News Releases
EDMONTON, Nov. 6 /CNW/ - The Churchill Corporation (TSX: CUQ) today
announced record financial results for its third quarter ended September 30,
2008.
<<
CONSOLIDATED FINANCIAL HIGHLIGHTS
-------------------------------------------------------------------------
Three months ended
September 30
----------------------------------------------------
($ millions, except $ %
per share amounts) 2008 2007 Change Change
-------------------------------------------------------------------------
Contract Revenue $ 228.9 $ 203.8 $ 25.1 12%
Contract Income 28.0 17.9 10.1 56%
EBITDA(1) 17.3 9.6 7.7 80%
Earnings before Tax 16.0 8.4 7.6 90%
Net Earnings 11.2 5.6 5.6 100%
Per Share - Basic $ 0.62 $ 0.31 $ 0.31 100%
Work-in-hand(2) 585.8 734.5 -148.7 -20%
Backlog(3) $1,459.3 $1,160.0 $ 299.3 26%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Nine months ended
September 30
----------------------------------------------------
($ millions, except $ %
per share amounts) 2008 2007 Change Change
-------------------------------------------------------------------------
Contract Revenue $ 642.5 $ 544.6 $ 97.9 18%
Contract Income 71.0 47.2 23.8 50%
EBITDA(1) 40.4 22.1 18.3 83%
Earnings before Tax 36.5 19.1 17.4 91%
Net Earnings 25.2 12.9 12.3 95%
Per Share - Basic $ 1.41 $ 0.73 $ 0.68 93%
Work-in-hand(2) 585.8 734.5 -148.7 -20%
Backlog(3) $1,459.3 $1,160.0 $ 299.3 26%
-------------------------------------------------------------------------
(1)(2)(3) Refer to the "Terminology" section for further details.
>>
The Corporation posted third quarter contract revenue of $228.9 million
and net earnings of $11.2 million ($0.62 per share). These results compare to
contract revenue of $203.8 million and net earnings of $5.6 million ($0.31 per
share) in Q3 2007.
"Churchill has once again delivered record quarterly profits," said Peter
Adams, President and Chief Executive Officer, The Churchill Corporation.
"Stuart Olson, Insulation Holdings and Laird Electric exceeded previous record
earnings results and during the nine months ended September 30, 2008 the
Corporation exceeded its full year 2007 net earnings of $21.1 million by $4.1
million (19%). These results are indicative of the hard work of our various
management teams and their staffs to strive for greater volumes, profitable
execution and increased efficiency. Additionally, our backlog has increased to
a new record level of $1.5 billion. Operationally we will continue to focus on
converting our work-in-hand volume into near-term shareholder profits."
THIRD QUARTER RESULTS
For the third quarter of 2008, consolidated contract revenue was
$228.9 million, which was $25.1 million or 12% greater than the same period in
2007. This higher level of revenue on a year-over-year basis was a result of
continued strength in our building construction segment plus growth in all of
our industrial segments. Revenue for the nine months ended September 30, 2008,
was $642.5 million compared to $544.6 million for the same period of 2007.
Year to date contract revenue has increased by 14% in the building segment,
131% in the industrial general contracting segment, 38% in the insulation
segment and decreased by 8% in the electrical contracting segment, for a
consolidated increase of 18%.
Contract income increased from $17.9 million in the third quarter of 2007
to $28.0 million in the current quarter, as stronger margins in the buildings,
insulation and electrical segments led to improved overall results. Contract
income year to date was $71.0 million, an increase of 50% over the first nine
months of 2007. This year-over-year increase is due to greater overall
construction volume and improved contract income margin percentage.
Indirect and administrative expenses amounted to $11.3 million in the
quarter, compared to $9.2 million in the comparable period of 2007, reflecting
increased expenses associated with higher revenue. For the nine months year to
date, indirect and administrative expenses of $33.0 million were $5.9 million
higher than in the corresponding period of 2007. Greater levels of activity in
the buildings segment, consulting costs for the industrial electrical segment
and greater corporate expenses were the main contributors to this increase.
EBITDA in the quarter was $17.3 million, compared to $9.6 million in the
third quarter of 2007. EBITDA was $40.4 million for the nine months ended
September 30, 2008, an increase of $18.3 million or 83% over the prior year
period. Earnings before tax in Q3 2008 increased 90% to $16.0 million,
compared to $8.4 million reported in Q3 2007. Earnings before tax were
$36.5 million for the nine months ended September 30, 2008, an increase of 91%
from the $19.1 million reported in 2007. The Corporation's consolidated net
earnings for the three months ended September 30, 2008 were $11.2 million
compared to net earnings of $5.6 million in 2007. Net earnings increased by
95% to $25.2 million for the nine months ended September 30, 2008, as compared
to net earnings of $12.9 million during the same period in 2007.
Work-in-hand at September 30, 2008, was $585.8 million compared to
$734.5 million in the third quarter of 2007. This reduction in work-in-hand is
due to the timing and stage of contracting activity, and is not an indication
of expected future activity levels. The Corporation's backlog at the
conclusion of the quarter was $1.5 billion, an increase of 26% compared to
Q3 2007. New contract awards of $229.2 million were booked into work-in-hand
during the current quarter, which compares with $180.9 million in Q3 2007. The
majority of the increase in new work secured came from the buildings segment.
<<
RESULTS OF OPERATIONS
Buildings
---------
>>
For the three months ended September 30, 2008, Stuart Olson's revenue
increased by $5.6 million to $158.4 million, compared to $152.8 million in the
prior year. The company continues to experience higher levels of activity in
all of its branches; however growth was particularly strong in the Southern
Alberta and British Columbia branches. Stuart Olson remains active on projects
ranging from educational and healthcare facilities, to civic infrastructure
and commercial buildings.
Contract income margin in the third quarter increased 46% to
$17.1 million from $11.7 million for the same period in 2007. Contract income
margin percentage increased to 10.8% in 2008 as compared to 7.6% in 2007.
Stuart Olson's operational strength is allowing it to grow margins through
solid project execution.
Earnings before tax from the buildings segment were $12.1 million in Q3
2008, compared to $7.2 million in Q3 2007. This 68% improvement in earnings
was a result of the increase in overall contract volume and strong project
execution.
For the nine months ended September 30, 2008, Stuart Olson reported
revenues of $434.7 million compared to revenues of $382.1 million last year.
This $52.6 million growth in revenue on a year-over-year basis was generated
by increased activity in all regions.
Contract income margin for the first nine months of 2008 was
$41.7 million compared to $26.1 million in 2007. Contract income margin
percentage was 9.6% compared to 6.8%, respectively. Earnings before tax
increased to $27.0 million compared to $14.5 million. A strong market combined
with solid project execution has allowed Stuart Olson to be more profitable.
Stuart Olson had work-in-hand of $480.8 million and a backlog of
$1.1 billion as at June 30, 2008. In the three months ended September 30,
2008, the company added a further $141.2 million of contracts to its
work-in-hand, and executed $158.4 million of contract revenue. The company
completed the quarter with $463.6 million of work-in-hand, of which $299.3
million is expected to carryover into 2009. The company continues to focus its
efforts on securing larger projects which will allow it to maintain and grow
current volumes through 2009 and 2010. At September 30, 2008, Stuart Olson's
backlog amounted to $1.3 billion, a 27% increase compared to $1.0 billion at
the end of Q3 2007.
<<
Industrial General Contracting
------------------------------
>>
Triton's contract revenue for the quarter ended September 30, 2008, was
$13.0 million; an increase of 43% from the $9.1 million generated in the
comparable quarter of 2007. Revenues from all divisions were higher during the
third quarter of 2008, but most significantly in the construction division.
Contract income margin decreased to a loss of $0.3 million in Q3 2008
from a positive margin of $1.0 million in Q3 2007. Triton realized lower
contract income margins in its construction and maintenance divisions as a
result of unexpectedly poor soil conditions in the field and project
management challenges. As a result, Triton recorded a loss before tax of
$1.4 million in the third quarter of 2008, as compared to a loss before tax of
$0.5 million in Q3 2007.
For the nine months ended September 30, 2008, Triton reported revenues of
$66.9 million compared to revenues of $29.0 million last year. While all three
divisions have been busier than in 2007, the majority of this revenue
differential can be attributed to a significant year-over-year increase in
activity levels within the construction and maintenance divisions.
Contract income for the first nine months of 2008 was $4.5 million
compared to $3.9 million in 2007. Contract income margin percentage in 2008
was 6.7% compared to 13.4%, in 2007. Triton's year-to-date earnings before tax
was $0.6 million, compared to a loss before tax of $0.6 million in 2007.
Triton had work-in-hand of $25.1 million and a backlog of $29.4 million
at June 30, 2008. For the quarter ended September 30, 2008, the company
secured a further $17.8 million of contracts, and executed $13.0 million of
contractual work. Triton was awarded contracts from Berry Y&V, MEG Energy,
Statoil and TCPL among others during the quarter. The company ended the
quarter with $29.9 million of work-in-hand, of which it expects to execute
$12.0 million during the balance of 2008 and carry forward $17.9 million into
2009. At September 30, 2008, the company's backlog was $37.3 million versus a
Q3 2007 backlog of $37.1 million.
<<
Industrial Insulation Contracting
---------------------------------
>>
Insulation Holdings Inc. operates three business units - Fuller Austin,
Northern Industrial Insulation and Lakehead Insulation - all providing
insulation related contracting services for capital projects and maintenance
work. Lakehead is a wholly-owned subsidiary of Fuller Austin.
Revenue for the three months ended September 30, 2008, increased to
$19.4 million, compared to $15.6 million for the comparable period in 2007.
The increase in revenue was a result of greater activity in Fuller Austin
Saskatchewan and Northern Industrial divisions.
Contract income margin increased to $4.5 million in Q3 2008 from
$3.2 million for the comparable period of 2007. The increase in margin was a
result of continued strong project execution and the greater volume of work
executed. The contract income margin percentage was 23.0% in this quarter as
compared to 20.5% in the prior year.
The company's earnings before tax increased 53% to $2.9 million during
the period, compared to earnings before tax of $1.9 million in the third
quarter of 2007.
For the nine months ended September 30, 2008, Insulation Holdings
reported revenues of $53.0 million compared to revenues of $38.4 million last
year. The majority of the $14.6 million revenue differential is associated
with work completed in the Saskatchewan market.
Contract income for the first nine months of 2008 was $10.5 million
compared to $7.4 million in the comparable period of 2007. Contract income
margin percentage was 19.8% compared to 19.3%, respectively. This sustained
high level of contract income margin percentage was due to solid project
execution. Earnings before tax year to date increased to $6.4 million from
$3.8 million in 2007.
Insulation Holdings had work-in-hand of $39.9 million and backlog of
$51.8 million at June 30, 2008. During Q3 2008, they secured a further
$47.1 million of contracts and executed $19.4 million of contracts. New
contracts were secured from clients such as Jacobs, Ledcor, Shell and Suncor.
The insulation segment ended the quarter with $67.6 million of work-in-hand,
of which $45.9 million is expected to be completed in 2009. At September 30,
2008, the company had a backlog of $77.4 million, as compared to $40.5 million
in the prior year.
<<
Industrial Electrical Contracting
---------------------------------
>>
For the three months ended September 30, 2008, Laird's contract revenue
was $38.1 million compared to the $26.2 million reported in Q3 2007. In Q3
2008 Laird attained a new record for quarterly revenue, as a result of
significant manpower employed on several major oil sands projects and its
increased presence in the Edmonton industrial market.
Contract income increased from $1.9 million in 2007 to $6.5 million in Q3
2008, due to increased volume and improved project execution. The contract
income margin percentage of 17.1% generated during the third quarter of 2008
was significantly higher than the 7.3% margin achieved in Q3 2007. This was a
result of the revenue mix from contracts under construction, strong project
execution and ongoing systems and process improvements.
Laird achieved record quarterly earnings before tax of $4.2 million for
the period, compared to earnings before tax of $0.5 million in Q3 2007. The
increase in earnings was a result of the higher contract income margin in Q3
2008 as compared to the prior year.
For the nine months ended September 30, 2008, Laird reported revenues of
$87.8 million compared to revenues of $95.0 million last year, a decrease of
$7.2 million. In the first nine months of 2007, Laird undertook a significant
amount of construction related activities for a major oil sands client, which
contributed to the greater prior year volume.
Contract income for the first nine months of 2008 was $13.7 million
compared to $9.3 million in 2007. This increase in contract income,
notwithstanding the year-over-year revenue decrease of $7.2 million, was due
to improved contract terms, improved project execution and systems and process
improvements. Contract income margin percentage was 15.6% for the first nine
months of 2008 as compared to 9.8% for the corresponding period in 2007.
Earnings before tax year to date increased to $7.5 million compared to
$4.8 million in 2007. The $2.7 million increase in earnings before tax is
attributable to the increase in contract income margin percentage.
Laird reported work-in-hand and backlog amounting to $39.7 million at
June 30, 2008. New contract awards of $23.2 million were secured in the third
quarter and $38.1 million of contracts were executed. Projects were secured
from clients including Albian, Nexen, TransAlta and Suncor. Laird ended the
third quarter with $24.8 million of work-in-hand of which $12.9 million is
expected to carryover into 2009. At September 30, 2008 Laird had a backlog of
$29.8 million compared to its backlog of $44.4 million at the end of Q3 2007.
<<
Corporate and Other
-------------------
>>
In the third quarter of 2008, the Corporate and Other segment incurred a
loss before tax of $1.8 million compared to a loss before tax of $0.8 million
in 2007. For the nine months ended September 30, 2008, the Corporate and Other
segment generated a loss before tax of $5.0 million compared to a loss before
tax of $3.3 million for the same period in 2007. Corporate expenses were
higher due to recognition of stock based compensation expenses, consulting
fees and a larger work force.
CASH FLOW, FINANCING, CAPITAL REQUIREMENTS, LIQUIDITY
Cash and cash equivalents at September 30, 2008, totaled $78.4 million,
which compares with $108.1 million at the end of 2007. Of the $78.4 million of
cash and cash equivalents, $12.9 million was subject to deemed trust
conditions under the British Columbia Lien Act, compared to $25.3 million at
December 31, 2007. As such, this cash is restricted to the payment of direct
costs related to specific construction projects.
Operating activities provided $4.8 million of cash during the quarter as
compared to providing $13.7 million of cash during the third quarter of 2007.
Changes in non-cash working capital accounts, particularly a reduction in
contract advances and costs in excess of billings account for the majority of
the difference between the periods.
Investing activities resulted in the use of $1.8 million of cash during
the third quarter of 2008, which compares with cash used of $1.0 million in Q3
2007. The investments were made in construction equipment to support
operations.
During the third quarter of 2008 net cash used in financing activities
amounted to $0.4 million, compared to cash used in financing activities of
$15.5 million in the third quarter of 2007. The Corporation repaid
$0.5 million of long-term debt during Q3 2008, and received proceeds of
$51 thousand from the exercise of stock options.
Cash used in operations of $23.4 million in the first nine months of 2008
was in contrast to cash generated from operations of $30.4 million in the same
period last year. This change can be attributed to additional income taxes
paid and greater working capital investment to support revenue growth on a
year-over-year basis.
For the nine months ended September 30, 2008, investing activities
resulted in a use of cash of $5.0 million compared to $3.2 million of cash
used in the prior year. The Corporation has primarily used this cash to
acquire construction equipment in both periods.
For the nine months ended September 30, 2008, cash used in financing
activities amounted to $1.3 million compared to $13.1 million during 2007.
Proceeds and repayments applied to the operating line of credit during the
year to date have offset each other compared to a net repayment of
$12.0 million in 2007. Repayment of long-term debt in the first nine months of
2008 was $1.5 million versus $1.1 million in 2007. Repayments to the demand
term loan in 2007 were $0.5 million; subsequent to the third quarter of 2007
this demand term loan was converted to a committed debt facility. As at
September 30, 2008, the Corporation was in compliance with the repayment terms
associated with its contractual obligations. The Corporation has received
proceeds of $0.3 million from the exercise of stock options during the first
nine months of 2008, and proceeds of $0.5 million in the corresponding period
of 2007.
As at September 30, 2008, Churchill had working capital of $69.9 million,
which compares favourably to the working capital position of $47.9 million at
the end of 2007.
The Corporation remains a partner in two joint ventures. In each instance
the Corporation has provided joint and several guarantees, increasing the
maximum potential exposure to the full value of the work remaining under the
contract.
Shareholders' equity was $95.9 million at September 30, 2008, as compared
to $69.7 million at December 31, 2007. Share capital has increased by
$0.4 million during the first nine months of 2008 to recognize options
exercised. Year to date, contributed surplus increased $0.6 million as a
result of the recognition of stock-based compensation. Retained earnings
increased from $47.5 million at December 31, 2007, to $72.8 million at
September 30, 2008, reflecting the year to date addition of $25.3 million of
net earnings.
Share Data
As at September 30, 2008, the Corporation had 17,981,991 common shares
issued and outstanding and 423,396 options convertible into common shares upon
exercise (September 30, 2007 - 17,822,491 common shares and 300,000 options).
During the period from October 1, 2008, to November 5, 2008, no new share
options were granted, exercised or cancelled.
The Corporation has an Employee Share Purchase Plan available to all
full-time employees. At September 30, 2008, the plan held 779,961 Churchill
common shares for employees (Q3 2007 - 1,150,869 common shares). Under the
plan, shares are acquired in the open market.
OUTLOOK
While infrastructure spending continues to remain strong in Western
Canada and particularly Alberta, building permit activity in our markets is
starting to soften and commodity prices have fallen dramatically in response
to global credit conditions and forecasted weaker demand. The response by
governments to these conditions is unknown, however, government at all levels
in Canada are in better fiscal condition than in past recessions. Stuart Olson
is successfully growing its backlog as it now has the people available to
manage and execute new projects into 2009 and 2010. Stuart Olson remains
confident that it can maintain its volume of activity despite a tightening
economic climate and competitive market conditions.
Activity levels at Triton are forecast to remain at the levels reported
in this quarter for the first half of 2009, as the energy industry experiences
some delays in project approvals and monitors the credit and commodity market
conditions. This will have some impact on Triton's ability to secure new work
and may impact its ability to maintain profitability.
The insulation companies are successfully securing new clients and work
due to their past project execution and client relationships. Activity levels
are expected to remain high as we head into 2009, supported by a record
backlog. We continue to look for smaller acquisition opportunities to
complement the personnel and services we provide in this business segment.
Laird continues to make progress on its project management initiatives
and positioning itself for long-term growth in the oil sands construction and
maintenance market. Laird's maintenance role on a major oil sands site has
been extended by the general contractor through the first quarter of 2009,
under the existing contract and we are hopeful that a new contract will be
executed prior to year-end. Decreased capital spending by Suncor related to
its Voyageur Upgrader is not expected to have a material impact on Laird's
outlook and in fact could be viewed positively, as projects related to Firebag
and Suncor's main site may advance more quickly.
Churchill's year-to-date results have exceeded its full year 2007
profitability by 19% on 13% less contract revenue. This has been accomplished
by Churchill's operating companies through their focus and diligence on
increasing efficiencies and generating higher margins from existing revenue
volumes. We remain confident that as 2009 unfolds, our operating companies
generally will be able to identify and secure the necessary projects to
maintain revenues and profitability at desirable levels. This confidence is
based on the size, reputation, market position, ability to execute and
management strength of these companies.
<<
CONSOLIDATED STATEMENTS OF EARNINGS, COMPREHENSIVE INCOME
AND RETAINED EARNINGS
($ thousands, except Three months ended Nine months ended
per share amounts) September 30 (unaudited) September 30 (unaudited)
---------------------------------- ------------ ------------ ------------
2008 2007 2008 2007
---------------------------------- ------------ ------------ ------------
Contract revenue $ 228,937 $ 203,756 $ 642,465 $ 544,597
Contract costs 200,983 185,860 571,440 497,393
---------------------------------- ------------ ------------ ------------
Contract income 27,954 17,896 71,025 47,204
Interest income 581 813 2,135 1,742
Sundry income
(expense) 71 (3) 289 293
Indirect and
administrative
expenses (11,266) (9,189) (33,042) (27,139)
Depreciation and
amortization (1,211) (903) (3,450) (2,413)
Interest expense (136) (179) (443) (552)
---------------------------------- ------------ ------------ ------------
Earnings before
income taxes 15,993 8,435 36,514 19,135
---------------------------------- ------------ ------------ ------------
Income tax (expense)
recovery
Current income tax (6,646) (5,523) (15,480) (8,134)
Future income tax 1,831 2,653 4,214 1,917
---------------------------------- ------------ ------------ ------------
(4,815) (2,870) (11,266) (6,217)
---------------------------------- ------------ ------------ ------------
Net earnings 11,178 5,565 25,248 12,918
Comprehensive income - - - -
---------------------------------- ------------ ------------ ------------
Net earnings and
comprehensive income 11,178 5,565 25,248 12,918
Retained earnings,
beginning of period 61,598 33,755 47,528 26,402
---------------------------------- ------------ ------------ ------------
Retained earnings,
end of period $ 72,776 $ 39,320 $ 72,776 $ 39,320
Accumulated
comprehensive
income, beginning
of period $ - $ - $ - $ -
Comprehensive income
for the period - - - -
---------------------------------- ------------ ------------ ------------
Accumulated
comprehensive
income, end of
period $ - $ - $ - $ -
---------------------------------- ------------ ------------ ------------
---------------------------------- ------------ ------------ ------------
Net earnings per
common share
Basic $ 0.62 $ 0.31 $ 1.41 $ 0.73
---------------------------------- ------------ ------------ ------------
Diluted $ 0.62 $ 0.31 $ 1.39 $ 0.72
---------------------------------- ------------ ------------ ------------
---------------------------------- ------------ ------------ ------------
Weighted average
common shares:
Basic 17,972,643 17,725,969 17,927,430 17,687,198
---------------------------------- ------------ ------------ ------------
Diluted 18,127,052 18,034,466 18,119,649 17,966,548
---------------------------------- ------------ ------------ ------------
---------------------------------- ------------ ------------ ------------
CONSOLIDATED BALANCE SHEETS
($ thousands)
------------------------------------------------------------ ------------
September 30, December 31,
2008 2007
(unaudited)
------------------------------------------------------------ ------------
ASSETS
Current Assets
Cash and cash equivalents $ 78,425 $ 108,105
Accounts receivable 199,165 123,906
Inventories and prepaid expenses 1,449 859
Future income tax assets 3,829 759
------------------------------------------------------------ ------------
282,868 233,629
Future income tax assets 2,263 788
Property and equipment 24,659 22,832
Goodwill and intangible assets 7,357 7,420
------------------------------------------------------------ ------------
$ 317,147 $ 264,669
------------------------------------------------------------ ------------
------------------------------------------------------------ ------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 174,046 $ 149,057
Contract advances and unearned income 35,092 24,611
Income taxes payable 1,948 10,148
Current portion of long-term debt 1,917 1,963
------------------------------------------------------------ ------------
213,003 185,779
Long-term debt 7,445 8,755
Future income tax liabilities 790 457
------------------------------------------------------------ ------------
221,238 194,991
SHAREHOLDERS' EQUITY
Share capital 16,812 16,414
Contributed surplus 6,321 5,736
Retained earnings 72,776 47,528
Accumulated other comprehensive income - -
------------------------------------------------------------ ------------
95,909 69,678
------------------------------------------------------------ ------------
$ 317,147 $ 264,669
------------------------------------------------------------ ------------
------------------------------------------------------------ ------------
CONSOLIDATED STATEMENTS OF CASH FLOW
Three months ended Nine months ended
($ thousands) September 30 (unaudited) September 30 (unaudited)
---------------------------------- ------------ ------------ ------------
2008 2007 2008 2007
---------------------------------- ------------ ------------ ------------
OPERATING ACTIVITIES
Net earnings $ 11,178 $ 5,565 $ 25,248 $ 12,918
Depreciation and
amortization 1,211 903 3,450 2,413
Gain on disposal of
equipment (14) (21) (34) (37)
Share-based
compensation 326 4 696 41
Future income taxes (1,831) (2,653) (4,214) (1,917)
---------------------------------- ------------ ------------ ------------
10,870 3,798 25,146 13,418
Net change in accounts
receivable, inventories
and prepaid expenses (8,185) (30,631) (75,848) (88,559)
Net change in accounts
payable and accrued
liabilities 8,795 26,748 24,990 61,049
Net change in contract
advances and unearned
income and costs in
excess of billings (12,513) 9,343 10,482 43,965
Net change in income
taxes payable 5,792 4,469 (8,200) 575
---------------------------------- ------------ ------------ ------------
4,759 13,727 (23,430) 30,448
---------------------------------- ------------ ------------ ------------
INVESTING ACTIVITIES
Proceeds on disposal
of equipment 47 27 229 177
Additions to property
and equipment (1,846) (1,025) (5,217) (3,368)
---------------------------------- ------------ ------------ ------------
(1,799) (998) (4,988) (3,191)
---------------------------------- ------------ ------------ ------------
FINANCING ACTIVITIES
Proceeds under
operating line of
credit - - 9,000 5,000
Repayments under
operating line of
credit - (15,500) (9,000) (17,000)
Repayment of
long-term debt (495) (441) (1,549) (1,076)
Repayment of demand
term loan - (65) - (455)
Issuance of common
shares 51 470 287 470
---------------------------------- ------------ ------------ ------------
(444) (15,536) (1,262) (13,061)
---------------------------------- ------------ ------------ ------------
Increase (decrease)
in cash 2,516 (2,807) (29,680) 14,196
Cash, beginning of
period 75,909 67,390 108,105 50,387
---------------------------------- ------------ ------------ ------------
Cash, end of period $ 78,425 $ 64,583 $ 78,425 $ 64,583
---------------------------------- ------------ ------------ ------------
---------------------------------- ------------ ------------ ------------
SUPPLEMENTAL CASH
FLOW INFORMATION
---------------------------------- ------------ ------------ ------------
Cash received (paid)
during the year for:
Interest $ 461 $ 610 $ 1,716 $ 1,189
Income taxes $ (997) $ (1,054) $ (23,680) $ (7,559)
---------------------------------- ------------ ------------ ------------
SELECTED FINANCIAL STATEMENT DISCLOSURE
Three months ended Industrial Industrial Industrial
September 30, 2008 Buildings General Insulation Electric
-------------------------------------------------------------------------
Revenues $ 158,385 $ 13,011 $ 19,415 $ 38,126
-------------------------------------------------------------------------
EBITDA(1) 12,668 (1,314) 2,950 4,438
Depreciation and
amortization 511 96 55 267
Interest expense 13 19 1 15
-------------------------------------------------------------------------
Earnings (loss)
before tax $ 12,144 $ (1,429) $ 2,894 $ 4,156
Income taxes
Net earnings
Goodwill and
intangible assets $ - $ - $ - $ 7,315
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 219,525 $ 30,648 $ 23,821 $ 34,975
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 913 $ 89 $ 200 $ 432
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended Corporate
September 30, 2008 and Other Total
-----------------------------------------------
Revenues $ - $ 228,937
-----------------------------------------------
EBITDA(1) (1,402) 17,340
Depreciation and
amortization 282 1,211
Interest expense 88 136
-----------------------------------------------
Earnings (loss)
before tax $ (1,772) $ 15,993
------------
Income taxes (4,815)
------------
Net earnings $ 11,178
------------
------------
Goodwill and
intangible assets $ 42 $ 7,357
-----------------------------------------------
-----------------------------------------------
Total Assets $ 8,178 $ 317,147
-----------------------------------------------
-----------------------------------------------
Capital Expenditures $ 281 $ 1,915
-----------------------------------------------
-----------------------------------------------
Three months ended Industrial Industrial Industrial
September 30, 2007 Buildings General Insulation Electric
-------------------------------------------------------------------------
Revenues $ 152,781 $ 9,154 $ 15,644 $ 26,177
-------------------------------------------------------------------------
EBITDA(1) 7,622 (333) 1,923 793
Depreciation and
amortization 359 104 58 245
Interest expense 16 21 - 10
-------------------------------------------------------------------------
Earnings (loss)
before tax $ 7,247 $ (458) $ 1,865 $ 538
Income taxes
Net earnings
Goodwill and
intangible assets $ - $ - $ - $ 7,315
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 188,471 $ 13,266 $ 18,047 $ 35,821
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 529 $ 80 $ 73 $ 376
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Three months ended Corporate
September 30, 2007 and Other Total
-----------------------------------------------
Revenues $ - $ 203,756
-----------------------------------------------
EBITDA(1) (488) 9,517
Depreciation and
amortization 137 903
Interest expense 132 179
-----------------------------------------------
Earnings (loss)
before tax $ (757) $ 8,435
------------
Income taxes (2,870)
------------
Net earnings $ 5,565
------------
------------
Goodwill and
intangible assets $ 126 $ 7,441
-----------------------------------------------
-----------------------------------------------
Total Assets $ 14,272 $ 269,877
-----------------------------------------------
-----------------------------------------------
Capital Expenditures $ 338 $ 1,396
-----------------------------------------------
-----------------------------------------------
Nine months ended Industrial Industrial Industrial
September 30, 2008 Buildings General Insulation Electric
-------------------------------------------------------------------------
Revenues $ 434,715 $ 66,934 $ 53,019 $ 87,797
-------------------------------------------------------------------------
EBITDA(1) 28,530 996 6,521 8,325
Depreciation and
amortization 1,460 291 163 754
Interest expense 42 58 1 55
-------------------------------------------------------------------------
Earnings (loss)
before tax $ 27,028 $ 647 $ 6,357 $ 7,516
Income taxes
Net earnings
Goodwill and
intangible assets $ - $ - $ - $ 7,315
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 219,525 $ 30,648 $ 23,821 $ 34,975
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 2,573 $ 251 $ 262 $ 1,058
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Nine months ended Corporate
September 30, 2008 and Other Total
-----------------------------------------------
Revenues $ - $ 642,465
-----------------------------------------------
EBITDA(1) (3,965) 40,407
Depreciation and
amortization 782 3,450
Interest expense 287 443
-----------------------------------------------
Earnings (loss)
before tax $ (5,034) $ 36,514
------------
Income taxes (11,266)
------------
Net earnings $ 25,248
------------
------------
Goodwill and
intangible assets $ 42 $ 7,357
-----------------------------------------------
-----------------------------------------------
Total Assets $ 8,178 $ 317,147
-----------------------------------------------
-----------------------------------------------
Capital Expenditures $ 1,266 $ 5,410
-----------------------------------------------
-----------------------------------------------
Nine months ended Industrial Industrial Industrial
September 30, 2007 Buildings General Insulation Electric
-------------------------------------------------------------------------
Revenues $ 382,112 $ 29,022 $ 38,426 $ 95,037
-------------------------------------------------------------------------
EBITDA(1) 15,405 (212) 3,941 5,457
Depreciation and
amortization 878 339 182 635
Interest expense 50 62 1 30
-------------------------------------------------------------------------
Earnings (loss)
before tax $ 14,477 $ (613) $ 3,758 $ 4,792
Income taxes
Net earnings
Goodwill and
intangible assets $ - $ - $ - $ 7,315
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 188,471 $ 13,266 $ 18,047 $ 35,821
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 2,657 $ 91 $ 199 $ 1,461
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Nine months ended Corporate
September 30, 2007 and Other Total
-----------------------------------------------
Revenues $ - $ 544,597
-----------------------------------------------
EBITDA(1) (2,491) 22,100
Depreciation and
amortization 379 2,413
Interest expense 409 552
-----------------------------------------------
Earnings (loss)
before tax $ (3,279) $ 19,135
------------
Income taxes (6,217)
------------
Net earnings $ 12,918
------------
------------
Goodwill and
intangible assets $ 126 $ 7,441
-----------------------------------------------
-----------------------------------------------
Total Assets $ 14,272 $ 269,877
-----------------------------------------------
-----------------------------------------------
Capital Expenditures $ 385 $ 4,793
-----------------------------------------------
-----------------------------------------------
>>
The Churchill Corporation provides building construction, industrial
construction and maintenance services throughout western Canada. Churchill
common shares are listed on The Toronto Stock Exchange under the symbol "CUQ".
TERMINOLOGY
Throughout this Press Release, and other documents referred to,
management refers to certain terms when explaining its financial results that
do not have any standardized meaning under Canadian GAAP as set out in the
CICA Handbook. Specifically, the terms "contract income margin percentage",
"work-in-hand", "backlog", "working capital", "EBITDA" and "book value per
share" have been defined as:
Contract income margin percentage is the percentage derived by dividing
contract income by contract revenue. Contract income is calculated by
deducting all associated direct and indirect costs from contract revenue in
the period.
Work-in-hand is the unexecuted portion of work that has been
contractually awarded for construction to the Corporation. It includes an
estimate of the revenue to be generated from contracts during the shorter of
(a) twelve months, or (b) the remaining life of the contract.
Backlog means the total value of work that has not yet been completed
that; (a) is assessed by the Corporation as having high certainty of being
performed by the Corporation or its subsidiaries by either the existence of a
contract or work order specifying job scope, value and timing; or (b) has been
awarded to the Corporation or its subsidiaries, as evidenced by an executed
binding or non-binding letter of intent or agreement, describing the general
job scope, value and timing of such work, and with the finalization of a
formal contract respecting such work currently assessed by the Corporation as
being reasonably assured.
Working capital is current assets less current liabilities. Our
calculation of working capital is provided in the table below:
<<
-------------------------------------------------------------------------
As at September 30, December 31,
($ millions) 2008 2007
-------------------------------------------------------------------------
Current assets $ 282.9 $ 233.6
Less:
Current liabilities 213.0 185.7
-------------------------------------------------------------------------
Working Capital $ 69.9 $ 47.9
-------------------------------------------------------------------------
EBITDA is equal to earnings before interest expense, taxes, depreciation
and amortization. This measure as reported by the Corporation may not be
comparable to similar measures presented by other reporting issuers.
-------------------------------------------------------------------------
Three months ended Nine months ended
($ millions) September 30, September 30,
------------------------- -------------------------
2008 2007 2008 2007
-------------------------------------------------------------------------
Net Earnings $ 11.2 $ 5.6 $ 25.2 $ 12.9
Add:
Income Taxes 4.8 2.9 11.3 6.2
Depreciation &
Amortization 1.2 0.9 3.5 2.4
Interest expense 0.1 0.2 0.4 0.6
-------------------------------------------------------------------------
EBITDA $ 17.3 $ 9.6 $ 40.4 $ 22.1
-------------------------------------------------------------------------
>>
Book value per share is the value of shareholders' equity less value of
preferred stock divided by basic shares outstanding at the end of the period.
FORWARD LOOKING STATEMENTS
Certain statements in this Third Quarter Press Release may constitute
"forward-looking statements". Forward-looking statements include, without
limitation, statements regarding the future financial position, business
strategy, budgets, litigation, projected costs, capital expenditures,
financial results, taxes, plans and objectives of the Corporation. Many of
these statements can be identified by looking for words such as "believes,"
"expects," "may," "will," "intends," "anticipates," "estimates," "continues,"
or the negative thereof, or other variations thereon. Although management of
Churchill believes its expectations regarding future performance of the
Corporation are based on reasonable assumptions and currently available
competitive, financial and economic data, market conditions and operating
plans, it can give no assurance its expectations will be achieved. The
Corporation cautions that, by their nature, forward-looking statements,
involve risks, and uncertainties and that its actual actions, and/or results
could differ materially from those expressed or implied in such
forward-looking statements, and that the aforementioned risks, uncertainties
and actions could affect the extent to which a particular projection
materializes. The Corporation assumes no obligation to update the
forward-looking statements should circumstances or the Corporation's
management's estimates or opinions change.
