35% increase - Canam Group posts $13.3 million in net earnings for the second quarter of 2007



    BOUCHERVILLE, QC, Aug. 2 /CNW Telbec/ - Construction product manufacturer
Canam Group Inc. (TSX: CAM) today reported net earnings of $13.3 million, or
$0.27 per share, for the quarter ended June 30, 2007, up 35% from
$9.9 million, or $0.22 per share, for the corresponding period in 2006.
Consolidated sales rose by 32% to $218.9 million, compared with $166.2 million
for the same quarter in 2006.
    For the six-month period ended June 30, 2007, net earnings totaled
$19.6 million, or $0.40 per share (based on 48,880,339 shares), up 28%
compared with net earnings of $15.3 million, or $0.35 per share (based on
43,911,300 shares), for the same period in 2006. Consolidated sales for the
first six months of 2007 increased by 21% to $380 million, from $314.9 million
for the same period last year.
    To the president and chief operating officer of Canam Group, Marc Dutil,
these results show that Canam Group business units were able to take advantage
of a high level of activity to increase their profitability. Mr. Dutil also
underlined the acquisition of a 49% interest in United Steel Structures
Limited in Guangzhou, China, which took place in the second quarter, and the
recent purchase of the assets of Eastern Bridge, located in Claremont,
New Hampshire, both of which will allow Canam Group to grow its presence in
markets outside Canada.
    The quarterly results include a net loss of $3.2 million stemming from
Canam Romsa in Mexico, comprised of $1.4 million in operating losses and a
$1.8 million reduction in the investment. Management expects that the
reorganization that is underway in Mexico will rectify the situation by the
end of 2007.
    As at June 30, 2007, Canam Group had a healthy balance sheet, with
shareholders' equity totaling $350 million and a net debt of $106 million,
translating into a debt-to-equity ratio of 0.30. For the second quarter of
2007, Pro forma EBITDA stood at $28.4 million, or 13.0% of sales, compared to
$21.1 million, or 12.7% of sales, for the corresponding quarter.
    The order backlog for all business units stood at $392 million as at
June 30, 2007, which represents a 65% increase compared with $237 million as
at June 24, 2006.
    The board of directors has approved a quarterly dividend of $0.04 per
share payable on September 28, 2007 to shareholders of record on September 14,
2007.

    Canam Group is an industrial company operating 12 plants specialized in
the design and fabrication of construction products and solutions. The company
employs more than 3,000 people in Canada, the United States, Romania and
India, and has partnerships with companies in Mexico, France, Saudi Arabia,
the United Arab Emirates, Russia and China.

    Conference call

    Canam Group will hold a conference call with financial analysts and the
media on Thursday, August 2, 2007 at 4:30 p.m. The conference call will be
webcast live at www.canamgroup.ws and www.cnw.ca. A replay of the conference
call will be available until August 24, 2007 at the following number:
1-800-408-3053, access code 3227122 followed by the pound key #.


    
                     Consolidated Statements of Earnings

    Periods ended June 30, 2007 and June 24, 2006
    (in thousands of dollars, except
     per share amounts)
     (unaudited)                     3 months                  6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
                                         (restated)                (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Sales                   $ 218,912    $ 166,156    $ 380,019    $ 314,914
    -------------------------------------------------------------------------
    Cost of sales             175,349      127,782      300,146      241,405
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Gross profit               43,563       38,374       79,873       73,509
    -------------------------------------------------------------------------
    Selling and
     administrative
     expenses                  18,478       16,905       38,404       34,428
    -------------------------------------------------------------------------
    Profit sharing and
     continuous improvement
     programs                   1,452        1,426        1,920        2,788
    -------------------------------------------------------------------------
    Exchange gain              (4,023)         (41)      (4,510)         (18)
    -------------------------------------------------------------------------
    Interest income              (297)        (579)        (676)      (1 136)
    -------------------------------------------------------------------------
    Increase in the
     redemption value of
     an investment in a
     related company             (470)        (470)        (935)        (904)
    -------------------------------------------------------------------------
                            -------------------------------------------------
                               28,423       21,133       45,670       38,351
    -------------------------------------------------------------------------
    Depreciation of
     property, plant and
     equipment                  3,628        3,793        7,332        7,321
    -------------------------------------------------------------------------
    Amortization of
     intangible assets            360          214          814          448
    -------------------------------------------------------------------------
    Financial expenses          1,830        2,570        3,516        5,508
    -------------------------------------------------------------------------
    Loss (gain) on
     disposal of property,
     plant and equipment         (258)          29         (251)          39
    -------------------------------------------------------------------------
    Gain on disposal of
     investments               (1,260)        (678)      (1,304)        (678)
    -------------------------------------------------------------------------
    Impairment of the
     investment in a
     variable interest
     entity located in
     Mexico                     1,815            -        1,815            -
    -------------------------------------------------------------------------
    Expenses related to
     plant closings                 -          800            -        1,183
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Earnings before income
     tax expense and
    undermentioned items       22,308       14,405       33,748       24,530
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Income tax expense
      Current                   7,393        6,871       12,015       10,736
      Future                    1,335       (2,539)       1,646       (2,175)
    -------------------------------------------------------------------------
                            -------------------------------------------------
                                8,728        4,332       13,661        8,561
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Earnings before
     undermentioned items      13,580       10,073       20,087       15,969
    -------------------------------------------------------------------------
    Share in earnings of
     companies subject to
     significant influence        257           91          253          239
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Net earnings from
     continuing operations     13,837       10,164       20,340       16,208
    -------------------------------------------------------------------------
    Net loss from
     discontinued
     operations                  (555)        (294)        (704)        (912)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Net earnings            $  13,282    $   9,870    $  19,636    $  15,296
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings
     (net loss) per share
    Basic:
      From continuing
       operations           $    0.28    $    0.23    $    0.41    $    0.37
      From discontinued
       operations               (0.01)       (0.01)       (0.01)       (0.02)
                            -------------------------------------------------
                            -------------------------------------------------
      Total                 $    0.27    $    0.22    $    0.40    $    0.35
    Diluted:
      From continuing
       operations           $    0.28    $    0.22    $    0.41    $    0.37
      From discontinued
       operations               (0.01)       (0.01)       (0.01)       (0.02)
                            -------------------------------------------------
                            -------------------------------------------------
       Total                $    0.27    $    0.21    $    0.40    $    0.35
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Weighted average
     number of shares
     (in thousands of
     shares)
      Basic                    48,894       45,149       48,880       43,911
      Diluted                  49,386       47,550       49,357       46,232
    -------------------------------------------------------------------------
    Number of common
     shares                                              48,793       46,939
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


               Consolidated Statements of Comprehensive Income

    Periods ended June 30, 2007 and June 24, 2006
    (in thousands of dollars)
     (unaudited)                     3 months                  6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
                                         (restated)                (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net earnings            $  13,282    $   9,870    $  19,636    $  15,296
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Other comprehensive
     income, net of income
     taxes:
      Unrealized losses on
       translating
       financial
       statements of self-
       sustaining foreign
       operations           $ (10,522)   $  (5,355)   $ (12,038)   $  (4,771)
      Reclassification in
       earnings related to
       the reduction in
       the net investment
       in a self-sustaining
       foreign operation        1,815          189        1,959          189
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Unrealized foreign
     currency translation
     losses                 $  (8,707)   $  (5,166)   $ (10,079)   $  (4,582)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Unrealized losses on
     available-for-sale
     financial assets
     arising during the
     period                 $     (89)   $       -    $    (136)   $       -
    Reclassification in
     earnings                       -            -          (64)           -
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Unrealized losses on
     available-for-sale
     financial assets       $     (89)   $       -    $    (200)   $       -
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Gains on derivatives
     designated as cash
     flow hedges            $   1,302    $       -    $   1,425    $       -
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Other comprehensive
     income                 $  (7,494)   $  (5,166)   $  (8,854)   $  (4,582)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Comprehensive income    $   5,788    $   4,704    $  10,782    $  10,714
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                 Consolidated Statements of Retained Earnings

    Periods ended June 30, 2007 and June 24, 2006
    (in thousands of dollars)
     (unaudited)                     3 months                  6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Opening balance         $ 165,231    $ 131,358    $ 160,840    $ 127,633
    -------------------------------------------------------------------------
    Net earnings               13,282        9,870       19,636       15,296
    -------------------------------------------------------------------------
    Issue expenses related
     to share issue                 -          (27)           -          (27)
    -------------------------------------------------------------------------
    Dividends                  (1,964)      (1,884)      (3,927)      (3,585)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Closing balance         $ 176,549    $ 139,317    $ 176,549    $ 139,317
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                         Consolidated Balance Sheets

                                                       As at           As at
                                                     June 30,    December 31,
                                                        2007            2006
    (in thousands of dollars)                     (unaudited)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Assets
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Current assets
      Cash                                         $  15,690       $   8,977
      Accounts receivable                            169,675         149,291
      Inventories                                    160,854         126,149
      Unrealized asset on foreign currency
       forward contracts                               3,105               -
      Income taxes recoverable                           201             209
      Future income tax assets                         5,019           6,380
      Prepaid expenses and other assets                7,614           6,510
      Current assets of discontinued operations        6,437          12,618
                                                 ----------------------------
                                                 ----------------------------
       Total current assets                          368,595         310,134
    -------------------------------------------------------------------------
                                                 ----------------------------
    Investments                                       76,097          72,270
    -------------------------------------------------------------------------
    Property, plant and equipment                    165,585         172,025
    -------------------------------------------------------------------------
    Property, plant and equipment held for sale        6,189           6,782
    -------------------------------------------------------------------------
    Intangible assets                                  3,015           2,713
    -------------------------------------------------------------------------
    Goodwill                                             312             160
    -------------------------------------------------------------------------
    Unrealized asset on foreign currency
     forward contracts                                 1,085               -
    -------------------------------------------------------------------------
    Future income tax assets                           3,339           3,487
    -------------------------------------------------------------------------
    Other assets                                      10,773           8,704
    -------------------------------------------------------------------------
    Long-term assets of discontinued operation        20,886          23,917
    -------------------------------------------------------------------------
                                                 ----------------------------
                                                   $ 655,876       $ 600,192
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Liabilities
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Current liabilities
      Bank loans                                   $  13,957       $  10,363
      Accounts payable and accrued liabilities       157,753         129,083
      Unrealized liability on foreign currency
       forward contracts                                   -           1,450
      Income taxes payable                             3,361           4,246
      Future income tax liabilities                    1,030              37
      Current portion of long-term debt                2,397           1,240
      Current liabilities of discontinued
       operations                                      2,690           4,356
                                                 ----------------------------
                                                 ----------------------------
      Total current liabilities                      181,188         150,775
    -------------------------------------------------------------------------
                                                 ----------------------------
    Long-term debt                                   105,247          85,384
    -------------------------------------------------------------------------
    Deferred credits                                   5,138           5,287
    -------------------------------------------------------------------------
    Future income tax liabilities                      9,416           9,556
    -------------------------------------------------------------------------
    Long-term liabilities of discontinued
     operations                                        4,856           5,830
    -------------------------------------------------------------------------
                                                 ----------------------------
                                                   $ 305,845       $ 256,832
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Shareholders' Equity
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Share capital                                    194,623         195,822
    -------------------------------------------------------------------------
    Retained earnings                                176,549         160,840
    -------------------------------------------------------------------------
    Contributed surplus                                2,490           2,020
    -------------------------------------------------------------------------
    Accumulated other comprehensive income           (23,631)        (15,322)
    -------------------------------------------------------------------------
                                                 ----------------------------
                                                     350,031         343,360
    -------------------------------------------------------------------------
                                                 ----------------------------
                                                   $ 655,876       $ 600,192
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                   Consolidated Statements of Cash Flows

    Periods ended June 30, 2007 and June 24, 2006
    (in thousands of dollars)
     (unaudited)                     3 months                  6 months
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                 2007         2006         2007         2006
                                         (restated)                (restated)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash flows from the
     following activities:
    Operating activities
    -------------------------------------------------------------------------
    Net earnings from
     continuing operations  $  13,837    $  10,164    $  20,340    $  16,208
    -------------------------------------------------------------------------
    Items not affecting
     cash
      Depreciation of
       property, plant and
       equipment                3,628        3,793        7,332        7,321
      Amortization of
       intangible assets          360          214          814          448
      Amortization of
       deferred financing
       expenses                    95          181          201          706
      Amortization of
       deferred issue
       expenses related to
       convertible
       debentures                   -           19            -           74
      Future income tax
       expense                  1,335       (2,539)       1,646       (2,175)
      Loss (gain) on
       disposal of
       property, plant and
       equipment                 (258)          29         (251)          39
      Unrealized loss
       (earnings) on
       foreign currency
       forward contracts       (2,616)         (66)      (3,544)          62
      Gain on disposal of
       investments             (1,260)        (678)      (1,304)        (678)
      Impairment of
       property, plant and
       equipment held for
       sale                         -          800            -          800
      Impairment of the
       investment in a
       variable interest
       entity located in
       Mexico                   1,815            -        1,815            -
      Pension expense            (210)         353         (366)         706
      Compensation cost
       related to stock
       options                     10           23           20          (61)
      Amortization of
       compensation cost
       related to the
       employee share
       purchase plan on
       the open market            225          105          450          210
      Increase in the fair
       value of
       convertible
       debentures                   -           51            -          207
      Increase in the
       redemption value of
       an investment in a
       related company           (470)        (470)        (935)        (904)
      Share in earnings of
       companies subject
       to significant
       influence                 (257)         (91)        (253)        (239)
                            -------------------------------------------------
                            -------------------------------------------------
                               16,234       11,888       25,965       22,724
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net change in non-cash
     operating working
     capital items
      Decrease (increase)
       in accounts
       receivable             (35,393)     (13,493)     (22,224)       2,140
      Increase in
       inventories            (13,842)     (32,792)     (35,038)     (38,940)
      Decrease (increase)
       in income taxes
       recoverable                 16          300            8       (1,105)
      Decrease (increase)
       in prepaid expenses
       and other assets        (2,069)         199         (166)       1,031
      Increase in accounts
       payable and accrued
       liabilities             26,685       28,662       32,159       19,822
      Increase (decrease)
       in interest payable         (8)         159           (2)        (138)
      Decrease in income
       taxes payable           (1,585)      (2,552)      (1,649)      (5,343)
                            -------------------------------------------------
                            -------------------------------------------------
                              (26,196)     (19,517)     (26,912)     (22,533)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Cash flows from
     continuing operating
     activities                (9,962)      (7,629)        (947)         191
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Financing activities
    -------------------------------------------------------------------------
    Shares purchased in
     employee's name on
     the open market                -            -       (1,445)        (214)
    -------------------------------------------------------------------------
    Proceeds from issuance
     of shares                     55          453          246          914
    -------------------------------------------------------------------------
    Issue expenses related
     to share issue                 -          (27)           -          (27)
    -------------------------------------------------------------------------
    Dividends                  (1,964)      (1,701)      (3,927)      (1,701)
    -------------------------------------------------------------------------
    Increase in long-term
     debt and bank loans       29,979       13,343       31,566       13,343
    -------------------------------------------------------------------------
    Repayment of long-term
     debt and bank loans         (803)      (3,526)      (9,204)      (8,400)
    -------------------------------------------------------------------------
    Issue expenses related
     to long-term debt           (108)         (15)        (126)        (129)
    -------------------------------------------------------------------------
    Deferred credits              110          693          117          439
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Cash flows from
     continuing financing
     activities                27,269        9,220       17,227        4,225
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Investing activities
    -------------------------------------------------------------------------
    Proceeds from sale of
     property, plant and
     equipment                  3,186          299        3,193          324
    -------------------------------------------------------------------------
    Additions to property,
     plant and equipment       (4,917)      (6,552)      (7,641)      (9,824)
    -------------------------------------------------------------------------
    Additions to
     intangible assets           (239)        (151)        (617)        (982)
    -------------------------------------------------------------------------
    Acquisition of
     investments                   (5)        (150)      (2,311)        (150)
    -------------------------------------------------------------------------
    Proceeds from disposal
     of investments                 -        1,124          168        1,124
    -------------------------------------------------------------------------
    Increase in long-term
     receivables               (2,617)        (147)      (2,401)        (846)
    -------------------------------------------------------------------------
    Business acquisitions,
     net of cash acquired      (5,303)           -       (5,403)           -
    -------------------------------------------------------------------------
    Assets held for sale            -        3,807            -        3,336
    -------------------------------------------------------------------------
    Other assets                    -           (7)           -            -
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Cash flows from
     continuing investing
     activities                (9,895)      (1,777)     (15,012)      (7,018)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Effect of changes in
     foreign exchange rate
     on cash                    1,084         (175)       1,051         (169)
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Net change in cash
     from continuing
     operations                 8,496         (361)       2,319       (2,771)
    -------------------------------------------------------------------------
    Net cash flows from
     discontinued
     operations                 1,914          (15)       4,394          387
    -------------------------------------------------------------------------
    Cash, beginning of
     year                       5,280        3,271        8,977        5,279
    -------------------------------------------------------------------------
                            -------------------------------------------------
    Cash, end of year       $  15,690    $   2,895    $  15,690    $   2,895
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplementary
     information
      Interest paid         $   1,577    $   3,218    $   3,134    $   5,368
      Income taxes
       paid, net            $   5,954    $   7,126    $  10,577    $  15,074
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Jasmin Gosselin, Vice President,
Communications, (450) 641-4000,jasmin.gosselin@canamgroup.ws,
www.canamgroup.ws

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