Seacliff Construction Corp.

Seacliff Construction Corp.

August 13, 2008 16:05 ET

Seacliff Reports Strong Second Quarter 2008 Results

Revenue, Gross Profit, EBITDA and Total Work on Hand Increase Over 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 13, 2008) - Seacliff Construction Corp. (TSX:SDC) -

Seacliff Construction Corp. will hold a conference call and webcast to discuss 2008 second quarter and first half financial results and corporate developments on Thursday, August 14th, 2008 at 8:00 am Pacific Time (11:00 am Eastern Time).

To participate, please dial 1-866-507-1212 (toll free) or 416-695-6130 (GTA and international) approximately five minutes before the call. A replay will be available through August 27, 2008 at 1-800-408-3053 or 416-695-5800 passcode: 3266192. 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 six months ended June 30, 2008. Copies of management's discussion and analysis, and the unaudited interim financial statements will be available at and on the company's website at on or about August 14, 2008.

Seacliff completed an initial public offering ("IPO") on April 24, 2008, raising net proceeds of approximately $45 million for the Corporation. 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.

"As expected, increased government investment in infrastructure and strong economic conditions across Western Canada, as well as a sharpened focus on high margin projects enabled Seacliff to generate excellent financial results during the second quarter and first half of the year," said Bill Crarer, Seacliff's CEO. "Revenue, Gross Profit, EBITDA and Total Work On Hand all showed significant increases over 2007."



(in $ thousands Three months Six months
except per unit ended June 30 ended June 30
amounts) 2008 2007 2008 2007

Consolidated revenue $125,011 $92,914 $222,422 $188,544
Gross profit 14,176 11,097 27,601 22,032
EBITDA(1) 7,010 5,615 14,394 10,431
Adjusted net income (1) 4,942 3,465 9,893 6,649
Net income 3,553 3,465 8,504 6,649
Adjusted net income per share (1)
Basic 0.25 0.22 0.56 0.44
Diluted 0.24 0.22 0.55 0.44
Net income per share
Basic 0.18 0.22 0.48 0.44
Diluted 0.17 0.22 0.47 0.44

As at As at
June 30 Dec 31
2008 2007

Cash and cash equivalents $95,983 $51,361
Working capital (1) 83,833 14,335
Shareholders' equity 90,197 20,582
Total Work on Hand (1) $709,431 $685,803

(1) These items are non-GAAP measures. Refer to Seacliff's MD&A for the
period ended June 30, 2008.

Reconciliation of adjusted net income to net income

Three months Six months
ended June 30 ended June 30
2008 2007 2008 2007

Adjusted net income $4,942 $3,465 $9,893 $6,649
Non-cash stock compensation
expense resulting from the
corporate reorganization that
occurred concurrent with the IPO.
Refer to Note 7b in the
consolidated interim financial
statements for the six months
ended June 30, 2008. (1,389) - (1,389) -
Net income $3,553 $3,465 $8,504 $6,649

Second Quarter and First Half 2008 Highlights

- Consolidated revenue grew by $32.1 million, or 34.5% in the second quarter and by $33.9 million, or 18% in the first half

- Gross profit increased by $3.1 million, or 28% in the second quarter and by $5.6 million, or 25% in the first half

- Second quarter EBITDA increased by $1.4 million, or 25%, to $7.0 million, and grew by $4.0 million, or 38%, to $14.4 million for the first half

- Adjusted net income grew by $1.5 million or 40% in the second quarter and by $3.3 million or 50.0% in the first half. Basic adjusted net income per share was $0.25 for the quarter and $0.56 for the first half

- As at June 30, 2008, cash and cash equivalents totaled $96.0 million and working capital totaled $83.8 million. As a result, Seacliff is well positioned to pursue large-scale projects, such as public private partnerships ("P3s") and suitable acquisition targets

- Total Work on Hand grew to $709 million at quarter end, up from $686 million at June 30, 2007 and $620 million at December 31, 2007

- Seacliff secured approximately $234 million worth of new projects during the second quarter


The outlook for Seacliff is positive. While the economy in Western Canada appears to have slowed somewhat, cooling some residential construction markets, the commercial, industrial and institutional construction sectors, where the Corporation's primary focus lies, remain strong.

In B.C., major construction projects related to health, education, transportation, and the upcoming 2010 Olympics continue to support the busiest construction market in decades. In Alberta, continued investment in oil sands development is driving strong economic growth, with the Edmonton market performing particularly well. Saskatchewan continues to be a centre of high growth potential, with the recent election of a more business friendly government further stimulating the economy. And in Manitoba, major infrastructure projects, such as the expansion of the Red River Floodway and the redevelopment of the Winnipeg International Airport, are contributing to a robust construction market. Going forward, Seacliff foresees many upcoming opportunities to bid on new projects in all four western provinces.

Over the longer term, Seacliff also anticipates growth through the targeted acquisition of other general and electrical contracting companies. Seacliff is currently working with a team of outside advisors to identify and qualify appropriate acquisition targets, and discussions are underway with a number of potential candidates. While the Corporation believes that its solid reputation, strong financial condition, and experience in successfully acquiring and growing construction businesses leave it ideally positioned to grow through consolidation, Seacliff will only make an acquisition if it is accretive to earnings per share and strengthens its competitive position.

In the meantime, with its highly skilled and committed personnel, Seacliff is well equipped to fulfill both current and future work commitments. The Corporation recently strengthened its management team in two key areas. In June, Chris Collison became Dominion's Vice President for Edmonton. Mr. Collison, who was recruited from the United Kingdom, brings more than 30 years experience and extensive knowledge of all aspects of construction to his new role. In addition, Doug Hale, who joined Canem in 1991, was appointed to the position of Vice President of Construction, effective July 1, 2008. In this role, Mr. Hale will oversee Canem's construction policies and procedures, employee training, and productivity and profitability initiatives.

"With our two business units, 16 locations, long-established customer relationships, significant financial resources, and reputation for consistently delivering high-quality work, on time and on budget, Seacliff is well positioned to capitalize on strong market opportunities over the near and long term," said Bill Crarer.

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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