Canam Group: Net Income Increases by 28% in the Fourth Quarter of 2014

SAINT-GEORGES, QC, Feb. 26, 2015 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the periods ended December 31, 2014.

Highlights

• 36.2% increase in consolidated revenues for the fourth quarter of 2014 as compared with the same quarter in 2013
• 28% increase in net income attributable to shareholders for the fourth quarter of 2014 as compared with the same quarter in 2013
• 70% increase in the backlog of orders compared with December 31, 2013, for a record amount of $1,007M

	Quarters ended				Twelve months ended
(in millions of $, except per share amounts)	December 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Revenues	$	383.6	$	281.6	$	1,232.8	$	1,028.2
Adjusted EBITDA^1	$	28.2	$	20.3	$	78.6	$	75.9
Net income attributable to shareholders	$	13.8	$	10.8	$	29.3	$	31.2
Net income per share attributable to shareholders (basic and diluted)	$	0.33	$	0.26	$	0.70	$	0.74

^1	Refer to the section entitled "Non-IFRS measure" in the present press release

"The results reflect the attention paid to operations and our discipline in selecting projects," explains Marc Dutil, President and Chief Executive Officer. "In addition to achieving the best quarterly sales ever, we have called all of our people back to work and created new jobs, wrapping up the year with some 350 more colleagues throughout our network."

Results for the fourth quarter of 2014
Consolidated revenues for the fourth quarter of 2014 totaled $383.6M, representing a $102M or 36.2% increase, as compared with revenues of $281.6M for the same quarter in 2013. The increase is mainly attributable to joist and steel deck, heavy structural steel and light structural steel activities.

In the fourth quarter of 2014, selling and administrative expenses totaled $24.6M, or 6.4% of revenues, compared to $25.3M, or 9% of revenues in 2013. This variation is explained by the decrease in legal and related fees, partially offset by an increase in salary charges to maintain sales growth.

Adjusted EBITDA in the fourth quarter of 2014 amounted to $28.2M, or 7.3% of revenues, as compared with an Adjusted EBITDA of $20.3M, or 7.2% of revenues, for the same quarter of 2013. This variation is mainly attributable to the increase in sales volume, partially offset by the decrease in the Adjusted gross margin, which itself resulted from the lower margins for bridge activities and a change in the relative weight of the various activities in the global results of 2014 compared to 2013. These elements were partially offset by the improved Adjusted gross margins of joist and steel deck activities in the United States.

In the fourth quarter of 2014, net income attributable to shareholders totaled $13.8M, or $0.33 per share, as compared with $10.8M, or $0.26 per share, for the same period in 2013.

Results for fiscal year 2014
In 2014, revenues reached $1,232.8M compared to $1,028.2M in 2013, representing a $204.6M or 19.9% increase. The upsurge in revenues is attributable to all of the Corporation's activities.

In fiscal 2014, net income attributable to shareholders amounted to $29.3M, or $0.70 per share, compared to $31.2M, or $0.74 per share, for the previous fiscal year. The decrease is attributable to difficult weather conditions during the first four months of the year in northeastern North America, the compression of the Adjusted gross margins of joist and steel deck activities in Canada and of bridge activities, and a change in the relative weight of the various activities in the global results of 2014 compared to 2013.

Backlog of orders
The backlog of orders stood at $1,007M as at December 31, 2014, compared to $909M as at September 27, 2014 and $592M as at December 31, 2013.

Dividend
The Board of Directors approved a quarterly dividend of $0.04 per common share payable on March 31, 2015 to shareholders of record on March 17, 2015.

About Canam Group Inc.
Canam Group is the largest fabricator of steel components in North America. Specialized in designing construction solutions and fabricating customized products since 1961, Canam Group takes part in close to 10,000 building, structural steel and bridge projects each year. The Corporation operates 22 plants across North America and employs over 3,900 people in Canada, the United States, Romania, India and Hong Kong.

Conference call and presentation
Canam Group will hold a conference call with financial analysts and media representatives on Thursday, February 26, 2015 at 9:00 a.m. EST.

Please note that the conference call will be accompanied by a complementary presentation in PDF format that will be available on the Corporation's website at www.canamgroupinc.com. A replay of the conference call will be available until March 12, 2015 by dialing 1-800-408-3053 and entering access code 6183702, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by IFRS and cannot be formally presented in the consolidated financial statements. Even though Adjusted EBITDA is a non-IFRS measure, it is used by managers, analysts, investors and other financial stakeholders to assess the Corporation's performance and management from a financial and operational standpoint. Refer to the section entitled "Non-IFRS measures" of the Corporation's 2013 Annual Report for the definition of this indicator.

Caution regarding forward-looking statements

This press release may contain forward-looking statements, which include, but are not limited to, statements with respect to the Corporation's growth strategy, costs, financial position and financial results, economic and business outlook, prospects and trends of the Corporation's industry segment, expected growth in demand for products and services, the dates of expected or scheduled deliveries, orders and project execution in general, objectives, projects, targets, priorities, business strategy, and the expected impact of legislative and regulatory environment and legal proceedings. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "will", "expect", "intend", "anticipate", "plan", "foresee", "believe", "continue" or "maintain", the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require the Corporation to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecasted results. While the Corporation considers its assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include in particular the risks and uncertainties described in the Corporation's 2013 Annual Report in the section entitled "Risks and Uncertainties". The forward-looking statements contained herein are made as of the date hereof and are subject to change thereafter, and the Corporation has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities regulations.

CONSOLIDATED STATEMENTS OF INCOME
Periods and years ended December 31
		Three-month periods				Years
(in thousands of Canadian dollars, except per share amounts)			2014		2013		2014		2013
Revenues		$	383,641	$	281,611	$	1,232,809	$	1,028,235
Cost of sales, excluding depreciation and amortization^(1)			327,153		234,682		1,056,905		859,360
Selling and administrative expenses			24,601		25,308		91,456		89,811
Profit sharing program			3,982		1,546		6,459		5,205
Depreciation of property, plant and equipment			5,342		5,771		22,668		22,098
Amortization of intangible assets			669		432		2,226		1,608
Other gains — net			(170)		(246)		(887)		(2,075)
Finance costs			4,108		3,884		15,125		14,842
Finance revenue			(204)		(244)		(955)		(1,227)
Share of loss (income) of a joint venture and associates			282		221		866		(274)
Income before income tax			17,878		10,257		38,946		38,887
Tax expense (income)
	Current		6,782		4,309		9,166		11,257
	Deferred		(2,617)		(4,877)		595		(3,581)
			(4,165)		(568)		9,761		7,676
Net income		$	13,713	$	10,825	$	29,185	$	31,211
Net income attributable to:
	Shareholders	$	13,828	$	10,825	$	29,318	$	31,211
	Non-controlling interests		(115)		- -		(133)		- -
		$	13,713	$	10,825	$	29,185	$	31,211
Net earnings per share attributable to shareholders
	Basic	$	0.33	$	0.26	$	0.70	$	0.74
	Diluted	$	0.33	$	0.26	$	0.70	$	0.74
Weighted average number of common shares (in thousands of shares)
	Basic		42,029		41,982		42,054		41,983
	Diluted		42,079		42,073		42,105		42,074
Number of common shares outstanding (in thousands of shares)							42,079		42,073

^(1)	As at December 31, 2014 and 2013, the cost of sales, including depreciation and amortization, totaled $332,298 and $239,610, respectively, for the three-month periods, and $1,076,639 and $878,378, respectively, for the years.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Periods and years ended December 31
		Three-month periods				Years
(in thousands of Canadian dollars)			2014		2013		2014		2013
Net income		$	13,713	$	10,825	$	29,185	$	31,211
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
	Change in unrealized gains on translating foreign operations		11,952		9,707		24,431		16,946
	Change in unrealized losses on translating debts designated as hedging items of the net investment in foreign operations		(806)		- -		(806)		- -
			11,146		9,707		23,625		16,946
Available-for-sale assets:
	Unrealized gains on available-for-sale assets arising during the periods and years		- -		- -		- -		41
	Reclassified to statements of income		- -		- -		- -		(867)
	Tax income		- -		- -		- -		137
			- -		- -		- -		(689)
			11,146		9,707		23,625		16,257
Items not to be reclassified to profit or loss
Defined benefit plans:
	Actuarial gains (losses) of the defined benefit plans		(1,343)		5,508		(1,343)		5,508
	Tax income (expense)		352		(1,452)		352		(1,452)
			(991)		4,056		(991)		4,056
Other comprehensive income			10,155		13,763		22,634		20,313
Comprehensive income		$	23,868	$	24,588	$	51,819	$	51,524
Attributable to:
	Shareholders	$	23,996	$	24,588	$	51,967	$	51,524
	Non-controlling interests		(128)		- -		(148)		- -
		$	23,868	$	24,588	$	51,819	$	51,524

CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars)	As at December 31, 2014		As at December 31, 2013
Assets
Current assets
Cash and cash equivalents	$	8,261	$	4,690
Accounts receivable		276,691		217,004
Costs and estimated profits in excess of billings		126,590		82,977
Inventories		156,990		110,993
Recoverable tax assets		1,346		264
Prepaid expenses and other assets		5,619		3,762
		575,497		419,690
Non-current assets
Investments		4,593		4,699
Interests in a joint venture and associates		40,919		41,390
Property, plant and equipment		308,362		293,856
Intangible assets		10,811		9,760
Goodwill		45,097		41,417
Deferred tax assets		10,128		11,957
Long-term receivables and other assets		7,428		10,971
Total assets	$	1,002,835	$	833,740
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	183,937	$	146,040
Billings in excess of costs and estimated profits		74,366		39,869
Current tax liabilities		4,943		8,119
Current portion of long-term debt		17,659		13,000
Convertible debentures		67,137		- -
		348,042		207,028
Non-current liabilities
Debt		175,585		124,025
Convertible debentures		- -		65,442
Provisions		7,417		6,816
Deferred tax liabilities		7,477		9,922
Other liabilities		7,090		8,849
Total liabilities		545,611		422,082
Equity
Share capital		168,162		168,057
Retained earnings		252,386		230,717
Other equity items		36,640		12,884
Total equity attributable to shareholders		457,188		411,658
Non-controlling interests		36		- -
Total equity		457,224		411,658
Total equity and liabilities	$	1,002,835	$	833,740

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(in thousands of Canadian dollars)	Employee benefits paid in equity instruments		Exchange differences resulting from the translation of foreign operations		Exchange differences resulting from the translation of debts designated as hedging items		Available-for- sale financial assets		Debenture conversion options		Total other equity items		Share capital		Retained earnings		Total share capital attributable to shareholders		Non- controlling interests		Total equity
Balance as at January 1, 2013	$	1,994	$	(11,941)	$	- -	$	691	$	5,764	$	(3,492)	$	168,529	$	197,148	$	362,185	$	- -	$	362,185
Net income for the year		- -		- -		- -		- -		- -		- -		- -		31,211		31,211		- -		31,211
Comprehensive income		- -		16,946		- -		(689)		- -		16,257		- -		4,056		20,313		- -		20,313
Dividends		- -		- -		- -		- -		- -		- -		- -		(1,682)		(1,682)		- -		(1,682)
Shares purchased by a trust in employees' name on the secondary market		- -		- -		- -		- -		- -		- -		(651)		- -		(651)		- -		(651)
Shares acquired by employees		(202)		- -		- -		- -		- -		(202)		202		- -		- -		- -		- -
Repurchase of shares		- -		- -		- -		- -		- -		- -		(23)		- -		(23)		- -		(23)
Excess of acquisition cost over carrying amount of acquired common shares		- -		- -		- -		- -		- -		- -		- -		(16)		(16)		- -		(16)
Amortization of compensation costs related to the profit sharing program -  stock ownership component		321		- -		- -		- -		- -		321		- -		- -		321		- -		321
Balance as at December 31, 2013	$	2,113	$	5,005	$	- -	$	2	$	5,764	$	12,884	$	168,057	$	230,717	$	411,658	$	- -	$	411,658
Balance as at January 1, 2014	$	2,113	$	5,005	$	- -	$	2	$	5,764	$	12,884	$	168,057	$	230,717	$	411,658	$	- -	$	411,658
Investment in a subsidiary by a non-controlling interest		- -		- -		- -		- -		- -		- -		- -		- -		- -		184		184
Net income for the year		- -		- -		- -		- -		- -		- -		- -		29,318		29,318		(133)		29,185
Comprehensive income		- -		24,446		(806)		- -		- -		23,640		- -		(991)		22,649		(15)		22,634
Dividends		- -		- -		- -		- -		- -		- -		- -		(6,658)		(6,658)		- -		(6,658)
Shares acquired by employees		(26)		- -		- -		- -		- -		(26)		26		- -		- -		- -		- -
Issuance of shares upon the  conversion of debentures		- -		- -		- -		- -		- -		- -		73		- -		73		- -		73
Exercise of options upon the  conversion of debentures		- -		- -		- -		- -		(6)		(6)		6		- -		- -		- -		- -
Amortization of compensation costs related to the profit sharing program -  stock ownership component		148		- -		- -		- -		- -		148		- -		- -		148		- -		148
Balance as at December 31, 2014	$	2,235	$	29,451	$	(806)	$	2	$	5,758	$	36,640	$	168,162	$	252,386	$	457,188	$	36	$	457,224

CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods and years ended December 31
		Three-month periods				Years
(in thousands of Canadian dollars)		2014		2013		2014		2013
Cash flows from the following activities:
Operating activities
Net income		$	13,713	$	10,825	$	29,185	$	31,211
Adjustments:
	Amortization of compensation costs related to the profit sharing program – stock ownership component		21		80		148		321
	Loss on revaluation of balances of purchase price of businesses		- -		35		- -		100
	Gain on disposal of investments		- -		- -		- -		(867)
	Loss in decline in value of an investment		200		- -		200		431
	Loss (gain) on disposal of property, plant and equipment		101		35		178		(36)
	Gain on revaluation of property, plant and equipment		- -		(299)		- -		(1,242)
	Depreciation of property, plant and equipment		5,342		5,771		22,668		22,098
	Amortization of intangible assets		669		432		2,226		1,608
	Amortization of deferred financing expenses		119		312		419		560
	Provisions		66		1,968		164		4,660
	Interest rate swaps		(39)		(98)		(260)		(464)
	Imputed interest		642		523		2,337		2,218
	Pension expense		(803)		(456)		(2,838)		(2,801)
	Deferred tax expense (income)		(2,617)		(4,877)		595		(3,581)
	Share of loss (income) of joint ventures and associates		282		221		866		(274)
			17,696		14,472		55,888		53,942
Net change in non-cash operating working capital items
Decrease (increase) in accounts receivable			(5,913)		25,596		(48,140)		(2,155)
Increase in costs and estimated profits in excess of billings			(2,095)		(977)		(38,608)		(12,252)
Decrease (increase) in inventories			9,994		3,156		(39,845)		9,832
Decrease (increase) in current tax assets			1,002		(17)		(1,061)		(134)
Decrease (increase) in prepaid expenses and other assets			403		(498)		(1,586)		(557)
Increase (decrease) in accounts payable and accrued liabilities			(10,920)		(10,726)		27,916		22,542
Increase (decrease) in billings in excess of costs and estimated profits			7,321		(8,539)		31,570		5,062
Decrease in interest payable			(1,220)		(1,339)		(11)		(298)
Increase (decrease) in current tax liabilities			4,423		2,637		(3,214)		1,159
			2,995		9,293		(72,979)		22,899
Cash flows from operating activities			20,691		23,765		(17,091)		76,841
Financing activities
Shares purchased by a trust in employees' name on the secondary market			- -		- -		- -		(651)
Repurchase of shares			- -		- -		- -		(39)
Dividends			(1,669)		- -		(4,991)		- -
Increase in debt and bank loans			16,249		5,911		131,482		13,831
Repayment of debt and bank loans			(30,204)		(31,741)		(82,058)		(67,506)
Repayment of balances of purchase price of businesses			- -		- -		- -		(9,558)
Issue expenses related to debt			- -		(346)		(1,164)		(542)
Decrease in other liabilities			(106)		(57)		(82)		(57)
Cash flows from financing activities			(15,730)		(26,233)		43,187		(64,522)
Investing activities
Proceeds from sale of property, plant and equipment			229		226		353		596
Additions to property, plant and equipment			(7,192)		(5,121)		(22,780)		(17,429)
Additions to intangible assets			(284)		(288)		(1,830)		(1,431)
Acquisition of investments			- -		- -		(1,000)		- -
Proceeds from disposal of investments			- -		- -		- -		4,585
Distributions received			- -		- -		156		- -
Decrease in receivables and other assets			109		213		1,146		6,615
Increase in receivables and other assets			- -		- -		(10)		(27)
Business acquisitions, net of cash acquired			- -		(720)		(1,136)		(7,773)
Cash flows from investing activities			(7,138)		(5,690)		(25,101)		(14,864)
Effects of changes in foreign exchange rate on cash and cash equivalents			2,143		(38)		2,576		448
Net change in cash			(34)		(8,196)		3,571		(2,097)
Cash and cash equivalents – Beginning of periods and years			8,295		12,886		4,690		6,787
Cash and cash equivalents – End of periods and years		$	8,261	$	4,690	$	8,261	$	4,690
Supplementary information
	Interest paid	$	3,822	$	3,723	$	10,668	$	10,052
	Income taxes paid, net	$	320	$	1,560	$	12,522	$	10,269

  

SOURCE Canam Group Inc.

Media: François Bégin, Vice President, Communications, Canam Group Inc., 450-641-4000, 418-225-1355 (mobile), [email protected]; Investors: René Guizzetti, Vice President and Chief Financial Officer, Canam Group Inc., 450-641-4000, [email protected]