINANCING, CAPITAL REQUIREMENTS AND LIQUIDITY

    Cash and equivalents at December 31, 2007, totaled $108.1 million, which
compares with $50.4 million at the end of 2006. Of the $108.1 million of cash
and cash equivalents, $25.3 million was subject to deemed trust conditions
under the British Columbia Lien Act, compared to $10.7 million at December 31,
2006. As such, this cash is restricted to the payment of direct costs related
to specific construction projects.
    Cash flow provided from operating activities increased by 192% to
$73.7 million, compared to $25.2 million provided from operations during 2006.
This $48.5 million improvement was primarily due to the impact of 2007's
increased profits and net cash positive changes in the working capital
accounts.
    Investing activities resulted in a use of cash of $2.4 million during
2007, which compares with cash used of $7.0 million in 2006. The decrease in
cash invested was due to the release during the third quarter of 2007 of
$4.0 million previously held as a long-term asset due to a contractual
restriction.
    During 2007 cash used in financing activities amounted to $13.6 million,
compared to proceeds from financing of $3.0 million in 2006. Net repayments
applied to the Corporation's line of credit in 2007 amounted to $12.0 million,
compared to net advances of $4.2 million in 2006. On July 9, 2007, the
Corporation's amended credit agreement converted its demand term loan balance
of $6.4 million to a non-revolving term loan facility. At December 31, 2007,
the current portion of long-term debt, long-term debt and the converted demand
term loan balance amounted to $10.7 million, compared to $11.2 million at
December 31, 2006. During 2007, the Corporation repaid $1.8 million of
long-term debt and $0.5 million of the demand term loan. These payments were
in accordance with the repayment schedules and the contractual obligations as
described in previous quarters and the Corporation's 2006 Annual Report. Stock
options exercised by directors and officers of the Corporation contributed
$0.7 million to the cash generated from financing.
    As at December 31, 2007, Churchill had working capital of $47.9 million,
which compares favourably to the working capital position of $27.4 million at
the end of 2006.

    
    Contractual Obligations
    -----------------------
    ($ millions)
    December 31, 2007

                                       Current       2-3       4-5   After 5
                               Total      Year     years     years     years
                            -------------------------------------------------
    Term loan(1)                $6.0      $0.8      $1.6      $1.6      $2.0
    Mortgage payable             1.2       0.0       0.1       0.1       1.0
    Finance contracts
     and capital lease
     obligations                 3.5       1.1       1.9       0.5       0.0

                            -------------------------------------------------
                               $10.7      $1.9      $3.5      $2.2      $3.0
                            -------------------------------------------------
    (1) The above table represents scheduled repayments.
    

    The long-term debt, mortgage payable, finance contracts and lease
obligations are more fully described in Note 9 of the notes to the
Consolidated Financial Statements.
    Scheduled debt repayments for 2008 are $1.9 million. During 2008, the
level of required replacement capital spending for Churchill is estimated to
be approximately $7.4 million. To support expansion and growth opportunities,
additional capital expenditures up to $6.1 million could be authorized.
    Management believes that the Corporation has the capital resources and
liquidity necessary to meet its commitments, support its operations and
finance its growth strategies.
    The Corporation remains a partner in two joint ventures. In each instance
the Corporation has provided a joint and several guarantee, increasing the
maximum potential exposure to the full value of the work remaining under the
contract.
    Shareholders' equity was $69.7 million at December 31, 2007, as compared
to $47.7 million at December 31, 2006. Retained earnings increased from
$26.4 million at December 31, 2006 to $47.5 million at the end of 2007,
reflecting the addition of net earnings of $21.1 million for the year.

    Share Data

    Churchill is listed on the Toronto Stock Exchange under the trading
symbol "CUQ". On December 31, 2007, the Corporation had 17,886,991 common
share issued and outstanding and 317,500 options convertible into common
shares upon exercise (December 31, 2006 - 17,667,491 common shares and 571,667
options). There were 721,199 options available for grant at December 31, 2007.
    The Corporation has an Employee Share Purchase Plan (the "ESPP")
available to all full-time employees. At December 31, 2007, 73% of eligible
employees were participants in the ESPP. At December 31, 2007, the Plan held
896,143 Churchill common shares for employees. Under the Plan, shares are
acquired in the open market.


    
    CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME AND RETAINED
    EARNINGS

                                                           Year ended
    ($ thousands, except per share amounts)                December 31
    -------------------------------------------------------------------------
                                                           2007         2006
    -------------------------------------------------------------------------

      Contract revenue                              $   736,141  $   531,290
      Contract costs                                    666,562      480,129
    -------------------------------------------------------------------------
      Contract income                                    69,579       51,161

      Interest income                                     2,777          896
      Sundry income                                         887          369
      Indirect and administrative expenses              (38,146)     (36,123)
      Depreciation and amortization                      (3,522)      (2,666)
      Interest expense                                     (749)        (945)
    -------------------------------------------------------------------------

    Earnings before income taxes                         30,826       12,692
    -------------------------------------------------------------------------
    Income tax (expense) recovery
      Current income tax                                (14,292)      (4,464)
      Future income tax                                   4,592          (88)
    -------------------------------------------------------------------------
                                                         (9,700)      (4,552)
    -------------------------------------------------------------------------

    Net earnings                                         21,126        8,140

    Comprehensive income                                      -            -
    -------------------------------------------------------------------------

    Net earnings and comprehensive income                21,126        8,140

    Retained earnings, beginning of year                 26,402       18,993

    Return of escrowed shares                                 -         (731)
    -------------------------------------------------------------------------
    Retained earnings, end of year                  $    47,528  $    26,402

    Accumulated other comprehensive income,
     beginning of year                              $         -  $         -

    Comprehensive income for the year                         -            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Accumulated other comprehensive income,
     end of year                                    $         -  $         -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Net earnings per common share
      Basic                                         $      1.19  $      0.46
      Fully diluted                                 $      1.17  $      0.45
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average common shares:
      Basic                                          17,730,644   17,746,020
      Diluted                                        17,995,235   17,960,636
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED BALANCE SHEETS

    ($ thousands)
    -------------------------------------------------------------------------
                                                    December 31, December 31,
                                                           2007         2006
    -------------------------------------------------------------------------
    ASSETS
    Current Assets
      Cash and equivalents                          $   108,105  $    50,387
      Accounts receivable                               123,906       83,369
      Inventories and prepaid expenses                      859        1,174
      Costs in excess of billings                             -          620
      Future income tax assets                              759            -
    -------------------------------------------------------------------------
                                                        233,629      135,550

    Long-term cash and equivalents                            -        4,000
    Future income tax assets                                788          631
    Property and equipment                               22,832       17,816
    Goodwill and intangible assets                        7,420        7,504
    -------------------------------------------------------------------------
                                                    $   264,669  $   165,501
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES
    Current Liabilities
      Operating line of credit                      $         -  $    12,000
      Accounts payable and accrued liabilities          149,057       86,191
      Contract advances and unearned income              24,611            -
      Income taxes payable                               10,148        4,327
      Future income tax liabilities                           -        3,902
      Demand term loan                                        -        6,825
      Current portion of long-term debt                   1,963          917
    -------------------------------------------------------------------------
                                                        185,779      114,162

    Long-term debt                                        8,755        3,419
    Future income tax liabilities                           457          231
    -------------------------------------------------------------------------
                                                        194,991      117,812

    SHAREHOLDERS' EQUITY
    Share capital                                        16,414       15,508
    Contributed surplus                                   5,736        5,779
    Retained earnings                                    47,528       26,402
    Accumulated other comprehensive income                    -            -
    -------------------------------------------------------------------------
                                                         69,678       47,689

    Contingencies and Commitments, and Guarantees
    -------------------------------------------------------------------------
                                                    $   264,669  $   165,501
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



    CONSOLIDATED STATEMENTS OF CASH FLOW

                                                           Year ended
    ($ thousands)                                          December 31
    -------------------------------------------------------------------------
                                                           2007         2006
    -------------------------------------------------------------------------
    OPERATING ACTIVITIES
    Net earnings                                    $    21,126  $     8,140
      Depreciation and amortization                       3,522        2,666
      Gain on disposal of equipment                        (224)          (5)
      Future income taxes                                (4,592)          88
      Share-based compensation                              194          110
    -------------------------------------------------------------------------
                                                         20,026       10,999

    Net change in accounts receivable, inventories
     and prepaid expenses                               (40,222)     (10,402)
    Net change in accounts payable and
     accrued liabilities                                 62,866        4,416
    Net change in contract advances and unearned
     income and costs in excess of billings              25,231       12,507
    Net change in income taxes payable                    5,821        7,637
    -------------------------------------------------------------------------
                                                         73,722       25,157
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
    Long-term cash and equivalents                        4,000       (4,000)
    Proceeds on disposal of equipment                       369          226
    Additions to intangible assets                            -         (252)
    Additions to property and equipment                  (6,806)      (2,929)
    -------------------------------------------------------------------------
                                                         (2,437)      (6,955)
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
    Proceeds under operating line of credit               5,000       24,570
    Repayments under operating line of credit           (17,000)     (20,350)
    Repayment of long-term debt                          (1,781)        (717)
    Repayment of demand term loan                          (455)        (715)
    Issuance of common shares                               669          220
    -------------------------------------------------------------------------
                                                        (13,567)       3,008
    -------------------------------------------------------------------------

    Increase in cash                                     57,718       21,210

    Cash, beginning of year                              50,387       29,177
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Cash, end of year                               $   108,105  $    50,387
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    SUPPLEMENTAL CASH FLOW INFORMATION
    -------------------------------------------------------------------------
    Cash paid (received) during the year for:
      Interest                                      $       659  $       957
      Income taxes                                  $     8,471  $    (3,173)
    -------------------------------------------------------------------------
    

    The Churchill Corporation provides building construction, industrial
construction and maintenance services throughout western Canada. Churchill
common shares are listed on The Toronto Stock Exchange under the symbol "CUQ".

    TERMINOLOGY

    Throughout this Press Release, and other documents referred to,
management refers to certain terms when explaining its financial results that
do not have any standardized meaning under Canadian GAAP as set out in the
CICA Handbook. Specifically, the terms "contract income margin percentage",
"work-in-hand", "backlog", "working capital", "EBITDA" and "book value per
share" have been defined as:

    Contract income margin percentage is the percentage derived by dividing
contract income by contract revenue. Contract income is calculated by
deducting all associated direct and indirect costs from contract revenue in
the period.

    Work-in-hand is the unexecuted portion of work that has been
contractually awarded for construction to the Corporation. It includes an
estimate of the revenue to be generated from contracts during the shorter of
(a) twelve months, or (b) the remaining life of the contract.

    Backlog means the total value of work that has not yet been completed
that; (a) is assessed by the Corporation as having high certainty of being
performed by the Corporation or its subsidiaries by either the existence of a
contract or work order specifying job scope, value and timing; or (b) has been
awarded to the Corporation or its subsidiaries, as evidenced by an executed
binding or non-binding letter of intent or agreement, describing the general
job scope, value and timing of such work, and with the finalization of a
formal contract respecting such work currently assessed by the Corporation as
being reasonably assured.

    Working capital is current assets less current liabilities excluding that
portion relating to any demand term loan which is scheduled to be repaid
beyond one year (applicable in 2006 only).

    
    -------------------------------------------------------------------------
    As at                                           December 31, December 31,
    ($ millions)                                           2007         2006
    -------------------------------------------------------------------------
    Current assets                                       $233.6       $135.6
    Less:
      Current liabilities                                 185.8        114.2
    Add:
      Current portion of demand term loan                   0.0          6.0
    -------------------------------------------------------------------------

    Working Capital                                       $47.9        $27.4
    -------------------------------------------------------------------------

    EBITDA is equal to earnings before interest expense, taxes, depreciation
and amortization. This measure as reported by the Corporation may not be
comparable to similar measures presented by other reporting issuers.

    -------------------------------------------------------------------------
                                Three months ended       Twelve months ended
    ($ millions)                       December 31               December 31
                                -------------------      --------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------

    Net Earnings                 $8.2         $3.7        $21.1         $8.1
    Add:
      Income Taxes                3.5          2.1          9.7          4.6
      Amortization                1.1          0.7          3.5          2.7
      Interest expense            0.2          0.2          0.7          0.9
    -------------------------------------------------------------------------

    EBITDA                      $13.0         $6.7        $35.1        $16.3
    -------------------------------------------------------------------------
    

    Book value per share is the value of shareholders' equity less value of
preferred stock divided by basic shares outstanding at the end of the period.

    FORWARD LOOKING STATEMENTS

    Certain statements in this Fourth Quarter Press Release may constitute
"forward-looking statements". Forward-looking statements include, without
limitation, statements regarding the future financial position, business
strategy, budgets, litigation, projected costs, capital expenditures,
financial results, taxes, plans and objectives of the Corporation. Many of
these statements can be identified by looking for words such as "believes,"
"expects," "may," "will," "intends," "anticipates," "estimates," "continues,"
or the negative thereof, or other variations thereon. Although management of
Churchill believes its expectations regarding future performance of the
Corporation are based on reasonable assumptions and currently available
competitive, financial and economic data, market conditions and operating
plans, it can give no assurance its expectations will be achieved. The
Corporation cautions that, by their nature, forward-looking statements,
involve risks, and uncertainties and that its actual actions, and/or results
could differ materially from those expressed or implied in such
forward-looking statements, and that the aforementioned risks, uncertainties
and actions could affect the extent to which a particular projection
materializes. The Corporation assumes no obligation to update the
forward-looking statements should circumstances or the Corporation's
management's estimates or opinions change.





For further information:

For further information: Peter F. Adams, Ph.D., P.Eng., Chairman and
Interim Chief Executive Officer, The Churchill Corporation, (780) 454-3667,
www.churchillcorporation.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890