Canam Group Posts a Second Quarter Net Income of $7.4M

BOUCHERVILLE, QC, Aug. 6, 2013 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), specialized in the design and fabrication of construction products, today recorded a net income of $7.4M, or $0.18 per share, for the second quarter of 2013, compared with a net income of $4.5M, or $0.10 per share, for the corresponding quarter in 2012 which included a gain on disposal of investment in the amount of $2.1M. Consolidated sales for the second quarter of 2013 increased by 8.7% to $251.9M compared with $231.7M for the year-earlier period.

For the first six months of 2013, net income totaled $10.4M, or $0.25 per share, compared with a net income of $3.2M, or $0.07 per share, for the corresponding period in 2012. Consolidated sales for the first six months of the year totaled $461.6M compared to $440M during the same period in 2012.

The increase in sales recorded in the second quarter is mainly attributable to light structural steel activities in the United States. The Corporation's three groups of products and services, i.e. buildings, structural steel and bridges, each saw an improvement in their profit margins.

As at June 30, 2013, the backlog of orders stood at $619M compared to $575M as at March 30, 2013 and $503M at the end of the second quarter of 2012.

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 an average of 10,000 construction projects each year in the following activity sectors: buildings, structural steel and bridges. The Corporation operates 21 plants across North America and employs 3,500 people in Canada, the United States, Romania, India and Hong Kong.

Conference call
Canam Group will hold a conference call with financial analysts and media representatives on Tuesday, August 6, 2013 at 4:30 p.m. EDT. A podcast will be available at www.canamgroupinc.com and www.newswire.ca. A replay of the conference call will be available until August 20, 2013 by dialing 1-800-408-3053 and entering access code 2317621, followed by the pound key (#).

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars, except per share amounts)			Three months				Six months
(unaudited)			2013		2012		2013		2012
Revenues		$	251,850	$	231,741	$	461,602	$	440,035
Cost of sales, excluding depreciation and amortization^(1)			209,787		199,082		386,256		382,892
Selling and administrative expenses			23,215		20,610		43,323		41,018
Profit sharing program			1,286		148		1,536		358
Depreciation of property, plant and equipment			5,471		5,259		10,777		10,552
Amortization of intangible assets			401		352		778		708
Other gains — net			(1,668)		(2,929)		(1,787)		(4,684)
			13,358		9,219		20,719		9,191
Finance costs			3,571		4,277		7,320		8,777
Finance revenue			(311)		(365)		(617)		(1,409)
Share of income of joint ventures and associates			(36)		(29)		(340)		(420)
Income before income tax			10,134		5,336		14,356		2,243
Tax expense (income)
	Current		1,725		1,534		2,842		1,611
	Deferred		984		(692)		1,116		(2,545)
			2,709		842		3,958		(934)
Net income		$	7,425	$	4,494	$	10,398	$	3,177
Net earnings per share
	Basic	$	0.18	$	0.10	$	0.25	$	0.07
	Diluted	$	0.18	$	0.10	$	0.25	$	0.07
Weighted average number of common shares (in thousands of shares)
	Basic		41,957		42,856		41,953		43,087
	Diluted		42,088		42,950		42,084		43,182
Number of common shares outstanding (in thousands of shares)							42,073		42,105

^(1)	As at June 29, 2013 and June 30, 2012, the cost of sales, including depreciation and amortization, totaled $214,442 and $203,551, respectively, for the three-month period and $395,624 and $391,870, respectively, for the six-month period.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars)				Three months				Six months
(unaudited)				2013		2012		2013		2012
Net income			$	7,425	$	4,494	$	10,398	$	3,177
Other comprehensive income (loss):
	Items that will be reclassified subsequently to profit or loss
	Change in unrealized gains (losses) on translating foreign operations			7,134		3,818		11,198		(324)
	Available-for-sale assets:
		Unrealized gains (losses) on available-for-sale financial assets arising during the period		14		(88)		41		47
		Realized gains reclassified to statements of income		(828)		- -		(867)		(274)
		Tax expense		135		11		137		29
				(679)		(77)		(689)		(198)
Other comprehensive income (loss)				6,455		3,741		10,509		(522)
Comprehensive income			$	13,880	$	8,235	$	20,907	$	2,655

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars) (unaudited)		As at June 29, 2013			As at December 31, 2012
Assets
Current assets
Cash and cash equivalents	$	5,959			$	6,787
Accounts receivable		316,183				273,383
Inventories		113,607				113,217
Recoverable tax assets		147				122
Prepaid expenses and other assets		4,667				3,040
		440,563				396,549
Property, plant and equipment classified as held for sale		1,550				1,466
		442,113				398,015
Non-current assets
Investments		4,699				6,036
Ownership interests in joint ventures and associates		41,453				44,316
Property, plant and equipment		291,980				282,556
Intangible assets		10,057				9,563
Goodwill		38,088				38,088
Deferred tax assets		7,207				7,897
Long-term receivables and other assets		17,293				17,656
Total assets	$	852,890			$	804,127
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	184,853			$	148,202
Current tax liabilities		2,294				6,942
Current portion of long-term debt		11,373				10,382
Current portion of balances of purchase price of businesses		9,715				8,988
		208,235				174,514
Non-current liabilities
Debt		171,695				175,605
Convertible debentures		64,321				63,446
Provisions		1,850				2,156
Deferred tax liabilities		8,494				8,629
Other liabilities		15,734				17,592
Total liabilities		470,329				441,942
Equity
Share capital		168,057				168,529
Retained earnings		207,530				197,148
Other equity items		6,974				(3,492)
Total equity		382,561				362,185
Total equity and liabilities	$	852,890			$	804,127

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands of Canadian dollars) (unaudited)		Employee benefits paid in equity instruments		Exchange differences resulting from the translation of foreign operations		Available-for- sale financial assets		Debenture conversion options		Total other equity items		Share capital		Retained earnings		Total equity
Balance as at January 1, 2012		$	2,928	$	(6,408)	$	840	$	5,764	$	3,124	$	172,869	$	184,774	$	360,767
Net income for the period			- -		- -		- -		- -		- -		- -		3,177		3,177
Comprehensive loss			- -		(324)		(198)		- -		(522)		- -		- -		(522)
Shares acquired by employees			(1,160)		- -		- -		- -		(1,160)		1,160		- -		- -
Repurchase of shares			- -		- -		- -		- -		- -		(5,395)		- -		(5,395)
Excess of acquisition cost over carrying amount of acquired common shares			- -		- -		- -		- -		- -		- -		(1,317)		(1,317)
Amortization of compensation costs related to the profit sharing program - stock ownership component			113		- -		- -		- -		113		- -		- -		113
Balance as at June 30, 2012		$	1,881	$	(6,732)	$	642	$	5,764	$	1,555	$	168,634	$	186,634	$	356,823
Balance as at January 1, 2013		$	1,994	$	(11,941)	$	691	$	5,764	$	(3,492)	$	168,529	$	197,148	$	362,185
Net income for the period			- -		- -		- -		- -		- -		- -		10,398		10,398
Comprehensive income			- -		11,198		(689)		- -		10,509		- -		- -		10,509
Shares purchased by a trust in employees' name on the secondary market			- -		- -		- -		- -		- -		(651)		- -		(651)
Shares acquired by employees			(202)		- -		- -		- -		(202)		202		- -		- -
Repurchase of shares			- -		- -		- -		- -		- -		(23)		- -		(23)
Excess of acquisition cost over carrying amount of acquired common shares			- -		- -		- -		- -		- -		- -		(16)		(16)
Amortization of compensation costs related to the profit sharing program - stock ownership component			159		- -		- -		- -		159		- -		- -		159
Balance as at June 29, 2013		$	1,951	$	(743)	$	2	$	5,764	$	6,974	$	168,057	$	207,530	$	382,561

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars)			Three months			Six months
(unaudited)		2013		2012		2013			2012
Cash flows from the following activities:
Operating activities
Net income		$	7,425	$	4,494	$	10,398	$	3,177
Adjustments:
	Amortization of compensation costs related to the profit sharing program - stock ownership component		80		57		159		113
	Loss on revaluation of balances of purchase price of businesses		- -		- -		65		- -
	Gain on disposal of investments		(828)		(2,099)		(867)		(2,361)
	Loss on decline in value of an investment		431		- -		431		- -
	Loss (gain) on disposal of property, plant and equipment		(110)		5		(107)		(5)
	Loss on revaluation of property, plant and equipment		(943)		- -		(943)		- -
	Depreciation of property, plant and equipment		5,471		5,259		10,777		10,552
	Amortization of intangible assets		401		352		778		708
	Amortization of deferred financing expenses		83		61		165		122
	Provisions		(298)		(111)		(306)		(84)
	Interest rate swaps		(243)		109		(335)		36
	Imputed interest		555		559		1,144		1,216
	Pension expense		(804)		(738)		(1,608)		(1,600)
	Deferred tax expense (income)		984		(692)		1,116		(2,545)
	Share of income of joint ventures and associates		(36)		(29)		(340)		(420)
			12,168		7,227		20,527		8,909
Net change in non-cash operating working capital balances
Decrease (increase) in accounts receivable			(29,226)		(25,400)		(31,977)		18,109
Decrease in inventories			5,508		6,528		6,488		12,119
Decrease (increase) in current tax assets			(18)		13,793		(18)		14,534
Decrease (increase) in prepaid expenses and other assets			659		348		(1,493)		151
Increase (decrease) in accounts payable and accrued liabilities			24,281		6,346		29,478		(3,422)
Decrease in interest payable			(1,227)		(1,258)		(91)		(10)
Increase (decrease) in current tax liabilities			(524)		30		(4,662)		64
			(547)		387		(2,275)		41,545
Cash flows from operating activities			11,621		7,614		18,252		50,454
Financing activities
Shares purchased by a trust in employees' name on the secondary market			- -		- -		(651)		- -
Repurchase of shares			- -		(5,490)		(39)		(6,712)
Increase in debt and bank loans			2,811		- -		4,961		579
Repayment of debt and bank loans			(6,102)		(11,134)		(11,432)		(39,981)
Repayment of balances of purchase price of businesses			- -		- -		(3,326)		(6,684)
Issue expenses related to long-term debt			(30)		- -		(30)		- -
Increase in other liabilities			- -		47		- -		55
Cash flows from financing activities			(3,321)		(16,577)		(10,517)		(52,743)
Investing activities
Proceeds from sale of property, plant and equipment			131		2		178		13
Additions to property, plant and equipment			(4,908)		(1,145)		(7,725)		(2,498)
Additions to intangible assets			(288)		(45)		(943)		(91)
Acquisition of investments			- -		- -		- -		(2,620)
Proceeds from disposal of investments			2,406		4,850		2,743		5,172
Distributions received			- -		90		- -		265
Decrease in receivables and other assets			152		576		491		1,096
Increase in long-term receivables			(27)		- -		(27)		- -
Acquisition of business assets			(3,586)		- -		(3,586)		- -
Cash flows from investing activities			(6,120)		4,328		(8,869)		1,337
Effects of changes in foreign exchange rate on cash and cash equivalents			138		(208)		306		(400)
Net change in cash			2,318		(4,843)		(828)		(1,352)
Cash and cash equivalents - Beginning of period			3,641		10,859		6,787		7,368
Cash and cash equivalents - End of period		$	5,959	$	6,016	$	5,959	$	6,016
Supplementary information
	Interest paid	$	4,500	$	3,777	$	5,955	$	4,456
	Income taxes paid (recovered), net	$	2,292	$	(12,275)	$	7,560	$	(12,965)

 

SOURCE: CANAM GROUP INC.

François Bégin
Vice President, Communications
Canam Group Inc.
Telephone: [phone]
Email: [email protected]