Norwall Group Inc. reports second quarter end results

BRAMPTON, ON, Oct. 15 /CNW/ - Norwall Group Inc., one of North America's largest manufacturers and distributors of residential wallcovering, announced today its financial results for the quarter ended and six months ended June 30, 2009 .

Sales for the six months ended June 30, 2009 were $12,847,000 , down $3,914,000 or 23.4% as compared to the same period in the previous year. The current quarter's net loss was $2,518,000 or $0.35 per share as compared to the net loss of $1,170,000 or $0.16 per share for the comparable period last year. The Company continues to maintain a positive working capital balance of $6,032,000 at the end of the second quarter of 2009 as compared to $6,598,000 at year end. The Company believes that it is in the final stages of discussions to extend the existing mortgage which expired on October 1, 2009 and anticipates finalizing the new arrangement shortly.

Norwall Group (TSX:NGI) manufactures quality residential wallpapers and borders and distributes them to thousands of home centres, specialty stores and mass merchants in Canada and through its wholly-owned operating subsidiary, Patton Wallcoverings, in the United States .

This Press Release contains forward-looking statements reflecting management's current expectations regarding future results of operations, economic performance, financial conditions, and achievements of the Company. Actual results may differ materially from those in such statements. The Company wishes to caution the reader that those important factors described elsewhere in the management's discussion and analysis of operations could affect the Company's actual results and could cause such results to materially differ from those expressed in any forward-looking statement made by, or on behalf of, the Company.

(1) EBITA is not a recognized measure under Canadian generally accepted accounting principles (GAAP). Investors should be cautioned, however, that EBITA should not be construed as an alternative to net income (loss) determined in accordance with GAAP as an indicator of the Company's performance or to cash flows from operating, investing and financing activities as a measure of liquidity and cash flows. The Company's method of calculating EBITA may differ from other companies and, accordingly, EBITA may not be comparable to measures used by other companies. EBITDA is calculated as earnings before income taxes, depreciation, amortization and severance.

    
                             NORWALL GROUP INC.
                         Consolidated Balance Sheets
         (In thousands of Canadian dollars, except per share amounts)

                                                        June 30, December 31,
                                                           2009         2008
                                                              $            $
                                                     (Unaudited)

    Assets

    Current assets
    Cash and cash equivalents                             4,021        2,294
    Accounts receivable                                   4,518        6,035
    Inventories                                           4,384        5,445
    Merchandising supplies                                  325          657
    Prepaid expenses and other                               63          439
                                                      -----------------------
                                                         13,311       14,870

    Property, plant and equipment                        13,188       14,082

    Future income taxes                                   2,421        2,861
                                                      -----------------------
                                                         28,920       31,813
                                                      -----------------------
                                                      -----------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities              2,585        3,410
    Current portion of long-term debt                     4,694        4,862
                                                      -----------------------
                                                          7,279        8,272
                                                      -----------------------

    Shareholders' Equity

    Share capital                                        33,134       33,134

    Accumulated other comprehensive income (loss)            96         (522)

    Deficit                                             (11,589)      (9,071)
                                                      -----------------------
                                                         21,641       23,541
                                                      -----------------------
                                                         28,920       31,813
                                                      -----------------------
                                                      -----------------------



                             NORWALL GROUP INC.
                    Consolidated Statements of Operations
         (In thousands of Canadian dollars, except per share amounts)

                             FOR THE THREE MONTHS        FOR THE SIX MONTHS
                                     ENDED                      ENDED
                            -----------------------   -----------------------
                              June 30,     June 30,     June 30,     June 30,
                                 2009         2008         2009         2008
                            unaudited    unaudited    unaudited    unaudited
                            -----------------------   -----------------------
    Sales                       6,073        7,787       12,847       16,761
    Cost of goods sold          4,397        6,333        9,320       12,893
                            -----------------------   -----------------------
    Gross profit                1,676        1,454        3,527        3,868
    Selling, general and
     administrative expenses    2,352        2,468        4,620        5,334
                            -----------------------   -----------------------
    Loss before the
     undernoted                  (676)      (1,014)      (1,093)      (1,466)
    Severance and
     termination costs              6           66          613           66
                            -----------------------   -----------------------
    Loss from operations
     before the following
     items                       (682)      (1,080)      (1,706)      (1,532)
    Foreign exchange
     (gain) loss                  382           (9)         119         (268)
    Interest expense               53           52          110          111
                            -----------------------   -----------------------
    Loss before income
     taxes                     (1,117)      (1,123)      (1,935)      (1,375)
    Provision of income
     taxes                        361          (52)         583         (205)
                            -----------------------   -----------------------
    Net loss for the
     period                    (1,478)      (1,071)      (2,518)      (1,170)
                            -----------------------   -----------------------
    Basic and diluted
     loss per common share      (0.21)       (0.15)       (0.35)       (0.16)
                            -----------------------   -----------------------
                            -----------------------   -----------------------
    Weighted and average
     number of common
     shares outstanding     7,135,032    7,135,032    7,135,032    7,135,032
                            -----------------------   -----------------------
                            -----------------------   -----------------------
    

%SEDAR: 00002584E

For further information: contact: [phone]; James J. Patton, President and Chief Executive Officer, [email protected]; Edward Diochon, Vice President of Finance, [email protected]