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Press release from CNW Group

Canam Group posts a 21% sales increase and a net loss of $5.8m for the second quarter of 2011

Thursday, August 04, 2011

Canam Group posts a 21% sales increase and a net loss of $5.8m for the second quarter of 201106:30 EDT Thursday, August 04, 2011BOUCHERVILLE, QC, Aug. 4, 2011 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced that its consolidated sales grew by 21% to $218.5M for the second quarter ended June 25, 2011, compared with $180M for the second quarter of 2010. Net loss was $5.8M or $0.13 per share for the second quarter of 2011, compared with a net loss of $1.7M or $0.04 per share, for the year-earlier quarter.For the first six months of 2011, net loss amounted to $45.5M or $1.01 per share compared with a net loss of $2.3M or $0.05 per share over the same period last year. Consolidated sales for the first six months totaled $369.1M versus $281.8M for the corresponding period in 2010, representing a 31% increase.Canam Group president and chief operating officer Marc Dutil indicated that the quarterly loss is mainly attributable to the execution of contracts listed in the backlog of orders, including the BC Place contract, for which sales prices and profit margins were compressed due to market conditions created by the economic slowdown that has been in place since 2009 in the Canadian and U.S. construction sector.  For the first six months of 2011, the loss is mainly attributable to the cost overrun related to the BC Place project that was announced in the first quarter.For the first six months of 2011, most of the Company's business units have contributed to the increase in sales. M. Dutil notes an increase in sales and new bookings in the joist and steel deck markets, in both Canada and United States.Canam Group's backlog of orders as at June 25, 2011, stood at $512M compared with $519M as at March 26, 2011.Due to the current economic situation, the Board of Directors of Canam Group considers it is prudent to suspend dividend payouts.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 virtual design and construction 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 9:00 a.m. on Thursday, August 4, 2011. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until August 19, 2011, by dialing 1-800-408-3053 and entering access code 4184177, followed by the pound key (#).Interim Consolidated Statements of Income (Loss)Periods ended June 25, 2011 and June 26, 2010   (in thousands of Canadian dollars, except per share amounts)Three months     Six months(unaudited) 2011 2010 2011 2010Revenues$218,475$179,969$369,110$281,823Cost of sales 197,761 156,409 373,896 244,150  20,714 23,560 (4,786) 37,673Selling and administrative expenses 21,525 19,596 43,847 35,261Profit sharing programs 121 200 219 508Exchange loss (gain) (324) 193 69 235Gain on disposal of property, plant and equipment (129) (222) (221) (233)Gain on disposal of investments - - (9) - - (9)  (479) 3,802 (48,700) 1,911Depreciation of property, plant and equipment 5,058 4,624 10,007 8,854Amortization of intangible assets 395 1,554 1,267 2,215Finance costs 4,603 1,142 7,529 1,636Gain on revaluation of investments - - - - - - (3,888)Share in loss of joint ventures and associates (459) (190) (238) (24)Loss before income tax (10,076) (3,328) (67,265) (6,882)Income tax expense (recovery)         Current (2,145) 1,242 (15,423) 350 Deferred (2,130) (2,863) (6,304) (4,900)  (4,275) (1,621) (21,727) (4,550)Net loss attributable to shareholders of Canam Group Inc. $(5,801)$(1,707)$(45,538)$(2,332)         Net loss per share        Basic$(0.13)$(0.04)$(1.01)$(0.05)Diluted$(0.13)$(0.04)$(1.01)$(0.05)Weighted average number of common shares (in thousands of shares)         Basic 45,264 45,101 45,269 45,102 Diluted 45,385 45,429 45,387 45,414Number of common shares outstanding     45,352 45,366Interim Consolidated Statements of Comprehensive lossPeriods ended June 25, 2011 and June 26, 2010 Three months    Six months(in thousands of Canadian dollars) (unaudited) 2011 2010 2011 2010Net loss$(5,801)$(1,707)$(45,538)$(2,332)Other comprehensive income (loss):                 Change in unrealized gains and losses on translating foreign operations 1,074 517 (730) (2,970)Unrealized gains (losses) on available-for-sale financial assets arisingduring the period 7 (127) 115 (76)Income tax expense (1) 22 (15) 14  6 (105) 100 (62)Other comprehensive income (loss) 1,080 412 (630) (3,032)Comprehensive loss attributable to shareholders of Canam Group Inc.$(4,721)$(1,295)$(46,168)$(5,364)Interim Consolidated Balance Sheets(in thousands of Canadian dollars) (unaudited)As at June 25, 2011As at December 31, 2010As at January 1,2010       Assets      Current assets      Cash and cash equivalents$7,496$8,530$57,469Short-term investment pledged as collateral 9,870 9,946 - -Accounts receivable 215,260 198,807 97,196Inventories 155,832 132,684 102,432Current tax assets 15,666 4,190 6,701Prepaid expenses and other assets 3,646 3,675 3,363Current assets of discontinued operations - - - - 1,230  407,770 357,832 268,391Property, plant and equipment held for sale 1,454 1,465 1,549  409,224 359,297 269,940Non-current assets      Investments 5,031 4,895 16,677Ownership interests in joint ventures and associates 60,142 59,913 58,845Property, plant and equipment 280,985 280,292 211,956Intangible assets 10,114 11,156 1,127Goodwill 48,991 49,366 150Deferred tax assets 19,826 13,788 3,362Long-term receivables and other assets 24,413 24,020 21,389Non-current assets of discontinued operations - - - - 8,618Total assets$858,726$802,727$592,064       Liabilities      Current liabilities      Bank loans$32,435$8,454$- -Accounts payable and accrued liabilities 159,369 138,853 74,060Provisions 10,431 6,500 - -Current tax liabilities 129 56 580Current portion of long-term debt 9,138 8,855 5,477Current portion of balances of purchase price of businesses 8,979 10,043 1,495  220,481 172,761 81,612Non-current liabilities      Debt 167,237 104,388 62,212Balances of purchase price of businesses 18,854 24,173 - -Convertible debentures 61,056 60,408 - -Provisions 1,337 1,325 3,335Deferred tax liabilities 25,341 25,623 20,329Other liabilities 12,476 12,606 9,661Non-current liabilities of discontinued operations - - - - 1,604Total liabilities 506,782 401,284 178,753       Equity      Equity attributable to shareholders of Canam Group Inc.      Share capital 180,883 179,102 178,024Retained earnings 173,677 222,877 230,800Other equity items (2,616) (536) 4,487Total equity 351,944 401,443 413,311Total equity and liabilities$858,726$802,727$592,064Interim Consolidated Statements of Changes in Equity          ATTRIBUTABLE TO SHAREHOLDERS OF CANAM GROUP INC.  (in thousands of Canadian dollars)(unaudited)Employee benefits paid in equity instrumentsTranslation differences resulting from the translation of foreign operationsAvailable-for-sale financial assetsDebenture conversion optionsTotal other equity itemsShare capitalRetained earningsTotal equityBalance as at January 1, 2010$4,038$- -$449$- -$4,487$178,024$230,800$413,311Net loss for the period - - - - - - - - - - - - (2,332) (2,332)Comprehensive loss - - (2,970) (62) - - (3,032) - - - - (3,032)Dividends - - - - - - - - - - - - (3,629) (3,629)Issuance of shares pursuant to options (4) - - - - - - (4) 129 - - 125Shares purchased by a trust in employees' name on the secondary market - - - - - - - - - - (364) - - (364)Shares acquired by employees (1,382) - - - - - - (1,382) 1,382 - - - -Repurchase of shares - - - - - - - - - - (69) - - (69)Excess of acquisition cost over carrying amount of acquired common shares - - - - - - - - - - - - (58) (58)Amortization of compensation costs related to the profit sharing program - stock ownership component 692 - - - - - - 692 - - - - 692Balance as at June 26, 2010$3,344$(2,970)$387$- -$761$179,102$224,781$404,644Balance as at January 1, 2011$4,035$(11,133)$798$5,764$(536)$179,102$222,877$401,443Net loss for the period - - - - - - - - - - - - (45,538) (45,538)Comprehensive loss - - (730) 100 - - (630) - - - - (630)Dividends - - - - - - - - - - - - (3,592) (3,592)Issuance of shares pursuant to options (13) - - - - - - (13) 57 - - 44Shares acquired by employees (1,810) - - - - - - (1,810) 1,810 - - - -Repurchase of shares - - - - - - - - - - (86) - - (86)Excess of acquisition cost over carrying amount of acquired common shares - - - - - - - - - - - - (70) (70)Amortization of compensation costs related to the profit sharing program - stock ownership component 373 - - - - - - 373 - - - - 373Balance as at June 25, 2011$2,585$(11,863)$898$5,764$(2,616)$180,883$173,677$351,944Interim Consolidated Statements of Cash FlowsPeriods ended June 25, 2011 and June 26, 2010 Three months          Six months(in thousands of Canadian dollars) (unaudited)2011201020112010Cash flows from the following activities:        Operating activities        Net loss$(5,801)$(1,707)$(45,538)$(2,332)Adjustments:         Amortization of compensation costs related to the profit sharing program - stock ownership component 187 345 373 691 Gain on revaluation of investments - - - - - - (3,888) Gain on disposal of investments - - (9) - - (9) Gain on disposal of property, plant and equipment (129) (222) (221) (233) Depreciation of property, plant and equipment 5,058 4,624 10,007 8,854 Amortization of intangible assets 395 1,554 1,267 2,215 Amortization of deferred financing expenses 132 62 244 117 Provisions (9) (3) 12 (689) Interest rate swaps 308 - - 191 - - Imputed interest 1,141 401 1,671 535 Pension expense 146 (187) 199 (438) Deferred tax expense (2,130) (2,863) (6,304) (4,900) Share in loss of joint ventures and associates (459) (190) (238) (24)  (1,161) 1,805 (38,337) (101)Net change in non-cash operating working capital items         Increase in accounts receivable (58,735) (24,084) (16,641) (12,441) Increase in inventories (5,939) (21,498) (23,558) (28,067) Decrease (increase) in income taxes assets 30 787 (11,478) (223) Decrease in prepaid expenses and other assets 1,115 624 18 547 Increase in accounts payable and accrued liabilities 36,235 17,972 19,264 10,344 Increase (decrease) in provisions (23,569) - - 3,931 - - Increase (decrease) in interest payable (1,256) 387 (3) 586 Increase (decrease) in current tax liabilities 10 13 115 (483)  (52,109) (25,799) (28,352) (29,737)Cash flows from continuing operating activities (53,270) (23,994) (66,689) (29,838)Financing activities        Shares purchased by a trust in employees' name on the secondary market - - - - - - (364)Repurchase of shares - - (9) (156) (127)Proceeds from issuance of shares 10 104 44 125Dividends - - (1,814) (1,796) (1,814)Increase in debt and bank loans 60,897 25,156 91,299 54,027Repayment of debt and bank loans (2,511) (1,729) (4,304) (2,645)Repayment of balances of purchase price of businesses (164) - - (7,056) - -Issue expenses related to debt and debenture (173) - - (768) - -Other liabilities (195) 12 (406) 23Cash flows from continuing financing activities 57,864 21,720 76,857 49,225Investing activities        Proceeds from sale of property, plant and equipment 19 500 66 507Additions to property, plant and equipment (5,109) (9,577) (11,315) (16,993)Additions to intangible assets (61) (99) (306) (185)Acquisition of investments - - - - - - (120)Proceeds from disposal of investments - - 3 - - 3Decrease in receivable and other assets 81 952 162 1,715Increase in receivable and other assets (2) (68) (52) (68)Business acquisitions, net of cash acquired - - - - - - (38,684)Cash flows from continuing investing activities (5,072) (8,289) (11,445) (53,825)Effects of changes in foreign exchange rate on cash and cashequivalents 214 482 243 (688)Net change in cash from continuing operations (264) (10,081) (1,034) (35,126)Cash flows from discontinued operations         Operating activities - - 96 - - 123 Investing activities - - - - - - 15  - - 96 - - 138Cash and cash equivalents, beginning of period 7,760 32,466 8,530 57,469Cash and cash equivalents, end of period$7,496$22,481$7,496$22,481Supplementary information         Interest paid$2,644$1,289$3,934$2,019 Income taxes paid (recovered), net$(2,054)$(404)$(3,121)$597  For further information: Source:  Jasmin Gosselin   Vice President, Communications   Tel.: 450-641-4000   Email: jasmin.gosselin@canamgroup.ws     www.canamgroup.ws