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Press release from CNW Group

The Churchill Corporation Reports 2012 First Quarter Results, Declares Dividend

Tuesday, May 08, 2012

The Churchill Corporation Reports 2012 First Quarter Results, Declares Dividend18:40 EDT Tuesday, May 08, 2012Industrial Services Segment Drives Revenue GrowthCALGARY, May 8, 2012 /CNW/ - The Churchill Corporation (TSX: CUQ) (TSX: CUQ.DB) ("Churchill" or the "Corporation") today released its 2012 first quarter results and declared a quarterly dividend of $0.12 per common share. Revenue for the first quarter of 2012 was $333.2 million compared to $304.7 million in the three months ended March 31, 2011, a 9% increase due to organic growth in the Corporation's Industrial Services segment driven largely by Western Canada oilsands and mining activity. Quarterly earnings before interest, taxes, depreciation and amortization ("EBITDA") was $13.9 million, compared to $17.2 million reported in the first quarter of 2011, as strong results from the Industrial Services segment partially offset lower results from the General Contracting segment. Net earnings were $3.2 million in the first three months of 2012, compared to $5.8 million recorded in the first quarter of 2011. Backlog as of March 31, 2012 was $1,751.5 million compared to a record $1,842.6 million as of December 31, 2011.The dividend will be paid July 17, 2012 to shareholders of record on June 29, 2012. The ex-dividend date is June 27, 2012. The Corporation has a dividend reinvestment plan in place for which details are available on Churchill's website ( QUARTER OPERATIONAL HIGHLIGHTSThe Industrial Services operating segment, consisting of Churchill Services Group Inc. ("CSG") and Broda Construction Inc. ("Broda"), delivered a 63% revenue increase as demand for CSG's services expanded along with Western Canada's oilsands and mining sectors, and Broda benefited from expansion of its operations into southern Alberta and a relatively mild winter.Canem Holdings Ltd. ("Canem"), which forms Churchill's Commercial Systems segment, grew first quarter revenue by 13% as it benefited from the revenue generated by its Manitoba operations.Stuart Olson Dominion Construction Ltd. ("Stuart Olson Dominion"), which forms Churchill's General Contracting segment, improved the risk profile of its $1.3 billion backlog to 97% low-risk construction management assignments, from 90% at December 31, 2011, as it nears completion of certain underperforming fixed price projects.FIRST QUARTER FINANCIAL HIGHLIGHTS    3 Months Ended March 31($millions, except per share amounts)20122011Contract revenue$                      333.3$                      304.7Contract income35.736.6EBITDA from continuing operations13.917.2Net earnings3.25.8Net earnings per common share- Basic0.130.24 - Diluted0.130.24 As of Mar. 31, 2012As of Dec. 31, 2011Backlog$                  1,751.5$                  1,842.6Long-term debt (excluding current portion)65.560.4Convertible debentures (excluding equity portion)77.376.7Total assets856.4888.5   These financial results are presented in conformance with International Financial Reporting Standards ("IFRS"). 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 measures under IFRS. For a description of these measures, see the Terminology section in Churchill's first quarter 2012 management discussion and analysis ("MD&A").Backlog of $1,751.5 million as of March 31, 2012, compared to $1,842.6 million on December 31, 2011, was comprised of General Contracting backlog of $1,307.6 million (December 31, 2011 - $1,445.3 million), Commercial Systems backlog of $204.4 million (December 31, 2011 - $133.3 million), and Industrial Services backlog of $239.5 million (December 31, 2011 - $264.0 million).Revenue for the first quarter of 2012 was $333.2 million compared to $304.7 million in the three months ended March 31, 2011, a 9% increase. Revenue growth in the Commercial Systems and Industrial Services operating segments of $5.3 million (13%) and $40.6 million (63%), respectively, was partly offset by a $13.5 million (7%) quarterly revenue decrease in the General Contracting segment.First quarter 2012 EBITDA was $13.9 million, compared to $17.2 million reported in the first quarter of 2011. Revenue growth was offset by a $2.2 million net loss on underperforming Dominion fixed price projects nearing completion, execution of lower margin projects at Canem, and the inclusion of high close-out margins in the Industrial Services segment in the comparable 2011 quarter.Net earnings were $3.2 million in the first quarter of 2012, compared to $5.8 million recorded in the three months ended March 31, 2011. The difference was primarily attributable to the change in EBITDA set out above, partially offset by a $1.2 million tax reduction and a $1.0 million gain on sale of non-core assets.Stuart Olson Dominion generated first quarter 2012 revenue of $194.2 million and EBITDA of $5.3 million (2011 first quarter revenue of $207.7 million and EBITDA of $9.0 million).Canem produced first quarter 2012 revenue of $46.6 million and EBITDA of $4.9 million (2011 first quarter revenue of $41.3 million and EBITDA of $6.2 million).Churchill's Industrial Services segment produced 2012 first quarter revenue of $104.9 million and EBITDA of $7.3 million (2011 first quarter revenue of $64.2 million and EBITDA of $6.3 million)."In the first quarter of 2012 CSG and Broda together produced near-record revenue and increased EBITDA of the Industrial Services segment in spite of the seasonal nature of their businesses," said Jim Houck, Churchill's President and CEO. "Canem grew revenue and maintained strong margins due to its contract mix, efficient operating practices and best-in-class marketing programs. Stuart Olson Dominion replaced projects executed in its $1.3 billion backlog with quality projects that provide visibility of future revenue and earnings growth, while nearing the announcement of some large projects that we expect to add in the coming quarters. Underperforming fixed price projects are nearly complete and Stuart Olson Dominion's backlog is now 97% low-risk construction management and cost-plus projects, compared to 90% at 2011 year-end. These projects provide reasonable returns while limiting the risk of losses, and most of them have additional profit opportunities available through self-perform work and the potential for conversion to higher yield contract structures as risk/return profiles improve with project maturity."OUTLOOK"Western Canada's economy, driven by growing global demand for petroleum, metals and minerals, continues to thrive," continued Mr. Houck. "Activity in the oilsands and mining sectors is accelerating and Western Canadian governments are continuing to update and make new investments in infrastructure. Our Industrial Services segment is benefiting directly from this significant industrial capital and maintenance spending. Our General Contracting and Commercial Systems segments, with a preponderance of institutional government-funded projects such as hospitals, schools, prisons and recreation centres, and commercial projects such as office towers, business parks and data centres, are profiting from government and private sector spending to build the infrastructure required to support a growing workforce.""We intend to continue on our road to higher value mainly through accelerating the profitable organic growth of our operating companies. We may also move forward with tuck-in acquisitions that enhance our strategic goals and fit our entrepreneurial culture, but only when financial, operational and market conditions make economic sense."CONFERENCE CALLChurchill will hold a conference call and webcast to discuss the 2012 first quarter results on Wednesday, May 9, 2012 at 7:30 a.m. Mountain Time (9:30 a.m. Eastern).A presentation will be posted on Churchill's website prior to the call at under the "News and Events" tab. Management's prepared remarks on the call will follow the presentation. Choose "Churchill First Quarter 2012 Conference Call" to view the presentation.The conference call will include prepared remarks from Jim Houck, Churchill's President and CEO, and Daryl Sands, Executive Vice President and CFO.  After the prepared remarks, Churchill will accept questions from analysts and institutional investors.Date:  Wednesday, May 9, 2012Time:  7:30 a.m. MT (9:30 a.m. ET)Call:   1-800-319-4610 (Canada and USA) or 1-604-638-5340 (outside Canada and USA)  Participants are asked to call at least 10 minutes prior to the start of the call.  For those unable to participate on the live call, a replay will be made available until Saturday, June 9, 2012 by dialling 1-800-319-6413 (Canada and USA) or 1-604-638-9010 (outside Canada and USA), passcode 1514#.  The public is invited to listen to the live conference call or the replay.This conference call will be webcast live over the internet and can be accessed by all interested parties on Churchill's website through the News & Events / Events tab at: listen to the live webcast, visit Churchill's website at least 10 minutes early to register, download and install any necessary audio software.  For those unable to listen during the live webcast, an audio replay will be available on Churchill's website shortly after the conclusion of the conference call for a period of 90 days.About The Churchill CorporationThe 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, northern 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. www.churchillcorporation.comForward Looking InformationThis press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, statements pertaining to the following:  a)     Management's views on the economic growth in Western Canada and the ability of the Corporation to profit from that growth;b)     the Corporation's current and future projects, and in respect to those projects, the completion status, associated risks, potential earnings and ability to convert to higher yield contract structures as risk/return profiles improve with project maturity;c)     management's expectations that the Corporation's operating companies will improve their business prospects in any manner whatsoever including, without limitation, through margin expansion, organic growth or productivity efficiencies; andd)     the ability of management to deliver organic growth and execute upon acquisitions that enhance the strategic goals of the Corporation.Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements. The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Corporation's financial position and the results of its operations as at the date hereof.  By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Corporation's anticipated results will not be achieved. Although the Corporation believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Corporation's Annual Report filed with the securities regulatory authorities in Canada under the Corporation's profile at  Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions. The forward-looking information in this press release is current to the date hereof, and is subject to change following such date.  While the Corporation may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.   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 Email: Ken Wetherell, CFA Director, Investor Relations The Churchill Corporation (403) 685-7776 Email: