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The Churchill Corporation Reports 2011 Annual Results

Reports Record Backlog and Industrial Earnings, Declares Quarterly Dividend

CALGARY, March 6, 2012 /CNW/ - The Churchill Corporation (TSX: CUQ) (TSX: CUQ.DB) ("Churchill" or the "Corporation") today released its 2011 annual and fourth quarter results and declared a quarterly dividend of $0.12 per common share. Backlog increased 18% to a record $1,842.6 million as of December 31, 2011, compared to $1,555.0 million on December 31, 2010, providing excellent visibility of future revenue and earnings sources. Revenue for 2011 was $1,409.2 million compared to $1,183.9 million in 2010, a 19% increase. Annual earnings before interest, taxes, depreciation and amortization ("EBITDA") were $72.0 million in 2011, compared to $71.8 million reported in 2010. Net earnings were $24.9 million in 2011, compared to $34.2 million recorded in 2010, as increased interest, depreciation and amortization, associated with assets acquired in 2010 and 2011, were partially offset by reduced taxes.

The dividend will be paid April 17, 2012 to shareholders of record on March 30, 2012. The ex-dividend date is March 28, 2012. The Corporation has a dividend reinvestment plan in place for which details are available on Churchill's website (


  • Churchill reported record backlog of $1.84 billion.
  • The Industrial Services segment, consisting of Laird Electric Inc. ("Laird Electric"), Laird Constructors Inc. ("Laird Constructors"), Insulation Holdings Inc. ("Insulation Holdings") and Broda Construction Inc. ("Broda"), secured many large contracts in 2011, setting new records in revenue, earnings and backlog. Churchill also furthered the segment's bundled service offering strategy with the establishment of Churchill Services Group ("CSG") with David LeMay, who was President and COO of Laird Electric, as President, effective January 1, 2012. CSG will lead new business origination related to integrated products and services on behalf of Churchill's Industrial Services segment and Stuart Olson Dominion's industrial building activities.
  • In 2011, Canem Holdings Ltd. ("Canem"), which forms Churchill's Commercial Systems segment, expanded its footprint into Manitoba with the acquisition of McCaine Electric, expanded its service offering with the opening of its Centre for Building Performance, and won several major electrical and data systems contracts.
  • Stuart Olson Dominion Construction Ltd. ("Stuart Olson Dominion"), which forms Churchill's General Contracting segment, bolstered its presence throughout Western Canada in 2011 with several major new projects in the institutional and commercial construction sectors and entered the industrial buildings market with $40 million of new projects.


    Year Ended December 31 3 Months Ended December 31
($millions, except per share amounts)   2011 2010 2011 2010
Contract revenue   $                  1,409.2 $                  1,183.9 $                      384.3 $                      391.4
Contract income   157.9 144.4 45.1 50.0
EBITDA from continuing operations   72.0 71.8 19.5 28.1
Net earnings   24.9 34.2 7.3 11.5
Net earnings per common share - Basic 1.02 1.66 0.30 0.55
  - Diluted 0.94 1.55 0.27 0.49
        As of Dec. 31, 2011 As of Dec. 31, 2010
Backlog       $                  1,842.6 $                  1,555.0
Long-term debt (excluding current portion)       60.4 74.1
Convertible debentures (excluding equity portion)       76.7 74.5
Total assets       888.5 871.8

2011 financial results are presented in conformance with International Financial Reporting Standards ("IFRS") and prior year results have been restated accordingly. All figures are in Canadian dollars unless otherwise noted. Certain financial and operational measures referred to in this press release, including "EBITDA" and "backlog", are not prescribed under IFRS. For a description of these measures, see the Terminology section in Churchill's annual 2011 management discussion and analysis ("MD&A").

  • Backlog of $1,842.6 million as of December 31, 2011, compared to $1,555.0 million on December 31, 2010, was comprised of General Contracting backlog of $1,445.3 million, Commercial Systems backlog of $133.3 million, and Industrial Services backlog of $264.0 million.
  • Revenue for 2011 was $1,409.2 million compared to $1,183.9 million in 2010, a $225.3 million increase. Growth was realized in all operating segments attributable partly to the inclusion of the operations of The Dominion Company Inc., Canem and Broda for a full year in 2011, compared to 5½ months in 2010. Record performance from Churchill's legacy industrial operations and geographic expansion in all operating segments also contributed to revenue growth.
  • Annual earnings before interest, taxes, depreciation and amortization ("EBITDA") were $72.0 million in 2011, compared to $71.8 million reported in 2010. Revenue growth was partly offset by margin pressure, primarily in the General Contracting segment, which was impacted by the inclusion of low margin projects secured in the more competitive markets of late 2008, 2009 and early 2010, low margin projects from legacy Dominion, and being in the early phases of construction on several new projects.
  • Net earnings were $24.9 million in 2011, compared to $34.2 million recorded in 2010. The difference was attributable to increased interest, depreciation and amortization associated with assets acquired in 2010 and 2011, partially offset by reduced taxes.
  • Stuart Olson Dominion generated 2011 revenue of $907.0 million and EBITDA of $26.2 million (2010 revenue of $817.3 million and EBITDA of $56.7 million).
  • Canem produced revenue of $192.7 million and EBITDA of $24.0 million (2010 revenue of $83.2 million and EBITDA of $12.5 million).
  • Churchill's Industrial Services segment produced 2011 revenue of $367.0 million and EBITDA of $33.4 million (2010 revenue of $301.2 million and EBITDA of $25.5 million).

"Geographic expansion and the addition of quality projects to our backlog in 2011 provide visibility of future revenue and earnings growth and strengthen our outlook," said Jim Houck, Churchill's President and CEO. "Laird Electric, Laird Constructors, Insulation Holdings and Broda together produced record revenue and EBITDA for our Industrial Services segment and secured backlog that promises continuing strong performance from this segment. Canem performed well due to its contract mix, efficient operating practices and best-in-class marketing programs. Stuart Olson Dominion added many quality projects to backlog and began to participate in the industrial market, where we believe many profitable growth opportunities exist. Underperforming fixed price projects are substantially complete and Stuart Olson Dominion's current backlog is 90% low-risk construction management and cost-plus projects, many with additional return opportunities available through self-perform work."


"Western Canada's economy, driven by vibrant demand for petroleum, metals and minerals, continues to outperform the rest of Canada with the two largest western provinces, Alberta and British Columbia, both projecting large government budget surpluses in 2013," continued Mr. Houck. "Our $1.8 billion backlog is about 60% institutional government-funded projects such as hospitals, schools, prisons and recreation centres, 25% commercial business projects such as office towers and data centres, and 15% industrial projects directly related to Western Canada's resource extraction industries, so we stand to benefit from all sectors of the growing Western Canadian economy."

"We intend to continue to create value for our shareholders through building on the profitable organic growth of our five operating companies, and executing acquisitions that enhance our strategic goals and fit our entrepreneurial culture when financial, operational and market conditions are right."


Churchill will hold a conference call and webcast to discuss the results on Wednesday, March 7, 2012 at 7:30 a.m. Mountain Time (9:30 a.m. Eastern).

A presentation will be posted on Churchill's website prior to the call at under the "News and Events" tab. Management's prepared remarks on the call will follow the presentation. Choose "Churchill Fourth Quarter 2011 Conference Call" to view the presentation.

The conference call will include prepared remarks from Jim Houck, Churchill's President and CEO, and Daryl Sands, Executive Vice President and CFO.  After the prepared remarks, Churchill will accept questions from analysts and institutional investors.

Date:   Wednesday, March 7, 2012
Time:   7:30 a.m. MT (9:30 a.m. ET)
Call:    1-800-319-4610 (Canada and USA) or 1-604-638-5340 (outside Canada and USA)

Participants are asked to call at least 10 minutes prior to the start of the call.  For those unable to participate on the live call, a replay will be made available until Friday, April 6, 2012 by dialling 1-800-319-6413 (Canada and USA) or 1-604-638-9010 (outside Canada and USA), passcode 1514#.  The public is invited to listen to the live conference call or the replay.

This conference call will be webcast live over the internet and can be accessed by all interested parties on Churchill's website through the News & Events / Events tab at:

To listen to the live webcast, visit Churchill's website at least 10 minutes early to register, download and install any necessary audio software.  For those unable to listen during the live webcast, an audio replay will be available on Churchill's website shortly after the conclusion of the conference call for a period of 90 days.

About The Churchill Corporation

The Churchill Corporation provides building construction, commercial and industrial electrical contracting, earthmoving and industrial insulation services to an array of public and private sector clients. Churchill operates office locations throughout British Columbia, Alberta, Saskatchewan, Manitoba, northern Ontario and the Yukon. Churchill common shares and convertible debentures are listed on the Toronto Stock Exchange under the symbols "CUQ" and "CUQ.DB", respectively.

Forward Looking Information

This press release contains certain statements that may constitute forward-looking information within the meaning of applicable securities laws. This forward-looking information includes, without limitation, statements pertaining to the following:

a)      management's visibility on future revenue sources, earnings growth potential and its 2012 outlook for the Corporation's businesses;
b)      the Corporation's current and future projects, and in respect to those projects, the completion status, associated risks and potential earnings;
c)      management's expectations that the Corporation's operating companies will improve their business prospects or continue to grow their revenue, earnings and backlog in any manner whatsoever including, without limitation, through margin expansion, organic growth or productivity efficiencies; and
d)      the ability of management to deliver organic growth and execute upon acquisitions that enhance the strategic goals of the Corporation.

Often, but not always, forward-looking information can be identified by the use of such words as "may", "will", "expect", "believe", "plan", "intend", "estimate", "outlook", "forecast", "should", "anticipate" and other similar terminology, including statements concerning possible or assumed future results. Forward-looking information is based on management's reasonable assumptions, analysis and estimates in respect of its experience and perception of trends, current economic conditions, government policies and expected developments, as well as other material factors that it considers to be relevant at the time of making such statements.

The forward-looking information in this press release is included solely for the purpose of assisting investors in understanding the Corporation's financial position and the results of its operations as at the date hereof.  By its nature, forward-looking information involves known and unknown risks and uncertainties, which give rise to the possibility that management's assumptions, analysis and estimates will be incorrect and that the Corporation's anticipated results will not be achieved. Although the Corporation believes that the statements with respect to forward-looking information are reasonable and current, such statements should not be interpreted as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. Forward-looking information is necessarily subject to a number of factors that may cause actual results to differ materially from those results implied by the expectations suggested by such information. Those factors include, without limitation, the risks and uncertainties described in the Corporation's Annual Report filed with the securities regulatory authorities in Canada under the Corporation's profile at  Readers are encouraged to consider the foregoing risks and other factors carefully when evaluating the forward-looking information and are cautioned not to place undue reliance upon such information when making investment decisions.

The forward-looking information in this press release is current to the date hereof, and is subject to change following such date.  While the Corporation may elect to do so, unless required by applicable law, it undertakes no obligation to update this information to reflect new information or circumstances at any particular time.


For further information:

James C. Houck, B.Sc., MBA
President and Chief Executive Officer
The Churchill Corporation
(403) 685-7777

Andrew Apedoe
Vice President Investor Relations & Secretary
The Churchill Corporation
(403) 685-7775

Ken Wetherell, CFA
Director, Investor Relations
The Churchill Corporation
(403) 685-7776