Seacliff Construction Corp.

Seacliff Construction Corp.

March 25, 2009 16:52 ET

Seacliff Reports Strong 2008 Annual Results

Revenue, Gross Profit, and EBITDA Increase Over 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - March 25, 2009) - Seacliff Construction Corp. (TSX:SDC) -

Seacliff Construction Corp. will hold a conference call and webcast to discuss 2008 fourth quarter and annual financial results, and corporate developments on March 26, 2009 at 8:00 am Pacific Time (11:00 am Eastern Time).

To participate, please dial 1-800-766-6630 (toll free) or 416-695-6622 (GTA and international) approximately five minutes before the call. A replay will be available through April 8, 2009 at
1-800-408-3053 (toll free) or 416-695-5800 (GTA and international) passcode: 2860631

In addition, a live and archived webcast can be accessed at: or on the company's website at

Seacliff Construction Corp. ("Seacliff" or "the Corporation"), one of the largest and most diversified construction companies in Western Canada, today reported financial results for the three and 12 months ended December 31, 2008. Copies of management's discussion and analysis, and the audited annual financial statements will be available at and on the company's website at on or before March 26, 2009.

Seacliff conducts its operations through two business units - Dominion Construction (or "Dominion"), a general contractor, and Canem Systems (or "Canem"), which designs, builds, maintains and services electrical and data communication systems.

"We are very pleased with our 2008 financial results," said Bill Crarer, Seacliff's CEO. "With 69% of our consolidated revenue coming from the institutional sector, we were relatively well sheltered from the slowdowns experienced in other sectors of the construction industry. As a result, Dominion and Canem operated at close to capacity throughout the year, with both business units generating record levels of adjusted net income, and significant increases in revenue and EBITDA."


(unaudited) Three months ended 12 months ended
December 31 December 31
($000's except per share amounts) 2008 2007 2008 2007

Consolidated revenue $138,584 $128,022 $503,561 $436,862
Gross profit 18,468 19,060 65,082 54,004
EBITDA (1) 9,687 12,083 35,327 29,385
EBITDA Margin 7.0% 9.4% 7.0% 6.7%
Adjusted net income (1) 6,385 8,616 23,713 19,629
Net income 3,890 8,115 17,747 19,128

Adjusted net income per share (1)
Basic 0.31 0.56 1.24 1.28
Diluted 0.30 0.56 1.20 1.28
Net income per share
Basic 0.19 0.53 0.93 1.25
Diluted 0.18 0.53 0.90 1.25

As at Dec As at Dec
31, 2008 31, 2007

Cash and cash equivalents $113,255 $51,361
Total current assets 231,709 151,141
Total assets 240,862 158,136
Total current liabilities 140,022 136,807
Shareholders' equity 99,754 20,582

Working capital (1) 91,686 14,335
Total Work on Hand (1) 647,000 618,000

(1) These items are non-GAAP measures. Refer to Seacliff's MD&A for the
year ended December 31, 2008.

Reconciliation of adjusted net income to net income

Three months ended 12 months ended
December 31 December 31
2008 2007 2008 2007

Adjusted net income $ 6,385 $ 8,616 $ 23,713 $ 19,629
Non-cash stock compensation expense
(refer to Note 7b in the
consolidated interim financial
statements for the year ended
December 31, 2008) (2,495) (501) (5,966) (501)
Net income $ 3,890 $ 8,115 $ 17,747 $ 19,128

2008 Highlights

- Consolidated revenue grew by $66.7 million, or 15.3%, for the full year when compared to 2007

- Gross profit was up by $11.1 million, or 20.6%, for the year

- EBITDA grew by $5.9 million, or 20.1%, to $35.3 million for the year

- Adjusted net income grew by $4.1 million, or 20.9%, for the full year 2008. Basic adjusted net income per share was $1.24 for the year

- As at December 31, 2008, cash and cash equivalents totaled $113.3 million and working capital totaled $91.7 million. As a result, Seacliff remains well positioned to pursue large-scale projects and suitable acquisition targets

- Total Work on Hand grew to $647 million at December 31, 2008, up from $618 million at the end of 2007

- Seacliff secured approximately $110.0 million worth of new work during the fourth quarter, of which $51 million comprised institutional projects

- On December 23, 2008, Seacliff announced the acquisition of Canem West, an independently owned electrical and data communications contractor based in Vancouver, for $8 million. The acquisition, which closed on February 2, 2009, immediately strengthens Canem's competitive position in the Vancouver market and broadens its service offerings across BC


Seacliff's outlook for 2009 is cautiously optimistic. The company begins the year with Work on Hand to be executed in 2009 representing approximately 73% of its 2008 revenue.

"We remain confident that the institutional infrastructure sector will sustain us at a reasonable level of profitability through this economic downturn," said Bill Crarer. "Since the beginning of the year, we have been awarded three major institutional projects totalling $54.4 million. In addition, all three levels of government have recently announced further infrastructure funding commitments designed to stimulate the ailing economy. So, while we are facing a challenging environment on the commercial front with increased competition putting pressure on margins, we are well positioned to benefit from a growing number of institutional opportunities."

In 2009, Seacliff intends to continue executing its acquisition growth strategy. With $113 million cash on hand, and no debt on its balance sheet, the company has significant resources to deploy on growth. Seacliff believes that private sector expectations are now becoming more closely aligned with public market realities and that the time is right to pursue the strategic acquisition of other general and electrical contracting companies. The company reiterated that any such acquisition must be accretive to its earnings per share within one-to-three years and must strengthen its competitive position.

With its cautiously optimistic outlook and very strong balance sheet, Seacliff has announced a quarterly dividend policy. The first dividend of $0.05 per share will be paid on April 15, 2009 to the shareholders of record on March 31, 2009.

About Seacliff Construction Corp.

Seacliff is one of the largest and most diversified construction companies in Western Canada. It provides general contracting construction services and electrical contracting services to a wide array of clients in both the public and private sectors, with a majority of its business derived from institutional, commercial and light industrial construction projects. Seacliff is headquartered in Vancouver, B.C. and operates 15 locations in British Columbia, Alberta, Saskatchewan and Manitoba, as well as one location in northwestern Ontario. Seacliff's business is conducted through two business units: Dominion Construction, a general contractor; and Canem Systems, an electrical contractor.

As a general contractor, Dominion offers diversified general contracting, construction management and design build services in Western Canada primarily to institutional, commercial and light industrial clients. Dominion's services include preconstruction planning and comprehensive project management services, including the planning and scheduling of the manpower, equipment, materials and subcontractors required for a project.

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. Canem's electrical contracting services include: designing electrical distribution systems within a building or complex; procuring and installing electrical equipment and materials; on-call service for electrical maintenance and troubleshooting; preventative and scheduled maintenance for critical component installations; budgeting and preconstruction services; and management of regional and national contracts for multi-site installations.


Completion of Initial Public Offering

On April 24, 2008, Seacliff completed an IPO, issuing 7,692,408 common shares at a price of $13.00 each, for total proceeds of approximately $100 million, and net proceeds after issue expenses of approximately $94 million. Subsequent to that, the company commenced trading on the Toronto Stock Exchange under the ticker symbol "SDC". The offering was primarily an indirect secondary offering by Seacliff's principal shareholders, in that Seacliff used approximately $47 million of the net proceeds of the offering as partial consideration to acquire, indirectly, Dominion and Canem (the company's two operating divisions) from the principal shareholders. Seacliff intends to use the remainder of the net proceeds of the IPO, approximately $45 million, for general working capital purposes and acquisitions.

Seacliff filed a final prospectus in relation to the offering on April 21, 2008, a copy of which is available under Seacliff's profile on SEDAR (

Forward-Looking Statements

This press release contains statements concerning Seacliff's services, uses 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.

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