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Press release from CNW Group

Canam Group Posts Second-Quarter Net Income of $4.5M

Tuesday, August 07, 2012

Canam Group Posts Second-Quarter Net Income of $4.5M15:08 EDT Tuesday, August 07, 2012BOUCHERVILLE, QC, Aug. 7, 2012 /CNW Telbec/ - Construction products fabricator Canam Group Inc. (TSX: CAM) today announced a net income of $4.5M, or $0.10 per share, for the second quarter of 2012, compared with a net loss of $5.8M, or $0.13 per share, for the same quarter in 2011. Consolidated revenues increased by 6% to $232M as compared to $218M for the year-earlier quarter.For the first six months of 2012, net income totaled $3.2M, or $0.07 per share, compared with a net loss of $45.5M, or $1.01 per share, for the corresponding period in 2011. Consolidated sales for the first six months of the year increased by 19%, from $369M in 2011 to $440M in 2012.The results include a gain on disposal of investment in the amount of $2.1M following the sale of the 50% ownership interest held by the Corporation in the Amcan-Jumax joint venture.The increase in sales recorded in the second quarter is mainly attributable to joist and steel deck activities in Canada and the United States. The results reflect a gradual improvement in the profit margins of joist, steel deck and bridge activities.As at June 30, 2012, the backlog of orders stood at $503M compared to $421M as at March 31, 2012.In 2012, the Corporation repurchased 1,320,688 common shares for a total consideration of $6.7M, representing an average price of $5.04 per share. The average price of the 3,232,588 shares repurchased since the implementation of the buyback program on November 1, 2011 is $3.99.Changes in the management teamMr. Dutil underlined the departure of Charles Pinel, who held the position of Vice President and Chief Financial Officer for over seven years. Mr. Dutil wished to thank Mr. Pinel for his thoroughness as well as his contribution in ensuring a sound and efficient management. René Guizzetti, Vice President, Corporate Control and Taxation, will occupy both positions in the interim.About Canam Group Inc.Canam Group is a manufacturing company that operates 20 plants across North America. Specialized in designing construction solutions and fabricating customized products since 1961, Canam Group takes part in an average of 10,000 construction projects each year in three activity sectors: buildings, structural steel and bridges. The Corporation employs close to 3,500 people in Canada, the United States, Romania, India and China. Conference callCanam Group will hold a conference call with financial analysts and media representatives on Tuesday, August 7, 2012 at 4:30 p.m. A podcast will be available at www.canamgroup.ws and www.cnw.ca. A replay of the conference call will be available until August 22, 2012 by dialing 1-800-408-3053 and entering access code 8436533, followed by the pound key (#).CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME (LOSS)             Periods ended June 30, 2012 and June 25, 2011            (in thousands of Canadian dollars, except per share amounts) Three months Six months(unaudited)  2012  2011  2012  2011Revenues $231,741 $218,475 $440,035 $369,110Cost of sales, excluding depreciation and amortization (1)  199,082  197,761  382,892  373,896Selling and administrative expenses  20,610  21,525  41,018  43,847Profit sharing program  148  121  358  219Depreciation of property, plant and equipment  5,259  5,058  10,552  10,007Amortization of intangible assets  352  395  708  1,267Other gains - net  (2,929)  (453)  (4,684)  (152)   9,219  (5,932)  9,191  (59,974)Finance costs  4,277  5,000  8,777  8,331Finance revenue  (365)  (397)  (1,409)  (802)Share of income of joint ventures and associates  (29)  (459)  (420)  (238)Income (loss) before income tax  5,336  (10,076)  2,243  (67,265)Tax expense (income)             Current (recovered)  1,534  (2,145)  1,611  (15,423) Deferred  (692)  (2,130)  (2,545)  (6,304)   842  (4,275)  (934)  (21,727)Net income (loss) $4,494 $(5,801) $3,177 $(45,538)             Net income (loss) per share             Basic $0.10 $(0.13) $0.07 $(1.01) Diluted $0.10 $(0.13) $0.07 $(1.01)             Weighted average number of common shares (in thousands of shares)             Basic  42,856  45,264  43,087  45,269 Diluted  42,950  45,385  43,182  45,387Number of common shares outstanding (in thousands of shares)        42,105  45,352  (1)As at June 30, 2012 and June 25, 2011, the cost of sales, including depreciation and amortization, respectively totaled $203,551 and$202,098 for the three-month period, and $391,870 and $382,543 for the six-month period.                          CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)             Periods ended June 30, 2012 and June 25, 2011(in thousands of Canadian dollars)   Three months Six months  (unaudited)  2012  2011  2012  2011Net income (loss) $4,494 $(5,801) $3,177 $(45,538)Other comprehensive income (loss):             Change in unrealized gains (losses) on translating foreign operations  3,818  1,074  (324)  (730)             Available-for-sale assets:             Unrealized gains (losses) on available-for-sale assets arising during the period  (88)  7  47  115 Reclassified to statements of income (loss)  - -  - -  (274)  - - Tax income (expense)  11  (1)  29  (15)   (77)  6  (198)  100Other comprehensive income (loss)  3,741  1,080  (522)  (630)Comprehensive income (loss) $8,235 $(4,721) $2,655 $(46,168)CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS       (in thousands of Canadian dollars)(unaudited) As atJune 30,2012   As atDecember 31,2011Assets      Current assets      Cash and cash equivalents $6,016 $7,368Accounts receivable  287,306  304,551Inventories  99,897  111,955Recoverable tax assets  2,055  16,588Prepaid expenses and other assets  3,911  4,063   399,185  444,525Property, plant and equipment held for sale  1,500  1,498   400,685  446,023Non-current assets      Investments  6,023  4,959Ownership interests in joint ventures and associates  56,662  61,954Property, plant and equipment  271,064  279,554Intangible assets  9,242  9,772Goodwill  38,972  38,930Deferred tax assets  27,907  25,149Long-term receivables and other assets  22,271  21,820Total assets $832,826 $888,161Liabilities      Current liabilities      Bank loans $24,123 $32,761Accounts payable and accrued liabilities  165,038  169,110Current tax liabilities  227  165Current portion of long-term debt  11,344  37,038Current portion of balances of purchase price of businesses  3,663  7,315   204,395  246,389Non-current liabilities      Debt  158,638  163,782Balances of purchase price of businesses  5,868  8,768Convertible debentures  62,612  61,816Provisions  1,529  1,613Deferred tax liabilities  28,891  28,784Other liabilities  14,070  16,242Total liabilities  476,003  527,394Equity      Share capital  168,634  172,869Retained earnings  186,634  184,774Other equity items  1,555  3,124Total equity  356,823  360,767Total equity and liabilities $832,826 $888,161CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                  (in thousands of Canadian dollars) (unaudited) Employeebenefits paidin equityinstrumentsExchangedifferencesresulting fromthe translation offoreign operationsAvailable-for-sale financialassetsDebentureconversionoptionsTotal otherequity itemsShare capitalRetainedearningsTotal equityBalance 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$351,944Balance as at January 1, 2012 $2,928$(6,408)$840$5,764$3,124$172,869$184,774$360,767Net earnings for the period  - - - - - - - - - - - - 3,177 3,177Comprehensive loss  - - (324) (198) - - (522) - - - - (522)Shares acquired by employees  (1,160) - - - - - - (1,160) 1,160 - - - -Repurchase of shares  - - - - - - - - - - (5,395) - - (5,395)Excess of acquisition cost over carrying amount of acquired common shares  - - - - - - - - - - - - (1,317) (1,317)Amortization of compensation costs related to the profit sharing program - stock ownership component  113 - - - - - - 113 - - - - 113Balance as at June 30, 2012 $1,881$(6,732)$642$5,764$1,555$168,634$186,634$356,823CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS          Periods ended June 30, 2012 and June 25, 2011(in thousands of Canadian dollars) Three months Six months(unaudited) 2012 2011 2012 2011Cash flows from the following activities:        Operating activities        Net income (loss)$4,494$(5,801)$3,177$(45,538)Adjustments:         Amortization of compensation costs related to the profit sharing program - stock ownership component 57 187 113 373 Gain on disposal of investments (2,099) - - (2,361) - - Gain on disposal of property, plant and equipment 5 (129) (5) (221) Depreciation of property, plant and equipment 5,259 5,058 10,552 10,007 Amortization of intangible assets 352 395 708 1,267 Amortization of deferred financing expenses 61 132 122 244 Provisions (111) (9) (84) 12 Interest rate swaps 109 308 36 191 Imputed interest 559 1,141 1,216 1,671 Pension expense (738) 146 (1,600) 199 Deferred tax expense (692) (2,130) (2,545) (6,304) Share of income of joint ventures and associates (29) (459) (420) (238)  7,227 (1,161) 8,909 (38,337)Net change in non-cash operating working capital items                 Decrease (increase) in accounts receivable (25,400) (64,299) 18,109 (25,404)Decrease (increase) in inventories 6,528 (375) 12,119 (14,795)Decrease (increase) in current tax assets 13,793 30 14,534 (11,478)Decrease in prepaid expenses and other assets 348 1,115 151 18Increase (decrease) in accounts payable and accrued liabilities 6,346 36,235 (3,422) 19,264Increase (decrease) in provisions - - (23,569) - - 3,931Decrease in interest payable (1,258) (1,256) (10) (3)Increase in current tax liabilities 30 10 64 115  387 (52,109) 41,545 (28,352)Cash flows from operating activities 7,614 (53,270) 50,454 (66,689)Financing activities        Repurchase of shares (5,490) - - (6,712) (156)Proceeds from issuance of shares - - 10 - - 44Dividends - - - - - - (1,796)Increase in debt and bank loans - - 60,897 579 91,299Repayment of debt and bank loans (11,134) (2,511) (39,981) (4,304)Repayment of balances of purchase price of businesses - - (164) (6,684) (7,056)Issue expenses related to debt and debenture - - (173) - - (768)Other liabilities 47 (195) 55 (406)Cash flows from financing activities (16,577) 57,864 (52,743) 76,857Investing activities        Proceeds from sale of property, plant and equipment 2 19 13 66Additions to property, plant and equipment (1,145) (5,109) (2,498) (11,315)Additions to intangible assets (45) (61) (91) (306)Acquisition of investments - - - - (2,620) - -Proceeds from disposal of investments 4,850 - - 5,172 - -Distribution received from a joint venture 90 - - 265 - -Decrease in receivables and other assets 576 81 1,096 162Increase in receivables and other assets - - (2) - - (52)Cash flows from investing activities 4,328 (5,072) 1,337 (11,445)Effects of changes in foreign exchange rate on cash and cash equivalents (208) 214 (400) 243Net change in cash (4,843) (264) (1,352) (1,034)Cash and cash equivalents - Beginning of period 10,859 7,760 7,368 8,530Cash and cash equivalents - End of period$6,016$7,496$6,016$7,496Supplementary information         Interest paid$3,777$2,644$4,456$3,934 Income taxes recovered, net$(12,275)$(2,054)$(12,965)$(3,121)  SOURCE: CANAM GROUP INC.For further information: François Bégin Vice President, Communications Canam Group Inc. 450-641-4000 francois.begin@canamgroup.ws