Canam Group Posts a Third-Quarter Net Income of $10.4M and a Record Order Backlog of $909M

BOUCHERVILLE, QC, Oct. 29, 2014 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), specialized in the design and fabrication of construction products, reported a net income of $10.4M, or $0.25 per share, in the third quarter of 2014, compared with a net income of $10M, or $0.24 per share, for the corresponding period in 2013. Consolidated revenues in the third quarter increased by 15.5% to $329M compared with $285M for the year-earlier quarter.

After the first nine months of fiscal 2014, net income totaled $15.5M, or $0.37 per share, compared with a net income of $20.4M, or $0.49 per share, for the same period in 2013. Consolidated revenues in the first nine months of 2014 totaled $849M compared to $747M for the corresponding period in 2013, which represents a 13.7% increase.

The increase in revenues in the third quarter of 2014 is attributable to all of the Corporation's activities, particularly joist and steel deck activities in Canada and the United States, as well as light and heavy structural steel construction activities.

Despite an increase in revenues, net income in the third quarter of 2014 is comparable to that posted in 2013, which is mainly attributable to a compression in margins for joist and steel deck activities in Canada, bridge and light structural steel activities.

Backlog of orders

New contracts that were recently obtained in heavy and light structural steel activities contributed to the increase in the order backlog, which stood at $909M as at September 27, 2014, compared to $857M as at June 28, 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 January 5, 2015 to shareholders of record on December 17, 2014.

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 building, structural steel and bridge projects each year. The Corporation operates 22 plants across North America and employs 3,900 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 Wednesday, October 29, 2014 at 4:30 p.m. EDT. A podcast will be available at http://www.canamgroupinc.com and www.newswire.ca. A replay of the conference call will be available until November 12, 2014 by dialing 1-800-408-3053 and entering access code 9808907, followed by the pound key (#).

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF INCOME
Periods ended September 27, 2014 and September 28, 2013
(in thousands of Canadian dollars, except per share amounts)				Three months				Nine months
(unaudited)				2014		2013		2014		2013
Revenues			$	329,249	$	285,022	$	849,168	$	746,624
Cost of sales, excluding depreciation and amortization^(1)				280,528		238,422		729,752		624,678
Selling and administrative expenses				22,856		21,180		66,855		64,503
Profit sharing program				1,602		2,123		2,477		3,659
Depreciation of property, plant and equipment				5,886		5,550		17,326		16,327
Amortization of intangible assets				601		398		1,557		1,176
Other gains — net				(607)		(42)		(717)		(1,829)
Finance costs				3,828		3,638		11,017		10,958
Finance revenue				(233)		(366)		(751)		(983)
Share of loss (income) of a joint venture and associates				263		(155)		584		(495)
Income before income tax				14,525		14,274		21,068		28,630
Tax expense
	Current			2,973		4,106		2,384		6,948
	Deferred			1,131		180		3,212		1,296
				4,104		4,286		5,596		8,244
Net income			$	10,421	$	9,988	$	15,472	$	20,386
Net income attributable to:
	Shareholders		$	10,486	$	9,988	$	15,490	$	20,386
	Non-controlling interests			(65)		- -		(18)		- -
			$	10,421	$	9,988	$	15,472	$	20,386
Net earnings per share attributable to shareholders
	Basic		$	0.25	$	0.24	$	0.37	$	0.49
	Diluted		$	0.25	$	0.24	$	0.37	$	0.49
Weighted average number of common shares (in thousands of shares)
	Basic			42,025		41,972		42,050		41,968
	Diluted			42,079		42,079		42,104		42,075
Number of common shares outstanding (in thousands of shares)								42,079		42,073

^(1)	As at September 27, 2014 and September 28, 2013, the cost of sales, including depreciation and amortization, was $285,439 and $243,143, respectively, for the three-month period and $744,341and $638,767, respectively, for the nine-month period.

NOTICE
The Corporation's independent auditors have not performed a review of the accompanying condensed interim consolidated financial statements.

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
Periods ended September 27, 2014 and September 28, 2013
(in thousands of Canadian dollars)			Three months				Nine months
(unaudited)			2014		2013		2014		2013
Net income		$	10,421	$	9,988	$	15,472	$	20,386
Other comprehensive income (loss):
Items that will be reclassified subsequently to profit or loss
	Change in unrealized gains (losses) on translating foreign operations		12,344		(3,958)		12,479		7,239
Available-for-sale assets:
	Unrealized gains on available-for-sale financial assets arising during the period		- -		- -		- -		41
	Reclassified to statements of income		- -		- -		- -		(867)
	Tax income		- -		- -		- -		137
			- -		- -		- -		(689)
Other comprehensive income (loss)			12,344		(3,958)		12,479		6,550
Comprehensive income		$	22,765	$	6,030	$	27,951	$	26,936
Attributable to:
	Shareholders	$	22,835	$	6,030	$	27,971	$	26,936
	Non-controlling interests		(70)		- -		(20)		- -
		$	22,765	$	6,030	$	27,951	$	26,936

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(in thousands of Canadian dollars) (unaudited)	As at September 27, 2014			As at December 31, 2013
Assets
Current assets
Cash and cash equivalents	$	8,295		$	4,690
Accounts receivable		387,949			299,981
Inventories		164,141			110,993
Recoverable tax assets		2,352			264
Prepaid expenses and other assets		5,897			3,762
		568,634			419,690
Property, plant and equipment classified as held for sale		1,644			1,567
		570,278			421,257
Non-current assets
Investments		4,593			4,699
Interests in a joint venture and associates		41,403			41,390
Property, plant and equipment		299,176			292,289
Intangible assets		10,898			9,760
Goodwill		43,397			41,417
Deferred tax assets		9,313			11,957
Long-term receivables and other assets		8,052			10,971
Total assets	$	987,110		$	833,740
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	257,928		$	185,909
Current tax liabilities		502			8,119
Current portion of long-term debt		17,296			13,000
		275,726			207,028
Non-current liabilities
Debt		185,885			124,025
Convertible debentures		66,627			65,442
Provisions		7,207			6,816
Deferred tax liabilities		10,002			9,922
Other liabilities		6,660			8,849
Total liabilities		552,107			422,082
Equity
Share capital		168,162			168,057
Retained earnings		241,217			230,717
Other equity items		25,460			12,884
Total equity attributable to shareholders		434,839			411,658
Non-controlling interests		164			- -
Total equity		435,003			411,658
Total equity and liabilities	$	987,110		$	833,740

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 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 period		- -		- -		- -		- -		- -		- -		20,386		20,386		- -		20,386
Comprehensive income		- -		7,239		(689)		- -		6,550		- -		- -		6,550		- -		6,550
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		241		- -		- -		- -		241		- -		- -		241		- -		241
Balance as at September 28, 2013	$	2,033	$	(4,702)	$	2	$	5,764	$	3,097	$	168,057	$	217,518	$	388,672	$	- -	$	388,672
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 period		- -		- -		- -		- -		- -		- -		15,490		15,490		(18)		15,472
Comprehensive income		- -		12,481		- -		- -		12,481		- -		- -		12,481		(2)		12,479
Dividends		- -		- -		- -		- -		- -		- -		(4,990)		(4,990)		- -		(4,990)
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		127		- -		- -		- -		127		- -		- -		127		- -		127
Balance as at September 27, 2014	$	2,214	$	17,486	$	2	$	5,758	$	25,460	$	168,162	$	241,217	$	434,839	$	164	$	435,003

CONDENSED INTERIM CONSOLIDATED
STATEMENTS OF CASH FLOWS
Periods ended September 27, 2014 and September 28, 2013
(in thousands of Canadian dollars)		Three months				Nine months
(unaudited)		2014		2013		2014		2013
Cash flows from the following activities:
Operating activities
Net income		$	10,421	$	9,988	$	15,472	$	20,386
Adjustments:
	Amortization of compensation costs related to the profit sharing program – stock ownership component		24		82		127		241
	Loss on revaluation of balances of purchase price of businesses		- -		- -		- -		65
	Gain on disposal of investments		- -		- -		- -		(867)
	Loss on decline in value of an investment		- -		- -		- -		431
	Loss (gain) on disposal of property, plant and equipment		4		36		77		(71)
	Gain on revaluation of property, plant and equipment		- -		- -		- -		(943)
	Depreciation of property, plant and equipment		5,886		5,550		17,326		16,327
	Amortization of intangible assets		601		398		1,557		1,176
	Amortization of deferred financing expenses		112		83		300		248
	Provisions		(1)		(2)		98		(308)
	Interest rate swaps		(124)		(31)		(221)		(366)
	Imputed interest		614		551		1,695		1,695
	Pension expense		(701)		(737)		(2,035)		(2,345)
	Deferred tax expense		1,131		180		3,212		1,296
	Share of loss (income) of a joint venture and associates		263		(155)		584		(495)
			18,230		15,943		38,192		36,470
Net change in non-cash operating working capital balances
Increase in accounts receivable			(46,097)		(5,507)		(78,740)		(37,484)
Decrease (increase) in inventories			(22,741)		188		(49,839)		6,676
Increase in current tax assets			(195)		(99)		(2,063)		(117)
Decrease (increase) in prepaid expenses and other assets			(1,321)		1,434		(1,989)		(59)
Increase in accounts payable and accrued liabilities			58,633		19,888		63,085		49,366
Increase in interest payable			1,017		1,132		1,209		1,041
Increase (decrease)  in current tax liabilities			(45)		3,184		(7,637)		(1,478)
			(10,749)		20,220		(75,974)		17,945
Cash flows from operating activities			7,481		36,163		(37,782)		54,415
Financing activities
Shares purchased by a trust in employees' name on the secondary market			- -		- -		- -		(651)
Repurchase of shares			- -		- -		- -		(39)
Dividends			- -		- -		(3,322)		- -
Increase in debt and bank loans			47,305		2,959		115,233		7,920
Repayment of debt and bank loans			(45,429)		(24,333)		(51,854)		(35,765)
Repayment of balances of purchase price of businesses			- -		(6,232)		- -		(9,558)
Issue expenses related to long-term debt			(1,164)		(166)		(1,164)		(196)
Increase in other liabilities			8		- -		24		- -
Cash flows from financing activities			720		(27,772)		58,917		(38,289)
Investing activities
Proceeds from sale of property, plant and equipment			5		192		124		370
Additions to property, plant and equipment			(4,642)		(4,583)		(15,588)		(12,308)
Additions to intangible assets			(417)		(200)		(1,546)		(1,143)
Acquisition of interests in an associate			- -		- -		(1,000)		- -
Proceeds from disposal of investments			- -		- -		- -		2,743
Distributions received			- -		503		156		503
Decrease in receivables and other assets			855		5,911		1,037		6,402
Increase in long-term receivables			(10)		- -		(10)		(27)
Acquisition of business assets			- -		(3,467)		(1,136)		(7,053)
Cash flows from investing activities			(4,209)		(1,644)		(17,963)		(10,513)
Effects of changes in foreign exchange rate on cash and cash equivalents			1,805		180		433		486
Net change in cash and cash equivalents			5,797		6,927		3,605		6,099
Cash and cash equivalents – Beginning of period			2,498		5,959		4,690		6,787
Cash and cash equivalents – End of period		$	8,295	$	12,886	$	8,295	$	12,886
Supplementary information
	Interest paid	$	1,593	$	374	$	6,846	$	6,329
	Income taxes paid, net	$	3,264	$	1,149	$	12,202	$	8,709

SOURCE: Canam Group Inc.

François Bégin, Vice President, Communications, Canam Group Inc., 450-641-400, 418-225-1355 (mobile), [email protected]