Seacliff Construction Corp.
TSX : SDC

Seacliff Construction Corp.

March 04, 2010 17:21 ET

Seacliff Reports Record Annual Profit and Increases Quarterly Dividend

Revenue, Gross Profit, EBITDA and Adjusted Net Income All Up Over 2008

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 4, 2010) -

Seacliff Construction Corp. (TSX:SDC) will hold a conference call and webcast to discuss 2009 fourth quarter and annual financial results and corporate developments on Friday, March 5, 2010 at 8:00 am Pacific Time (11:00 am Eastern Time).

To participate, please dial 1-866-223-7781 (toll free) or 416-340-8018 (GTA and international) approximately five minutes before the call. A replay will be available through March 19, 2010 at 1-800-408-3053 (toll free) or 416-695-5800 (GTA and international) passcode: 2255555. In addition, a live and archived webcast, as well as an mp3 download, can be accessed at: http://www.investorcalendar.com/IC/CEPage.asp?ID=155978 or on Seacliff's website at www.seacliffconstruction.ca.

Seacliff Construction Corp. ("Seacliff" or "the Corporation"), one of the largest and most diversified construction companies in Western Canada, today reported its financial results for the three and 12 months ended December 31, 2009.

Seacliff conducts its operations through three business units - Dominion Construction (or "Dominion"), a general contractor, Canem Systems (or "Canem"), which designs, builds, maintains and services electrical and data communication systems, and the Broda Construction Group (or "Broda"), a heavy construction company specializing in aggregate processing, earthwork, civil construction and concrete production.

"2009 was a record year for Seacliff," said Bill Crarer, Seacliff's CEO. "In addition to generating year-over-year growth in our annual revenue, gross profit, EBITDA and adjusted net income, we acquired two solid companies that contributed to our strong results and further strengthened our ability to execute on our strategy of growth, both organically and through acquisition. These milestone events, together with our decision to implement a quarterly dividend policy last March, contributed to a great year for Seacliff - and our shareholders."

2009 Financial Highlights

(For the 12 months ended December 31, 2009)

- Consolidated revenue grew by $73.2 million, or 14.5%, compared to 2008

- Gross profit was up by $14.7 million, or 22.4%, for the year

- EBITDA grew by $6.0 million, or 17.0%, to $41.2 million

- Adjusted net income grew by $4.9 million, or 20.7%. Basic adjusted net income per share was $1.38 for the year

- As at December 31, 2009, cash, cash equivalents and marketable securities totaled $88.2 million, bank indebtedness was $1.9 million and working capital totaled $64.0 million. As a result, Seacliff remains well positioned to pursue large-scale projects and suitable acquisition targets

- Seacliff secured approximately $140.4 million worth of new work during the fourth quarter of 2009, of which $90.5 million comprised institutional projects

- On March 20, 2009, Seacliff's Board of Directors announced the implementation of a cash dividend policy reflecting its confidence in the Corporation's financial position and its commitment to returning value to shareholders. Since then, Seacliff has paid shareholders four quarterly dividends of $0.05 per share.

Dividend Increase

- On March 3, 2010, Seacliff's Board of Directors declared a dividend of $0.06 per share, payable on March 31, 2010 to shareholders of record on March 15, 2010. Valued at $1.3 million, these dividends will be eligible for Canadian tax purposes. This represents a 20% increase in the quarterly dividend, reflecting Seacliff's confidence in the sustainability of its dividend policy, as well as its positive outlook for the future and belief that its strategy for continued growth is attainable.

Summary of Quarterly Results

(unaudited)

The following table summarizes key financial data, which was derived from, and should be read in conjunction with, Seacliff's previously issued quarterly unaudited consolidated interim financial statements for the periods ended March 31, June 30 and September 30, 2009, Seacliff's 2008 annual audited consolidated financial statements and all related MD&A documents filed on SEDAR (www.sedar.com).



(Expressed in $ thousands,
except $ per share and percentages)

Dec. Sep. Jun. Mar. Dec. Sep. Jun. Mar.
Quarter 31, 30, 30, 31, 31, 30, 30, 31,
ended 2009 2009 2009 2009 2008 2008 2008 2008
----------------------------------------------------------------------------

Revenue 153,580 147,033 152,705 124,798 138,451 142,753 125,232 98,475

Net income
after tax 10,481 4,166 4,410 2,784 3,889 5,353 3,553 4,951
Net income
after tax
(%) 6.8% 2.8% 2.9% 2.2% 2.8% 3.7% 2.8% 5.0%

EBITDA 14,993 9,282 9,853 7,050 9,547 10,992 6,991 7,719
EBITDA
margin 9.8% 6.3% 6.5% 5.6% 6.9% 7.7% 5.6% 7.8%

Total work
on hand 576,000 535,000 596,000 639,000 647,000 704,000 710,000 625,000
Working
capital 63,963 98,922 81,580 88,713 91,686 89,547 83,833 n/m

Dividends
payable
per share 0.05 0.05 0.05 0.05 - - - -

Shareholder's
equity 134,755 114,973 109,659 103,724 99,753 95,715 90,197 n/m
Common
shares
issued 21,873 20,823 20,673 20,522 20,372 21,251 21,091 n/m
Book value
per share 6.16 5.55 5.30 5.05 4.90 4.50 4.28 n/m

n/m = certain figures prior to Seacliff's IPO, completed on April 14, 2008,
are not meaningful


For the For the
FINANCIAL HIGHLIGHTS three months ended 12 months ended
December 31 December 31
($ thousands, except share and per
share amounts) 2009 2008 2009 2008
---------------------------------------------------------------------------

Income Statement
Revenue 153,580 138,451 578,116 504,911
EBITDA 14,993 9,547 41,214 35,188
EBITDA margin 9.8% 6.9% 7.1% 7.0%
Adjusted net income 11,408 6,384 28,639 23,712
Net income 10,481 3,889 21,841 17,746

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

Segmented Data
Revenue
Broda 2,198 - 2,198 -
Canem 43,287 36,112 157,202 134,126
Dominion 108,413 105,373 423,689 376,629
Eliminating intersegment transactions (318) (3,034) (4,973) (5,844)
----------------------------------
Total revenue 153,580 138,451 578,116 504,911
----------------------------------
----------------------------------
EBITDA
Broda 165 - 165 -
Canem 8,680 5,105 25,803 20,547
Dominion 7,096 6,685 19,969 18,408
Corporate (948) (2,243) (4,723) (3,767)
----------------------------------
Total EBITDA 14,993 9,547 41,214 35,188
----------------------------------
----------------------------------

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

Per Share Amounts
Net income per common share
Basic ($ per share) 0.50 0.19 1.05 0.93
Fully diluted ($ per share) 0.49 0.18 1.04 0.90
Adjusted net income per common share
Basic ($ per share) 0.54 0.31 1.38 1.24
Fully diluted ($ per share) 0.54 0.30 1.37 1.20
Dividends per common share 0.05 - 0.20 -

---------------------------------------------------------------------------
Reconciliation of Adjusted Net Income
to Net Income
Adjusted net income 11,408 6,384 28,639 23,712
Non-cash stock compensation expense (924) (2,495) (6,795) (5,966)
(refer to Note 7b in the consolidated
audited year end December 31(st) 2008
financial statements
The portion of the amortized intangible (3) - (3) -
Work in Progress associated with the
Broda acquisition
----------------------------------
Net income 10,481 3,889 21,841 17,746
----------------------------------
----------------------------------

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

EBITDA Reconciliation
Net income 10,481 3,889 21,841 17,746
Interest income (349) (768) (1,480) (2,709)
Interest expense 121 - 121 404
Net change in amortized cost of holdbacks 140 (123) (190) 224
(receivable and payable)
Amortization 873 499 3,264 1,792
Income taxes 2,800 3,555 10,860 11,765
Stock based compensation 924 2,495 6,795 5,966
Intangible WIP amortization 3 - 3 -
----------------------------------
14,993 9,547 41,214 35,188
----------------------------------
----------------------------------


----------------------------------------------------------------------------
As at As at As at As at As at
December September June 30, March 31, December
Balance Sheet 31, 2009 30, 2009 2009 2009 31, 2008
-------------------------------------------------
Cash and cash equivalents 69,204 97,808 89,482 106,377 114,164
Marketable securities 19,022 18,995 12,555 - -
Total current assets 226,092 255,995 231,283 227,537 231,818
Total assets 310,135 273,923 261,369 244,710 240,971
Total current liabilities 162,129 157,073 149,703 138,824 140,132
Shareholders' equity 134,755 114,973 109,659 103,724 99,753
Working capital 63,963 98,922 81,580 88,713 91,686
Total work on hand 576,000 535,000 596,000 639,000 647,000


Results from Operations - Three Months Ended December 31, 2009

During the three months ended December 31, 2009, Seacliff generated consolidated revenue of $153.6 million, up by $15.1 million, or 10.9%, from $138.5 million in the fourth quarter of 2008. Revenue from Seacliff's BC operations grew by $9.5 million, with most of the increase related to Dominion's upgrade of BC Place Stadium in Vancouver and construction of a new corrections centre in the Yukon. Canem West, the independent electrical contractor that Seacliff acquired in February 2009, also contributed to the revenue growth in BC. In Alberta, Seacliff recorded revenue growth of $8.1 million, relating primarily to major Canem projects such as the Edmonton Remand Centre, the Edmonton North Clinic and the Centennial Centre for Interdisciplinary Science (CCIS) at the University of Alberta.

The Manitoba market remained stable in the fourth quarter of 2009, but was not as robust as in 2008. The Portage La Prairie Recreation Centre, a $29.7 million dollar project, was a major contributor to revenue from the Manitoba operations.

Revenue from Saskatchewan remained consistent with the fourth quarter of 2008 and included one-month's revenue of $2.2 million from Broda. The Broda revenue contribution was primarily related to Agrium Inc.'s tailing pond expansion project in Vanscoy.

Fourth quarter gross profit was $25.3 million. This represents an increase of $6.4 million, or 33.9%, over the $18.9 million recorded in Q4 2008. Most of the increase ($5.7 million) was generated by Canem, with Dominion recording a $0.7 million year-over-year increase, and Broda, Seacliff's new business unit, contributing $0.4 million of gross profit during December. Canem's increased profitability resulted from a number of factors including:

- $1.7 million coming from increased revenue

- $4.0 million resulting from continued solid project execution and improved margin performance on the Edmonton Remand Centre, CCIS, Edmonton North Clinic, the Southern Alberta Institute of Technology (SAIT) Parkade, Eighth Avenue Place, the Calgary Roundup Centre and the completion of two residential projects (Parkside Victoria Resort & Spa and Dockside Green).

Seacliff's fourth quarter gross profit as a percentage of revenue was 16.4%, up from 13.7% for the same period in 2008. This increase was generated primarily by Canem, which recorded gross margins of 33.5%, up from 24.6% in the fourth quarter of 2008. At Dominion, gross margins rose to 9.9% from 9.6% in Q4 2008, while Broda generated a gross margin percentage of 17.0% during December 2009.

General and administrative expenses for the three months ended December 31, 2009 totaled $10.2 million, up $0.5 million from the fourth quarter of 2008. The $0.5 million increase is mainly related to $0.7 million in additional profit sharing associated with Seacliff's strong fourth quarter 2009 performance, partially offset by some minor G&A adjustments.

Fourth quarter EBITDA totaled $15.0 million, up from $9.5 million in 2008. The increase primarily reflects Seacliff's increased revenue and higher gross margin as a percentage of revenue, as discussed above. On a divisional basis, Dominion contributed EBITDA of $7.1 million (an increase of 6.0% over the $6.7 million recorded in Q4 2008), Canem contributed $8.7 million (up by 70.6% from $5.1 million in Q4 2008) and Broda contributed $0.2 million. Corporate EBITDA expense for the fourth quarter of 2009 was $0.9 million, compared to an expense of $2.4 million in 2008.

For the three months ended December 31, 2009, Seacliff recorded net income of $10.5 million, compared to net income of $3.9 million in the fourth quarter of 2008. The key factor driving the income growth was an increase in gross margin as a percentage of revenue, together with the finalization of a non-cash stock compensation expense in October 2009. Excluding the non-cash stock compensation expense and the purchase price fair valuation resulting from the amortization of Broda's intangible work in progress, fourth quarter adjusted net income was $11.4 million, an increase of $5.0 million, or 78.7%, from the $6.4 million recorded in Q4 2008. This improvement mainly reflects the higher gross margin as a percentage of revenue recorded in 2009.

Results from Operations - Twelve Months Ended December 31, 2009

Consolidated revenue for the 12 months ended December 31, 2009 was $578.1 million, up by $73.2 million, or 14.5%, from $504.9 million in 2008. Approximately $47.1 million of the increase was generated by Dominion, which had a number of significant construction projects underway in 2009. These included the upgrade of BC Place Stadium in Vancouver, as well as construction of the Saskatchewan Disease Control Lab in Regina, Walmart West in Saskatoon, the International Broadcast Centre in Vancouver, Broadway Tech Centre in Vancouver, EVRAZ Place in Regina, the University of Calgary International House and the Yukon Correction Centre. Canem generated $23.1 million of the revenue increase, with the Canem West acquisition and Alberta projects such as the CCIS, the Edmonton Remand Centre, the Taylor Family Digital Library at the University of Calgary, the Leduc Recreation Centre, the SAIT Parkade, the Calgary Roundup Centre and the Edmonton North Clinic all contributing to the growth. Following its acquisition at the beginning of December, Broda added $2.2 million in revenue.

Gross profit for 2009 was $80.2 million, an increase of $14.7 million, or 22.4%, over the $65.5 million generated in 2008. The majority of the growth ($9.7 million) resulted from the year-over-year revenue increase. The balance ($5.0 million) was related to improved project execution, resulting in an improved gross profit percentage.

Twelve-month gross profit as a percentage of revenue improved to 13.9%, from 13.0% in 2008. The improvement was mainly attributable to the success of both Dominion and Canem in securing higher contract margins throughout 2008 and then executing well on these projects during 2009. While Dominion experienced a tightening of margins on some of its larger projects due to increased competition, Canem successfully completed a number of larger and more technically complex projects at margins similar to those achieved in 2008.

Interest income for the 12 months ended December 31, 2009 was $1.7 million, down from $2.4 million in 2008. The decrease was due to lower interest rates during 2009. Other income relates to vendor rebates and favorable WCB rate adjustments that occur from time to time.

Full year general and administrative expenses totaled $39.2 million, compared to $31.4 million in 2008. The $7.8 million increase is mainly attributable to:

- $2.0 million in new public company corporate expenses, commencing in May 2008 and comprising incremental audit, legal, rent and salary costs;

- $3.7 million in salaries and benefits relating to additional staff hired to execute the increased work flow, the addition of the Canem West team and the Broda Construction Group, annual compensation adjustments; and

- $1.9 million in profit sharing, reflecting a stronger performance by both Dominion and Canem.

EBITDA for 2009 was $41.2 million, up by $6.0 million, or 17.0%, from $35.2 million in 2008. On a divisional basis, Dominion's EBITDA increased by 8.7% to $20.0 million from $18.4 million in 2008, and Canem's EBITDA increased by 25.9% to $25.8 million from $20.5 million. In both cases, the growth was primarily related to increased revenue, stronger gross margins and the efficient execution of projects during 2009. The increase also included the Broda acquisition, which contributed $0.2 million of EBITDA during December 2009. Seacliff's EBITDA margin increased to 7.1% for the year, up from 7.0% in 2008.

For the 12 months ended December 31, 2009, net income increased by 22.8% to $21.8 million, up from $17.7 million in 2008. The improvement was mainly related to strong growth in revenue and gross margins. Excluding the non-cash stock compensation expense and the purchase price fair valuation resulting from the amortization of Broda's intangible work in progress, 12-month adjusted net income was $28.6 million, up by $4.9 million, or 20.8%, from $23.7 million in 2008.

TOTAL WORK ON HAND

During the fourth quarter of 2009, Seacliff secured $140.4 million in new contracts, including scope changes to existing contracts. Of the projects won, Dominion will complete approximately $122.7 million and Canem will complete $17.7 million.

Dominion's new projects include a $35.0 million contract to add approximately 79 long-term care beds to the Kelsey Trail Health Region facility near Saskatoon, a $19.0 million contract to renovate and expand the Stobart Elementary School in Duck Lake in Saskatchewan, a $17.2 million contract to build a five-storey, 1200-stall parkade for the Mount Royal University in Calgary and a $10.0 million contract with the Calgary Police Services to convert an existing manufacturing facility into a new head office. Canem's new Work on Hand includes a $9.1 million addition to the Edmonton North Clinic contract for the facility's interior fit-out, a $2.8 million tenant improvement package at the University of Calgary's new downtown campus at Eighth and Eighth, a $1.9 million contract to fit out the new teaching space at the Health Science Centre in Calgary and five other projects totaling approximately $3.9 million in value. On a consolidated basis, approximately $90.5 million, or 64.5%, of the new work secured by Dominion and Canem is for the institutional sector.

As at December 31, 2009, Total Work on Hand was $576 million, comprising $492 million of Backlog and $84 million of Agency Projects. This compares to Total Work on Hand of $535 million at September 30, 2009 and $647 million at December 31, 2008. Going forward the recently announced awards not included in the year-end 2009 Work on Hand, coupled with the numerous opportunities on the horizon give Seacliff good visibility for 2010.



Quarter-End "Work on Hand" Totals (2008 - 2009)

Agency
($ millions) Backlog Projects Total
-------------------------------------------------------
31-Mar-08 $460 $165 $625
30-Jun-08 $597 $113 $710
30-Sep-08 $528 $176 $704
31-Dec-08 $512 $135 $647
31-Mar-09 $521 $118 $639
30-Jun-09 $500 $96 $596
30-Sep-09 $453 $82 $535
31-Dec-09 $492 $84 $576


Projects to be completed by Broda account for approximately $44.8 million of Seacliff's Total Work on Hand. Of this, $12.3 million is related to Agrium's expansion of its tailing pond in Vanscoy, SK. The remaining $32.5 million is associated with ballast production for CN and CP Railways, with the revenue expected to be evenly generated over the next three years.

Seacliff performs a variety of short duration service work and maintenance projects where the exact scope of work to be performed cannot be reliably quantified. Consequently, these projects are excluded from Work on Hand. While comparatively small in dollar value, these projects are numerous and collectively generate a consistent annual revenue stream. Projects of this nature accounted for approximately $27.5 million of Seacliff's revenue during 2009.

Subsequent Events

- On February 18, 2010, Seacliff announced that Canem had been awarded the $40 million electrical contract for the Trades and Technology Complex at Southern Alberta Institute of Technology (SAIT) in Calgary.

- On March 3, 2010, Seacliff announced that Dominion had been awarded two new projects totaling $61.8 million. These include a $31.8 million project involving the construction of a new administrative building at the British Columbia Institute of Technology (BCIT) campus in Vancouver and a $30 million contract to build a new 77,000 sq. ft. public library in Surrey, BC.

Outlook

Seacliff remains cautious in its outlook for 2010, yet encouraged by new projects on the horizon and the expectation that the majority of government stimulus spending is still to come. Looking ahead, management expects stimulus-related project awards to peak by the third quarter of 2010 and the financial benefits generated by new projects to continue through to the end of 2011. Early signs of a broader economic recovery are also starting to appear, with an increase in enquiries relating to new high-rise residential and commercial complexes, and increased opportunities for small-to-mid-size commercial projects. However, challenges still linger. Greater-than-normal competition remains a factor in most markets, and with credit markets remaining tight, the pursuit of new business requires an innovative and focused approach.

After completing a number of marquee projects such as the Richmond Speed Skating Oval and upgrades to BC Place Stadium in 2008 and 2009, Dominion has responded to current market conditions by looking further afield for new opportunities. During 2009, Dominion began work on the $49 million Yukon Corrections Centre and is now well positioned to capitalize on other opportunities in the Yukon region. Elsewhere in Canada, Dominion is actively pursuing the P3 market with three projects in the proposal stage, including a joint-venture proposal with Stuart Olson for the ASAPII schools package in Alberta, the $100 million Thunder Bay Courthouse and the OPP facilities package in Ontario. British Columbia will continue to be a key market for Dominion and, with two new projects totaling $61.8 million announced at the beginning of March, an economic recovery in the province appears to be underway.

Moving into 2010, while Dominion will continue to target large project opportunities, it will also work to expand its penetration of the smaller projects arena in all of its geographic markets. This strategy helped the business deliver record levels of profitability during 2009 and has proven effective in reducing the volatility generally experienced during economic downturns.

At Canem, momentum is building with the recent award of the $40 million SAIT Trade and Technology Centre project, and two additional phases of work at the Edmonton International Airport in its sights. Internally, Canem is moving forward on two major initiatives, including the development of a standalone prefabrication facility, which will enable more of the division's work to be assembled in a controlled environment prior to installation. Prefabrication proved highly successful at the pilot project stage and promises to significantly improve productivity when fully implemented.

As discussed previously, Canem is also embarking on a major new initiative in the emerging market for Building and Energy Management. Also known as "Connected Real Estate", this program employs mechanical, electrical and data solutions to reduce energy consumption and its related building operating costs. In October 2009, Seacliff hired an expert in the field to head up this new initiative and to manage Canem's P3 opportunities.

The outlook for the Broda business is extremely positive. Supported by Seacliff's financial strength and business acumen, Broda is well positioned to pursue the significant opportunities available in the Saskatchewan market, where four of the province's major potash and uranium producers have major capital expense programs slated for the next five years. This, coupled with the considerable amount of highway work planned throughout the province, will provide opportunities to fully utilize Broda's extensive equipment fleet in 2010. Meanwhile, the increase in project management depth orchestrated by Seacliff will enable Broda to pursue other untapped market opportunities.

Continued growth remains a key objective for Seacliff in 2010 as the Corporation focuses on building its business in the Saskatchewan, Manitoba and Ontario markets. With in excess of $85 million in cash and marketable securities, and minimal debt on the balance sheet, Seacliff has the resources to pursue both organic and acquisition-related growth opportunities.

Managing risk and improving the bottom line will remain priorities for Seacliff in 2010. Initiatives currently underway or planned for the coming year include:

- Refinement of financial systems throughout Dominion's operations - to this end, Seacliff has engaged the services of a prominent consulting firm;

- Strengthening the Broda project management team; and

- Continued pursuit of innovative cost solutions such as Canem's prefabrication initiative, which is expected to enhance profitability from this business unit.

Overall, Seacliff sees a wide range of opportunities for all three of its business units in 2010, with good prospects continuing in the institutional sector and the expectation of an increase in the office building retrofits that typically emerge during an economic recovery.

At Dominion, the focus will be on improving the bottom line through continued operational improvement, the pursuit of P3 opportunities, and by building on an already strong presence in the high-margin building improvement and small project market.

Canem will continue to target large, complex electrical projects where there are fewer qualified competitors. It will also establish its presence in the emerging Building and Energy Management market as part of its broader strategy to increase its recurring revenue streams.

Broda will capitalize on the strength of its current operations, expand business opportunities with its elite customer base and pursue untapped opportunities in new sectors, such as oil and gas.

Overall, management expects that Seacliff will continue generating good results in 2010, while focusing on improving its bottom-line performance. The Corporation's financial position remains strong, and with increased diversity across three business lines, five provinces and nearly 8,000 contracts per annum, Seacliff is well positioned to capitalize on the many opportunities that will emerge as the economy improves.

About Seacliff Construction Corp.

Seacliff is one of the largest and most diversified construction companies in Western Canada. The Corporation provides general contracting construction services, electrical contracting and earthmoving services to a wide array of clients in both the public and private sectors. The majority of Seacliff's business is derived from institutional, commercial, civil and light industrial construction projects. Headquartered in Vancouver, British Columbia, Seacliff operates across Western Canada, with 22 locations in British Columbia, Alberta, Saskatchewan and Manitoba, as well as two locations in Northwestern Ontario. Seacliff's business is conducted through three business units: Dominion Construction, a general contractor; Canem Systems, an electrical contractor; and the Broda Construction Group, an earth moving and heavy civil construction contractor.

As a general contractor, Dominion offers diversified general contracting, construction management and design-build services primarily to institutional, commercial and light industrial clients. Dominion's services include preconstruction planning and comprehensive project management services.

Canem provides a broad range of services including designing, building, maintaining and servicing electrical and data communication systems for institutional, commercial, light industrial and multi-family residential customers.

Broda specializes in aggregate processing, earthwork, civil construction and concrete production. Based in Saskatchewan's fast-growing resource market, and backed by a large and modern fleet of construction and support equipment, Broda serves a geographic market ranging from Prince George, BC to Dryden, Ontario.

FORWARD-LOOKING STATEMENTS

This press release contains statements concerning Seacliff's services, use of funds, business plan, and objectives. Seacliff's Total Work on Hand, other expectations, plans, goals, objectives, assumptions, information or statements about future events or conditions may constitute forward-looking statements or information under applicable securities legislation. Such forward-looking statements or information are based on a number of assumptions which may prove to be incorrect. Assumptions have been made regarding, among other things, the successful implementation of Seacliff's business plan, the availability to Seacliff of qualified personnel, the continuation and completion of the projects forming Seacliff's Total Work on Hand, and general economic, business and market conditions. Although Seacliff believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because Seacliff can give no assurance that such expectations will prove to be correct. The forward-looking statements are based on Seacliff's current expectations, estimates and projections, and are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks and uncertainties include, among others, Seacliff's ability to be retained for existing and new project work by existing and new clients, Seacliff's ability to retain and hire the qualified personnel required, the delay or cancellation of projects forming Seacliff's Total Work on Hand, general economic, business and market conditions, and other risks as are detailed from time to time in continuous disclosure filings of Seacliff. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. These forward-looking statements are made as of the date of this press release, and Seacliff assumes no obligation to update or revise them to reflect new events or circumstances, except as required by applicable laws.

NON-GAAP MEASURES

Throughout this press release, Seacliff uses the following terms not found in the Handbook of the Canadian Institute of Chartered Accountants ("CICA") and which terms do not have a standardized meaning under Canadian Generally Accepted Accounting Principles ("GAAP"). Our definition for each term is as follows:

- "Adjusted net income" is calculated by adding the non-cash stock compensation expense back to net income, and by adding back the portion of the amortized intangible Work in Progress associated with the Broda purchase price fair valuation lift;

- "Adjusted net income per common share (basic and fully diluted)" is calculated using adjusted net income divided by the basic and fully diluted weighted average number of shares outstanding;

- "Agency Projects" means the total value of Dominion's construction management agency work that has not yet been completed that: (a) is assessed by Seacliff as having a high certainty of being performed by either the existence of an executed contract or work order specifying job scope, value and timing; or (b) has been awarded pursuant to an executed binding or non-binding letter of intent or agreement, which, together with related third-party documentation prepared in connection with such work, evidences the general job scope, value and timing of such work, and with the finalization of a formal contract respecting such work currently assessed by Seacliff as being reasonably assured;

- "Backlog" means the total value of work, other than Agency Projects, that has not yet been completed that: (a) is assessed by Seacliff as having a high certainty of being performed by either the existence of an executed contract or work order specifying job scope, value and timing; or (b) has been awarded pursuant to an executed binding or non-binding letter of intent or agreement, which, together with related third-party documentation prepared in connection with such work, evidences the general job scope, value and timing of such work, and with the finalization of a formal contract respecting such work currently assessed by Seacliff as being reasonably assured;

- "Book value per share" is calculated by dividing the number of Common shares issued and outstanding into the Shareholders' equity;

- "EBITDA" is calculated as income before interest income and expense, provision for income taxes, amortization, the non-cash stock based compensation expense arising from the common shares vested during the period (as described in Note 7b in the consolidated audited year-end December 31, 2008 financial statements), the portion of the amortized intangible Work in Progress associated with the Broda purchase price fair valuation lift and management fee expense and income. We believe that EBITDA is a useful complementary measure of pre-tax profitability commonly used to evaluate the Corporation's performance. The most directly comparable measure to EBITDA calculated in accordance with GAAP is net income;

- "EBITDA Margin" is calculated as EBITDA divided by and expressed as a percentage of construction and contract revenue;

- "Gross Profit" is calculated by subtracting direct costs from construction and contract revenue;

- "Total Work on Hand" means the total value of Seacliff's Backlog and Agency Projects;

- "Working Capital" means total current assets less total current liabilities; and

- "Working Capital Ratio" means total current assets divided by total current liabilities



Consolidated Balance Sheet (unaudited)

As at
December 31, December 31,
(Expressed in $ thousands) 2009 2008
-------------------------
ASSETS
Current
Cash and cash equivalents 69,204 114,164
Marketable securities 19,022 -
Accounts receivable 116,040 108,246
Contracts in progress 6,951 4,559
Prepaid expenses and other assets 9,969 2,695
Current portion of long-term receivables 295 295
Future income tax asset 4,611 1,859
-------------------------
Total current assets 226,092 231,818
Long-term receivables 95 89
Equipment 42,715 5,550
Intangible assets 20,212 -
Goodwill 17,064 -
Future income tax asset 1,433 1,529
Accrued pension asset 2,524 1,985
-------------------------
310,135 240,971
-------------------------
-------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness 1,892 -
Accounts payable and accrued liabilities 108,625 91,346
Deferred revenue 31,044 42,839
Income tax payable 7,983 -
Current portion of capital lease obligations 2,559 48
Current portion of promissory note 751 -
Current portion of long-term debt 3,045 -
Future income tax liability 6,230 5,899
-------------------------
Total current liabilities 162,129 140,132
Capital lease obligations 1,097 113
Long-term liabilities 1,336 -
Future income tax liability 10,818 973
-------------------------
Total liabilities 175,380 141,218
-------------------------
SHAREHOLDERS' EQUITY
Share capital 105,654 89,668
Contributed surplus 9,775 8,243
Accumulated other comprehensive income (loss) (197) -
Retained earnings 19,523 1,842
-------------------------
134,755 99,753
-------------------------
310,135 240,971
---------------------------------------------------------------------------
---------------------------------------------------------------------------


Consolidated Statements of Income and Retained Earnings (unaudited)

(Expressed in $ thousands, except
share and per share amounts) For the three months For the 12 months
ended December 31 ended December 31

2009 2008(i) 2009 2008(i)
----------------------------------------
REVENUE
Construction and contract revenue 153,580 138,451 578,116 504,911
Direct costs 128,323 119,521 497,933 439,404
----------------------------------------
Gross profit 25,257 18,930 80,183 65,507

Interest income 209 891 1,670 2,485
Other income (78) 296 264 1,110
----------------------------------------
25,388 20,117 82,117 69,102
----------------------------------------
EXPENSES
General and administrative 10,189 9,679 39,236 31,429
Amortization 873 499 3,264 1,792
Interest 121 - 121 404
----------------------------------------
11,183 10,178 42,621 33,625
----------------------------------------
Income before the undernoted 14,205 9,939 39,496 35,477
Stock based compensation 924 2,495 6,795 5,966
----------------------------------------
Income before income taxes 13,281 7,444 32,701 29,511
----------------------------------------
Provision for income taxes
Current 4,263 4,181 12,836 9,384
Future (1,463) (626) (1,976) 2,381
----------------------------------------
2,800 3,555 10,860 11,765
----------------------------------------

Net income for the period 10,481 3,889 21,841 17,746

Retained earnings, beginning
of period 10,122 (2,047) 1,842 18,457
Dividends on common shares (1,080) - (4,160) (64)
Redemption of shares in excess
of cost - - - (34,297)
----------------------------------------
Retained earnings/(deficit), end
of period 19,523 1,842 19,523 1,842
----------------------------------------
----------------------------------------

Net income per common share
Basic 0.50 0.19 1.05 0.93
Fully diluted 0.49 0.18 1.04 0.90
----------------------------------------

Weighted average number of shares
outstanding ('000s)
Basic 21,091 20,428 20,706 19,111
Fully diluted 21,200 21,247 20,956 19,771
---------------------------------------------------------------------------
---------------------------------------------------------------------------

(i) Certain balances from 2008 have been reclassified to conform to 2009
presentation


Contact Information