Canam Group Announces its 2016 Fourth Quarter Results
February 16, 2017
(Saint-Georges, QC) – Canam Group Inc. (TSX:CAM) (“Canam Group” or the “Corporation”) today published its financial results for the three-month period and fiscal year ended December 31, 2016.
Results for the fourth quarter of 2016
Consolidated revenues for the fourth quarter of 2016 totalled $486.5M, compared to $493.8M for the same quarter in 2015.
Selling and administrative expenses represented 6.2% of fourth-quarter revenues in 2016, or $30M, compared to 6.3% of revenues in 2015, or $30.9M. This variation is particularly attributable to the payroll decrease resulting from the refocusing of the heavy structural steel business approach begun in the third quarter of 2016.
The adjusted EBITDA in the fourth quarter of 2016 amounted to $9.5M or 1.9% of revenues, as compared with an adjusted EBITDA of $34M or 6.9% of revenues for the same quarter of 2015. The decrease is attributable to the compression of gross margins in certain Corporation’s groups of products and services.
In the fourth quarter of 2016, the net loss attributable to shareholders totaled $2M, or $0.04 per share, compared to a net income of $17.8M, or $0.39 per share, in 2015.
Results for fiscal year 2016
In 2016, revenues totaled $1,856.9M, compared to $1,606.9M in 2015, representing an increase of $250M, or 15.6%. This increase is attributable to all of the Corporation’s activities, but primarily to bridge products and services. Sales made in US dollars benefited from the devaluation of the Canadian dollar compared to the US dollar.
The net loss attributable to shareholders in the 2016 fiscal year represented $13.3M, or $0.28 per basic share, compared to a net income of $46.8M, or $1.09 per basic share, for the previous year. The loss is mainly attributable to the recording of an after-tax allowance of $32M in the second quarter of 2016 due to significant additional costs for a heavy structural steel project, and to the unfavorable impact of bridge projects in the United States.
Refocusing of the Corporation’s activities
- Heavy structural steel
Following the revision of its approach to the heavy structural steel market begun last July, the Corporation announced that it will no longer act as a structural steel contractor for complex, large‑scale projects. Accordingly, in the future, it will participate in structural steel projects that present a reasonable level of risk given the size of the Corporation and the nature of its primary activities. This will allow for a more predictable evolution of profits.
After reducing its estimation and project management workforce last summer, the Corporation completed its reorganization over the last few weeks. The new team has a mandate to maximize the use of the structural steel manufacturing capacity at the St. Gédéon de Beauce plant.
- Bridge activities in the United States
In light of the challenges encountered with bridge projects in the United States over the last year, the Corporation decided to thoroughly review all of its US activities in the bridge sector, taking into consideration all the options that would enable the Corporation to meet its profitability objectives.
Pressure on gross margins
“The 2016 results reflect a non-residential construction market that slowed down in Canada but was very active in the United States, without relieving the pressure on the margins,” explained Marc Dutil, President and CEO. “But our results are affected by negative margins on bridge projects in the United States and in particular by the allowance taken in the second quarter for a heavy structural steel project. We are continuing discussions with the client to resolve the issue of additional costs, and we are confident that we will reach an agreement.”
The order backlog stood at $1,139M as at December 31, 2016, compared to $1,183M as at December 31, 2015.
The Board of Directors approved the payment of a dividend of $0.04 per share payable on March 31, 2017, to shareholders of record on March 17, 2017.
About Canam Group Inc.
Canam Group specializes in designing integrated solutions and fabricating customized products for the North American construction industry. Each year, Canam Group takes part in an average of 10,000 building, structural steel and bridge projects, which can also include the supply of preconstruction and project management services. The Corporation operates 23 plants across North America and employs close to 4,650 people in Canada, the United States, Romania and India.
Conference call, webcast and presentation
Canam Group will hold a conference call with financial analysts and media representatives on Thursday, February 16, 2017, at 9:00 a.m. EST. The call can be accessed via webcast at canamgroupinc.com and newswire.ca.
Please note that the conference call will be accompanied by a complementary presentation in PDF format that can be downloaded from the Corporation’s website at canamgroupinc.com. A replay of the conference call will be available until March 2, 2017, by dialing 1-800-408-3053 and entering access code 3495498, followed by the pound key (#).
Earnings before interest, tax, depreciation and amortization (adjusted EBITDA) and net debt are not defined by International Financial Reporting Standards (IFRS) and cannot be formally presented in the consolidated financial statements. Even though adjusted EBITDA and net debt are non-IFRS measures, they are used by managers, analysts, investors and other financial stakeholders to assess the Corporation’s operating performance and management from a financial and operational standpoint. Refer to the section entitled “Non-IFRS measures” of the Corporation’s 2015 Annual Report for the definition of this indicator.
Caution regarding forward-looking statements
This press release may contain forward-looking statements, which include, but are not limited to, statements with respect to the Corporation’s growth strategy, costs, financial position and financial results, economic and business outlook, prospects and trends of the Corporation’s industry segment, expected growth in demand for products and services, the dates of expected or scheduled deliveries, orders and project execution in general, objectives, projects, targets, priorities, business strategy, and the expected impact of legislative and regulatory environment and legal proceedings. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may”, “will”, “expect”, “intend”, “anticipate”, “plan”, “foresee”, “believe”, “continue” or “maintain”, the negative of these terms, variations of them or similar terminology. By their nature, forward-looking statements require the Corporation to make assumptions and are subject to important known and unknown risks and uncertainties, which may cause actual results in future periods to differ materially from forecasted results. While the Corporation considers its assumptions to be reasonable and appropriate based on information currently available, there is a risk that they may not be accurate. Readers should not place undue reliance on forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in the forward-looking statements include in particular the risks and uncertainties described in the Corporation’s 2015 Annual Report in the section entitled “Risks and Uncertainties”. The forward-looking statements contained herein are made as of the date hereof and are subject to change thereafter, and the Corporation has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities regulations.
Vice President, Communications
Canam Group Inc.
Telephone: 418-228-8031/ 418-225-1355 (mobile phone)
Vice President and Chief Financial Officer
Canam Group Inc.