The Churchill Corporation Reports Third Quarter Results



    Quarterly Revenue and Earnings Records

    EDMONTON, Nov. 5 /CNW/ - The Churchill Corporation (TSX: CUQ) today
announced record financial results for its third quarter ended September 30,
2007.

    Consolidated Financial Highlights

    
    -------------------------------------------------------------------------
                                              Three months ended
                                                 September 30
                                 --------------------------------------------
    ($ millions, except                                     $            %
     per share amounts)            2007        2006      Change       Change
    -------------------------------------------------------------------------
    Contract Revenue             $203.8      $145.5       $58.3          40%
    Contract Income                17.9        13.4         4.5          34%
    EBITDA(1)                       9.6         5.4         4.2          78%
    Earnings before Tax             8.4         4.6         3.8          83%
    Net Earnings                    5.6         3.0         2.6          87%
      Per Share - Basic           $0.31       $0.17       $0.14          82%
    Work-in-hand                  734.5       469.6       264.9          56%
    -------------------------------------------------------------------------


    -------------------------------------------------------------------------
                                               Nine months ended
                                                 September 30
                                 --------------------------------------------
    ($ millions, except                                     $            %
     per share amounts)            2007        2006      Change       Change
    -------------------------------------------------------------------------
    Contract Revenue             $544.6      $378.9      $165.7          44%
    Contract Income                47.2        34.4        12.8          37%
    EBITDA(1)                      22.1         9.6        12.5         130%
    Earnings before Tax            19.1         6.8        12.3         181%
    Net Earnings                   12.9         4.4         8.5         193%
      Per Share - Basic           $0.73       $0.25       $0.48         192%
    Work-in-hand                  734.5       469.6       264.9          56%
    -------------------------------------------------------------------------

    (1) Refer to the "Terminology" section for further details.
    

    The Corporation posted third quarter contract revenue of $203.8 million
and net earnings of $5.6 million, or $0.31 per basic share. These results
compare to contract revenue of $145.5 million and net earnings of
$3.0 million, or $0.17 per basic share, for the third quarter of 2006. For the
nine months ended September 30, 2007, increased volume and the Corporation's
focus on expense management has allowed it to increase EBITDA by
$12.5 million, a 130% increase compared to the prior year's results. Net
earnings for the first nine months of 2007 were $12.9 million, $0.73 per basic
share compared to $4.4 million, or $0.25 per basic share for the same period
in 2006.
    "We are very pleased to have generated $544.6 million in revenue and
$12.9 million in net earnings, exceeding our full year fiscal 2006
performance," said Chairman and Interim Chief Executive Officer, Peter Adams.
"Our solid operating performance has resulted in the generation of significant
funds, enabling us to repay our operating line of credit and strengthen our
overall financial position. We are pleased with the strength of our balance
sheet and that we have no exposure to asset-backed commercial paper. The
building construction market remains strong and Stuart Olson has been awarded
several contracts which have not yet commenced construction. Our work-in-hand
balance remains at near record levels and we are looking forward to a strong
fourth quarter."

    RESULTS OF OPERATIONS

    For the third quarter of 2007, consolidated contract revenue was
$203.8 million, which was $58.3 million or 40% greater than the same period in
2006. This higher level of revenue on a year-over-year basis was the outcome
of continued strength in our Building construction segment. For the first nine
months of this year, contract revenue of $544.6 million was $165.7 million
greater than the comparable period in 2006. Year-over-year contract revenue
has increased in the Buildings and Industrial Electrical segments by
$178.0 million and $21.8 million, respectively, and decreased in the
Industrial General and Industrial Insulation segments by $12.2 million and
$21.9 million, respectively.
    Contract income increased from $13.4 million in the third quarter of 2006
to $17.9 million in the third quarter of 2007. Contract income year-to-date
was $47.2 million, $12.8 million greater than in the first nine months of
2006. This year-over-year increase is the net effect of greater overall
construction volume and improved contract income margin percentages in our
Buildings, Industrial General and Industrial Insulation Contracting segments,
partially offset by a decline in the contract income margin percentage of the
Industrial Electrical Contracting segment.
    Indirect and administrative expenses increased to $9.2 million in the
third quarter of 2007, from $8.2 million in the comparable period of 2006.
This increase is mainly attributable to higher personnel costs associated with
the additional activity in the Buildings segment. For the nine months
year-to-date, indirect and administrative expenses of $27.1 million were $1.3
million higher than in the corresponding period of 2006. Lower indirect and
administrative costs in the Corporate, and Industrial General Contracting
segments were offset by increased expenses required to support the higher
levels of activity in the Buildings segment.
    Earnings before interest, taxes, depreciation and amortization in the
quarter were $9.6 million, compared to $5.4 million in the third quarter of
2006. Year-over-year earnings before interest, taxes, depreciation and
amortization were $22.1 million compared to $9.6 million in 2006, an
improvement of 130%. Earnings before tax in Q3 2007 increased 83% to
$8.4 million, compared to $4.6 million reported in Q3 2006. For the nine
months ended September 30, 2007, earnings before tax amounted to
$19.1 million, which was $12.3 million greater than the prior year. The
Corporation's consolidated net earnings for the three months ended
September 30, 2007 grew 87% to $5.6 million, compared to net earnings of
$3.0 million in 2006. For the nine months ended September 30, 2007, Churchill
realized net earnings of $12.9 million compared to net earnings of
$4.4 million, a 193% increase.
    New contract awards of $180.9 million were booked in the current quarter,
which compares with $261.4 million in Q3 2006. Total new contract awards of
$785.2 million were recorded in the first nine months of 2007, compared to
$601.3 million recognized for the first nine months of 2006. Work-in-hand at
September 30, 2007 was $734.5 million. This is an increase of $264.9 million
over the amount at September 30, 2006. On a segmented work-in-hand basis,
there has been a year-over-year increase in the Buildings segment of
$258.8 million, an increase of $9.9 million in the Industrial General
Contracting segment, an increase of $7.2 million in Industrial Insulation
Contracting and an $11.0 million decrease in the Industrial Electrical
Contracting segments respectively.

    Buildings
    ---------
    Stuart Olson had work-in-hand of $662.8 million at June 30, 2007. For the
three months ended September 30, 2007, the company secured a further
$124.0 million of contracts, compared to $200.6 million secured in the same
quarter of 2006. New contracts were added to the backlog from clients such as
the Discovery Parks, Red Deer College, The University of Calgary and Capital
Health. During the quarter, the company executed and took into revenue
$152.8 million. The company ended the quarter with $634.0 million of
work-in-hand, of which $457.8 million is expected to carryover into 2008.
    For the three months ended September 30, 2007, Stuart Olson's revenues
increased by $75.6 million to $152.8 million, compared to $77.2 million in the
prior year. This increase in revenue was due to higher levels of activity,
particularly from the Alberta branches. Activity levels during the quarter
were highest on projects for the Calgary Regional Health Authority, the
Edmonton Regional Airport Authority, the Regional Municipality of Wood
Buffalo, and The City of Red Deer.
    Contract income in the third quarter increased to $11.7 million from
$5.2 million in 2006, an increase of $6.5 million. The contract income margin
percentage was higher at 7.7% in 2007 compared to 6.7% in 2006 as a result of
strong project execution. Earnings before tax increased to $7.2 million in the
third quarter of 2007, compared to $2.3 million in 2006. Earnings before tax
improved as a result of the stronger contract income margin percentage,
controlled spending growth on indirect and administrative expenses and greater
interest income.
    For the nine months ended September 30, 2007, Stuart Olson reported
revenues of $382.1 million compared to revenues of $204.1 million for the same
period in 2006. This $178.0 million growth in revenue on a year-over-year
basis was generated primarily by increased activity in the Alberta branches.
    Contract income for the first nine months of 2007 was $26.1 million
compared to $12.9 million in 2006. Contract income margin percentage was 6.8%
compared to 6.3%, respectively. Year-over-year earnings before tax increased
to $14.5 million, as compared to $4.4 million for the first nine months of
2006. A strong market combined with solid project execution has allowed Stuart
Olson to be more profitable.

    Industrial General Contracting
    ------------------------------
    Triton had work-in-hand of $20.7 million at June 30, 2007. For the
quarter ended September 30, 2007, the company secured a further $14.7 million
of contracts, compared to $4.4 million of new work secured in Q3 2006. The
company executed $9.1 million of contractual work during the quarter and as a
result had $26.3 million of work-in-hand as at September 30, 2007 of which
$15.1 million is expected to be completed in 2008. Triton has successfully
secured $42.1 million of new work thus far in 2007, as compared to awards of
$33.9 million for the nine months ended September 30, 2006.
    Third quarter revenue at Triton of $9.1 million was $2.5 million lower
than in the comparable quarter of 2006. This was primarily due to reduced
activity in the construction business unit. Triton supplied fabrication,
maintenance and construction services during the third quarter to clients
including CNRL, Metacor, and Terasen.
    Contract income in the third quarter of $1.0 million was reduced from the
$1.5 million earned in Q3 2006. Contract income margin percentage was 11.0% in
Q3 2007 a decrease from 12.9% in the third quarter of 2006. The Q3 2006
contract income margin reflected the benefit associated with the reversal of
$1.0 million in provisions taken in previous years. On a normalized basis
Triton's third quarter 2006 margin was 4.3%. Triton incurred a loss before tax
of $0.5 million for the current quarter, compared to a loss before tax of
$0.9 million in 2006 (loss before tax of $1.9 million in 2006 on a normalized
basis).
    For the nine months ended September 30, 2007, Triton reported revenues of
$29.0 million compared to revenue of $41.2 million in 2006. This $12.2 million
year-over-year decrease in revenue during the first nine months of 2007 is a
result of reduced activity within the construction and maintenance business
units. Triton has been awarded a number of construction and maintenance
contracts for execution over the next 12 months.
    Contract income for the first nine months of 2007 was $3.9 million
compared to $5.3 million in 2006. The contract income margin percentage for
the same period in 2007 was 13.4%, as compared to 12.9% in 2006. Contract
income in the first nine months of 2006 included $3.2 million of recoveries on
loss provisions recorded in a previous year; otherwise the 2006 contract
income and contract income margin percentage would have been $2.1 million and
5.1%, respectively. Triton's year-to-date loss before tax was $0.6 million,
compared to a loss before tax of $0.8 million in 2006 (loss before tax of
$4.0 million in 2006 on a normalized basis).

    Industrial Insulation Contracting
    ---------------------------------
    Industrial Insulation Contracting (also referred to as Insulation
Holdings Inc.) 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.
    Industrial Insulation Contracting had combined work-in-hand of
$27.2 million at June 30, 2007. For the three months ended September 30, 2007,
they secured a further $18.2 million of contracts, which was $2.1 million
greater than in the same period of 2006. Awards were received in the current
quarter from clients such as Horton CBI, Suncor, and Alstom. The insulation
companies executed $15.6 million of work during the third quarter, resulting
in $29.8 million of work-in-hand at September 30, 2007, $13.4 million of which
is expected to carry forward into 2008.
    Revenue for three months ended September 30, 2007 was $15.6 million,
compared to $21.8 million for the period ended September 30, 2006. During the
quarter, the insulation companies were active on projects for clients
including Suncor, Alstom and Agrium. Activity levels in the third quarter were
lower as a result of award and scheduling delays and reduced activity in all
of the company's insulation markets.
    Notwithstanding the reduced volume of work in the quarter, contract
income of $3.2 million was only slightly less than the $3.5 million achieved
in the comparable period of 2006. The similar contract income was as a result
of strong project execution by the insulation companies. The contract income
margin percentage was 20.5% in Q3 2007, as compared to 16.1% in Q3 2006.
    Earnings before tax in the Industrial Insulation Contracting segment were
$1.9 million for the quarter, $0.8 million less than the $2.7 million achieved
in the third quarter of 2006. The decrease in earnings resulted from the lower
volume of work and greater indirect and administrative expenses during the
period.
    For the nine months ended September 30, 2007, the Industrial Insulation
segment reported revenues of $38.4 million compared to revenues of
$60.3 million last year. The revenue differential is due to reduced insulation
and siding activity in all of the company's markets. The outlook is for
activity levels to improve in 2008.
    Contract income for the first nine months of 2007 was $7.4 million
compared to $7.8 million in the comparable period of 2006. Contract income
margin percentage was 19.3% compared to 12.8%, respectively. This increase in
contract income margin percentage was due to capable project execution and the
completion in 2006 of a large, lower margin, major oil sands contract.
Earnings before tax year-over-year was $3.8 million compared to $4.5 million
in 2006.

    Industrial Electrical Contracting
    ---------------------------------
    Laird reported work-in-hand of $46.6 million at the end of June 2007. In
the third quarter of 2007, new contract awards of $23.9 million were secured,
compared to $40.2 million in 2006. New contract awards were received from
customers including Nexen and Suncor. During the period, $26.2 million of work
was executed, leaving a backlog of $44.3 million, of which $27.4 million is
expected to carryover into 2008.
    For the three months ended September 30, 2007, Laird's revenue decreased
to $26.2 million, as compared to $34.9 million reported for the same period of
2006. The decline year-over-year was a result of engineering and award delays
in the first half of 2006 resulting in Laird executing a significant amount of
contracting activity in the third and fourth quarters of 2006.
    Contract income declined to $1.9 million in Q3 2007 from $3.0 million in
Q3 2006, due to the lower volume of activity in the current quarter. The
contract income margin percentage was 7.3% in Q3 2007 compared to 8.6% in Q3
2006. Laird achieved earnings before tax of $0.5 million in the third quarter
of 2007 compared to earnings before tax of $1.9 million in 2006. The decrease
in earnings before tax for the third quarter was a result of $0.8 million of
provisions and writedowns taken in the quarter for various items under
negotiation with clients and the lower activity level.
    For the nine months ended September 30, 2007, Laird reported revenues of
$95.0 million compared to revenues of $73.3 million last year. A significant
portion of this $21.7 million increase has been from maintenance related
activities for a major oil sands client.
    Contract income for the first nine months of 2007 was $9.3 million
compared to $7.7 million in 2006. The contract income margin percentage for
the first nine months of 2007 was 9.8%, compared to 10.5% for the
corresponding period in 2006. Earnings before tax year-over-year increased to
$4.8 million in 2007 compared to $3.2 million in 2006. Record volumes and
effective expense management has allowed Laird to generate greater earnings.

    Corporate and Other
    -------------------
    In the third quarter of 2007, the Corporate and Other segment incurred
$0.8 million of indirect and administrative expenses, as compared to
$1.4 million of expenses in the third quarter of 2006. For the nine months
ended September 30, 2007, the Corporate and Other segment incurred indirect
and administrative expenses of $3.3 million compared to $4.5 million for the
same period in 2006. This segment's expenses have decreased as a result of
lower professional fees, reduced personnel costs and a change in the
allocation of information technology expenses.

    CASH FLOW, FINANCING, CAPITAL REQUIREMENTS AND LIQUIDITY

    Cash and cash equivalents at September 30, 2007, totaled $64.6 million,
which compares with $50.4 million at the end of 2006. Of the $64.6 million of
cash and cash equivalents, $14.5 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 provided from operating activities amounted to $13.6 million in the
quarter, which compares to $4.3 million of cash invested in operations during
the third quarter of 2006. This favourable change of $17.9 million was the
result of greater net earnings in 2007 and cash positive changes in working
capital accounts.
    Investing activities resulted in a use of cash of $1.4 million during the
third quarter of 2007, which compares with cash used of $1.6 million in Q3
2006. This decrease in use of cash year-over-year resulted from the slightly
lower investment in property and construction equipment during the quarter.
    Cash used in financing activities amounted to $15.0 million in the
quarter ended September 30, 2007, compared to $2.0 million of cash provided
from financing activities in Q3 2006. The primary use of this cash was the
repayment of the Corporation's operating line of credit during the quarter.
Repayments applied to the line of credit during the third quarter were $15.5
million compared to $1.9 million of net proceeds received from the line of
credit in the third quarter of 2006. The Corporation increased long-term debt
by use of finance contracts in the amount of $0.4 million to acquire vehicles
in the third quarter of 2007 and 2006. During the third quarter of 2007, the
Corporation repaid $0.4 million of long-term debt (2006 - $0.2 million) and
$0.1 million of its demand term loan (2006 - $0.1 million).
    Cash provided from operating activities of $30.3 million in the first
nine months of 2007 was $36.2 million greater than in the same period last
year. This year-over-year improvement can be attributed to increased earnings
and improved working capital management.
    For the nine months ended September 30, 2007, investing activities
resulted in a use of cash of $4.3 million compared to $7.3 million of cash
used in the prior year. The Corporation has primarily used cash for additions
to property and equipment in 2007, while in 2006, $3.0 million related to
property and equipment and $4.0 million to the classification of restricted
cash as a long-term asset. As at October 25, 2007 the requirement to hold the
$4.0 million as restricted cash was removed, making these funds available as
general working capital in Q4 2007.
    For the nine months ended September 30, 2007, cash used in financing
activities amounted to $11.8 million compared to proceeds of $7.5 million
received in 2006. Net repayments applied to the line of credit year-to-date
equaled $12.0 million of cash repayments, compared to $7.5 million of net
proceeds in 2006. Issuances and repayments of long-term debt provided
$0.1 million of cash in 2007 and $0.5 million of cash in 2006. Repayments of
$0.5 million were applied to the demand term loan in 2007 and 2006,
respectively. On July 9, 2007, the Corporation's amended credit agreement
converted the demand term loan balance of $6.4 million to a non-revolving
long-term debt facility and lowered the interest rate from prime plus 1.25% to
prime plus 1.0%. At September 30, 2007, the current portion of long-term debt,
long-term debt and the converted demand term balance of $6.4 million amounted
to $11.1 million, compared to $11.2 million at the end of 2006. As at
September 30, 2007, the Corporation was in compliance with the repayment terms
associated with its long-term obligations.
    At September 30, 2007, Churchill had working capital of $38.4 million,
which was greater than the 2006 year-end working capital balance of
$27.4 million.
    Shareholders' equity was $61.1 million at September 30, 2007, as compared
to $47.7 million at December 31, 2006. Share capital increased by
$611 thousand as a result of the exercise of stock options and contributed
surplus has decreased $100 thousand for the same reason. Retained earnings
increased from $26.4 million at December 31, 2006 to $39.3 million as at
September 30, 2007, reflecting the year-to-date net earnings of $12.9 million.
    At September 30, 2007, there were 17,822,491 Common Shares and
300,000 options outstanding (December 31, 2006 - 17,667,491 Common Shares and
571,667 options). During the quarter ended September 30, 2007, no new share
options were issued and 155,000 share options were exercised. On October 4,
2007 the Corporation issued 82,000 share options to various management
employees.
    The Corporation has an Employee Share Purchase Plan available to all
full-time employees. As at September 30, 2007, the Plan held
1,150,869 Churchill Common Shares for the employees. Under the Plan, shares
are acquired in the open market.

    
    Consolidated Balance Sheets

    ($ thousands)
    ----------------------------------------------------------- -------------
                                                  September 30,  December 31,
                                                          2007        2006(*)
                                                    (unaudited)
    ----------------------------------------------------------- -------------
    ASSETS
    Current Assets
      Cash and cash equivalents                    $    64,583   $    50,387
      Accounts receivable                              171,526        83,369
      Inventories and prepaid expenses                   1,576         1,174
      Costs in excess of billings                            -           620
    ----------------------------------------------------------- -------------
                                                       237,685       135,550

    Long-term cash and equivalents                       4,000         4,000
    Future income tax assets                               632           631
    Property and equipment                              20,119        17,816
    Intellectual property                                  126           189
    Goodwill                                             7,315         7,315
    ----------------------------------------------------------- -------------
                                                   $   269,877   $   165,501
    ----------------------------------------------------------- -------------
    ----------------------------------------------------------- -------------
    LIABILITIES
    Current Liabilities
      Operating line of credit                     $         -   $    12,000
      Accounts payable and accrued liabilities         147,240        86,191
      Contract advances and unearned income             43,345             -
      Income taxes payable                               4,902         4,327
      Future income tax liabilities                      1,864         3,902
      Demand term loan                                       -         6,825
      Current portion of long-term debt                  1,948           917
    ----------------------------------------------------------- -------------
                                                       199,299       114,162

    Long-term debt                                       9,107         3,419
    Future income tax liabilities                          353           231
    ----------------------------------------------------------- -------------
                                                       208,759       117,812
    SHAREHOLDERS' EQUITY
    Share capital                                       16,119        15,508
    Contributed surplus                                  5,679         5,779
    Retained earnings                                   39,320        26,402
    Accumulated other comprehensive income                   -             -
    ----------------------------------------------------------- -------------
                                                        61,118        47,689
    ----------------------------------------------------------- -------------
                                                   $   269,877   $   165,501
    ----------------------------------------------------------- -------------
    ----------------------------------------------------------- -------------
    (*) Figures excerpted from the 2006 audited consolidated financial
        statements



    Consolidated Statements of Earnings and Retained Earnings

    ($ thousands,
     except share             Three months ended           Nine months ended
     data)               September 30 (Unaudited)    September 30 (Unaudited)
    ------------------------------- ------------- ------------- -------------
                              2007          2006          2007          2006
    ------------------------------- ------------- ------------- -------------
      Contract revenue $   203,756   $   145,453   $   544,597   $   378,881
      Contract costs       185,860       132,080       497,393       344,450
    ------------------------------- ------------- ------------- -------------
      Contract income       17,896        13,373        47,204        34,431

      Interest income          813           240         1,742           552
      Sundry income
       (expense)                (3)           40           293           409
      Indirect and
       administrative
       expenses             (9,189)       (8,160)      (27,139)      (25,803)
      Depreciation
       and amortization       (903)         (721)       (2,413)       (1,971)
      Interest expense        (179)         (213)         (552)         (788)
    ------------------------------- ------------- ------------- -------------
    Earnings before
     income taxes            8,435         4,559        19,135         6,830
    ------------------------------- ------------- ------------- -------------
    Income tax (expense)
     recovery
      Current income
       tax                  (5,523)       (2,595)       (8,134)       (2,715)
      Future income tax      2,653         1,073         1,917           298
    ------------------------------- ------------- ------------- -------------
                            (2,870)       (1,522)       (6,217)       (2,417)
    ------------------------------- ------------- ------------- -------------
    Net earnings             5,565         3,037        12,918         4,413

    Retained earnings,
     beginning of period    33,755        19,638        26,402        18,993
    Return of Laird
     escrowed shares             -             -             -          (731)
    ------------------------------- ------------- ------------- -------------
    Retained earnings,
     end of period     $    39,320   $    22,675   $    39,320   $    22,675

    Net earnings per
     common share
      Basic            $      0.31   $      0.17   $      0.73   $      0.25
      Diluted          $      0.31   $      0.16   $      0.72   $      0.24
    ------------------------------- ------------- ------------- -------------
    ------------------------------- ------------- ------------- -------------

    Weighted average
     common shares:
      Basic             17,725,969    17,584,158    17,687,198    17,784,997
      Diluted           18,034,466    17,855,248    17,966,548    18,056,087
    ------------------------------- ------------- ------------- -------------
    ------------------------------- ------------- ------------- -------------



    Consolidated Statements of Comprehensive Earnings and Accumulated
    Comprehensive Earnings

                              Three months ended           Nine months ended
    ($ thousands)        September 30 (Unaudited)    September 30 (Unaudited)
    ------------------------------- ------------- ------------- -------------
                              2007          2006          2007          2006
    ------------------------------- ------------- ------------- -------------
    Net earnings       $     5,565   $     3,037   $    12,918   $     4,413
    Other comprehensive
     earnings, net               -             -             -             -
    ------------------------------- ------------- ------------- -------------
    Comprehensive
     earnings          $     5,565   $     3,037   $    12,918   $     4,413
    ------------------------------- ------------- ------------- -------------

    Accumulated
     comprehensive
     earnings,
     beginning of
     period            $         -   $         -   $         -   $         -
    Other comprehensive
     earnings for the
     period                      -             -             -             -
    ------------------------------- ------------- ------------- -------------
    Accumulated
     comprehensive
     earnings, end of
     period            $         -   $         -   $         -   $         -
    ------------------------------- ------------- ------------- -------------
    ------------------------------- ------------- ------------- -------------



    Consolidated Statements of Cash Flow

                              Three months ended           Nine months ended
    ($ thousands)        September 30 (Unaudited)    September 30 (Unaudited)
    ------------------------------- ------------- ------------- -------------
                              2007          2006          2007          2006
    ------------------------------- ------------- ------------- -------------
    OPERATING
     ACTIVITIES
    Net earnings       $     5,565   $     3,037   $    12,918   $     4,413
      Depreciation and
       amortization            903           721         2,413         1,971
      Gain on disposal
       of equipment            (21)            6           (37)           (4)
      Future income
       taxes                (2,653)       (1,073)       (1,917)         (298)
      Stock-based
       compensation           (137)           32          (100)          111
    ------------------------------- ------------- ------------- -------------
                             3,657         2,723        13,277         6,193

    Net change in
     accounts
     receivable,
     inventories and
     prepaid expenses      (30,631)      (37,665)      (88,559)      (53,763)
    Net change in
     accounts payable
     and accrued
     liabilities            26,748        12,046        61,049        (2,463)
    Net change in
     contract advances
     and unearned
     income and costs in
     excess of billings      9,343        15,557        43,965        38,265
    Net change in income
     taxes payable           4,469         2,999           575         5,899
    ------------------------------- ------------- ------------- -------------
                            13,586        (4,340)       30,307        (5,869)
    ------------------------------- ------------- ------------- -------------
    INVESTING ACTIVITIES
    Long-term cash and
     equivalents                 -             -             -        (4,000)
    Proceeds on disposal
     of equipment               27            17           177           214
    Additions to
     intellectual property       -             -             -          (253)
    Additions to property
     and equipment          (1,396)       (1,588)       (4,505)       (3,232)
    ------------------------------- ------------- ------------- -------------
                            (1,369)       (1,571)       (4,328)       (7,271)
    ------------------------------- ------------- ------------- -------------
    FINANCING ACTIVITIES
    Proceeds under
     line of credit              -         8,300         5,000        15,770
    Repayments under
     line of credit        (15,500)       (6,400)      (17,000)       (8,300)
    Issuance of
     long-term debt            371           408         1,137         1,050
    Repayment of
     long-term debt           (441)         (204)       (1,076)         (531)
    Repayment of demand
     term loan                 (65)         (130)         (455)         (520)
    Issuance of common
    shares                     611             -           611             -
    ------------------------------- ------------- ------------- -------------
                           (15,024)        1,974       (11,783)        7,469
    ------------------------------- ------------- ------------- -------------

    Increase (decrease)
     in cash                (2,807)       (3,937)       14,196        (5,671)
    Cash, beginning of
     period                 67,390        27,443        50,387        29,177
    ------------------------------- ------------- ------------- -------------
    Cash, end of
     period            $    64,583   $    23,506   $    64,583   $    23,506
    ------------------------------- ------------- ------------- -------------
    ------------------------------- ------------- ------------- -------------

    SUPPLEMENTAL CASH
     FLOW INFORMATION
    ------------------------------- ------------- ------------- -------------
    Cash paid
     (received) during
     the year for:
      Interest         $       171   $       184   $       534   $       564
      Income taxes     $     1,054   $      (404)  $     7,559   $    (3,184)
    ------------------------------- ------------- ------------- -------------
    


    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", "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 maintenance contracts during the
shorter of (a) twelve months, or (b) the remaining life of the contract.

    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.

    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.

    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 Third Quarter Press Release may constitute
"forward-looking statements". 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. Such forward-looking statements involve
risk, uncertainties and other factors that might cause the actual results,
performance or achievements of the Corporation to vary significantly from any
future results, performance or achievements expressed or implied in any
forward-looking statements.





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