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Press release from CNW Group

CANAM GROUP REPORTS NET EARNINGS OF $2.1M FOR THE THIRD QUARTER OF 2010

Wednesday, October 27, 2010

CANAM GROUP REPORTS NET EARNINGS OF $2.1M FOR THE THIRD QUARTER OF 201006:00 EDT Wednesday, October 27, 2010BOUCHERVILLE, QC, Oct. 27 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced net earnings of $2.1M, or $0.05 per share, for the third quarter of 2010, compared with $4.4M, or $0.10 per share, for the same quarter in 2009. Consolidated sales for the quarter rose 46% to $211.9M versus $144.7M for the year-earlier quarter.For the first nine-month period of 2010, the company's net loss was $0.9M, or $0.02 per share, compared to $15M, or $0.33 per share, for the corresponding period in 2009. Consolidated sales for the first nine months of 2010 totaled $502.9M, up 5.6% from $476.2M last year.President and chief operating officer Marc Dutil said that the growth in third quarter sales resulted from a higher volume of structural steel construction projects and the acquisition of FabSouth earlier this year. The company has a solid backlog of $513M despite a persisting slowdown in commercial and industrial construction, primarily in the United States, which exerts strong pressure on the margins.On October 21, Canam Group completed a $69-million public offering of convertible debentures bearing interest at 6.25% and maturing on October 31, 2015. The company also signed letters of commitment with lenders for a new revolving credit facility and non-revolving loan totaling $118M.Canam Group's order backlog as at September 25, 2010 stood at $513M, up from $392M as at September 26, 2009.The board of directors approved the payment of a quarterly dividend of $0.04 per share on December 31, 2010 to shareholders of record on December 17, 2010.About Canam Group Inc.Canam Group is a leader in the design and fabrication of construction products and solutions and a leading provider of design-build and building information modeling (BIM) services. The company operates more than 25 manufacturing plants and engineering offices in Canada, the United States, Romania, India and China, and has partnerships with companies in Saudi Arabia, the United Arab Emirates and China.Conference callCanam Group will hold a conference call with financial analysts and media representatives on Wednesday, October 27, 2010 at 9:00 a.m. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until November 10, 2010 by dialing 1-800-408-3053 and entering access code 7502286, followed by the pound key (#).Interim Consolidated Statements of EarningsPeriods ended September 25, 2010 and September 26, 2009(in thousands of dollars, except per share amounts) (unaudited)3 months9 months  2010 2009 2010 2009Sales$211,883$144,722$502,886$476,165Cost of sales 182,934 116,476 434,904 382,917Gross profit 28,949 28,246 67,982 93,248Selling and administrative expenses 19,675 17,000 56,383 52,361Profit sharing programs 266 654 774 1,818Exchange loss (gain) 214 (716) 464 (998)Gain on disposal of investments (439) - - (448) (209)Loss (gain) on disposal of property, plant and equipment 166 101 (140) 16  9,067 11,207 10,949 40,260Depreciation of property, plant and equipment 4,889 4,186 14,145 12,197Amortization of intangible assets 631 316 2,847 1,038Financial expenses 1,542 453 3,198 1,584Gain on revaluation of investments - - - - (3,888) - -Earnings (loss) before income tax expense and undermentioned items 2,005 6,252 (5,353) 25,441Income tax expense (recovery)         Current 1,786 2,102 2,220 8,418 Future (1,804) (58) (6,743) 95  (18) 2,044 (4,523) 8,513Earnings (loss) before undermentioned items 2,023 4,208 (830) 16,928Share in earnings (loss) of companies subject to significant influence 57 47 (93) (850)Net earnings (net loss) from continuing operations 2,080 4,255 (923) 16,078Net earnings (net loss) from discontinued operations - - 173 60 (1,051)Net earnings (net loss)$2,080$4,428$(863)$15,027Net earnings (net loss) per share        Basic:         From continuing operations$0.05$0.09$(0.02)$0.36 From discontinued operations - - 0.01 - - (0.03) Total$0.05$0.10$(0.02)$0.33Diluted:         From continuing operations$0.05$0.09$(0.02)$0.35 From discontinued operations - - 0.01 - - (0.02) Total$0.05$0.10$(0.02)$0.33Weighted average number of common shares(in thousands of shares)         Basic 45,156 44,988 45,155 45,001 Diluted 45,388 45,377 45,404 45,388Number of common shares outstanding     45,366 45,368Interim Consolidated Statements of Comprehensive Income (loss) Periods ended September 25, 2010 and September 26, 2009(in thousands of dollars) (unaudited)3 months9 months  2010 2009 2010 2009Net earnings (net loss)$2,080$4,428$(863)$15,027Other comprehensive loss:         Change in unrealized gains and losses on translating financial statements of self-sustaining foreign operations$(979)$(8,602)$(3,417)$(18,031) Unrealized gains on available-for-sale financial assets arising during the period$834$26$758$555 Reclassification in earnings (421) - - (421) - - Income tax expense (72) (5) (58) (104)Change in unrealized gains and losses on available-for-sale financial assets$341$21$279$451Other comprehensive loss$(638)$(8,581)$(3,138)$(17,580)Comprehensive income (loss)$1,442$(4,153)$(4,001)$(2,553)Interim Consolidated Statements of Retained Earnings Periods ended September 25, 2010 and September 26, 2009(in thousands of dollars) (unaudited)3 months9 months  2010 2009 2010 2009Opening balance$237,399$238,208$244,029$232,208Net earnings (net loss) 2,080 4,428 (863) 15,027Dividends (1,739) (1,816) (5,368) (5,447)Excess of acquisition cost over carrying value of acquired common shares - - - - (58) (968)Closing balance$237,740$240,820$237,740$240,820Interim Consolidated Balance SheetsAs at September 25, 2010As at December 31,2009(in thousands of dollars)(unaudited) Assets        Current assets         Cash and cash equivalents  $24,381$67,393 Accounts receivable   196,825   99,594 Inventories   155,099   104,540 Income taxes recoverable   210   6,701 Future income tax assets   9,188   1,008 Prepaid expenses and other assets   3,984   3,484 Current assets of discontinued operations   - -   1,230 Total current assets   389,687   283,950Investments   48,833   63,503Property, plant and equipment   246,468   184,851Property, plant and equipment held for sale   1,511   1,549Intangible assets   12,593   1,127Goodwill   52,284   150Future income tax assets   219   363Long-term receivables and other assets   22,874   21,942Long-term assets of discontinued operations   - -   8,618   $774,469$566,053Liabilities        Current liabilities         Bank loans  $23,703$- - Accounts payable and accrued liabilities   178,220   77,112 Income taxes payable   68   635 Future income tax liabilities   170   876 Current portion of long-term debt   5,984   5,477 Current portion of the balance of purchase price ofsubsidiaries   10,070   - - Current liabilities of discontinued operations   - -   1,495 Total current liabilities   218,215   85,595Long-term debt   125,717   62,212Balance of purchase price of subsidiaries   22,196   - -Deferred credits   5,119   4,749Future income tax liabilities   11,322   11,296Long-term liabilities of discontinued operations   - -   1,604    382,569   165,456Shareholders' Equity        Share capital   179,102   178,024Retained earnings   237,740   244,029Contributed surplus   4,514   4,862Accumulated other comprehensive loss   (29,456)   (26,318)    391,900   400,597   $774,469$566,053Interim Consolidated Statements of Cash FlowsPeriods ended September 25, 2010 and September 26, 2009(in thousands of dollars) (unaudited)  3months  9 months  2010 2009 2010 2009Cash flows from the following activities:        Operating activities        Net earnings (net loss) from continuing operations$2,080$4,255$(923)$16,078Items not affecting cash and cash equivalents         Amortization of compensation costs related to the profit sharing program - stock ownership component 347 433 1,038 1,349 Unrealized loss (gain) on foreign currency forward contracts - - 211 - - (1,322) Gain on revaluation of investments - - - - (3,888) - - Gain on disposal of investments (439) - - (448) (209) Loss (gain) on disposal of property, plant and equipment 166 101 (140) 16 Depreciation of property, plant and equipment 4,889 4,186 14,145 12,197 Amortization of intangible assets 631 316 2,847 1,038 Amortization of deferred financing expenses 62 52 179 160 Pension expense 106 82 180 (24) Future income tax expense (1,804) (58) (6,743) 95 Share in loss (earnings) of companies subject to significant influence (57) (47) 93 850  5,981 9,531 6,340 30,228Net change in non-cash operating working capital items         Decrease (increase) in accounts receivable (36,224) 4,082 (50,045) 28,670 Decrease (increase) in inventories (6,708) 13,663 (34,645) 46,817 Decrease (increase) in income taxes recoverable 5,312 (359) 5,060 1,566 Decrease (increase) in prepaid expenses and other assets 214 (124) 623 3,407 Increase (decrease) in accounts payable and accrued liabilities 33,511 (4,491) 42,930 (25,245) Increase in interest payable 558 204 1,144 185 Increase (decrease) in income taxes payable (301) 2,385 (778) 2,338  (3,638) 15,360 (35,711) 57,738Cash flows from continuing operating activities 2,343 24,891 (29,371) 87,966Financing activities        Shares purchased by a trust in employees' name on the secondary market - - - - (364) (1,871)Repurchase of shares - - - - (127) (2,122)Proceeds from issuance of shares - - - - 125 47Dividends (1,764) - - (3,578) (3,631)Increase in long-term debt and bank loans 20,724 3,297 74,751 11,977Repayment of long-term debt and bank loans (1,020) (880) (4,369) (19,724)Deferred credits (589) - - (1,255) (235)Cash flows from continuing financing activities 17,351 2,417 65,183 (15,559)Investing activities        Proceeds from sale of property, plant and equipment 73 - - 580 392Additions to property, plant and equipment (10,560) (4,663) (27,600) (17,062)Additions to intangible assets (144) (86) (329) (416)Acquisition of investments - - - - (120) (4,593)Proceeds from disposal of investments 1,500 - - 1,503 1,144Distribution from a company subject to significant influence - - - - - - 300Decrease in long-term receivables 2,868 826 4,583 2,500Increase in long-term receivables (67) (1,631) (135) (4,290)Repayment of balance of purchase price of subsidiaries (2,630) - - (2,630) - -Business acquisitions, net of cash acquired (15,601) - - (54,285) - -Cash flows from continuing investing activities (24,561) (5,554) (78,433) (22,025)Effect of changes in foreign exchange rate on cash and cash equivalents 138 (128) (589) (439)Net change in cash and cash equivalents from continuing operations (4,729) 21,626 (43,210) 49,943Cash flows from discontinued operations         Operating activities - - 610 184 641 Investing activities - - 93 14 378  - - 703 198 1,019Cash and cash equivalents, beginning of period 29,110 44,252 67,393 15,619Cash and cash equivalents, end of period$24,381$66,581$24,381$66,581Supplementary information         Interest paid$1,127$669$3,212$2,717 Income taxes paid (recovered), net$(3,966)$(1,341)$(3,261)$3,699For further information: Jasmin GosselinVice President, CommunicationsTel.: 450-641-4000Email:   jasmin.gosselin@canamgroup.ws www.canamgroup.ws