Canam Group Posts a Third Quarter Net Income of $10M and Reinstates Quarterly Dividend

BOUCHERVILLE, QC, Oct. 23, 2013 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced a net income of $10M, or $0.24 per share, for the third quarter of 2013 compared with a net income of $6.5M, or $0.15 per share, for the corresponding period in 2012. Consolidated sales for the third quarter of 2013 totaled $285M compared with $226.9M for the year-earlier period.

For the first nine months of 2013, net income totaled $20.4M, or $0.49 per share, compared with a net income of $9.6M, or $0.23 per share, for the same period in 2012. Consolidated sales for the first nine months of the year increased by 12%, from $666.9M in 2012 to $746.6M in 2013.

The growth in net income for the third quarter of 2013 as compared with the corresponding period in 2012 is mainly attributable to the increase in light structural steel revenues combined with improved profit margins in the Corporation's three groups of products and services, i.e. buildings, structural steel and bridges.

Net debt, excluding convertible debentures, totaled $147.6M, which represents a $31.6M decrease compared with December 31, 2012. As at September 28, 2013, the net debt, excluding convertible debentures, to equity ratio was 0.38 compared to 0.49 as at December 31, 2012 and 0.63 as at December 31, 2011.

As at September 28, 2013, the backlog of orders stood at $636M compared to $619M as at June 29, 2013. "Both the volume and quality of the orders constitute encouraging signs," explained Marc Dutil, President and Chief Executive Officer. "Our backlog reflects the gradual improvement seen in the heavy structural steel market."

Reinstatement of dividend
The Board of Directors approved a quarterly dividend of $0.04 per common share payable on January 3, 2014 to shareholders of record on December 15, 2013. "We are pleased to reinstate the payment of a dividend that had been suspended in 2011," continued Marc Dutil. "Conditions are now in place to pay a dividend without sacrificing our ability to continue investing and take advantage of timely opportunities."

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 Wednesday, October 23, 2013 at 4:45 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 November 6, 2013 by dialing 1-800-408-3053 and entering access code 1650511, followed by the pound key (#).

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars, except per share amounts)			Three months				Nine months
(unaudited)			2013		2012		2013		2012
Revenues		$	285,022	$	226,894	$	746,624	$	666,929
Cost of sales, excluding depreciation and amortization^(1)			238,422		190,630		624,678		573,522
Selling and administrative expenses			21,180		18,859		64,503		59,877
Profit sharing program			2,123		802		3,659		1,160
Depreciation of property, plant and equipment			5,550		5,138		16,327		15,690
Amortization of intangible assets			398		384		1,176		1,092
Other losses (gains) — net			(42)		229		(1,829)		(4,455)
Finance costs			3,638		4,070		10,958		12,847
Finance revenue			(366)		(352)		(983)		(1,761)
Share of income of joint ventures and associates			(155)		72		(495)		(348)
Income before income tax			14,274		7,062		28,630		9,305
Tax expense (income)
	Current		4,106		1,721		6,948		3,332
	Deferred		180		(1,131)		1,296		(3,676)
			4,286		590		8,244		(344)
Net income		$	9,988	$	6,472	$	20,386	$	9,649
Net earnings per share
	Basic	$	0.24	$	0.15	$	0.49	$	0.23
	Diluted	$	0.24	$	0.15	$	0.49	$	0.23
Weighted average number of common shares (in thousands of shares)
	Basic		41,972		42,013		41,968		42,737
	Diluted		42,079		42,096		42,075		42,820
Number of common shares outstanding (in thousands of shares)							42,073		42,079

^(1)	As at September 28, 2013 and September 29, 2012, the cost of sales, including depreciation and amortization, totaled $243,143 and $195,042 respectively, for the three-month period and $638,767 and $586,913 respectively, for the nine-month period.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars)				Three months				Nine months
(unaudited)				2013		2012		2013		2012
Net income			$	9,988	$	6,472	$	20,386	$	9,649
Other comprehensive income (loss):
	Items that will be reclassified subsequently to profit or loss
	Change in unrealized gains (losses) on translating foreign operations			(3,958)		(8,588)		7,239		(8,912)
	Available-for-sale assets:
		Unrealized gains on available-for-sale financial assets   arising during the period		- -		16		41		63
		Realized gains reclassified to statements of income		- -		- -		(867)		(274)
		Tax income (expense)		- -		(1)		137		28
				- -		15		(689)		(183)
Other comprehensive income (loss)				(3,958)		(8,573)		6,550		(9,095)
Comprehensive income			$	6,030	$	(2,101)	$	26,936	$	554

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars) (unaudited)	As at September 28, 2013			As at December 31, 2012
Assets
Current assets
Cash and cash equivalents	$	12,886		$	6,787
Accounts receivable		318,374			273,383
Inventories		112,088			113,217
Recoverable tax assets		242			122
Prepaid expenses and other assets		3,184			3,040
		446,774			396,549
Property, plant and equipment classified as held for sale		1,518			1,466
		448,292			398,015
Non-current assets
Investments		4,197			6,036
Ownership interests in joint ventures and associates		41,606			44,316
Property, plant and equipment		287,861			282,556
Intangible assets		9,696			9,563
Goodwill		38,088			38,088
Deferred tax assets		6,880			7,897
Long-term receivables and other assets		11,442			17,656
Total assets	$	848,062		$	804,127
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	203,317		$	148,202
Current tax liabilities		5,472			6,942
Current portion of long-term debt		12,612			10,382
Current portion of balances of purchase price of businesses		- -			8,988
		221,401			174,514
Non-current liabilities
Debt		147,921			175,605
Convertible debentures		64,775			63,446
Provisions		1,848			2,156
Deferred tax liabilities		8,494			8,629
Other liabilities		14,951			17,592
Total liabilities		459,390			441,942
Equity
Share capital		168,057			168,529
Retained earnings		217,518			197,148
Other equity items		3,097			(3,492)
Total equity		388,672			362,185
Total equity and liabilities	$	848,062		$	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		- -		- -		- -		- -		- -		- -		9,649		9,649
Comprehensive loss		- -		(8,912)		(183)		- -		(9,095)		- -		- -		(9,095)
Shares acquired by employees		(1,160)		- -		- -		- -		(1,160)		1,160		- -		- -
Repurchase of shares		- -		- -		- -		- -		- -		(5,500)		- -		(5,500)
Excess of acquisition cost over carrying amount of acquired common shares		- -		- -		- -		- -		- -		- -		(1,341)		(1,341)
Amortization of compensation costs related to the profit sharing program - stock ownership component		170		- -		- -		- -		170		- -		- -		170
Balance as at September 29, 2012	$	1,938	$	(15,320)	$	657	$	5,764	$	(6,961)	$	168,529	$	193,082	$	354,650
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		- -		- -		- -		- -		- -		- -		20,386		20,386
Comprehensive income		- -		7,239		(689)		- -		6,550		- -		- -		6,550
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		241		- -		- -		- -		241		- -		- -		241
Balance as at September 28, 2013	$	2,033	$	(4,702)	$	2	$	5,764	$	3,097	$	168,057	$	217,518	$	388,672

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Periods ended September 28, 2013 and September 29, 2012

(in thousands of Canadian dollars)			Three months				Nine months
(unaudited)			2013		2012		2013		2012
Cash flows from the following activities:
Operating activities
Net income		$	9,988	$	6,472	$	20,386	$	9,649
Adjustments:
	Amortization of compensation costs related to the profit sharing program - stock ownership component		82		57		241		170
	Loss on revaluation of balances of purchase price of businesses		- -		- -		65		- -
	Gain on disposal of investments		- -		- -		(867)		(2,361)
	Loss on decline in value of an investment		- -		- -		431		- -
	Loss (gain) on disposal of property, plant and equipment		36		(19)		(71)		(24)
	Gain on revaluation of property, plant and equipment		- -		- -		(943)		- -
	Depreciation of property, plant and equipment		5,550		5,138		16,327		15,690
	Amortization of intangible assets		398		384		1,176		1,092
	Amortization of deferred financing expenses		83		74		248		196
	Provisions		(2)		106		(308)		22
	Interest rate swaps		(31)		11		(366)		47
	Imputed interest		551		564		1,695		1,780
	Pension expense		(737)		(641)		(2,345)		(2,241)
	Deferred tax expense (income)		180		(1,131)		1,296		(3,676)
	Share of income of joint ventures and associates		(155)		72		(495)		(348)
			15,943		11,087		36,470		19,996
Net change in non-cash operating working capital balances
Decrease (increase) in accounts receivable			(5,507)		1,888		(37,484)		19,997
Decrease (increase) in inventories			188		(4,413)		6,676		7,706
Decrease (increase) in current tax assets			(99)		1,703		(117)		16,237
Decrease (increase) in prepaid expenses and other assets			1,434		167		(59)		318
Increase (decrease) in accounts payable and accrued liabilities			19,888		(3,097)		49,366		(6,519)
Increase (decrease) in interest payable			1,132		(150)		1,041		(160)
Increase (decrease) in current tax liabilities			3,184		860		(1,478)		924
			20,220		(3,042)		17,945		38,503
Cash flows from operating activities			36,163		8,045		54,415		58,499
Financing activities
Shares purchased by a trust in employees' name on the secondary market			- -		- -		(651)		- -
Repurchase of shares			- -		(129)		(39)		(6,841)
Increase in debt and bank loans			2,959		4,372		7,920		4,951
Repayment of debt and bank loans			(24,333)		(7,347)		(35,765)		(47,328)
Repayment of balances of purchase price of businesses			(6,232)		(245)		(9,558)		(6,929)
Issue expenses related to long-term debt			(166)		(257)		(196)		(257)
Increase in other liabilities			- -		8		- -		63
Cash flows from financing activities			(27,772)		(3,598)		(38,289)		(56,341)
Investing activities
Proceeds from sale of property, plant and equipment			192		221		370		234
Additions to property, plant and equipment			(4,583)		(2,745)		(12,308)		(5,243)
Additions to intangible assets			(200)		(808)		(1,143)		(899)
Acquisition of investments			- -		(149)		- -		(2,769)
Proceeds from disposal of investments			- -		- -		2,743		5,172
Distributions received			503		- -		503		265
Decrease in receivables and other assets			5,911		1,198		6,402		2,294
Increase in long-term receivables			- -		- -		(27)		- -
Acquisition of business assets			(3,467)		- -		(7,053)		- -
Cash flows from investing activities			(1,644)		(2,283)		(10,513)		(946)
Effects of changes in foreign exchange rate on cash and cash equivalents			180		(693)		486		(1,093)
Net change in cash			6,927		1,471		6,099		119
Cash and cash equivalents - Beginning of period			5,959		6,016		6,787		7,368
Cash and cash equivalents - End of period		$	12,886	$	7,487	$	12,886	$	7,487
Supplementary information
	Interest paid	$	374	$	1,367	$	6,329	$	5,823
	Income taxes paid (recovered), net	$	1,149	$	(641)	$	8,709	$	(13,606)

 

SOURCE: Canam Group Inc.

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