News Releases

EDMONTON, May 8 /CNW/ - The Churchill Corporation (TSX: CUQ) today
announced record financial results for its first quarter ended March 31, 2008.

<<
CONSOLIDATED FINANCIAL HIGHLIGHTS

-------------------------------------------------------------------------
Three months ended March 31
---------------------------------------
($ millions, except $ %
per share amounts) 2008 2007 Change Change
-------------------------------------------------------------------------

Contract Revenue $ 184.0 $ 153.9 $ 30.1 20%
Contract Income 17.9 12.4 5.5 44%
EBITDA(1) 8.1 4.3 3.8 88%
Earnings before Tax 6.9 3.3 3.6 109%
Net Earnings 4.5 2.3 2.2 96%
Per Share - Basic $ 0.25 $ 0.13 $ 0.12 92%
Work-in-hand(2) 639.7 596.6 43.1 7%
Backlog(3) $1,428.0 $1,047.1 $ 380.9 36%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(1)(2)(3) Refer to the "Terminology" section for further details.
>>

The Corporation posted first quarter contract revenue of $184.0 million
and net earnings of $4.5 million, or $0.25 per basic common share. These
results compare to contract revenue of $153.9 million and net earnings of $2.3
million, or $0.13 per basic common share, for the first quarter of 2007.
"Our first quarter results were very strong," said Chairman and Interim
Chief Executive Officer, Peter Adams. "Strong demand and solid execution on
infrastructure and industrial projects by all four of our operating companies
enabled us to make significant revenue and profit gains during this quarter.
On a year-over-year basis our backlog has grown by 36% and we are optimistic
that we will see further awards as 2008 unfolds."

FIRST QUARTER RESULTS

For the first quarter of 2008, consolidated contract revenue was $184.0
million, which was $30.1 million or 20% 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 and significant growth
in our industrial general contracting segment.
Contract income increased from $12.4 million in the first quarter of 2007
to $17.9 million in the current period as stronger margins in all of our
business segments improved overall results.
Indirect and administrative expenses amounted to $10.8 million in the
quarter, compared to $8.6 million in the comparable period of 2007, reflecting
increased expenses associated with higher revenue.
Earnings before interest, taxes, depreciation and amortization in the
quarter were $8.1 million, compared to $4.3 million in the first quarter of
2007. Earnings before tax in Q1 2008 increased 109% to $6.9 million, compared
to $3.3 million reported in Q1 2007. All of the operating companies were
profitable in the first quarter of 2008. The Corporation's consolidated net
earnings for the three months ended March 31, 2008 were $4.5 million compared
to net earnings of $2.3 million in 2007.
Work-in-hand at March 31, 2008 was $639.7 million, an increase of $43.1
million compared to $596.6 million in the first quarter of 2007. New contract
awards of $109.9 million were booked in the current quarter, which compares
with $256.7 million in Q1 2007. The majority of the variance in new work
secured was from the buildings segment. Stuart Olson is targeting certain
large projects within Alberta and British Columbia with a view to securing new
projects for late 2008 and early 2009 construction.

RESULTS OF OPERATIONS

Buildings
---------
For the three months ended March 31, 2008, Stuart Olson's revenue
increased by $28.2 million to $127.4 million, compared to $99.2 million in the
prior year. The company experienced higher levels of activity at all the
branches, however growth was particularly strong in the British Columbia
branch. Stuart Olson was active during the period on projects ranging from
educational and healthcare facilities, to civic infrastructure and commercial
buildings.
Contract income in the first quarter increased 73% to $10.7 million from
$6.2 million for the same period in 2007. Contract income margin percentage
increased to 8.4% in 2008 as compared to 6.2% in 2007. Stuart Olson continues
to demonstrate an ability to effectively manage its construction costs.
Earnings before tax from the buildings segment were $5.9 million in Q1
2008, compared to $2.7 million in Q1 2007. This 119% improvement in earnings
was a result of the increase in overall contract volume and strong project
execution.
Stuart Olson ended 2007 with $581.2 million of work-in-hand and a backlog
of $1.2 billion. In the three months ended March 31, 2008, the company secured
a further $54.8 million of contracts, and executed $127.4 million of contract
revenue. The company completed the quarter with $508.6 million of
work-in-hand, of which $84.0 million is expected to carryover into 2009. The
company continues to focus its efforts on securing larger projects with
construction starts scheduled for the second half of 2008 and into 2009. At
March 31, 2008, Stuart Olson's backlog amounted to $1.3 billion, compared to
$0.95 billion in Q1 2007, an increase of 37%.

Industrial General Contracting
------------------------------
Triton's revenue for the period ending March 31, 2008, was $26.2 million,
increasing 182% from the $9.3 million generated in the comparable quarter of
2007. Revenues from all divisions were higher during the first quarter of
2008, but most significantly in the construction division.
Contract income margin increased 189% to $2.6 million in Q1 2008 from
$0.9 million in Q1 2007. The company's contract income margin percentage was
slightly higher at 9.9%, up from 9.7% in 2007.
Earnings before tax increased to $1.3 million in the first quarter of
2008, as compared to a loss before tax of $0.7 million in 2007. The increase
in pre-tax earnings was a result of greater activity levels and a reduction in
company overheads not allocated to work-in-progress.
Triton entered the year with $45.1 million of work-in-hand and a backlog
of $50.5 million. For the quarter ending March 31, 2008, the company secured a
further $22.0 million of contracts, and executed $26.2 million of contractual
work. Triton was awarded contracts from CNRL, Encana, Enbridge, MEG Energy,
TCPL and others during the quarter. The company ended the quarter with $40.9
million of work-in-hand, which it expects to execute during the balance of
2008. At March 31, 2008, the company's backlog was $42.7 million versus a Q1
2007 backlog of $30.5 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 March 31, 2008, increased to $13.6
million, compared to $11.9 million for the comparable period in 2007. The
increase in revenue was primarily the result of greater activity in the
Saskatchewan market.
Contract income margin increased to $2.1 million in Q1 2008 from $1.8
million for the comparable period of 2007. The increase in margin was a result
of continued strong project execution and greater volume of work executed. The
contract income margin percentage was 15.4% in this quarter as compared to
15.1% in the prior year.
The company's earnings before tax increased 50% to $0.9 million during
the period, compared to earnings before tax of $0.6 million in the first
quarter of 2007.
Insulation Holdings ended 2007 with work-in-hand of $35.8 million and
backlog of $46.7 million. During Q1 2008, they secured a further $22.2 million
of contracts and executed $13.6 million of contracts. The insulation segment
secured 19% more work in this quarter than it obtained in 2007. New contracts
were secured from clients such as Horton CBI, Potash Corporation, Suncor and
TIC Canada. The insulation segment ended the quarter with $44.4 million of
work-in-hand, of which $2.5 million is expected to be completed in 2009. At
March 31, 2008, the company had a backlog of $52.6 million, as compared to
$21.8 million in the prior year.

Industrial Electrical Contracting
---------------------------------
For the three months ended March 31, 2008, Laird's contract revenue was
$16.8 million compared to the $33.6 million reported in Q1 2007. This decrease
in revenue was primarily due to a reduction in activity levels associated with
several oil sands development projects in the Fort McMurray area and the
corresponding lull until new work is awarded on new construction sites.
Management believes that activity levels will be higher in subsequent
quarters.
Contract income decreased from $3.3 million in 2007 to $2.3 million in
2008, due to the lower volume of activity. The contract income margin
percentage was higher during the first quarter at 13.7% as compared to 9.8% in
2007. This was a result of the revenue mix from contracts under construction,
strong project execution and ongoing systems and process improvements.
Laird achieved earnings before tax of $0.3 million for the period,
compared to earnings before tax of $1.6 million in Q1 2007. The decrease in
earnings was a result of the lower volume of activity and greater indirect and
administrative expenses associated with process improvement and reengineering
projects undertaken in Q1 2008, as compared to the prior year.
Laird ended 2007 with work-in-hand and backlog amounting to $51.7
million. New contract awards of $10.9 million were secured in the first
quarter and $16.8 million of contracts were executed. Projects were secured
from clients including Albian, Nexen, TransAlta and Suncor. Laird ended the
first quarter with $45.8 million of work-in-hand and backlog, of which $4.0
million is expected to be completed in 2009. Laird's backlog at the end of Q1
2007 was $44.8 million.

Corporate and Other
-------------------
In the first quarter of 2008, the Corporate and Other segment incurred
$1.7 million of indirect and administrative expenses compared to $1.2 million
of indirect and administrative expenses in 2007.

CASH FLOW, FINANCING, CAPITAL REQUIREMENTS, LIQUIDITY

Cash and cash equivalents at March 31, 2008, totaled $85.0 million, which
compares with $108.1 million at the end of 2007. Of the $85.0 million of cash
and cash equivalents, $16.4 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 consumed $21.1 million of cash during the quarter as
compared to providing $5.3 million of cash from operations during the first
quarter of 2007. This change was primarily due to the impact of tax payments
made by the Corporation in the first quarter of 2008.
Investing activities resulted in a use of cash of $1.5 million during the
first quarter of 2008, which compares with cash used of $0.7 million in 2007.
The investments were made in property and equipment to support ongoing demand
for the Corporation's services.
During the first quarter of 2008 net cash used in financing activities
amounted to $0.5 million, compared to proceeds from financing of $3.0 million
in 2007. The Corporation repaid $0.5 million of long-term debt during Q1 2008.
As at March 31, 2008, Churchill had working capital of $51.4 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 a joint and several guarantee, increasing the
maximum potential exposure to the full value of the work remaining under the
contract.
Shareholders' equity was $74.3 million at March 31, 2008, as compared to
$69.7 million at December 31, 2007. During the quarter, contributed surplus
increased $67 thousand as a result of the recognition of stock-based
compensation. Retained earnings increased from $47.5 million at December 31,
2007 to $52.1 million at March 31, 2008, reflecting the addition of net
earnings of $4.6 million for the quarter.

Share Data

As at March 31, 2008, the Corporation had 17,886,991 common share issued
and outstanding and 428,604 options convertible into common shares upon
exercise (March 31, 2007 - 17,667,491 common shares and 455,000 options).
During the period from March 31, 2008, to May 7, 2008, no new share options
were granted or exercised, however 12,638 share options were cancelled.
The Corporation has an Employee Share Purchase Plan available to all
full-time employees. At March 31, 2008, the plan held 838,649 Churchill common
shares for employees. Under the plan, shares are acquired in the open market.

<<
CONSOLIDATED STATEMENTS OF EARNINGS,
COMPREHENSIVE INCOME AND RETAINED EARNINGS

Three months ended
($ thousands, except per share amounts) March 31 (unaudited)
-------------------------------------------------------------------------
2008 2007
-------------------------------------------------------------------------

Contract revenue $ 183,984 $ 153,904
Contract costs 166,109 141,470
-------------------------------------------------------------------------
Contract income 17,875 12,434

Interest income 956 413
Sundry income 96 4
Indirect and administrative expenses (10,839) (8,580)
Depreciation and amortization (1,070) (740)
Interest expense (160) (194)
-------------------------------------------------------------------------
Earnings before income taxes 6,858 3,337
-------------------------------------------------------------------------
Income tax (expense) recovery
Current income tax (3,091) (370)
Future income tax 759 (648)
-------------------------------------------------------------------------
(2,332) (1,018)
-------------------------------------------------------------------------
Net earnings 4,526 2,319
Comprehensive income - -
-------------------------------------------------------------------------
Net earnings and comprehensive income 4,526 2,319

Retained earnings, beginning of period 47,528 26,402
-------------------------------------------------------------------------
Retained earnings, end of period $ 52,054 $ 28,721

Accumulated comprehensive income,
beginning of period $ - $ -
Comprehensive income for the period - -
-------------------------------------------------------------------------
Accumulated comprehensive income,
end of period $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Net earnings per common share:
Basic $ 0.25 $ 0.13
-------------------------------------------------------------------------
Fully diluted $ 0.25 $ 0.13
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Weighted average common shares:
Basic 17,886,991 17,667,491
-------------------------------------------------------------------------
Diluted 18,099,719 17,914,755
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED BALANCE SHEETS

($ thousands)
-------------------------------------------------------------------------
March 31, December 31,
2008 2007
(unaudited)
-------------------------------------------------------------------------
ASSETS
Current Assets
Cash and cash equivalents $ 84,980 $ 108,105
Accounts receivable 164,935 123,906
Inventories and prepaid expenses 2,186 859
Income taxes recoverable 4,338 -
Future income tax assets 1,445 759
-------------------------------------------------------------------------
257,884 233,629

Future income tax assets 1,067 788
Property and equipment 23,328 22,832
Goodwill and intangible assets 7,399 7,420
-------------------------------------------------------------------------
$ 289,678 $ 264,669
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities $ 146,610 $ 149,057
Contract advances and unearned income 57,927 24,611
Income taxes payable - 10,148
Current portion of long-term debt 1,975 1,963
-------------------------------------------------------------------------
206,512 185,779

Long-term debt 8,232 8,755
Future income tax liabilities 663 457
-------------------------------------------------------------------------
215,407 194,991

SHAREHOLDERS' EQUITY
Share capital 16,414 16,414
Contributed surplus 5,803 5,736
Retained earnings 52,054 47,528
Accumulated other comprehensive income - -
-------------------------------------------------------------------------
74,271 69,678
-------------------------------------------------------------------------
$ 289,678 $ 264,669
-------------------------------------------------------------------------
-------------------------------------------------------------------------

CONSOLIDATED STATEMENTS OF CASH FLOW

Three months ended
($ thousands) March 31 (unaudited)
-------------------------------------------------------------------------
2008 2007
-------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings $ 4,526 $ 2,319
Depreciation and amortization 1,070 740
Gain on disposal of equipment (23) (2)
Share-based compensation 67 7
Future income taxes (759) 648
-------------------------------------------------------------------------
4,881 3,712

Net change in accounts receivable,
inventories and prepaid expenses (42,356) (40,674)
Net change in accounts payable and
accrued liabilities (2,447) 14,905
Net change in contract advances and
unearned income and costs in excess
of billings 33,316 31,338
Net change in income taxes payable (14,486) (3,960)
-------------------------------------------------------------------------
(21,092) 5,321
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Proceeds on disposal of equipment 24 2
Additions to property and equipment (1,546) (740)
-------------------------------------------------------------------------
(1,522) (738)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Proceeds under operating line of credit 5,000 5,000
Repayments under operating line of credit (5,000) (1,500)
Repayment of long-term debt (511) (262)
Repayment of demand term loan - (260)
-------------------------------------------------------------------------
(511) 2,978
-------------------------------------------------------------------------

(Decrease) increase in cash (23,125) 7,561
Cash, beginning of period 108,105 50,387
-------------------------------------------------------------------------
Cash, end of period $ 84,980 $ 57,948
-------------------------------------------------------------------------
-------------------------------------------------------------------------

SUPPLEMENTAL CASH FLOW INFORMATION
-------------------------------------------------------------------------
Cash received (paid) during the year for:
Interest $ 798 $ 241
Income taxes $ (17,577) $ (4,330)
-------------------------------------------------------------------------

SELECTED FINANCIAL STATEMENT DISCLOSURE

Industrial Industrial
March 31, 2008 Buildings General Insulation
-------------------------------------------------------------------------
Revenues $ 127,398 $ 26,204 $ 13,603
-------------------------------------------------------------------------
EBITDA(1) 6,393 1,411 910
Depreciation and amortization 460 96 55
Interest expense 15 20 -
-------------------------------------------------------------------------
Earnings (loss) before tax $ 5,918 $ 1,295 $ 855
Income taxes
Net earnings
Goodwill and intangible assets $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 200,494 $ 8,048 $ 37,510
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 730 $ 31 $ 155
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Corporate
March 31, 2008 Electric and Other Total
-------------------------------------------------------------------------
Revenues $ 16,779 $ - $ 183,984
-------------------------------------------------------------------------
EBITDA(1) 570 (1,196) 8,088
Depreciation and amortization 237 222 1,070
Interest expense 18 107 160
-------------------------------------------------------------------------
Earnings (loss) before tax $ 315 $ (1,525) $ 6,858
------------
Income taxes (2,332)
------------
Net earnings $ 4,526
------------
Goodwill and intangible assets $ 7,315 $ 84 $ 7,399
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 24,420 $ 19,206 $ 289,678
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 54 $ 576 $ 1,546
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Industrial
March 31, 2007 Buildings General Insulation
-------------------------------------------------------------------------
Revenues $ 99,162 $ 9,269 $ 11,887
-------------------------------------------------------------------------
EBITDA(1) 3,002 (513) 642
Depreciation and amortization 241 132 64
Interest expense 27 25 1
-------------------------------------------------------------------------
Earnings (loss) before tax $ 2,734 $ (670) $ 577
Income taxes
Net earnings
Goodwill and intangible assets $ - $ - $ -
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 128,587 $ 16,080 $ 17,213
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 694 $ 4 $ 59
-------------------------------------------------------------------------
-------------------------------------------------------------------------

Industrial Corporate
March 31, 2007 Electric and Other Total
-------------------------------------------------------------------------
Revenues $ 33,586 $ - $ 153,904
-------------------------------------------------------------------------
EBITDA(1) 1,841 (701) 4,271
Depreciation and amortization 184 119 740
Interest expense 16 125 194
-------------------------------------------------------------------------
Earnings (loss) before tax $ 1,641 $ (945) $ 3,337
------------
Income taxes (1,018)
------------
Net earnings $ 2,319
------------
Goodwill and intangible assets $ 7,315 $ 168 $ 7,483
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Total Assets $ 39,206 $ 12,707 $ 213,793
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Capital Expenditures $ 606 $ 13 $ 1,376
-------------------------------------------------------------------------
-------------------------------------------------------------------------
>>

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 excluding that
portion relating to any demand term loan which is scheduled to be repaid
beyond one year.

<<
-------------------------------------------------------------------------
As at March 31, December 31,
($ millions) 2008 2007
-------------------------------------------------------------------------

Current assets $ 257.9 $ 233.6
Less:
Current liabilities 206.5 185.7

-------------------------------------------------------------------------

Working Capital $ 51.4 $ 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
($ millions) March 31,
--------------------------
2008 2007
-------------------------------------------------------------------------

Net Earnings $ 4.5 $ 2.3
Add:
Income Taxes 2.3 1.0
Depreciation & Amortization 1.1 0.7
Interest expense 0.2 0.2
-------------------------------------------------------------------------

EBITDA $ 8.1 $ 4.3
-------------------------------------------------------------------------
>>

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 First 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.