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Press release from CNW Group

Canam Group Posts a Second Quarter Net Income of $7.4M

Tuesday, August 06, 2013

Canam Group Posts a Second Quarter Net Income of $7.4M

15:16 EDT Tuesday, August 06, 2013

BOUCHERVILLE, QC, Aug. 6, 2013 /CNW Telbec/ - Canam Group Inc. (TSX: CAM), specialized in the design and fabrication of construction products, today recorded a net income of $7.4M, or $0.18 per share, for the second quarter of 2013, compared with a net income of $4.5M, or $0.10 per share, for the corresponding quarter in 2012 which included a gain on disposal of investment in the amount of $2.1M. Consolidated sales for the second quarter of 2013 increased by 8.7% to $251.9M compared with $231.7M for the year-earlier period.

For the first six months of 2013, net income totaled $10.4M, or $0.25 per share, compared with a net income of $3.2M, or $0.07 per share, for the corresponding period in 2012. Consolidated sales for the first six months of the year totaled $461.6M compared to $440M during the same period in 2012.

The increase in sales recorded in the second quarter is mainly attributable to light structural steel activities in the United States. The Corporation's three groups of products and services, i.e. buildings, structural steel and bridges, each saw an improvement in their profit margins.

As at June 30, 2013, the backlog of orders stood at $619M compared to $575M as at March 30, 2013 and $503M at the end of the second quarter of 2012.

About Canam Group Inc.
Canam Group is the largest fabricator of steel components in 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 the following activity sectors: buildings, structural steel and bridges. The Corporation operates 21 plants across North America and employs 3,500 people in Canada, the United States, Romania, India and Hong Kong.

Conference call
Canam Group will hold a conference call with financial analysts and media representatives on Tuesday, August 6, 2013 at 4:30 p.m. EDT. A podcast will be available at www.canamgroupinc.com and www.newswire.ca. A replay of the conference call will be available until August 20, 2013 by dialing 1-800-408-3053 and entering access code 2317621, followed by the pound key (#).

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF INCOME

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars, except per share amounts)   Three months   Six months
(unaudited)   2013   2012   2013   2012
Revenues $ 251,850 $ 231,741 $ 461,602 $ 440,035
Cost of sales, excluding depreciation and amortization(1)   209,787   199,082   386,256   382,892
Selling and administrative expenses   23,215   20,610   43,323   41,018
Profit sharing program   1,286   148   1,536   358
Depreciation of property, plant and equipment   5,471   5,259   10,777   10,552
Amortization of intangible assets   401   352   778   708
Other gains — net   (1,668)   (2,929)   (1,787)   (4,684)
    13,358   9,219   20,719   9,191
Finance costs   3,571   4,277   7,320   8,777
Finance revenue   (311)   (365)   (617)   (1,409)
Share of income of joint ventures and associates   (36)   (29)   (340)   (420)
Income before income tax   10,134   5,336   14,356   2,243
Tax expense (income)                
  Current   1,725   1,534   2,842   1,611
  Deferred   984   (692)   1,116   (2,545)
    2,709   842   3,958   (934)
Net income $ 7,425 $ 4,494 $ 10,398 $ 3,177
                 
Net earnings per share                
  Basic $ 0.18 $ 0.10 $ 0.25 $ 0.07
  Diluted $ 0.18 $ 0.10 $ 0.25 $ 0.07
                 
Weighted average number of common shares (in thousands of shares)                
  Basic   41,957   42,856   41,953   43,087
  Diluted   42,088   42,950   42,084   43,182
Number of common shares outstanding (in thousands of shares)           42,073   42,105

(1) As at June 29, 2013 and June 30, 2012, the cost of sales, including depreciation and amortization, totaled $214,442 and $203,551, respectively, for the three-month period and $395,624 and $391,870, respectively, for the six-month period.



CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars)   Three months   Six months
(unaudited)   2013   2012   2013   2012
Net income $ 7,425 $ 4,494 $ 10,398 $ 3,177
Other comprehensive income (loss):                
  Items that will be reclassified subsequently to profit or loss                
  Change in unrealized gains (losses) on translating foreign operations   7,134   3,818   11,198   (324)
                 
  Available-for-sale assets:                
    Unrealized gains (losses) on available-for-sale financial assets arising during the period   14   (88)   41   47
    Realized gains reclassified to statements of income   (828)   - -   (867)   (274)
 
Tax expense   135   11   137   29
    (679)   (77)   (689)   (198)
Other comprehensive income (loss)   6,455   3,741   10,509   (522)
Comprehensive income $ 13,880 $ 8,235 $ 20,907 $ 2,655



CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(in thousands of Canadian dollars)
(unaudited)
  As at
June 29,
2013
  As at
December 31,
2012
Assets          
Current assets          
Cash and cash equivalents $ 5,959   $ 6,787
Accounts receivable   316,183     273,383
Inventories   113,607     113,217
Recoverable tax assets   147     122
Prepaid expenses and other assets   4,667     3,040
    440,563     396,549
Property, plant and equipment classified as held for sale   1,550     1,466
    442,113     398,015
Non-current assets          
Investments   4,699     6,036
Ownership interests in joint ventures and associates   41,453     44,316
Property, plant and equipment   291,980     282,556
Intangible assets   10,057     9,563
Goodwill   38,088     38,088
Deferred tax assets   7,207     7,897
Long-term receivables and other assets   17,293     17,656
Total assets $ 852,890   $ 804,127
Liabilities          
Current liabilities          
Accounts payable and accrued liabilities $ 184,853   $ 148,202
Current tax liabilities   2,294     6,942
Current portion of long-term debt   11,373     10,382
Current portion of balances of purchase price of businesses   9,715     8,988
    208,235     174,514
Non-current liabilities          
Debt   171,695     175,605
Convertible debentures   64,321     63,446
Provisions   1,850     2,156
Deferred tax liabilities   8,494     8,629
Other liabilities   15,734     17,592
Total liabilities   470,329     441,942
Equity          
Share capital   168,057     168,529
Retained earnings   207,530     197,148
Other equity items   6,974     (3,492)
Total equity   382,561     362,185
Total equity and liabilities $ 852,890   $ 804,127



CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(in thousands of Canadian dollars) (unaudited)   Employee
benefits paid
in equity
instruments
Exchange
differences
resulting from
the translation
of foreign
operations
Available-for-
sale financial
assets
Debenture
conversion
options
Total other
equity items
Share capital Retained
earnings
Total
equity
Balance as at January 1, 2012   $ 2,928 $ (6,408) $ 840 $ 5,764 $ 3,124 $ 172,869 $ 184,774 $ 360,767
Net income for the period     - -   - -   - -   - -   - -   - -   3,177   3,177
Comprehensive 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   - -   - -   113
Balance as at June 30, 2012   $ 1,881 $ (6,732) $ 642 $ 5,764 $ 1,555 $ 168,634 $ 186,634 $ 356,823
Balance as at January 1, 2013   $ 1,994 $ (11,941) $ 691 $ 5,764 $ (3,492) $ 168,529 $ 197,148 $ 362,185
Net income for the period     - -   - -   - -   - -   - -   - -   10,398   10,398
Comprehensive income     - -   11,198   (689)   - -   10,509   - -   - -   10,509
Shares purchased by a trust in employees' name on the secondary market     - -   - -   - -   - -   - -   (651)   - -   (651)
Shares acquired by employees     (202)   - -   - -   - -   (202)   202   - -   - -
Repurchase of shares     - -   - -   - -   - -   - -   (23)   - -   (23)
Excess of acquisition cost over carrying amount of acquired common shares     - -   - -   - -   - -   - -   - -   (16)   (16)
Amortization of compensation costs related to the profit sharing program - stock ownership component     159   - -   - -   - -   159   - -   - -   159
Balance as at June 29, 2013   $ 1,951 $ (743) $ 2 $ 5,764 $ 6,974 $ 168,057 $ 207,530 $ 382,561



CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

Periods ended June 29, 2013 and June 30, 2012

(in thousands of Canadian dollars)   Three months   Six months
(unaudited) 2013   2012 2013   2012
Cash flows from the following activities:                
Operating activities                
Net income $ 7,425 $ 4,494 $ 10,398 $ 3,177
Adjustments:                
  Amortization of compensation costs related to the profit sharing program - stock ownership component   80   57   159   113
  Loss on revaluation of balances of purchase price of businesses   - -   - -   65   - -
  Gain on disposal of investments   (828)   (2,099)   (867)   (2,361)
  Loss on decline in value of an investment   431   - -   431   - -
  Loss (gain) on disposal of property, plant and equipment   (110)   5   (107)   (5)
  Loss on revaluation of property, plant and equipment   (943)   - -   (943)   - -
  Depreciation of property, plant and equipment   5,471   5,259   10,777   10,552
  Amortization of intangible assets   401   352   778   708
  Amortization of deferred financing expenses   83   61   165   122
  Provisions   (298)   (111)   (306)   (84)
  Interest rate swaps   (243)   109   (335)   36
  Imputed interest   555   559   1,144   1,216
  Pension expense   (804)   (738)   (1,608)   (1,600)
  Deferred tax expense (income)   984   (692)   1,116   (2,545)
  Share of income of joint ventures and associates   (36)   (29)   (340)   (420)
    12,168   7,227   20,527   8,909
Net change in non-cash operating working capital balances                
Decrease (increase) in accounts receivable   (29,226)   (25,400)   (31,977)   18,109
Decrease in inventories   5,508   6,528   6,488   12,119
Decrease (increase) in current tax assets   (18)   13,793   (18)   14,534
Decrease (increase) in prepaid expenses and other assets   659   348   (1,493)   151
Increase (decrease) in accounts payable and accrued liabilities   24,281   6,346   29,478   (3,422)
Decrease in interest payable   (1,227)   (1,258)   (91)   (10)
Increase (decrease) in current tax liabilities   (524)   30   (4,662)   64
    (547)   387   (2,275)   41,545
Cash flows from operating activities   11,621   7,614   18,252   50,454
Financing activities                
Shares purchased by a trust in employees' name on the secondary market   - -   - -   (651)   - -
Repurchase of shares   - -   (5,490)   (39)   (6,712)
Increase in debt and bank loans   2,811   - -   4,961   579
Repayment of debt and bank loans   (6,102)   (11,134)   (11,432)   (39,981)
Repayment of balances of purchase price of businesses   - -   - -   (3,326)   (6,684)
Issue expenses related to long-term debt   (30)   - -   (30)   - -
Increase in other liabilities   - -   47   - -   55
Cash flows from financing activities   (3,321)   (16,577)   (10,517)   (52,743)
Investing activities                
Proceeds from sale of property, plant and equipment   131   2   178   13
Additions to property, plant and equipment   (4,908)   (1,145)   (7,725)   (2,498)
Additions to intangible assets   (288)   (45)   (943)   (91)
Acquisition of investments   - -   - -   - -   (2,620)
Proceeds from disposal of investments   2,406   4,850   2,743   5,172
Distributions received   - -   90   - -   265
Decrease in receivables and other assets   152   576   491   1,096
Increase in long-term receivables   (27)   - -   (27)   - -
Acquisition of business assets   (3,586)   - -   (3,586)   - -
Cash flows from investing activities   (6,120)   4,328   (8,869)   1,337
Effects of changes in foreign exchange rate on cash and cash equivalents   138   (208)   306   (400)
Net change in cash   2,318   (4,843)   (828)   (1,352)
                 
Cash and cash equivalents - Beginning of period   3,641   10,859   6,787   7,368
Cash and cash equivalents - End of period $ 5,959 $ 6,016 $ 5,959 $ 6,016
Supplementary information                
  Interest paid $ 4,500 $ 3,777 $ 5,955 $ 4,456
  Income taxes paid (recovered), net $ 2,292 $ (12,275) $ 7,560 $ (12,965)

 

SOURCE: CANAM GROUP INC.

For further information:

François Bégin
Vice President, Communications
Canam Group Inc.
Telephone: 450-641-4000 / 418-228-8031
Email: francois.begin@canamgroupinc.com

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