The Churchill Corporation Declares $0.12 Quarterly Dividend and Reports First Quarter 2011 Results

CALGARY, May 25, 2011 /CNW/ - The Churchill Corporation (TSX: CUQ, CUQ.DB) ("Churchill" or the "Corporation") is pleased to announce, along with its first quarter 2011 results, the declaration of a dividend for the second quarter of 2011 of $0.12 per common share, with future dividends intended to be paid quarterly. The first quarterly dividend will be paid July 15, 2011 to shareholders of record on June 30, 2011. The ex-dividend date is June 28, 2011. The Corporation intends to also introduce a dividend reinvestment plan ("DRIP") coincident with the record date, for which details will be made available on Churchill's website (

"Churchill's financial strength and ability to generate sustained cash flows can continue to support our growth strategies and can provide dividend income for our shareholders. The Corporation's past and projected performance gives our Board of Directors the confidence to declare the company's first ever common share dividend," said Jim Houck, President and CEO. "This dividend will reward our existing shareholders and will allow new investors with a yield mandate to buy our stock. Our intention is to introduce this modest quarterly dividend with potential to increase it as we grow our business."


  • Revenue for the quarter was $304.7 million compared to $182.5 million in the first quarter of 2010.
  • Quarterly earnings before interest, taxes, depreciation and amortization ("EBITDA") were $17.2 million, compared to $13.2 million reported in the first quarter of 2010.
  • Net earnings, reported for the first time under International Financial Reporting Standards ("IFRS"), were $5.8 million, compared to $8.3 million recorded in the first quarter of 2010. Basic and diluted earnings per share were $0.24 for the 2011 first quarter, compared to $0.47 basic and $0.45 diluted for the first quarter of 2010.
  • Backlog was $1,577 million as of March 31, 2011, compared to $1,555 million on December 31, 2010.
  • Stuart Olson Dominion Construction Ltd. ("SODCL"), Churchill's General Contracting segment, generated first quarter revenue of $207.7 million, compared to $139.5 million in the first quarter of 2010. SODCL's first quarter 2011 EBITDA was $9.0 million compared to $13.4 million in the three months ended March 31, 2010, with an EBITDA margin of 4.4% compared to 9.6% in the first quarter of 2010.
  • Canem Systems Ltd. ("Canem"), an electrical and data systems contractor, forms the Commercial Systems segment. Canem produced EBITDA of $6.2 million with an EBITDA margin of 15.1% in the first quarter of 2011.
  • Organic growth from Laird Electric Inc. ("Laird") and Insulation Holdings Inc. ("IHI") of Churchill's Industrial Services segment produced 2011 first quarter EBITDA of $6.3 million, compared to $3.0 million for the first three months of 2010. The third company in this segment, Broda Construction Inc. ("Broda"), showed an EBITDA loss of $1.6 million for the quarter. Broda's operations are extremely seasonal, skewed toward the second and third quarters as most civil and earthmoving work is done during these quarters. First and fourth quarters tend to be relatively low in activity for Broda and the company performs a significant amount of its equipment maintenance during this period, which is expensed under IFRS.

Financial Highlights

  3 Months Ended March 31
($millions, except per share amounts) 2011 2010 $ Change % Change
Contract revenue $304.7 $182.5 $122.2 67%
Contract income 36.6 23.8 12.8 54%
EBITDA from continuing operations 17.2 13.2 4.0 30%
Net earnings from continuing operations 5.8 8.1 (2.3) -28%
Net earnings 5.8 8.3 (2.5) -30%
Net earnings per common share - Basic 0.24 0.47 (0.23) -49%
                                                 - Diluted 0.24 0.45 (0.21) -47%
  31-Mar-11 31-Dec-10 $ Change % Change
Backlog 1,577.4 1,555.0 22.4 1%
Long-term indebtedness 136.5 148.6 (12.1) -8%
Total assets 844.9 865.1 (20.2) -2%

First quarter 2011 results are presented in conformance with IFRS and prior year first quarter results have been restated accordingly. All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "EBITDA" and "backlog", are not prescribed under Canadian Generally Accepted Accounting Principles ("GAAP") or IFRS. For a description of these measures, see the Terminology section in Churchill's 2010 management discussion and analysis ("MD&A").

"Our challenge in the first quarter of 2011 was to meet market expectations, after we posted record revenue and earnings in the third and fourth quarters of 2010," said Mr. Houck. "We typically register a seasonal decline in revenue in the first quarter due to lower construction activity in the Canadian winter, and this is in fact what our Commercial Systems and Industrial Services segments experienced, with sales moderating but margins strengthening. However, revenue for our largest company, Stuart Olson Dominion, which comprises our General Contracting segment, was negatively impacted by a particularly severe winter as new work fell short of replacing projects nearing completion. As well, Stuart Olson Dominion's contract income margin declined because of the execution of higher volumes of legacy Dominion's lower margin projects, a reduction in legacy Stuart Olson's margins as we work through projects secured in the more competitive markets of 2008 and 2009, and lower volumes of high-margin self-performed work. This followed a quarter in which we recognized profit from contingencies eliminated on some large projects nearing completion and we recorded a gain from a reduction in the amount of long-term deferred warranty claims liability, reflecting the ongoing assessment of subcontractor risk under the Corporation's Subguard Program. We expect margins to begin to improve in this segment towards the end of 2011 and into 2012 as we see an increase in the proportion of recently awarded higher margin work coming out of backlog."

"Going forward, the increased size, scope and scale that the transformational Seacliff acquisition provided will serve us well as Stuart Olson Dominion continues to accumulate a portfolio of high potential projects in its backlog, as Broda continues to leverage its stronger financial position as part of the Churchill group to bid and win large projects outside of its traditional service area, such as the Calgary Airport Authority's New Runway Development Program, and as Canem continues to execute on its best-in-class operational efficiencies and steps out into Manitoba with the addition of McCaine Electric's operations in the second quarter," continued Mr. Houck. "In addition, our legacy Industrial Services companies, Laird and Insulation Holdings, continue to generate healthy margins and are parlaying their strong safety records and operational excellence into growing their operations throughout Western Canada. In the current oil pricing environment, the spend of oil sands clients is poised to dramatically increase as new projects move forward and as sustaining and debottlenecking capital is employed. I believe that our focus on the growing resource-based Western Canada economy, and our unwavering strategy of profitable risk-adjusted organic growth supplemented by a disciplined approach to accretive acquisitions, will create value for our shareholders in 2011 and for years to come."

A full copy of Churchill's first quarter management's discussion and analysis, financial statements and notes can be obtained at and on Churchill'w website ('s management will comment on Churchill's first quarter results at the Corporation's Annual General Meeting on May 25 at 2 p.m. Mountain Time (4 p.m. Eastern Time). In addition, the Corporation will be hosting a conference call discussing Churchill's first quarter results at 10:30 a.m. Eastern Time on May 26. To listen to the conference call or view a webcast of the Annual General Meeting, visit

About The Churchill Corporation
The Churchill Corporation provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to an array of public and private sector clients. Churchill operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba, northwest Ontario and the Yukon. Churchill common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "CUQ" and "CUQ.DB", respectively.

Forward Looking Information
Certain statements in this Press Release may constitute "forward-looking statements". Forward-looking statements include, without limitation, statements regarding the future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans and objectives of the Corporation. Many of these statements can be identified by looking for words such as "believes," "expects," "may," "will," "intends," "anticipates," "estimates," "continues," or the negative thereof, or other variations thereon. Although management of Churchill believes its expectations regarding future performance of the Corporation are based on reasonable assumptions and currently available competitive, financial and economic data, market conditions and operating plans, it can give no assurance its expectations will be achieved. The Corporation cautions that, by their nature, forward-looking statements, involve risks, and uncertainties and that its actual actions, and/or results could differ materially from those expressed or implied in such forward-looking statements, and that the aforementioned risks, uncertainties and actions could affect the extent to which a particular projection materializes. The Corporation assumes no obligation to update the forward-looking statements should circumstances or the Corporation's management's estimates or opinions change, except as may be required by law.


SOURCE The Churchill Corporation

For further information:

James C. Houck, B.Sc., MBA
President and Chief Executive Officer
The Churchill Corporation
(403) 685-7777
Andrew Apedoe
Vice President Investor Relations & Secretary
The Churchill Corporation
(403) 685-7775
Ken Wetherell, CFA
Director, Investor Relations
The Churchill Corporation
(403) 685-7776


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