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Press release from CNW Group

CANAM GROUP: 2010 SALES UP 20% TO $751M

Tuesday, February 15, 2011

CANAM GROUP: 2010 SALES UP 20% TO $751M06:00 EST Tuesday, February 15, 2011BOUCHERVILLE, QC, Feb. 15 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), a leading construction product fabricator, closed its last financial year ended December 31, 2010 with consolidated sales totaling $751.3 million, up 20% from $625.8 million in 2009. The company posted net earnings of $0.1 million, or $0 per share, compared with $20.4 million, or $0.45 per share, last year.Fourth-quarter net earnings amounted to $0.8 million, or $0.02 per share, against $5.1 million, or $0.11 per share, for the corresponding quarter in 2009. Consolidated sales for the quarter increased 66%, from $149.7 million in 2009 to $248.4 million in 2010.Marc Dutil, Canam Group president and chief operating officer, stated that this growth in sales stems primarily from the acquisition of FabSouth in February 2010 whereas the contraction of gross margins reflects the downturn in non-residential construction across North America. Despite a very difficult economic environment, Mr. Dutil is pleased that the company has attained its goal to weather the recession with a strong balance sheet and make the right acquisitions at the right price, while maintaining jobs and profitability in anticipation of the economic recovery.The gross profit for 2010 amounted to $94.3 million and gross margin stood at 12.5% of sales compared to 19.4% at the end of the previous year. EBITDA went from $49 million at the close of 2009 to $14.8 million one year later. The company's net debt stood at $97.6 million versus $0.3 million a year ago. Shareholders' equity was $406.6 million.As at December 31, 2010, Canam Group's order backlog totaled $485 million compared to $460 million a year ago.The board of directors approved the payment of a quarterly dividend of $0.04 per common share on March 31, 2011 to shareholders of record on March 17, 2011.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 at 9 a.m. on Tuesday, February 15, 2011. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until March 1, 2011, by dialing 1-800-408-3053 and entering access code 1634675, followed by the pound key (#). ConsolidatedStatements of EarningsPeriods ended December 31        (in thousands of dollars, except per share amounts)3 months  12 months  2010 2009(restated) 2010 2009(restated)Sales $248,436   $149,678   $751,322   $625,843Cost of sales 222,162 121,204 657,066 504,121Gross profit 26,274 28,474 94,256 121,722Selling and administrative expenses 21,649 19,399 78,032 71,760Profit sharing programs 884 1,111 1,658 2,929Exchange loss (gain) (386) (1,155) 78 (2,153)Gain on disposal of investments - - (110) (448) (319)Loss on disposal of property, plant and equipment 154 457 125 402Impairment of property, plant and equipment held for sale - - 132 - - 132  3,973 8,640 14,811 48,971Depreciation of property, plant and equipment 4,873 4,368 18,678 16,285Amortization of intangible assets 1,124 256 3,971 1,294Financial expenses 3,262 458 6,460 2,042Gain (loss) on revaluation of investment 78 - - (3,810) - -Gain on business acquisition (7,464) - - (7,464) - -Earnings (loss) before income tax expense and undermentioned item 2,100 3,558 (3,024) 29,350Income tax expense (recovery)         Current (1,762) (4,392) 458 4,026 Future 2,918 3,044 (3,798) 3,207  1,156 (1,348) (3,340) 7,233Earnings before undermentioned items 944 4,906 316 22,117Share in earnings (loss) of companies subject to significant influence (189) 149 (282) (701)Net earnings from continuing operations 755 5,055 34 21,416Net earnings (net loss) from discontinued operations - - 67 60 (984)Net earnings$755$5,122$94$20,432Net earnings (net loss) per share        Basic:         From continuing operations$0.02$0.11$0$0.47 From discontinued operations - - - - 0 (0.02) Total$0.02$0.11$0$0.45Diluted:         From continuing operations$0.02$0.11$0$0.47 From discontinued operations - - - - 0 (0.02) Total$0.02$0.11$0$0.45Weighted average number of common shares        (in thousands of shares)         Basic 45,208 45,047 45,207 45,057 Diluted 45,394 45,385 45,396 45,385Number of common shares outstanding     45,366 45,368 Consolidated Statements of Comprehensive IncomePeriods ended December 31(in thousands of dollars)3 months12 months  2010 2009(restated) 2010 2009(restated)Net earnings $755   $5,122   $94   $20,432Other comprehensive income (loss):        Change in unrealized losses on translating financial statements of self-sustaining foreign operations$(7,293)$(6,136)$(10,838)$(25,391) Unrealized gains (losses) on available-for-sale financial assets arising during the year$81$(157)$839$398 Reclassification in earnings - - - - (421) - - Income tax expense (recovery) (12) 24 (70) (80) Change in unrealized gains and losses on available-for-sale financial assets$69$(133)$348$318          Other comprehensive loss$(7,224)$(6,269)$(10,490)$(25,073)          Comprehensive loss$(6,469)$(1,147)$(10,396)$(4,641) Consolidated Statements of Retained EarningsPeriods ended December 31(in thousands of dollars)3 months12 months  2010 2009(restated) 2010 2009(restated)Opening balance - As previously reported $237,740   $240,820   $244,029   $232,208 Change in accounting policies 18,366 18,065 18,164 17,782Opening balance - As restated 256,106 258,885 262,193 249,990Net earnings 755 5,122 94 20,432Dividends (1,789) (1,814) (7,157) (7,261)Excess of acquisition cost over carrying value of acquired common shares - - - - (58) (968)Closing balance$255,072$262,193$255,072$262,193 Consolidated Balance SheetsAs at December 31(in thousands of dollars)20102009(restated)Assets    Current assets        Cash and cash equivalents $15,968   $67,393    Short-term investment pledged as collateral 9,946 - -    Accounts receivable 202,963 99,594    Inventories 139,941 104,540    Income taxes recoverable 4,092 6,701    Future income tax assets 2,126 1,008    Prepaid expenses and other assets 4,170 3,484    Current assets of discontinued operations - - 1,230    Total current assets 379,206 283,950Investments 48,063 63,503Property, plant and equipment 280,293 209,204Property, plant and equipment held for sale 1,465 1,549Intangible assets 11,242 1,127Goodwill 49,582 150Future income tax assets 9,192 363Long-term receivables and other assets 24,500 21,942Long-term assets of discontinued operations - - 8,618 $803,543$590,406Liabilities    Current liabilities        Bank loans$8,729$- -    Accounts payable and accrued liabilities 149,206 77,112    Income taxes payable 56 635    Future income tax liabilities 409 876    Current portion of long-term debt 8,943 5,477    Current portion of balance of purchase price of business 10,043 - -    Current liabilities of discontinued operations - - 1,495    Total current liabilities 177,386 85,595Long-term debt 105,850 62,212Balance of purchase price of business 24,173 - -Convertible debentures 60,408 - -Deferred credits 4,254 4,749Future income tax liabilities 24,915 18,918Long-term liabilities of discontinued operations - - 1,604  396,986 173,078Shareholders' Equity    Share capital 179,102 178,024Retained earnings 255,072 262,193Debenture conversion options 5,764 - -Contributed surplus 4,859 4,862Accumulated other comprehensive loss (38,240) (27,751)  406,557 417,328 $803,543$590,406 Consolidated Statements of Cash FlowsPeriods ended December 31(in thousands of dollars)  3 months  12months  2010 2009(restated) 2010 2009(restated)Cash flows from the following activities:        Operating activities        Net earnings from continuing operations $755   $5,055   $34   $21,416Items not affecting cash and cash equivalents         Amortization of compensation costs related to the profit sharing program - stock ownership component 345 431 1,383 1,780 Unrealized loss (gain) on foreign currency forward contracts - - 579 - - (743) Gain on reevaluation of investments 78 - - (3,810) - - Gain on a business acquisition (7,464) - - (7,464) - - Gain on disposal of investments - - (110) (448) (319) Impairment of property, plant and equipment held for sale - - 132 - - 132 Loss on disposal of property, plant and equipment 154 457 125 402 Depreciation of property, plant and equipment 4,873 4,368 18,678 16,285 Amortization of intangible assets 1,124 256 3,971 1,294 Amortization of deferred financing expenses 55 54 234 214 Implicit interest on convertible debentures and balance of purchase price businesses 2,021 - - 2,021 - - Interest swaps 279 - - 279 - - Pension expense (107) (298) 73 (322) Future income tax expense 2,918 3,044 (3,798) 3,207 Share in loss of companies subject to significant influence 189 (149) 282 701  5,220 13,819 11,560 44,047Net change in non-cash operating working capital items         Increase in short-term investment pledged as collateral (9,946) - - (9,946) - - Decrease (increase) in accounts receivable (8,792) 17,935 (58,837) 46,605 Decrease (increase) in inventories 14,084 15,362 (20,561) 62,179 Decrease (increase) in income taxes recoverable (4,083) (3,180) 977 (1,614) Decrease (increase) in prepaid expenses and other assets (225) (718) 398 2,689 Increase (decrease) in accounts payable and accrued liabilities (25,742) (15,683) 17,188 (40,928) Increase (decrease) in interest payable (228) (211) 916 (26) Increase (decrease) in income taxes payable 410 (1,920) (368) 418  (34,522) 11,585 (70,233) 69,323Cash flows from continuing operating activities (29,302) 25,404 (58,673) 113,370Financing 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 (3,579) (3,630) (7,157) (7,261)Increase in long-term debt and bank loans 38,116 - - 112,867 11,977Repayment of long-term debt and bank loans (62,865) (6,679) (67,234) (26,403)Repayment of balance of purchase price of business (2,587) - - (5,217) - -Convertible debentures issuance 66,240 - - 66,240 - -Issue expenses related to long-term debt and convertible debentures (618) - - (618) - -Deferred credits (1,245) (2) (2,500) (237)Cash flows from continuing financing activities 33,462 (10,311) 96,015 (25,870)Investing activities        Proceeds from sale of property, plant and equipment (115) 531 465 923Additions to property, plant and equipment (11,534) (10,729) (39,134) (27,791)Additions to intangible assets (89) (51) (418) (467)Acquisition of investments - - (16,111) (120) (20,704)Proceeds from disposal of investments - - 2,428 1,503 3,572Distribution from companies subject to significant influence 379 167 379 467Decrease in long-term receivables 624 6,307 5,207 8,807Increase in long-term receivables (41) (93) (176) (4,383)Business acquisitions, net of cash acquired 146 - - (54,139) - -Cash flows from continuing investing activities (10,630) (17,551) (86,433) (39,576)Effect of changes in foreign exchange rate on cash and cash equivalents (1,943) 296 (2,532) (143)Net change in cash and cash equivalents from continuing operations (8,413) (2,162) (51,623) 47,781Cash flows from discontinued operations         Operating activities - - 2,957 184 3,598 Investing activities - - 17 14 395  - - 2,974 198 3,993Cash, beginning of year 24,381 66,581 67,393 15,619Cash and cash equivalents, end of year$15,968$67,393$15,968$67,393Supplementary information         Interest paid$1,933$1,177$5,145$3,894 Income taxes paid (recovered), net$1,553$(428)$(1,708)$3,271For further information: Jasmin Gosselin     Vice President, Communications Tel.: 450-641-4000Email: jasmin.gosselin@canamgroup.ws www.canamgroup.ws