Canam Group's Net Income in the Second Quarter of 2015 More Than Doubled Compared to the Year-Earlier Quarter

SAINT-GEORGES, QC, le 6 août 2015 /CNW Telbec/ - Canam Group Inc. (TSX: CAM) ("Canam Group" or the "Corporation") today published its financial results for the three-month and six-month periods ended June 27, 2015.

Highlights

• 33% increase in consolidated revenues compared to the second quarter of 2014
• 68% increase in earnings before interest, tax, depreciation and amortization
  (Adjusted EBITDA) compared to the second quarter of 2014

Quarters ended June 27, 2015 and June 28, 2014	Three months
(in millions of $, except per share amounts)		2015			2014
Revenues	$	371.8		$	280.6
Selling and administrative expenses	$	26.0	7.0%	$	22.2	7.9%
Adjusted EBITDA^1	$	26.8	7.2%	$	16.0	5.7%
Net income	$	10.0		$	4.5
Net earnings per share (basic and diluted)	$	0.24		$	0.11
	Six months
(in millions of $, except per share amounts)		2015			2014
Revenues	$	680.9		$	519.9
Selling and administrative expenses	$	50.2	7.4%	$	44.0	8.5%
Adjusted EBITDA^1	$	44.5	6.5%	$	25.7	5.0%
Net income	$	14.4		$	5.0
Net earnings per share (basic and diluted)	$	0.34		$	0.12
^1 Refer to the section entitled Non-IFRS measure

Results for the second quarter and first six months of 2015
Consolidated revenues for the second quarter of 2015 totaled $371.8M, which represents a $91.2M or 33% increase, compared to revenues of $280.6M for the same quarter in 2014. Consolidated revenues after the first six months of fiscal 2015 totaled $680.9M, representing a $161M or 31% increase, compared to revenues of $519.9M for the corresponding period in 2014. The increases are attributable to all of the Corporation's groups of products and services, primarily structural steel and buildings, as well as to the favorable impact of the US dollar's rise against the Canadian dollar since the beginning of 2015.

Selling and administrative expenses totaled $26M, or 7% of revenues, in 2015 compared to $22.2M, or 7.9% of revenues, in 2014. After the first six months of fiscal 2015, selling and administrative expenses totaled $50.2M, or 7.4% of revenues, compared to $44M, or 8.5% of revenues, for the corresponding six-month period in 2014. These variations are mainly attributable to payroll increase in order to maintain sales growth, along with the strengthening of the US dollar against the Canadian dollar.

Adjusted EBITDA in the second quarter of 2015 amounted to $26.8M, or 7.2% of revenues, compared to $16M, or 5.7% of revenues, for the same quarter in 2014. For the six-month period ended June 27, 2015, Adjusted EBITDA totaled $44.5M, or 6.5% of revenues, compared to $25.7M, or 5% of revenues, for the same period in 2014. These increases in Adjusted EBITDA since the beginning of 2015 are mainly attributable to a higher sales volume combined with a rise in the Adjusted gross margins of building and structural steel activities in addition to the US dollar's rise against the Canadian dollar.

In the second quarter of 2015, net income attributable to shareholders totaled $10M, or $0.24 per share, compared to $4.5M, or $0.11 per share, for the corresponding period in 2014. After the first six months of fiscal 2015, net income totaled $14.4M, or $0.34 per share, compared to $5M, or $0.12 per share, for the same six-month period in 2014.

Maintain performance
"All business units were able to take advantage of the recovery in the US non-residential construction market and contributed to these good results for the fourth consecutive quarter," explains Marc Dutil, President and Chief Executive Officer of Canam Group. "We will continue to focus our attention on a disciplined execution in order to maintain our performance, productivity and the gradual improvement of our results."

Order backlog
The order backlog stood at $1,058M as at June 27, 2015, compared to $1,118M as at March 28, 2015 and $1,007M as at December 31, 2014. Note that the Champlain Bridge project is not included in the order backlog as the final contract was not signed as at the end of the second quarter.   

Dividend
The Board of Directors approved a dividend of $0.04 per share payable on September 30, 2015 to shareholders of record on September 14, 2015.

Acquisition of Dessin Cadmax
On August 1, 2015, the Corporation acquired Dessin Cadmax, which is located in Boisbriand, Quebec, and employs some thirty steel detailing specialists. Founded in 1984, Dessin Cadmax has taken part in numerous large-scale projects, including several in collaboration with Canam Group. This acquisition is in line with the Corporation's goal to enhance and integrate its product and service offering in the construction industry.

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 over 4,100 people in Canada, the United States, Romania, India and Hong Kong.

Conference call, webcast and presentation

Canam Group will hold a conference call with financial analysts and media representatives on Thursday, August 6, 2015 at 9:00 a.m. EDT. The call can be accessed via webcast at canamgroupinc.com and newswire.ca.

Please note that the conference call will be accompanied by a complementary presentation in PDF format that can be downloaded from the Corporation's website at canamgroupinc.com.

A replay of the conference call will be available until August 20, 2015 by dialing 1-800-408-3053 and entering access code 5162459, followed by the pound key (#).

Non-IFRS measure

Earnings before interest, tax, depreciation and amortization (Adjusted EBITDA) is not defined by International Financial Reporting Standards (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 2014 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 2014 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.

Condensed Interim Consolidated
Statements of Income
Periods ended June 27, 2015 and June 28, 2014
(in thousands of Canadian dollars, except per share amounts)				Three months				Six months
(unaudited)				2015		2014		2015		2014
Revenues		$		371,815	$	280,616	$	680,917	$	519,919
Cost of sales, excluding depreciation and amortization^(1)				315,835		241,558		582,925		449,224
Selling and administrative expenses				26,004		22,194		50,187		43,999
Profit sharing program				2,595		658		3,084		875
Depreciation of property, plant and equipment				6,236		5,845		12,454		11,440
Amortization of intangible assets				675		483		1,365		956
Other losses (gains) — net				596		295		332		(110)
Finance costs				3,865		3,693		7,786		7,189
Finance revenue				(169)		(280)		(355)		(518)
Share of loss of a joint venture and associates				601		39		742		321
Income before income tax				15,577		6,131		22,397		6,543
Tax expense
	Current (recovered)			2,465		748		4,253		(589)
	Deferred			3,133		882		3,727		2,081
				5,598		1,630		7,980		1,492
Net income		$		9,979	$	4,501	$	14,417	$	5,051
Net income attributable to:
	Shareholders	$		10,036	$	4,530	$	14,433	$	5,004
	Non-controlling interests			(57)		(29)		(16)		47
		$		9,979	$	4,501	$	14,417	$	5,051
Net earnings per share attributable to shareholders
	Basic	$		0.24	$	0.11	$	0.34	$	0.12
	Diluted	$		0.24	$	0.11	$	0.34	$	0.12
Weighted average number of common shares (in thousands of shares)
	Basic			42,013		42,022		41,998		42,047
	Diluted			42,055		42,078		42,040		42,103
Number of common shares outstanding (in thousands of shares)								42,055		42,078
^(1) As at June 27, 2015 and June 28, 2014, the cost of sales, including depreciation and amortization, was $321,172 and $246,395, respectively, for the three-month period and $593,613 and $ 458,902, respectively, for the six-month period.
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

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 (Loss)
Periods ended June 27, 2015 and June 28, 2014
(in thousands of Canadian dollars)			Three months				Six months
(unaudited)			2015		2014		2015		2014
Net income		$	9,979	$	4,501	$	14,417	$	5,051
Other comprehensive income:
Items that will be reclassified subsequently to profit or loss
	Change in unrealized gains (losses) on translating foreign operations		(7,803)		(10,331)		19,302		135
	Change in unrealized gain (loss) on translating debt designated as hedging item of the net investment in foreign operations		472		- -		(1,265)		- -
			(7,331)		(10,331)		18,037		135
Available-for-sale asset:
	Reclassified to statements of income		(2)		- -		(2)		- -
Other comprehensive income (loss)			(7,333)		(10,331)		18,035		135
Comprehensive income (loss)		$	2,646	$	(5,830)	$	32,452	$	5,186
Attributable to:
	Shareholders	$	2,658	$	(5,804)	$	32,452	$	5,136
	Non-controlling interests		(12)		(26)		- -		50
		$	2,646	$	(5,830)	$	32,452	$	5,186
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Condensed Interim Consolidated Balance Sheets
(in thousands of Canadian dollars) (unaudited)		As at June 27, 2015		As at December 31, 2014
Assets
Current assets
Cash and cash equivalents	$	5,270	$	8,261
Accounts receivable		267,289		276,691
Costs and estimated profits in excess of billings		166,177		126,590
Inventories		169,671		156,990
Recoverable tax assets		1,271		1,346
Prepaid expenses and other assets		6,371		5,619
		616,049		575,497
Non-current assets
Investments		4,742		4,593
Interests in a joint venture and associates		40,172		40,919
Property, plant and equipment		317,204		308,362
Intangible assets		10,562		10,811
Goodwill		47,820		45,097
Deferred tax assets		7,306		10,128
Long-term receivables and other assets		6,262		7,428
Total assets	$	1,050,117	$	1,002,835
Liabilities
Current liabilities
Accounts payable and accrued liabilities	$	199,255	$	183,937
Billings in excess of costs and estimated profits		80,143		74,366
Current tax liabilities		1,882		4,943
Current portion of long-term debt		18,403		17,659
Convertible debentures		68,174		67,137
		367,857		348,042
Non-current liabilities
Debt		175,518		175,585
Provisions		7,748		7,417
Deferred tax liabilities		7,453		7,477
Other liabilities		5,455		7,090
Total liabilities		564,031		545,611
Equity
Share capital		168,314		168,162
Retained earnings		263,273		252,386
Other equity items		54,463		36,640
Total equity attributable to shareholders		486,050		457,188
Non-controlling interests		36		36
Total equity		486,086		457,224
Total equity and liabilities	$	1,050,117	$	1,002,835
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

 

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		Exchange difference resulting from the translation of the debt designated as hedging item		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, 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		- -		- -		- -		- -		- -		- -		- -		5,004		5,004		47		5,051
Comprehensive income		- -		132		- -		- -		- -		132		- -		- -		132		3		135
Dividends		- -		- -		- -		- -		- -		- -		- -		(3,322)		(3,322)		- -		(3,322)
Shares acquired by employees		(26)		- -		- -		- -		- -		(26)		26		- -		- -		- -		- -
Issuance of shares upon the conversion of debentures		- -		- -		- -		- -		- -		- -		59		- -		59		- -		59
Exercise of options upon the conversion of debentures		- -		- -		- -		- -		(5)		(5)		5		- -		- -		- -		- -
Amortization of compensation costs related to the profit sharing program - stock ownership component		103		- -		- -		- -		- -		103		- -		- -		103		- -		103
Balance as at June 28, 2014	$	2,190	$	5,137	$	- -	$	2	$	5,759	$	13,088	$	168,147	$	232,399	$	413,634	$	234	$	413,868
Balance as at January 1, 2015	$	2,235	$	29,451	$	(806)	$	2	$	5,758	$	36,640	$	168,162	$	252,386	$	457,188	$	36	$	457,224
Net income for the period		- -		- -		- -		- -		- -		- -		- -		14,433		14,433		(16)		14,417
Comprehensive income		- -		19,286		(1,265)		(2)		- -		18,019		- -		- -		18,019		16		18,035
Dividends		- -		- -		- -		- -		- -		- -		- -		(3,332)		(3,332)		- -		(3,332)
Repurchase of shares		- -		- -		- -		- -		- -		- -		(105)		- -		(105)		- -		(105)
Excess of acquisition cost over carrying amount of acquired common shares		- -		- -		- -		- -		- -		- -		- -		(214)		(214)		- -		(214)
Shares acquired by employees		(238)		- -		- -		- -		- -		(238)		238		- -		- -		- -		- -
Issuance of shares upon the conversion of debentures		- -		- -		- -		- -		- -		- -		18		- -		18		- -		18
Exercise of options upon the conversion of debentures		- -		- -		- -		- -		(1)		(1)		1		- -		- -		- -		- -
Amortization of compensation costs related to the profit sharing program - stock ownership component		43		- -		- -		- -		- -		43		- -		- -		43		- -		43
Balance as at June 27, 2015	$	2,040	$	48,737	$	(2,071)	$	- -	$	5,757	$	54,463	$	168,314	$	263,273	$	486,050	$	36	$	486,086
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

Condensed Interim Consolidated
Statements of Cash Flows
Periods ended June 27, 2015 and June 28, 2014
(in thousands of Canadian dollars)					Three months					Six months
(unaudited)					2015			2014		2015						2014
Cash flows from the following activities:
Operating activities
Net income			$	9,979		$		4,501		$		14,417		$		5,051
Adjustments:
	Amortization of compensation costs related to the profit sharing program – stock ownership component			22				20				43				103
	Gain on disposal of an investment			(5)				- -				(5)				- -
	Loss (gain) on disposal of property, plant and equipment			(25)				(37)				(2)				73
	Depreciation of property, plant and equipment			6,236				5,845				12,454				11,440
	Amortization of intangible assets			675				483				1,365				956
	Amortization of deferred financing expenses			127				95				253				188
	Provisions			- -				(5)				- -				99
	Interest rate swaps			(103)				(29)				(129)				(97)
	Imputed interest			657				547				1,311				1,081
	Pension expense			(734)				(630)				(1,582)				(1,334)
	Deferred tax expense			3,133				882				3,727				2,081
	Share of loss of a joint venture and associates			601				39				742				321
				20,563				11,711				32,594				19,962
Net change in non-cash operating working capital balances
Decrease (increase) in accounts receivable				(39,546)				(36,333)				20,070				(6,256)
Increase in costs and estimated profits in excess of billings				(12,520)				(12,646)				(34,185)				(26,387)
Increase in inventories				(3,620)				(11,628)				(6,905)				(27,098)
Decrease (increase) in current tax assets				(17)				(1,868)				158				(1,868)
Decrease (increase) in prepaid expenses and other assets				884				1,545				(461)				(668)
Increase (decrease) in accounts payable and accrued liabilities				19,027				9,269				6,469				(4,653)
Increase (decrease) in billings in excess of costs and estimated profits				(10)				13,996				2,261				9,105
Increase (decrease) in interest payable				(5)				(1,194)				(4)				192
Decrease in current tax liabilities				(414)				(493)				(3,104)				(7,592)
				(36,221)				(39,352)				(15,701)				(65,225)
Cash flows from operating activities				(15,658)				(27,641)				16,893				(45,263)
Financing activities
Repurchase of shares				- -				- -				(319)				- -
Dividends				- -				- -				(1,669)				(3,322)
Increase in debt and bank loans				29,049				38,972				29,049				67,928
Repayment of debt and bank loans				(6,506)				(3,714)				(35,389)				(6,425)
Issue expenses related to long-term debt				(7)				- -				(104)				- -
Increase in other liabilities				10				8				20				16
Cash flows from financing activities				22,546				35,266				(8,412)				58,197
Investing activities
Proceeds from sale of property, plant and equipment				31				77				417				119
Additions to property, plant and equipment				(6,862)				(7,315)				(11,746)				(10,946)
Additions to intangible assets				(401)				(792)				(643)				(1,129)
Acquisition of interests in an associate				- -				(1,000)				- -				(1,000)
Proceeds from disposal of an investment				1				- -				1				- -
Acquisition of an investment				- -				- -				(150)				- -
Distributions received				- -				- -				- -				156
Decrease in receivables and other assets				87				4				119				182
Acquisition of business assets				- -				(1,136)				- -				(1,136)
Cash flows from investing activities				(7,144)				(10,162)				(12,002)				(13,754)
Effects of changes in foreign exchange rate on cash and cash equivalents				389				(1,557)				530				(1,372)
Net change in cash and cash equivalents				133				(4,094)				(2,991)				(2,192)
Cash and cash equivalents – Beginning of period				5,137				6,592				8,261				4,690
Cash and cash equivalents – End of period			$	5,270		$		2,498		$		5,270		$		2,498
Supplementary information
	Interest paid		$	3,441		$		4,000		$		4,642		$		5,253
	Income taxes paid, net		$	2,797		$		3,083		$		7,094		$		8,938
The accompanying notes are an integral part of these condensed interim consolidated financial statements.

SOURCE Canam Group Inc.

Media: François Bégin, Vice President, Communications, Canam Group Inc., 418-228-8031/ 418-225-1355 (mobile phone), [email protected]; Investors: René Guizzetti, Vice President and Chief Financial Officer, Canam Group Inc., 450-641-4000, [email protected]