SICO INC.

SICO INC.

March 03, 2005 08:00 ET

SICO Announces its Best Annual Results Ever, With Net Earnings Up 40% Over 2003


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SICO INC.

TSX SYMBOL: SIC

MARCH 3, 2005 - 08:00 ET

SICO Announces its Best Annual Results Ever, With Net
Earnings Up 40% Over 2003

LONGUEUIL, QUEBEC--(CCNMatthews - March 3, 2005) - SICO INC. (TSX:SIC)



- The Company achieves net earnings of $15.5 million or $2.27 per
share ($2.24 diluted) in 2004.
- Sales increase to $303.4 million, mostly as a result of PARA's
full-year contribution and internal growth in the
ARCHITECTURAL SECTOR.
- The INDUSTRIAL SECTOR's North American sales increase by 6.2%.
- The Board of Directors raises the quarterly dividend paid to
common shareholders by 16.7%.


For the year ended December 31, 2004, SICO INC. (ticker symbol SIC/TSX)
achieved record results in terms of sales, net earnings and operating
cash flows. The Company recorded sales of $303.4 million, compared with
$280.5 million the previous year. The 8.2% increase is attributable to
the ARCHITECTURAL SECTOR's rise in revenues of 9.6% to $263.4 million,
fuelled by PARA's contribution for the entire 12-month period as opposed
to eight months in 2003, and by the organic sales growth of national
brand paints and specialty products. The INDUSTRIAL SECTOR's sales were
stable at $40.0 million. However, excluding revenues derived from the
50% interest in the Sico-Becker joint venture divested by SICO in the
fourth quarter of 2004, the INDUSTRIAL SECTOR's sales grew by 6.2%
(12.3% in the fourth quarter), driven by a recovery in North American
demand, particularly in the specialized equipment market, and the
addition of new accounts. The decline in the U.S. dollar against the
Canadian dollar had a negative impact of $1.1 million on this sector's
sales that would have otherwise reflected a 2.6% increase in 2004 (9.4%
for its North American sales).

Operating earnings before depreciation, amortization, financial
expenses, loss on goodwill and on the disposal of the joint venture and
income taxes ("EBITDA") grew by 36.5% to $32.3 million, compared with
$23.6 million EBITDA in 2003, which included non-recurring restructuring
costs related to the infrastructure optimization program. Excluding such
costs, EBITDA rose 13.5%. Excluding restructuring costs, the
ARCHITECTURAL SECTOR's EBITDA increased by 13.5% and profit margin
improved from 18.6% to 19.3%. Several factors accounted for this strong
performance, including PARA's additional contribution, the benefits of
the operational infrastructure optimization program and the national
brand product sales growth. Again excluding restructuring costs, the
INDUSTRIAL SECTOR's EBITDA jumped 74.7% to $2.0 million, while its
profit margin improved from 2.8% to 4.9%. Besides increased sales in
North America, this improvement is attributable to the streamlining and
optimization measures carried out during the previous year, including
the concentration of all manufacturing operations in a single plant in
order to improve productivity and lower costs.


It should be noted that, during the fourth quarter, SICO incurred
additional expenses due to the fact that 2004 comprised 53 weeks
compared to 52 in 2003. As the extra week corresponded to the December
24 to December 31 holiday period, the Company recorded little revenues,
while assuming full salaries and other fixed costs. As expected, SICO
also sustained significant price increases on some of its raw materials,
such as metal containers and petroleum derivatives. These price
increases were not fully offset by the efficiency of the Company's
procurement and inventory management practices and the strong Canadian
dollar.

In the fourth quarter, given the accumulated losses of the Sico-Becker
joint venture, the difficult market conditions and the uncertainty
concerning its future profitability, SICO sold its interest in this
entity to its partner Becker Industrie S.A.S. This transaction
translated into a $0.6 million loss on disposal, offset by a $0.5
million reduction in income taxes. In the third quarter, SICO had
recorded a $1.0 million loss on Sico-Becker's goodwill.

Consequently, SICO closed 2004 with net earnings of $15.5 million, up
40.0% over $11.0 million in 2003 - the highest net profit ever achieved
by the Company. Earnings per common share rose to $2.27 ($2.24 diluted),
from $1.68 ($1.64 diluted) in 2003. For information purposes, excluding
the non-recurring restructuring costs, net of related income taxes, and
restating for 2004 results the loss on goodwill and on the disposal of
Sico-Becker, net of the related tax recovery, SICO would have posted net
earnings of $16.4 million or $2.42 per share ($2.39 diluted), up 16.3%
over $14.1 million or $2.15 per share ($2.10 diluted) the previous year.

Operating activities (after net changes in non-cash working capital
items) provided cash flows of $34.8 million in 2004, compared with $12.9
million the previous year. These funds were notably used to reduce the
Company's total debt by $26.6 million. As at December 31, 2004, total
net indebtedness amounted to $13.9 million for a total net debt to
shareholders' equity ratio of 11:89. Hence, SICO is in an excellent
financial position to pursue its expansion, namely through business
acquisitions in the Canadian architectural paint market and the North
American industrial coatings sector.

Pierre Dufresne, President and Chief Executive Officer, said he is very
pleased with SICO's achievements for 2004 as the Company not only posted
a solid financial performance, but also met most of its chief
objectives, specifically to complete the integration of PARA, to
finalize the infrastructure optimization program initiated in the second
half of 2003 and to reposition the Industrial Sector on stronger bases
for future growth and profitability. "We therefore have every reason to
be optimistic about the Company's performance in 2005."

Outlook

SICO looks forward to a healthy financial performance in 2005. First, in
spite of the expected slowdown in renovation spending and new housing
starts, management expects the overall business environment in the
Canadian architectural paint market to remain favourable in 2005.
Second, the Company is currently witnessing a rise in demand in the
North American market for metal industrial coatings, which should offset
the impact that the disposal of its interest in Sico-Becker will have on
sales. This entity accounted for some $3.0 million of SICO's
consolidated sales in 2004. However, the sale of its stake in
Sico-Becker, coupled with greatly improved market conditions in North
America, should contribute to enhance the Industrial Sector's
profitability. Third, the Company implemented selling price increases
for most of its architectural products in the first quarter of 2005,
which should partly compensate for the higher prices of raw materials.

Dividend Payment

SICO's Board of Directors has voted in favour of a 16.7% increase in the
quarterly dividend paid to common shareholders. Accordingly, it has
declared a quarterly dividend of $0,14 per common share and a dividend
of $ 0.02956 per Class B preferred share. These dividends will be paid
on March 25, 2005 to the Company's registered shareholders as at March
11, 2005.



Management Report on the Year
Ended December 31, 2004

(Management's Discussion and Analysis of Operating Results and
Financial Position)


Description of Business

Dating back to the 1930s, Sico Inc. ("SICO" or the "Company") is the
largest company in Canada specializing in the development,
manufacture and marketing of paint, coatings and related products.
The Company's operating results are broken down into two reportable
business sectors:

- the ARCHITECTURAL SECTOR, which specializes in the development,
manufacture, marketing and distribution of paints, stains,
varnishes, caulking compounds and other related products used to
decorate, protect, renovate and maintain consumers' and building
owners' goods and properties; and

- the INDUSTRIAL SECTOR is mainly focused on the development,
manufacture, marketing and distribution of metal coatings for
transportation and specialized equipment used primarily in
agriculture, forestry, construction and the mining industry.


During the year ended December 31, 2004, the Company's two sectors
respectively accounted for 86.8% and 13.2% of its consolidated sales.

Architectural Sector

For over 65 years, SICO has been involved in the architectural coatings
market, where it offers a broad selection of products designed to meet
consumers' needs as well as the special requirements of professional
painters, architects, designers, building managers and construction site
managers. This selection includes latex and alkyd paints, indoor and
outdoor stains, caulking compounds, adhesives and certain other
specialty products. The Company's architectural products are
manufactured in four plants located in Toronto (Ontario), Quebec City
(Quebec), Terrebonne (Quebec) and Longueuil (Quebec) and distributed by
a network of six distribution centres strategically located across
Canada. They are sold nationwide under the Company's several trademarks
and the private labels of some of its retail customers.

SICO reaches its products users through all the architectural paint
distribution channels, primarily building material and hardware
retailers, who constitute its traditional customer base, as well as
stores specializing in paint and decorating products.

In recent years, the Canadian architectural paint industry has undergone
a certain degree of consolidation to which SICO has contributed by
completing two major acquisitions: Betonel Ltd. ("Betonel") in September
2001 (a paint manufacturer based in the Montreal area which also
operates Quebec's largest network of stores specialized in the sale of
architectural paints and related products to professional painters,
building managers and consumers), and Para Inc. ("PARA") in May 2003 (a
Toronto-area manufacturer mostly serving independent paint and
decorating specialty stores across Canada).

The Canadian architectural paint industry is subject to a seasonal
cycle. It is also fairly dependent on the health of the economy,
especially the strength of residential and commercial renovation
spending and new construction. (A description of the competitive
environment, seasonal fluctuations and risks specific to the Canadian
architectural paint industry is provided in the "Risks and
Uncertainties" section of this Management Report.) SICO's long
experience in this market enables it to successfully compete against
other North American manufacturers through its extensive distribution
networks which include some 2,400 outlets nationwide, its use of
innovative technologies, its complete selection of products recognized
for their performance and quality, its dynamic marketing and strong
branding strategies and finally, its capacity to establish long-term
relationships with its customers based, notably, on innovative
merchandising and training programs for its customers' employees.

Industrial Sector

SICO also specializes in the development, manufacture, marketing and
distribution of industrial coatings. The Company adopted a targeted
approach to this market in the late 1990s, focusing primarily on metal
coatings applications for the North American transportation equipment
industry (railway and subway passenger cars, commercial and military
aircraft, truck trailers), the heavy machinery industry (agricultural,
forestry and construction equipment) and certain other specialty
applications such as metal furniture. Its products and services are
designed for original equipment manufacturers and their subcontractors
who incorporate its coatings into their manufacturing processes.

The North American and global industrial coatings industry is still
relatively fragmented, consisting of a few large manufacturers and many
smaller-sized players. While this industry is not subject to seasonal
cycles, it strongly depends on the health of the economy, more
specifically the level of public and private capital expenditures in
industrial, commercial and institutional infrastructures (for further
details, see the "Risks and Uncertainties" section of this Management
Report). SICO strives to set itself apart in this market through two
major differentiating features: the quality of its technologies, which
notably meets equipment manufacturers' productivity and operational
flexibility requirements and growing needs with respect to environmental
protection; and the quality of the technical support it provides as part
of complete value-added solutions tailored to its customers' specific
needs. Among others, the December 2000 acquisition of Chemcraft
International Inc.'s industrial metal coatings manufacturing and
marketing operations in North America, coupled with the ongoing
development of new technologies, have provided SICO with a selection of
high-performance coatings meeting the strictest environmental standards,
including isocyanate-free coatings with a low volatile organic component
content. Moreover, its Technical Service Department excels in
after-sales support, so as to assist customers through every stage of
the coating process.

The research and development, manufacturing and marketing activities of
SICO's Industrial Sector are carried out at its main location in
Longueuil, Quebec. Through its subsidiary Pinturas Industriales Sicorel
S.A. de C.V. ("Sicorel"). the Company also operates a sales and service
centre in Monterrey, Mexico.

Foreword to Management Report

Basis of Presentation

This Management Report discusses the Company's operating results and
cash flows for the 12-month periods ended December 31, 2004 (53 weeks)
and December 26, 2003 (52 weeks) respectively, as well as its financial
position at those dates. It should be read in conjunction with the
consolidated financial statements and accompanying notes included in the
Annual Report. For further information, some supplementary documents,
including those prepared for the May 10, 2005, Annual General Meeting of
Shareholders, the Annual Information Form, interim reports and press
releases, are available on SEDAR's website at www.sedar.com.

The financial statements contained in the Annual Report have been
audited by the Company's auditors. In this Management Report, "SICO" or
the "Company" designates, as the case may be, Sico Inc. and its
subsidiaries and divisions, or Sico Inc. or one of its subsidiaries or
divisions. The term "year" refers to the 12-month financial period ended
on the last Friday of December of the year designated by the context.
All comparisons are made with the previous year.

The information contained in this Management Report takes into account
any major events that occurred prior to March 2, 2005, on which date the
financial statements and Management Report were approved by the
Company's Board of Directors. It presents the Company's status and
business context as they were, to management's best knowledge, at the
time these lines were written.

Compliance with Canadian Generally Accepted Accounting Principles

Unless otherwise indicated, the financial information presented below,
including tabular amounts, is expressed in Canadian dollars and prepared
in accordance with Canadian generally accepted accounting principles
("GAAP"). The information contained in this report also includes some
figures that are not performance measurements consistent with GAAP.

For instance, SICO uses operating earnings before financial expenses,
impairment loss on goodwill and loss on the disposal of the joint
venture, income taxes, depreciation and amortization ("EBITDA") because
this measure enables management to assess the operational performance of
the Company's various sectors. This measure is a widely accepted
financial indicator of a company's ability to reimburse and incur debt.
It should not be considered by an investor as an alternative to
operating income or net earnings, an indicator of financial performance
or cash flows, nor as a measure of liquidity. As EBITDA is not a
measurement established in accordance with GAAP, it may not be
comparable to the EBITDA of other companies. In SICO's statement of
earnings, EBITDA corresponds to "Operating earnings before".

In its analysis of operating results and in certain tables, for
information purposes and to facilitate comparison between net earnings
as well as basic and diluted earnings per share for 2003 and 2004, the
Company presents net earnings and earnings per share for 2003 as they
would have been excluding the non-recurring restructuring costs (net of
related income taxes), in comparison with net earnings and earnings per
share for 2004 as they would have been excluding the revaluation of
restructuring costs provision, the impairment loss on goodwill and the
loss on disposal of the joint venture net of the related tax recovery.

Finally, the Company uses total net indebtedness which consists of
long-term debt (including the current portion), Class B preferred shares
and the bank loan, less cash and cash equivalents. It also uses total
net debt to invested capital ratio, which corresponds to the percentage
of total net debt over the sum of total net debt and shareholders'
equity. These measurements are not established in accordance with GAAP
and may therefore not be comparable to similarly titled measures used by
other companies. They are used by SICO because they are widely accepted
indicators of a company's short and long-term financial health.

Forward-looking Statements

The statements set forth in this Management Report which describe SICO's
objectives, projections, estimates, expectations or forecasts may
constitute forward-looking statements within the meaning of securities
legislation. Positive or negative verbs such as "plan", "evaluate",
"estimate" and "believe" as well as other related expressions are used
to identify such forward-looking statements. SICO would like to point
out that, by their nature, forward-looking statements involve a number
of risks and uncertainties such that its actual results or the measures
it adopts could differ materially from those indicated or underlying
these forward-looking statements, or could have an impact on the degree
of realization of a particular projection. The major factors that may
lead to a material difference between the Company's actual results and
the projections or expectations expressed in these forward-looking
statements are described in the "Risks and Uncertainties" section of
this Management Report. Besides these major factors, the Company's
results are dependent on the competition, consumers' purchasing habits
and preference, general economic conditions, and the Company's financing
capabilities. There can be no assurance as to the materialization of the
results, performance or achievements as expressed or implied by the
forward-looking statements. SICO's management assumes no obligation as
to the updating or revision of the forward-looking statements as a
result of new information, future events or other changes.

Critical Accounting Estimates

The preparation of financial statements in conformity with Canadian GAAP
requires the Company to make estimates and assumptions which affect the
reported amounts of assets and liabilities, the disclosure of contingent
assets and liabilities at the date of the financial statements and
reported amounts of revenue and expenses for the reporting period. The
Ontario Securities Commission defines critical accounting estimates as
those requiring assumptions made about matters that are highly uncertain
at the time the estimate is made, and when the use of different
reasonable estimates or changes to the accounting estimates would have a
material impact on a Company's financial condition or operating results.
Based on this definition, the Company has identified the following
critical accounting estimates:

Revenue Recognition

Revenues are recognized when risks and rewards of ownership are
transferred, which coincides with shipment of the goods and when
reasonable assurance exists regarding collectibility. Revenues from
corporate stores are recognized at the time of the sale to the customer.
The Company recognizes its revenues net of rebates to customers.
Provisions are accounted for by the Company to estimate the sales volume
rebates to customers. However, in the event that actual outcome differs
from management's estimates, the provisions for sales volume rebates may
be adjusted.

Goodwill

Goodwill is not amortized but tested for impairment annually, or more
frequently if events or changes in circumstances indicate a possible
impairment. The Company compares the reporting unit's carrying value to
its market value determined through a discounted cash flow analysis. In
preparing discounted cash flows, the Company uses its judgment in
estimating future profitability, growth, capital spending and discount
rate. Management uses its judgment to estimate the market value of the
reporting units and changes to those estimates could modify the goodwill
value presented. If the carrying value of the reporting unit exceeds the
market value, the Company would then evaluate the impairment loss by
comparing the fair value of the goodwill to its carrying amount. On
September 24, 2004, the Company reduced by $1.0 million the value of the
goodwill related to its French joint venture Sico-Becker S.A.S.
("Sico-Becker") following an impairment test due to accumulated losses
and significant uncertainty concerning its future profitability. Based
on the impairment tests performed as at December 31, 2004, the Company
concluded that no additional goodwill impairment charge was required. In
the event that actual outcome differs from management's estimates, an
impairment could be necessary.

Impairment of Long-lived Assets

The Company tests the recoverability of long-lived assets, including
property, plant and equipment and other long-term assets, when events or
changes in circumstances indicate that their carrying amounts may not be
recoverable. Examples of such events and changes include: the
decommissioning of an asset, assets rendered idle after plant shutdown,
costs that significantly exceed the amount initially estimated for the
acquisition or construction of an asset, and continuous operating losses
or negative cash flows resulting from the use of an asset. An impairment
is recognized when the carrying amount of a long-lived asset is not
recoverable and exceeds its fair value. A long-lived asset, or group of
assets, is considered unrecoverable when its carrying value exceeds the
estimated undiscounted future cash flows directly associated with it.
The Company estimates future cash flows based on historical and budgeted
performance as well as assumptions on future economic environment,
pricing and volume. Management's judgment regarding the existence of
impairment indicators are based on market conditions and operating
performances. Future events could cause management to conclude that
impairment indicators exist and that the carrying values of some
long-lived assets are impaired. Any resulting impairment loss could have
a material adverse impact on the Company's financial position and
operating results.

Pension and Other Post-retirement Benefits

The Company maintains defined benefit plans and post-retirement benefits
for its employees and ensures that contributions are sustained at a
level sufficient to cover benefits. Actuarial valuations of the
Company's various pension plans were performed on December 31, 2003.
Plan assets are measured at fair value and consist of equity securities
and corporate and government fixed income securities. Pension and other
post-retirement net expense and obligations are based on various
economic and demographic assumptions determined with the help of
actuaries and are reviewed each year. Key assumptions include the
discount rate, the expected long-term rate of return on plan assets and
the rate of compensation increase. The discount rate assumption used to
calculate the present value of the plans' projected benefit payments was
determined using a measurement date of December 31, 2004 and based on
yields of long-term high-quality fixed income investments. The expected
long-term rate of return on pension plan assets was obtained by
calculating a weighted average rate based on targeted asset allocations
of the plans. The expected returns of each asset class are based on a
combination of historical performance analyses and forward-looking views
of financial markets. The rate of compensation increase is used to
project current plan earnings in order to estimate pension benefits at
future dates. This assumption was determined based on historical pay
increases, forecasts of salary budgets, collective bargaining influence
and competitive factors. The Company believes that the assumptions are
reasonable based on information currently available. However, in the
event that actual outcome differs from management's estimates, the
provision for pension and post-retirement benefit expenses and
obligations may be adjusted.

Allowance for Doubtful Accounts

The Company maintains an allowance for doubtful accounts for expected
losses from customers who are unable to pay their debts. The allowance
is reviewed periodically and is based on an analysis of specific
significant outstanding accounts, the aging of the receivables, customer
creditworthiness, and historical collection experience. In addition, the
Company has a credit insurance policy covering most of its major
customers. The policy contains usual clauses and limits the amounts that
can be claimed by event and year of coverage. The Company believes that
its allowance for doubtful accounts is sufficient to face the risks
inherent to outstanding receivables. However, in the event that actual
outcome differs from management's estimates, an additional allowance for
doubtful accounts expense could be recognized.

Allowance for Surplus Inventories or Inventory Obsolescence

Inventories are valued at the lower of cost, net realizable value or
replacement value. The cost of finished goods is calculated on the basis
of standard cost, which approximates actual cost calculated using the
first in, first out method. The Company records an allowance for
obsolescence calculated on the basis of assumptions about the future
demand for its products and conditions prevailing in the markets where
its products are sold. This allowance, which reduces inventories to
their net realizable value, is then entered as a reduction of
inventories in the consolidated balance sheet. Management must make
estimates and judgments when establishing such allowances. If actual
market conditions are less favourable than the Company's assumptions,
additional allowances could prove necessary.

Income Taxes

The Company uses its best judgment in determining its effective tax
rate. There are many factors in the normal course of business that
affect the effective tax rate, since the ultimate tax outcome of some
transactions and calculations is uncertain. The Company could be at any
time under audit by various tax authorities in each of the jurisdictions
in which it operates. A number of years may elapse before a particular
matter for which management has established a reserve is audited and
resolved. The number of years with open tax audits varies depending on
the tax jurisdiction. Management believes that its estimates are
reasonable and reflect the probable outcome of known tax contingencies,
although the final outcome and its timing are difficult to predict. In
the event that the tax outcome differs from management's estimates, the
provision may be adjusted.

Investment Tax Credits

The Company incurs research and development expenditures which qualify
for investment tax credits. The investment tax credits recorded are
based on its estimates of amounts expected to be recovered and are
subject to audit by the taxation authorities and, accordingly, these
amounts may vary materially.

Future Income Taxes

The Company is required to assess the ultimate realization of the future
income tax assets and liabilities generated from temporary differences
between the book and the tax value of assets and liabilities and loss
carry-forwards in the future. This assessment is judgmental in nature
and dependent on assumptions and estimates regarding the availability
and character of future taxable income. The ultimate amount of future
income tax assets realized could be materially different from those
recorded, as it is influenced by future operating results of the Company.

Changes in Accounting Policies in the Last Year

During the year ended December 31, 2004, SICO adopted several new
recommendations issued by the Canadian Institute of Chartered
Accountants ("CICA"). These new standards, along with those adopted
during the previous year, are described in Note 3 of the consolidated
financial statements contained in the Annual Report.

Generally Accepted Accounting Principles

In July 2004, the CICA issued Handbook Section 1100, Generally Accepted
Accounting Principles. This Section establishes standards for financial
reporting in accordance with Canadian GAAP and provides guidance on
sources to consult when selecting accounting policies and determining
appropriate disclosures when a matter is not dealt with explicitly in
the primary sources of Canadian GAAP. This new Section is effective for
the Company's fiscal year beginning on or after October 1, 2003. The
adoption of these recommendations did not have any impact on the
consolidated financial statements presentation and on the net earnings
of the Company.

Stock-based Compensation

Amended Handbook Section 3870, Stock-based Compensation and Other
Stock-based Payments, is effective for fiscal years beginning on or
after January 1, 2004. The amendments to the Section require the
adoption of the fair-value based method for all stock-based awards and
the recognition of an expense in the financial statements. The Company
has adopted this new standard for the current year and has restated the
December 26, 2003 results to account for the impact of the awards
granted after January 1, 2002. The restatement relates to the
calculation of the stock-based compensation cost which is based on the
Black and Scholes option pricing model using the assumptions described
in Note 19c) of the consolidated financial statements contained in the
Annual Report. The impact of this restatement is to recognize a cost for
stock-based compensation of $120,000 for the year ended December 26,
2003. The counterpart of this cost is accounted for in contributed
surplus.

Accounting for Certain Consideration Received from Vendors

In January 2004, the Emerging Issues Committee of the CICA released
Abstract EIC-144, Accounting by a Customer (Including a Reseller) for
Certain Consideration Received from a Vendor. EIC-144 specifies the
accounting methods to be applied to certain consideration received from
a vendor and should be applied retroactively to all financial statements
for annual and interim periods ending after August 15, 2004. In the
fourth quarter of 2004, the Company adopted this standard retroactively.
Under this new standard, certain cash consideration received from a
vendor must be considered as an adjustment of the prices of the vendors'
products and, therefore, must be treated as a reduction of cost of sales
and operating expenses and related inventories when recognized in the
financial statements. The impact of the retroactive application, with
restatement of the financial statements for the current and the prior
years, is a decrease in the value of inventories of $375,000, an
increase of the future income tax asset of $128,000 and a decrease of
the opening retained earnings of 2003 of $247,000. Following the
adoption of this standard, cash discounts amounting to $1,584,000
($1,439,000 in 2003) previously recorded as a reduction of financial
expenses were reclassified in cost of sales and operating expenses. The
adoption of this Section did not have any impact on the consolidated net
earnings for the years ended December 31, 2004 and December 26, 2003.

Pension and Other Post-retirement Benefit Plans

The Company adopted the additional CICA disclosure recommendations of
Handbook Section 3461 for Employee Future Benefit for the 2004 and 2003
year-ends.

Impairment of Long-lived Assets

The CICA issued Section 3063, Impairment of Long-lived Assets, which is
effective for the fiscal years beginning on or after April 1, 2003. This
Section provides guidance on the recognition, measurement and disclosure
of the impairment of long-lived assets. It replaces the write-down
provisions in Section 3061, Property, Plant and Equipment. The
provisions of the new Section could require an impairment loss for a
long-lived asset to be held and used to be recognized when its carrying
amount exceeds the sum of the undiscounted cash flows expected from its
use and eventual disposition. Impairment loss is measured as the amount
by which its carrying amount exceeds its fair value. The adoption of
this Section did not have a significant impact on the consolidated
financial statements.

Asset Retirement Obligations

The CICA issued Handbook Section 3110, Asset Retirement Obligations. The
new standard gives guidance on the recognition and measurement of
liabilities for obligations associated with the retirement of property,
plant and equipment when those obligations result from the acquisition,
construction, development or normal operation of the assets. The
standard is effective for years beginning on or after January 1, 2004.
The adoption of this Section did not have any impact on the consolidated
financial statements.

Hedging Relationships

As of December 27, 2003, the Company adopted Accounting Guideline
AcG-13, Hedging Relationships. Under this Guideline, the Company must
maintain proper documentation concerning its risk management objective
and strategy under which hedging activities are derived as well as for
the relationships between the various hedging instruments and the hedged
items. This process consists of matching all derivative hedging
instruments to specific assets and liabilities, to firm commitments or
specific anticipated transactions. When a hedging relationship is put in
place, there must be a reasonable assurance that the relationship will
remain effective for its duration, and in accordance with the Company's
risk management objective and strategy as initially documented. When
hedging instruments mature or become ineffective before their maturity
and are not replaced within the Company's documented hedging strategy,
deferred gains or losses on such instruments must continue to be
deferred and charged to income in the same period as for the
corresponding gains or losses for the hedged items, and gains and losses
subsequently realized must be charged directly to earnings. If the
hedged item ceases to exist due to its maturity, cancellation or
exercise before the hedging instrument expires, deferred gains or losses
must be charged to earnings. The Emerging Issues Committee also issued
Abstract EIC-128, Accounting for Trading Speculative or Non-Hedging
Derivative Financial Instruments. EIC-128 establishes that a derivative
financial instrument that does not qualify for hedge accounting under
AcG-13 should be recognized in the balance sheet at fair value, with
changes in fair value recognized in net earnings. Since the Company is
in compliance with the requirements of AcG-13 for its derivative
financial instruments, the adoption of these new recommendations had no
impact on the consolidated financial statements.

Disclosure of Guarantees

Effective January 1, 2003, the Company adopted the new recommendations
of the Accounting Guideline AcG-14 of the CICA Handbook, Disclosure of
Guarantees. This accounting guideline indicates the financial statements
disclosures to be made by a guarantor relative to its obligations under
guarantees conceded. The accounting guideline requires the disclosure of
the nature of the guarantee, the approximate term of the guarantee, the
context in which the guarantee was issued, the events or circumstances
that would lead to a recourse to the guarantee, the maximum potential
amount of future payments and, if any, the carrying amount of the
liability, the nature of any recourse provision and any assets held as
collateral.

Disposal of Long-lived Assets and Discontinued Operations

The CICA issued Section 3475, Disposal of Long-lived Assets and
Discontinued Operations, which is effective for disposal activities
initiated by the Company's commitment to a plan on or after May 1, 2003.
This Section provides guidance on the recognition measurement,
presentation and disclosure of long-lived assets to be disposed of. It
replaces the disposal provisions of Property, Plant and Equipment,
Section 3061, as well as prior Section 3475, Discontinued Operations.
Section 3475:



- provides criteria for classifying assets held for sale;
- requires an asset classified as held for sale to be measured at
fair value less cost to sell;
- provides criteria for classifying a disposal as a discontinued
operation; and
- specifies presentation and disclosure for discontinued operations
and other disposals of long-lived assets.


The adoption of this new Section did not have a significant impact on
the consolidated financial statements.

Termination Benefits and Costs Associated with Exit and Disposal
Activities

In March 2003, the Emerging Issues Committee released Abstracts EIC-134,
Accounting for Severance and Termination Benefits, and EIC-135,
Accounting for Costs Associated with Exit and Disposal Activities
(Including Costs Incurred in a Restructuring). EIC-134 provides
interpretive guidance to the accounting requirements for the various
types of severance and termination benefits covered in CICA Handbook
Section 3461, Employee Future Benefits. EIC-135 provides interpretive
guidance for the timing of the recognition of a liability for costs
associated with an exit or disposal activity. The new guidance requires
that the liability be recognized for those costs only when the liability
is incurred, that is, when it meets the definition of a liability in
CICA Handbook Section 1000, Financial Statement Concepts. These new EICs
also establish fair value as the objective for initial measurement of
liabilities related to exit or disposal activities. The Company adopted
the new recommendations effective April 1, 2003. The impact of the
application of those new Sections is reflected in Note 5 of the
consolidated financial statements contained in the Annual Report.

Future Accounting Changes

Variable Interest Entities

Accounting Guideline 15, Consolidation of Variable Interest Entities,
provides clarification on the consolidation of those entities defined as
variable interest entities, when equity investors are not considered to
have a controlling financial interest or they have not invested enough
equity to allow the entity to finance its activities without additional
subordinated financial support from other parties. Variable interest
entities are commonly referred to as special purpose entities. The
guideline comes into effect for interim periods beginning on or after
November 1, 2004. The adoption of this guideline should not have any
impact on the consolidated financial statements.

Financial Instruments

On January 27, 2005, the Canadian Accounting Standards Board (AcSB)
issued new accounting standards for financial instruments. The AcSB
presently has standards in place for disclosures of a company's use of
financial instruments and for presentation of financial instruments when
included in the balance sheet. However, new standards address when a
company should recognize a financial instrument in its balance sheet and
how it should measure the financial instrument once recognized. To this
effect, three new Handbook Sections were adopted.

New Handbook Section 3855, Financial Instruments - Recognition and
Measurement, prescribes when a financial instrument is to be recognized
in the balance sheet and at what amount. Sometimes the fair value is
used and other times a cost-based measure will be used. It also
specifies how financial instrument gains and losses are to be presented.

New Handbook Section 3865, Hedges, provides alternative treatments to
Section 3855, Financial Instruments - Recognition and Measurement, for
entities which choose to designate qualifying transactions as hedges for
accounting purposes. It builds on existing Accounting Guideline AcG-13,
Hedging Relationships, and Section 1650, Foreign Currency Translation,
by specifying how hedge accounting is applied and what disclosures are
necessary when it is applied. Application of this Section is optional.

New Handbook Section 1530, Comprehensive Income, introduces a new
requirement to temporarily present certain gains and losses outside net
earnings.

The mandatory effective date is for annual and interim periods beginning
on or after October 1, 2006. However, early adoption is permitted.

The Company is currently evaluating the impact of those new
recommendations.



Selected Consolidated Financial information
(in thousands of $, except share data)
Years ended the last Friday of December (1)

2004 2003 2002
$ $ $
--------------------------------------------------------------------
Sales
Architectural Sector 263,447 240,470 212,352
Industrial Sector 39,999 40,048 41,879
--------------------------------------------------------------------
Total 303,446 280,518 254,231

EBITDA
Architectural Sector 50,903 42,465 37,078
Industrial Sector 1,986 (890) 3,299
Head Office (20,636) (17,946) (15,783)
--------------------------------------------------------------------
Total 32,253 23,629 24,594

EBITDA before non-recurring
restructuring costs
Architectural Sector 50,774 44,734 37,078
Industrial Sector 1,969 1,127 3,299
Head Office (20,636) (17,582) (15,783)
--------------------------------------------------------------------
Total 32,107 28,279 24,594

Net earnings 15,455 11,041 12,028
basic earnings per share 2.27 1.68 2.15
diluted earnings per share 2.24 1.64 2.08

Net earnings excluding restructuring
costs, impairment loss on
goodwill and loss on disposal
of Sico-Becker
(net of related income taxes) (2) 16,448 14,138 12,028
basic earnings per share 2.42 2.15 2.15
diluted earnings per share 2.39 2.10 2.08

Weighted average number of
common shares outstanding 6,802,820 6,580,369 5,604,338
Weighted average number of diluted
common shares outstanding 6,884,817 6,722,279 5,793,576

Cash dividends paid on
common shares 3,270 2,963 2,308
per share 0.48 0.44 0.41

--------------------------------------------------------------------
Balance Sheet Data
--------------------------------------------------------------------
December December December
31, 26, 27,
2004 2003 2002
$ $ $
Total assets 170,733 188,576 155,348
Shareholders' equity 117,392 105,214 77,294
Long-term financial liabilities 18,945 47,253 42,601
--------------------------------------------------------------------

(1) Some figures for 2003 and 2002 have been reclassified according
to the presentation adopted for the current year, as described in
Note 31 of the consolidated financial statements contained in the
Annual Report. Some figures for the same years have also been

restated to reflect the accounting policy changes, as described
in Note 3 of the consolidated financial statements contained in
the Annual Report.

(2) For information purposes, the preceding table indicates what 2003
net earnings and earnings per share (basic and diluted) would
have been without the restructuring costs (net of related income
taxes), as well as what those for 2004 would have been without
the restated restructuring costs, impairment loss on goodwill and
loss on disposal of the joint venture, net of the related tax
recovery.


Major Events of the Past Three Years

On December 27, 2002, being the last day of 2002, SICO sold its 12
architectural paint stores operating under the Hancock banner in the
Boston, Massachusetts area. This asset sale, recorded at book value,
reduced sales by approximately $11 million in 2003 compared with 2002,
although it had no material impact on net earnings.


On February 21, 2003, in order to facilitate its
expansion-by-acquisition program, SICO proceeded with the public
offering of 1,000,000 common shares for net proceeds of $19.4 million.
This share issuance mostly accounts for the changes in the weighted
average number of shares over the past three years, and also had an
impact on shareholders' equity, total assets and per-share data.

On May 5, 2003, SICO acquired PARA, an Ontario-based architectural paint
manufacturer serving more than 400 retailers across Canada. Additional
sales generated by this major acquisition during the last eight months
of 2003 more than compensated for the revenue shortfall resulting from
the sale of the Hancock network. In fact, the acquisition of PARA
generated most of SICO's sales growth between 2002 and 2003. It also
largely accounts for the variations in consolidated results between 2004
and 2003, as PARA's contribution was reflected for the entire 12-month
period in 2004, as opposed to eight months in 2003.

In the wake of the PARA acquisition, between September and December
2003, SICO implemented a comprehensive operational infrastructure
optimization program aimed at enhancing its profitability through a
further specialization of all manufacturing, distribution and
administrative operations, in both Architectural and Industrial sectors.
This program mainly involved the closure of two plants and three
distribution centres, as well as further consolidation of customer
service. It entailed pre-tax non-recurring restructuring costs of $4.7
million ($3.1 million net of income taxes) during the year ended
December 26, 2003, of which an amount of $0.9 million was provisioned in
the closing balance sheet for that year. Combined with a decline in the
Industrial Sector's results due to more difficult market conditions, the
non-recurring costs incurred in 2003 essentially explains the reduction
in SICO's EBITDA and net earnings between 2002 and 2003.

During 2004, the Company effectively disbursed $0.8 million of the $0.9
million provisioned in connection with the infrastructure optimization
program, and recorded a $0.1 million reduction of the provision.

In the third quarter of 2004, given the accumulated losses of the joint
venture Sico-Becker, the difficult market conditions and the uncertainty
concerning its future profitability, SICO recorded a $1.0 million
impairment loss on this entity's goodwill. Subsequently, in the fourth
quarter, SICO sold its 50% interest in Sico-Becker to its European
partner Becker Industrie S.A.S. SICO's decision to divest its interest
is consistent with its commitment to optimize its assets in order to
increase its overall productivity and profitability, and those of its
Industrial Sector in particular. These events translated into an
impairment loss on goodwill and loss on disposal totalling $1.6 million
before income taxes ($1.1 million net of related income taxes) in the
2004 results.

Consolidated and Segmented Operating Results for the Year Ended December
31, 2004

Sales

During the last year, SICO achieved record sales of $303.4 million,
compared with $280.5 million the previous year, a $22.9 million or 8.2%
increase. This growth is fully attributable to the Architectural Sector
and can be explained by the larger volume of litres sold.



- The ARCHITECTURAL SECTOR's sales grew by $23.0 million or 9.6% to
$263.4 million, accounting for 86.8% of consolidated sales. This
increase is almost equally attributable to PARA's additional
contribution for the entire 12-month period as opposed to eight
months in 2003, and to the organic sales growth of national brand
architectural paints and specialty products. However, the Company
sustained a slight decline in private label paint sales associated
to certain major retailers. It should be pointed out that SICO
benefited from a favourable business environment throughout Canada
for the sale of architectural paints, driven by booming home
resales and renovation spending, the major growth factor within the
architectural paint industry, as well as strong activity in the
residential, commercial and institutional new construction sector.

- The INDUSTRIAL SECTOR's sales were stable at $40.0 million.
However, the Industrial Sector's North American sales grew by $2.2
million or 6.2%, driven by a recovery in demand, particularly in
the specialized equipment market, and the Company's internal
development efforts to expand its customer base. The decline in the
U.S. dollar against the Canadian dollar had a negative impact of
$1.1 million on this sector's sales, which would have otherwise
reflected a 2.6% increase over 2003 (9.4% for its North American
sales).

Geographically, SICO generated 95.4% of its sales in Canada, compared
with 94.4% in 2003, which can be explained by the organic growth in
Canadian sales, PARA's contribution for the entire period and lower
sales from the Sico-Becker European joint venture.

EBITDA

Consolidated EBITDA rose 36.5% to $32.3 million, compared with $23.6
million EBITDA in 2003, which included non-recurring restructuring
costs of $4.7 million related to the infrastructure optimization
program. Excluding these costs and the revaluation of the
restructuring costs of $0.1 million, EBITDA grew by 13.5% whereas the
EBITDA profit margin as a percentage of sales improved from 10.1% in
2003 to 10.6% in 2004, partly as a result of the optimization
program.

- The ARCHITECTURAL SECTOR's EBITDA amounted to $50.9 million, up
19.9% over $42.5 million in 2003, which included restructuring
costs of $2.3 million. Excluding such costs, the Architectural
Sector's EBITDA grew by 13.5% while its profit margin rose from
18.6% to 19.3%. Several factors accounted for this sector's
improved EBITDA, including PARA's additional contribution, the
benefits of the operational infrastructure optimization program and
the growth in national brand product sales. Meanwhile, the negative
impact of the price increases on metal containers and petroleum
derivatives was alleviated by the Company's stronger purchasing

power, efficient procurement and inventory management practices and
the strength of the Canadian dollar against the U.S. dollar.

Conversely, the Architectural Sector incurred additional marketing
expenses relating to the implementation of SICO's and Betonel's new
colour systems. The Company incurred additional expenses in the
fourth quarter due to the fact that 2004 comprised 53 weeks
compared with 52 in 2003. As the extra week corresponded to the
December 24 to December 31 holiday period, the Company recorded
little revenues, while assuming full salaries and other fixed
costs.

- The INDUSTRIAL SECTOR's EBITDA amounted to $2.0 million, as opposed
to a $0.9 million loss in 2003. Excluding the $2.0 million
restructuring costs for 2003, the Industrial Sector's EBITDA jumped
74.7%, while its EBITDA profit margin improved from 2.8% to 4.9%.
Besides increased sales in North America, this improvement is
attributable to the streamlining and optimization measures carried
out during the previous year, including the concentration of all
manufacturing operations in a single plant in order to improve
productivity and lower costs. The Sico-Becker joint venture
generated an EBITDA loss of $0.6 million in 2004, as opposed to a
break-even in 2003. Excluding restructuring costs and Sico-Becker's
results, the Industrial Sector's EBITDA amounts to $2.6 million, up
$1.5 million or 135% over 2003.

- Head office expenses, excluding depreciation and amortization,
increased from $17.9 million in 2003 to $20.6 million in 2004. This
growth, part of which is of a non-recurring nature, is mainly
attributable to the increase in salaries and employee benefits
associated with the 53rd week in 2004, insurance, professional fees
and certain expenses related to the integration of PARA. It was
partially offset by the savings achieved with respect to the
administrative expenses formerly incurred by PARA.


Depreciation, Amortization and Financial Expenses

For 2004, depreciation and amortization expenses increased by $0.5
million to $6.3 million, as a result primarily of higher amortization of
deferred charges related mostly to the development of new colour
systems. Conversely, depreciation of property, plant and equipment
slightly decreased, mostly due to the completion of the infrastructure
optimization program in the second half of 2003.

SICO incurred financial expenses of $1.4 million, consisting mainly of
$1.2 million interest on the long-term debt and bank loan and $0.2
million dividends on Class B preferred shares. In 2003, SICO had
recorded financial expenses of $0.9 million, including a $1.2 million
gain on the conversion of debts and cash denominated in foreign
currency. Despite higher financial expenses in 2004 due to the previous
year's exchange gain, the Company benefited from a $0.7 million
reduction in total interest expenses, which is attributable to a $14
million decrease in the average indebtedness level and a slightly lower
average interest rate than the previous year.

Impairment Loss on Goodwill and Loss on Disposal of the Sico-Becker
Joint Venture

During the third quarter of 2004, given the cumulative losses of the
Sico-Becker joint venture, difficult market conditions and the
uncertainty concerning its future profitability, SICO recorded a $1.0
million impairment loss on Sico-Becker's goodwill. In the fourth
quarter, the Company came to an agreement with its European partner,
Becker Industrie S.A.S., to sell the latter its 50% interest in
Sico-Becker. In addition to the $1.0 million impairment loss, the
transaction translated into a $0.6 million loss on disposal and a $0.5
million income tax recovery. (Further information concerning the
disposal of the Sico-Becker joint venture is provided in Note 6 of the
consolidated financial statements contained in the Annual Report.)

Earnings Before Income Taxes, Net Earnings and Earnings Per Share

SICO recorded pre-tax earnings of $23.0 million, up 35.9% over $16.9
million in 2003. Excluding non-recurring restructuring costs, impairment
loss on goodwill and loss on the disposal of Sico-Becker, pre-tax
earnings from core operations grew by 13.3%, from $21.6 million in 2003
to $24.4 million in 2004.

Income taxes amounted to $7.5 million in 2004 (effective tax rate of
32.8%), compared with $5.9 million in 2003 (effective tax rate of
34.8%). The lower effective tax rate can be explained partly by the $0.5
million tax recovery related to the loss on the disposal of Sico-Becker,
as well as a decrease in the Company's statutory tax rates.

Consequently, SICO closed 2004 with net earnings of $15.5 million, up
40.0% over $11.0 million in 2003 - the highest net profit ever achieved
by the Company. Earnings per common share amounted to $2.27 ($2.24
diluted) on a weighted average number of 6.8 million outstanding shares
in 2004 (6.9 million on a diluted basis), compared with $1.68 ($1.64
diluted) on 6.6 million shares in 2003 (6.7 million on a diluted basis).

For information purposes, excluding the non-recurring restructuring
costs, net of income taxes, and restating 2004 results for the
impairment loss on goodwill and loss on the disposal of Sico-Becker, net
of the related tax recovery, SICO would have posted net earnings of
$16.4 million or $2.42 per share ($2.39 diluted), up 16.3% over $14.1
million or $2.15 per share ($2.10 diluted) the previous year.

Consolidated and Segmented Operating Results for the Fourth Quarter
Ended December 31, 2004 (14 Weeks Versus 13 Weeks in 2003)

Sales

During the fourth quarter ended December 31, 2004, SICO recorded sales
of $62.3 million, compared with $57.4 million in the same quarter of
2003, an increase of $4.9 million or 8.6%. This period of the year
generally corresponds to a seasonal decline in Canadian sales of
architectural paint.



- The ARCHITECTURAL SECTOR's sales nonetheless showed a solid
increase of $4.6 million or 9.4% to reach $53.5 million, driven
essentially by organic growth. While continuing to grow its
national brand product sales, SICO benefited from an increase in
sales of products sold under private labels.

- Despite the disposal of SICO's interest in Sico-Becker during the
fourth quarter of 2004, the INDUSTRIAL SECTOR's sales grew by $0.3
million or 3.6% to $8.9 million. This growth is attributable to a
steady improvement in North American market conditions, especially
in the specialized machinery segment, combined with the addition of
new accounts in Canada and the United States. The Industrial
Sector's North American sales posted a $0.9 million or 12.3%
growth, despite the negative impact of currency fluctuations of
approximately $0.2 million.

EBITDA

SICO recorded EBITDA of $1.3 million, compared with $0.8 million in
the same period last year. Excluding non-recurring restructuring
costs, EBITDA declined by $0.7 million in the fourth quarter.

- The ARCHITECTURAL SECTOR's EBITDA increased to $6.5 million from
$5.9 million in the same quarter of the previous year. Excluding
restructuring costs, EBITDA decreased by $0.3 million to $6.5
million. As previously mentioned, this decline is largely
attributable to the recognition of salaries and other fixed costs
for an additional week during the fourth quarter of 2004, which
included 14 weeks instead of 13. As expected, the Company also
sustained significant price increases on some of its raw materials.
These price increases were not fully offset by the efficiency of
the Company's procurement and inventory management practices and
the strong Canadian dollar.

- For its part, the INDUSTRIAL SECTOR incurred a $0.1 million EBITDA
loss versus a $0.5 million loss in the same quarter of 2003, when
no major restructuring costs were incurred.

- Finally, head office expenses (other than depreciation and
amortization) rose from $4.6 million to $5.2 million, primarily due
to the salaries paid during the additional week of the fourth
quarter of 2004, and professional fees.


Depreciation and amortization expenses increased slightly, from $1.6
million to $1.7 million. SICO recorded financial expenses of $0.1
million, compared with $0.6 million in 2003. This positive variation
of $0.5 million is mostly attributable to a lower average
indebtedness in 2004.

SICO incurred a pre-tax loss of $1.1 million versus a pre-tax loss of
$1.5 million in the corresponding quarter of 2003. After excluding
non-recurring restructuring costs as well as the loss on the disposal
of Sico-Becker, the fourth-quarter pre-tax loss would have amounted
to $0.6 million in 2004 versus $0.4 million in 2003. The effective
tax recovery rate increased from 36.7% in 2003 to 78.2% in 2004, due
to the recognition of the $0.5 million tax reduction resulting from
the disposal of Sico-Becker.

After recovery of income taxes, SICO recorded a quarterly net loss of
$0.2 million or $0.04 per share (basic and diluted), compared with a
net loss of $0.9 million or $0.14 per share ($0.13 diluted) the
previous year. The weighted average number of outstanding shares
remained relatively unchanged, at 6.8 million (6.9 million on a
diluted basis). For information purposes, excluding restructuring
costs (net of income taxes) and the loss on the disposal of
Sico-Becker (net of income taxes) from fourth-quarter results, the
net loss for the two comparative periods would have been basically
the same, at $0.2 million.


Financial Information for the Last Eight Quarters (Unaudited)
(in thousands of $, except share data)

--------------------------------------------------------------------
First Second Third Fourth
Quarter Quarter Quarter Quarter
$ $ $ $
--------------------------------------------------------------------
Year ended December 31, 2004 (14 weeks)
--------------------------------------------------------------------
Sales 62,960 94,355 83,801 62,330
Net earnings (loss) 1,175 7,975 6,551 (246)
Earnings (loss) per share
basic 0.17 1.17 0.96 (0.04)
diluted 0.17 1.16 0.95 (0.04)
Excluding restructuring costs,
impairment loss on goodwill and
loss on the disposal of
Sico-Becker (net of income taxes)
Net earnings (loss) 1,175 7,880 7,551 (205)
Earnings (loss) per share

basic 0.17 1.16 1.11 (0.03)
diluted 0.17 1.14 1.10 (0.03)
--------------------------------------------------------------------
Year ended December 26, 2003 (13 weeks)
--------------------------------------------------------------------
Sales 58,891 85,184 79,024 57,419
Net earnings (loss) 2,004 6,775 3,185 (923)
Earnings (loss) per share
basic 0.33 1.01 0.47 (0.14)
diluted 0.32 0.99 0.46 (0.13)
Excluding restructuring costs
(net of income taxes)
Net earnings (loss) 2,004 6,775 5,557 (198)
Earnings (loss) per share
basic 0.33 1.01 0.82 (0.03)
diluted 0.32 0.99 0.81 (0.03)
--------------------------------------------------------------------


Seasonality

The sale of exterior architectural paint products, which accounts for
approximately 20% of the Architectural Sector's annual paint sales, is
seasonal in nature as it is affected by weather conditions. Accordingly,
the Company's sales and net earnings are generally lower in the first
and fourth quarters than in the second and third. The Industrial
Sector's sales are not subject to significant seasonal fluctuations, and
mostly depend on economic conditions as well as private and public
capital expenditures in industrial, commercial and institutional
infrastructures.

Comments on Results for the Last Eight Quarters

The sales analysis for the last eight quarters shows sustained sales
growth in each quarter of 2004 over the equivalent period of 2003, due
to PARA's contribution as of the second quarter of 2003, the
Architectural Sector's organic sales growth and the Industrial Sector's
renewed growth since the second quarter of 2004. Excluding restructuring
costs and the 2004 impairment loss on goodwill and loss on the disposal
of Sico-Becker (net of related income taxes), net earnings also show an
improvement in each quarter of 2004 over the corresponding period of the
previous year, except for the first quarter during which net earnings
were lower due to Sico-Becker's declining profitability in Europe and
the 2003 recording of a $0.8 million exchange gain.

Cash Flow Analysis

Over the past five years, the average annual cash flow from operating
activities (including net change in non-cash operating working capital
items) amounted to more than $17 million. The Company's significant
operating cash flows enabled it to maintain a solid financial position
as it reimbursed, within relatively short periods, the debts contracted
as part of the expansion-by-acquisition strategy implemented since 2000.
Meanwhile, SICO also regularly increased the dividends paid to common
shareholders.

Year Ended December 31, 2004

During 2004, operating activities provided cash flows of $24.1 million
before net change in non-cash working capital items, up 21.4% over $19.9
million in 2003. The net change in non-cash working capital items
provided cash flows of $10.7 million in 2004, notably due to a reduction
in accounts receivable and finished goods inventories as well as the
variation in income taxes payable and receivable. In 2003, the net
change in non-cash working capital items had used cash flows of $7.0
million, mostly related to PARA's acquisition. Consequently, operating
activities provided total cash flows of $34.8 million in 2004, compared
with $12.9 million the previous year.

Among other cash inflows during the last year, SICO recorded $2.2
million proceeds from the disposal of property, plant and equipment,
primarily the July 2004 divestiture of one of the properties put up for
sale as part of the Company's optimization program. Management is
pursuing its efforts to sell the remaining properties. SICO also
received $1.0 million upon the collection of long-term receivables, as
well as $1.2 million proceeds from the issuance of 81,445 common shares
following the exercise of stock options held by executives, senior
officers and directors, and 13,307 shares under the stock purchase plan
for employees, executives and directors.



During the year funds were used mainly for the following purposes:

- $5.4 million in new property, plant and equipment, primarily to
purchase manufacturing, tinting and warehousing equipment, to open
or renovate stores and to develop the Company's information
technology systems;

- a $4.0 million increase in deferred charges, mostly for the
development of new colour systems;

- reimbursements of $24.0 million of the long-term debt and $2.6
million of the bank loan;

- the redemption under the normal course issuer bid of 35,500 common
shares for a net cash consideration of $0.8 million; and

- the payment of dividends totalling $3.3 million or $0.48 per share
to common shareholders.

The various cash flows during 2004 reduced cash and cash equivalents
by $1.3 million.

Fourth Quarter Ended December 31, 2004

In the fourth quarter of 2004, operating activities provided cash
flows of $1.4 million before net change in non-cash working capital
items, compared with $1.7 million in the same quarter of 2003. This
variation can be explained mainly by the greater contributions to
pension plans following the actuarial valuations conducted as at
December 31, 2003. The net change in non-cash working capital items
provided cash flows of $6.1 million in 2004 versus $8.6 million in
2003. Operating activities therefore provided total cash flows of
$7.5 million, compared with $10.3 million in the fourth quarter of
the previous year.

The Company recorded various proceeds totalling $0.7 million,
including $0.3 million from the collection of long-term receivables
and $0.4 million from the issuance of common shares under the stock
purchase plan.

The main uses of funds for the period were as follows:

- the purchase of $1.5 million in property, plant and equipment;

- a $0.9 million increase in deferred charges;

- repayments of $5.0 million of the long-term debt and $1.0 million
of the bank loan; and

- the payment of dividends of $0.8 million or $0.12 per share to
common shareholders.


Financial Position as at December 31, 2004

At the close of last year, the Company's total assets amounted to $170.7
million, compared with $188.6 million at the end of 2003. This $17.9
million or 9.5% decline is mainly attributable to the disposal of SICO's
interest in Sico-Becker, the disposal of property, plant and equipment
and an overall improvement in working capital.

On December 31, 2004, SICO's working capital amounted to $45.9 million
for a current ratio of 2.33:1, compared with $55.1 million and a 2.53:1
ratio as at December 26, 2003, as a result mainly of a decrease in
accounts receivable and inventories as well as the variation in income
taxes payable and receivable. Besides the disposal of Sico-Becker, the
decline in accounts receivable can be explained by a faster average
collection period. The decrease in inventories is attributable to a
better turnover of finished goods inventories and higher fourth-quarter
sales in 2004, compared to the same quarter of 2003.

In regard to long-term assets, the value of property, plant and
equipment decreased from $33.8 million to $31.0 million. This decrease
is partly attributable to the reclassification as "property held for
sale" of a $2.0 million property put up for sale under the
infrastructure optimization program, and which the Company expects to
sell during 2005. Excluding this reclassification, operating property,
plant and equipment decreased by $0.8 million, as the property, plant
and equipment divested during the year coupled with depreciation and
amortization exceeded the value of new property, plant and equipment
purchases. Deferred charges increased by $1.5 million due to the
development of colour systems. The $3.5 million decline in goodwill can
mainly be explained by the disposal of Sico-Becker.

The accrued benefit liability decreased by $1.3 million due mainly to
greater contributions to the pension plans in 2004. Long-term debt
(including the current portion) was reduced by $25.9 million or 72.1%,
from $35.9 million as at December 26, 2003 to $10.0 million as at
December 31, 2004 following the year's repayments and the disposal of
Sico-Becker. Adding Class B preferred shares and the bank loan, net of
cash and cash equivalents, to long-term debt, brought down the total net
debt from $41.0 million as at December 26, 2003 to $13.9 million on
December 31, 2004. During the same period, shareholders' equity rose
11.6% to $117.4 million, with the result that the total net debt to
equity ratio was lowered from 28:72 to 11:89 between the beginning and
the end of last year.

Capital Stock

As at December 31, 2004, SICO's capital stock consisted of 6,813,886
issued and outstanding common shares, versus 6,754,634 shares as at
December 26, 2003. During 2004, the Company issued 94,752 common shares,
81,445 of which upon the exercise of stock options by executives and
directors, and 13,307 under the stock purchase plan for employees,
executives and directors. SICO also redeemed 35,500 common shares for
cancellation purposes under its normal course issuer bid.

Supplementary information about the stock option plan for senior
officers and directors, as well as the stock purchase plan for
employees, executives and directors as at December 31, 2004 is provided
in Note 19 of the consolidated financial statements contained in the
Annual Report.

At the date hereof, being March 2, 2005, SICO's capital stock consists
of 6,838,427 issued and outstanding common shares. In addition, 277,096
stock options were granted under the stock purchase plan for certain of
the Company's senior officers.

Outlook, Requirements and Sources of Funds for 2005

SICO looks forward to a healthy financial performance in 2005, in terms
of sales, net profit and operating cash flows. First, in spite of the
expected slowdown in renovation spending and new housing starts,
management expects the overall business environment in the Canadian
architectural paint market to remain favourable in 2005. Second, the
Company is currently witnessing a rise in demand in the North American
market for metal industrial coatings, which should offset the impact
that the disposal of its interest in Sico-Becker will have on sales.
This entity accounted for some $3 million of SICO's consolidated sales
in 2004. However, the sale of its stake in Sico-Becker, coupled with
greatly improved market conditions in North America, should contribute
to enhance the Industrial Sector's profitability. Third, the Company
implemented selling price increases for most of its architectural
products in the first quarter of 2005, which should partly compensate
for the higher prices of some of its raw materials, including metal
containers and petroleum derivatives.

In regard to SICO's funding requirements, capital expenditures of
approximately $8 million are planned for 2005, including for the
modernization of the Toronto architectural paint facility, the purchase
of manufacturing and warehousing equipment, the opening or renovation of
stores and the development of information technology systems.

The Company also intends to continue paying dividends to common
shareholders. In this regard, on March 2, 2005, the Board of Directors
raised by 16.7% the quarterly dividend to be paid on March 25, 2005 to
the Company's registered shareholders as at March 11, 2005.

Finally, each year SICO will continue to assess the opportunity of
redeeming common shares under its normal course issuer bid. Cash flows
from operating activities should be sufficient to cover these various
funding requirements.

SICO's loan agreements contain covenants pertaining to securities which
may be given, long-term assets which may be disposed of, and financial
ratios which are to be attained so that it is not required to give
specific securities. As at December 31, 2004, the Company had not given
any of those securities. Furthermore, at that date, SICO had an
authorized borrowing capacity totalling $86 million. The actual use of
its borrowing capacity amounted to $10.1 million at the end of last
year. Hence, the Company is in a favourable position to contemplate
other business acquisitions, in both the Canadian architectural paint
industry and the North American industrial coatings market.




Contractual Obligations

The following table summarizes the payments due in 2005 and
thereafter pursuant to the Company's contractual obligations:

--------------------------------------------------------------------
(in thousands of dollars) Payments due by period
--------------------------------------------------------------------
Total Less than 1 to 3 4 to 5 Over
one year years years 5 years
--------------------------------------------------------------------
Long-term debt 10,000 4,750 5,250 - -
--------------------------------------------------------------------
Operating leases 23,551 6,838 13,993 2,720 -
--------------------------------------------------------------------
Purchase obligations 1,058 1,058 - - -
--------------------------------------------------------------------
Total contractual
obligations 34,609 12,646 19,243 2,720 -
--------------------------------------------------------------------


Financial Instruments

Fair Value

The estimated fair values of cash and cash equivalents, accounts
receivable, long-term receivables, bank loan, and accounts payable and
accrued liabilities approximate their respective carrying values. The
estimated fair value of long-term debt is not significantly different
from its carrying value.

Derivative Instruments

SICO did not hold any financial instruments for trading or hedging
purposes as at December 31, 2004. In 2005, the Company nevertheless
undertook to purchase certain forward exchange contracts to hedge
against the risk associated with the disbursement for the purchase of
goods and services billed in U.S. dollars.

Risks and Uncertainties

Competition

SICO's industry is highly competitive in most product categories and
geographical regions. In the Architectural Sector, competition is
largely based on customer brand recognition, price, quality, the range
of products offered, successful new product development and
introduction, distribution capabilities and customer service. In the
Industrial Sector, competition is largely based on the quality and price
of products, technological advances in a rapidly evolving context, and
the scope and quality of the technical services provided to customers.
Furthermore, most available technologies must be certified by the
original equipment manufacturers, which can be a lengthy and costly
process.

In both sectors, the Company is and will be competing with larger,
highly-capitalized companies that may be better positioned to take
advantage of opportunities in the marketplace.

Dependence on Key Customers

Certain of the Company's largest customers, especially in the
Architectural Sector, account for a significant proportion of its
operating revenues. Although SICO believes its relationships with its
customers are good, the loss of a material amount of sales to any of
these customers could materially adversely affect the Company.

Weather, Seasonality and Economic Cycles

Exterior architectural paint products are subject to specific
application requirements related to weather conditions. The sales of
such products, which represent approximately 20% of the paint sales of
the Company's Architectural Sector, are dependent upon the weather
conditions and may be materially adversely affected by unfavourable
weather conditions persisting for several days or weeks. Thus, sales of
such products in the second and third quarters are significantly higher
than in the first and fourth quarters and, as such, net earnings are
significantly lower in those quarters. Variable costs can be managed to
match the seasonal pattern. However, a significant portion of the
Company's costs cannot be adjusted for seasonality.

The Industrial Sector, for its part, is not subject to significant
seasonal fluctuations. However, it is more dependent on economic
conditions as well as private and public capital expenditures in
industrial, commercial and institutional infrastructures.

Retail Industry


The Company is involved in the retail sale of architectural paint,
related products and accessories. Retail sales can be influenced by
economic conditions and consumer behaviour, each of which may be
unrelated to SICO's operations and beyond its direct control. The
Company's future performance in this sector will depend on its ability
to respond to changes in the economy that affect consumers' purchasing
decisions for the products sold or made available by the Company.

Exchange Rate Fluctuations

Some of Company's raw and packaging materials and some of its products
and services are priced and sold in U.S. dollars or linked to the U.S.
dollar. Accordingly, fluctuations in the value of the U.S. dollar can
affect the prices the Company pays for its main raw and packaging
materials. In addition, because a portion of the Company's sales, cost
of goods sold, indebtedness and other expenses are denominated in
currencies other than the Canadian dollar, the Company has exposure to
fluctuations in the exchange rate between such currencies and the
Canadian dollar. As SICO's Industrial Sector generates some of its
revenues in the United States, this sector's revenues are especially
vulnerable to fluctuations between the Canadian and U.S. dollars. These
currency fluctuations could therefore have an impact on SICO, which the
Company undertook to alleviate by purchasing forward exchange contracts
in 2005.

Environmental Considerations

The protection of the environment and the compliance with related
requirements are an ongoing concern for the Company, which has adopted a
firm policy in this regard. The Company has internal controls and
personnel dedicated to the compliance with all applicable environmental
legislation. The Company is subject to various laws and regulations
relating to the environment and to employee health and safety. These
environmental laws and regulations relate to the generation, storage,
transportation, disposal and emission into the environment of various
substances and also allow, among other things, regulatory authorities to
compel (or seek reimbursement for) cleanup of environmental
contamination. Environmental authorization certificates are required at
certain sites for operation of the Company's business and these
certificates are subject to modification and, in certain circumstances,
revocation. The Company believes it complies in all material respects
with currently applicable environmental laws and regulations, except for
the following.

All of the Company's plants hold, where applicable, the environmental
authorization certificates required to operate their business, except
for some plants that will obtain, or are in the process of obtaining or
amending, the required environmental authorization certificates. The
Company does not anticipate any problem in obtaining permits and
authorizations for which it has applied or will apply. However, there
can be no assurance that such permits will be granted.

Among the eleven properties held by the Company, six have contamination
problems to various degrees related to past operations. Types of
identified contaminants consist mainly of oils and greases, aromatic
solvents and volatile organic compounds. The Company believes that such
contamination poses no risk to public health and does not require
immediate intervention. However, no assurance can be given that
expenditures will not be required to deal with known or unknown
contamination, some or all of which may be material. Three of such
properties have been inactive from a manufacturing standpoint for
several years, one of which is being used by the Architectural Sector's
Technical Services and Research and Development departments and as a
warehouse for finished goods. The Company hopes to divest one of these
properties during 2005.

The Company cannot predict the environmental legislation or regulations
that may be enacted in the future or how existing or future laws will be
administered or interpreted. Compliance with more stringent laws or
regulations, as well as more vigorous enforcement policies by regulatory
agencies or stricter interpretation of existing laws, may require
additional expenditures by the Company, some or all of which may be
material.

Risks Related to Acquisitions

In order to expand its services and geographical presence, the Company's
business strategy includes growth through acquisitions. There can be no
assurance that future acquisitions will be consummated on acceptable
terms, that any newly acquired companies will be successfully integrated
into the Company's operations, or that the Company will fully realize
any of the synergies expected from such acquisitions. The Company may
issue shares (which could result in dilution for existing shareholders)
or may incur additional indebtedness or a combination thereof, for all
or a portion of the consideration to be paid with respect to future
acquisitions.

Raw Materials

Raw materials account for most of the cost of the finished goods
manufactured by the Company. SICO is reliant upon certain suppliers for
pigments, resins, solvents, thinners and other components, and no
assurances can be given that the Company will not experience delays or
other difficulties in obtaining supplies, as a result of trade disputes
or for other reasons. The global paint industry must deal with a growing
concentration of certain raw material providers, which may result in an
increase in raw material prices that SICO may not be able to pass on to
customers. Although the Company believes there are alternative suppliers
for key requirements, if its current suppliers are unable to provide the
necessary raw materials or otherwise fail to deliver products in the
quantities required in a timely manner, any resulting delays in the
manufacture or distribution of existing products could have a material
adverse impact on the Company's operating results and financial position.

Employees

Certain of the Company's employees are covered by collective agreements.
One collective agreement having been renewed in 2004, the Company has
five collective agreements covering slightly more than 100 employees to
be negotiated in 2005. The Company's ability to maintain its current
level of net earnings could be impaired in the event of protracted or
extensive work stoppages at any of its facilities.

Dependence on Key Personnel

SICO's success is dependent upon its personnel. The unexpected loss or
simultaneous departure of a number of the Company's key officers or
employees could be detrimental to its future business. The success of
the Company's business will depend, in part, upon its ability to attract
and retain qualified personnel in accordance with its needs. There can
be no assurance that the Company will be able to engage the services of
such personnel or to retain its current personnel.

Major Shareholders

To the knowledge of the Company's management, the only persons owning
beneficially, directly or indirectly, or exercising control over more
than 10% of the Company's outstanding voting shares are Jean-Paul Lortie
and 159585 Canada Inc.

The shareholders mentioned in the above paragraph can exercise
significant influence over both the Company's business affairs and
internal affairs including, if an election of its Board of Directors
were held, the entitlement to exercise a significant proportion of the
voting rights for the election of directors.

Additional Information

Additional information relating to the Company is available on SEDAR's
website at www.sedar.com.

(signed) Pierre Dufresne, CA

President and Chief Executive Officer


(signed) Jean Ouellet, CA

Vice President, Finance and Treasurer

March 2, 2005




CONSOLIDATED STATEMENTS OF EARNINGS
Periods ended December 31, 2004 and December 26, 2003
(in thousands of dollars except share data) (unaudited)

Three-month Twelve-month
periods periods
--------------------------------------------------------------------
2004 2003 2004 2003
(14 weeks) (13 weeks) (53 weeks) (52 weeks)
--------------------------------------------------------------------
$ $ $ $
(restated) (restated)

Sales 62,330 57,419 303,446 280,518
Cost of sales and
operating expenses
(Notes 11 and 13) 61,121 55,555 271,339 252,239
Restructuring expenses
(Note 4) (75) 1,089 (146) 4,650
--------------------------------------------------------------------
Operating earnings before: 1,284 775 32,253 23,629
--------------------------------------------------------------------
Depreciation and amortization
(Note 9) 1,729 1,635 6,265 5,796
Financial expenses (Note 10) 92 599 1,395 902
Impairment loss on goodwill
of the joint venture
Sico-Becker S.A.S. (Note 6) - - 1,000 -
Loss on disposal of the
joint venture Sico-Becker
S.A.S. (Note 5) 589 - 589 -
--------------------------------------------------------------------
2,410 2,234 9,249 6,698
--------------------------------------------------------------------
(Loss) earnings before
income taxes (1,126) (1,459) 23,004 16,931
Income taxes (880) (536) 7,549 5,890
--------------------------------------------------------------------
Net (loss) earnings (246) (923) 15,455 11,041
--------------------------------------------------------------------
--------------------------------------------------------------------

Weighted average number of
outstanding common
shares 6,796,179 6,756,327 6,802,820 6,580,369
Basic earnings per share
(Note 8e)) (0.04) (0.14) 2.27 1.68
Diluted earnings per share
(Note 8e)) (0.04) (0.13) 2.24 1.64


CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
For the twelve-month periods ended December 31, 2004
and December 26, 2003
(in thousands of dollars) (unaudited)

2004 2003
(53 weeks) (52 weeks)
--------------------------------------------------------------------
$ $
(restated)

Balance at beginning, previously reported 62,243 55,277
Restatement for cash discounts (Note 2) (247) (247)
Restatement for stock-based compensation cost
(Note 2) (120) -
--------------------------------------------------------------------

Balance at beginning, restated 61,876 55,030
Net earnings 15,455 11,041
Common share issue costs, net of income taxes - (988)
Premium on common shares redemption (Note 8b)) (572) (244)
Dividends on common shares (3,270) (2,963)
--------------------------------------------------------------------
Balance at end 73,489 61,876
--------------------------------------------------------------------
--------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.



CONSOLIDATED BALANCE SHEETS
As at December 31, 2004 and December 26, 2003
(in thousands of dollars) (unaudited)

2004 2003
---------------------------------------------------------------------
$ $
(restated)
ASSETS
Current assets
Cash and cash equivalents 64 1,404
Accounts receivable 31,668 36,152
Income taxes - 527
Inventories 41,652 45,167
Prepaid expenses 6,234 7,929
Current portion of long-term receivables 652 -
---------------------------------------------------------------------
80,270 91,179

Long-term receivables 92 1,281
Property, plant and equipment 30,968 33,815
Deferred charges 7,363 5,874
Intangible assets 15,500 15,875
Goodwill 33,651 37,128
Future income taxes 841 3,424
Property held for sale (Note 7) 2,048 -
---------------------------------------------------------------------
170,733 188,576
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES
Current liabilities
Bank loan 129 2,769
Accounts payable and accrued liabilities 27,656 28,590
Income taxes 1,861 -
Current portion of long-term debt (Note 16) 4,750 4,750
---------------------------------------------------------------------
34,396 36,109
Long-term debt (Note 16) 5,250 31,118
Future income taxes 8,766 9,854
Deferred credits 435 472
Accrued benefit liability 694 2,009
Preferred Class B shares (Note 8a) 3,800 3,800
---------------------------------------------------------------------
53,341 83,362
---------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Capital stock (Note 8a) 43,600 42,577
Contributed surplus 303 120
Retained earnings 73,489 61,876
Foreign currency translation adjustment
(Note 5) - 641
---------------------------------------------------------------------
117,392 105,214
---------------------------------------------------------------------
170,733 188,576
---------------------------------------------------------------------
---------------------------------------------------------------------
The accompanying notes are an integral part of these consolidated
financial statements.



CONSOLIDATED STATEMENTS OF CASH FLOWS
Periods ended December 31, 2004 and December 26, 2003
(in thousands of dollars) (unaudited)

Three-month periods Twelve-month periods
---------------------------------------------------------------------
2004 2003 2004 2003
(14 weeks) (13 weeks) (53 weeks) (52 weeks)
---------------------------------------------------------------------
$ $ $ $
(restated) (restated)

OPERATING ACTIVITIES
Net (loss) earnings (246) (923) 15,455 11,041
Adjustments for:
Depreciation and
amortization (Note 9) 1,872 1,723 6,787 6,142
Future income taxes 803 416 1,491 (52)
Exchange gain (37) - (24) (1,676)
(Gain) loss on disposal
of assets (23) 2,102 (32) 2,113
(Gain) loss on assets
revaluation - (1,912) - 1,051
Employee future benefit
funding (higher) lower
than expense (1,653) 174 (1,315) 1,153
Impairment loss on
goodwill of the joint
venture Sico-Becker
S.A.S. (Note 6) - - 1,000 -
Loss on disposal of the
joint venture Sico-Becker
S.A.S. (Note 5) 589 - 589 -
Stock-based compensation
cost (Note 8c)) 49 40 183 120
Other - - 9 -
Net change in non-cash
working capital
items (Note 12) 6,143 8,644 10,667 (6,997)
---------------------------------------------------------------------
Cash flow from operating
activities 7,497 10,264 34,810 12,895
---------------------------------------------------------------------
INVESTING ACTIVITIES
Acquisitions of property,
plant and equipment (1,450) (4,055) (5,386) (6,395)
Business acquisition, net
of cash acquired - 26 - (18,197)
Proceeds from disposal of
the joint venture Sico-
Becker S.A.S. net of
cash disposed (Note 5) (425) - (425) -
Disposal of Hancock Paint
Inc. assets - - - 2,721
Deferred charges (927) 35 (4,002) (1,782)
Proceeds from disposal of
property, plant and
equipment 77 4,524 2,220 4,988
Long-term receivables 291 397 1,001 86
---------------------------------------------------------------------
Cash flow (applied to)
from investing activities (2,434) 927 (6,592) (18,579)
---------------------------------------------------------------------
FINANCING ACTIVITIES
Bank loan (1,003) (2,231) (2,602) (11,587)
Increase in long-term
debt - - - 17 000
Reduction in long-term
debt (5,000) (15,200) (24,000) (24,061)
Issue of common shares
(Note 8b)) 350 306 1,249 21,037
Common share issue costs - - - (1,463)
Redemption of common
shares (Note 8b)) (35) (326) (798) (326)
Dividends on common
shares (815) (743) (3,270) (2,963)
---------------------------------------------------------------------
Cash flow applied to
financing activities (6,503) (18,194) (29,421) (2,363)
---------------------------------------------------------------------
Exchange (loss) gain on
foreign currency
denominated cash and cash
equivalents (48) (38) (137) 311
---------------------------------------------------------------------
Decrease in cash and cash
equivalents (1,488) (7,041) (1,340) (7,736)
Cash and cash equivalents
at beginning 1,552 8,445 1,404 9,140
---------------------------------------------------------------------
Cash and cash equivalents
at end 64 1,404 64 1,404
---------------------------------------------------------------------
---------------------------------------------------------------------
Supplementary information
Interest paid 111 412 1,180 1,826
Dividends paid on
preferred shares 37 43 153 180
Income taxes paid 207 1,791 3,974 7,627



The accompanying notes are an integral part of these consolidated
financial statements.



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Periods ended December 31, 2004 and December 26, 2003
(tabular amounts are in thousands of dollars, except share data)
(unaudited)


1. BASIS OF PRESENTATION

The consolidated financial statements for the three-month period and the
twelve-month period ended December 31, 2004 and December 26, 2003,
included in this report are unaudited and reflect normal and recurring
adjustments, which are, in the opinion of the Company, considered
necessary for a fair presentation. These consolidated financial
statements have been prepared in accordance with Canadian generally
accepted accounting principles ("GAAP"). However, they do not include
all disclosures required under Canadian GAAP for annual financial
statements, and should be read in conjunction with the consolidated
financial statements and the notes thereto included in the Company's
latest Annual Report. The results of operations for the interim periods
should not be considered indicative of full year results due to the
seasonality of the business. These financial statements follow the same
accounting policies as in the most recent annual financial statements,
year ended December 26, 2003, with the exception of the accounting
changes described in Note 2.

The three-month and the twelve-month periods ended December 31, 2004
have respectively 14 weeks and 53 weeks (13 weeks and 52 weeks in 2003).

2. ACCOUNTING CHANGES

Generally accepted accounting principles

In July 2004, the CICA issued Handbook Section 1100, Generally Accepted
Accounting Principles. This Section establishes standards for financial
reporting in accordance with Canadian GAAP, and provides guidance on
sources to consult when selecting accounting policies and determining
appropriate disclosures when a matter is not dealt with explicitly in
the primary sources of Canadian GAAP. This new Section is effective for
the Company's fiscal year beginning on or after October 1, 2003. The
adoption of these recommendations did not have any impact on the
consolidated financial statements presentation and on the net earnings
of the Company.

Stock-based compensation

Amended Section 3870, Stock-based Compensation and Other Stock-based
Payments, is effective for fiscal years beginning on or after January 1,
2004. The amendments of the Section require the adoption of the
fair-value based method for all stock-based awards and the recognition
of an expense in the financial statements. The Company has adopted this
new standard for the current year and has restated the December 26, 2003
results to account for the impact of the awards granted after January 1,
2002. The restatement relates to the calculation of the stock-based
compensation cost which is based on the Black and Scholes option pricing
model using the assumptions described in Note 8c). The impact of this
restatement is to recognize a cost for stock-based compensation of
$40,000 and $120,000 for the three-month and the twelve-month periods
ended December 26, 2003. The counterpart of this cost is accounted for
in contributed surplus.

Accounting for certain consideration received from vendors

In January 2004, the Emerging Issues Committee of the CICA released
Abstract EIC-144, Accounting by a Customer (including a reseller) for
Certain Consideration Received from a Vendor. EIC-144 specifies the
accounting methods to be applied to certain consideration received from
a vendor and should be applied retroactively to all financial statements
for annual and interim periods ending after August 15, 2004. In the
fourth quarter of 2004, the Company has adopted this standard
retroactively. Under this new standard, certain cash consideration
received from a vendor must be considered as an adjustment of the prices
of the vendors' products and, therefore, must be treated as a reduction
of cost of sales and operating expenses and related inventories when
recognized in the financial statements. The impact of the retroactive
application, with restatement of the financial statements for the
current and the prior years, is a decrease in the value of inventories
of $375,000, an increase of the future income tax asset of $128,000 and
a decrease of the opening retained earnings of 2003 of $247,000.
Following the adoption of this standard, cash discounts, amounting to
$370,000 ($407,000 in 2003) and $1,584,000 ($1,439,000 in 2003) for the
three-month and the twelve-month periods respectively, previously
recorded as a reduction of financial expenses were reclassified in cost
of sales and operating expenses. The adoption of this Section did not
have any impact on the consolidated net earnings for the three-month and
the twelve-month periods ended December 31, 2004 and December 26, 2003.

Pension and other post retirement benefit plans

The Company adopted the additional CICA disclosure recommendations of
Handbook Section 3461 for Employee Future Benefit for the 2004 and 2003
year ends.

Impairment of long-lived assets

The CICA issued Handbook Section 3063, Impairment of long-lived assets,
which is effective for the Company's fiscal year beginning on or after
April 1, 2003. This Section provides guidance on the recognition,
measurement and disclosure of the impairment of long-lived assets. It
replaces the write-down provisions in Section 3061, Property, plant and
equipment. The provisions of the new Section could require an impairment
loss for a long-lived asset to be held and used to be recognized when
its carrying amount exceeds the sum of the undiscounted cash flows
expected from its use and eventual disposition. Impairment loss is
measured as the amount by which the carrying amount exceeds the fair
value. The adoption of this new Section did not have a significant
impact on the consolidated financial statements.

Asset retirement obligations

The CICA issued Handbook Section 3110, Asset retirement obligations. The
new standard gives guidance on the recognition and measurement of
liabilities for obligations associated with the retirement of property,
plant and equipment when those obligations result from the acquisition,
construction, development or normal operation of the assets. The
standard is effective for years beginning on or after January 1, 2004.
The adoption of this new Section did not have any impact on the
consolidated financial statements.

Hedging relationship

As of December 27, 2003, the Company adopted Accounting Guideline
(AcG-13), Hedging relationships. Under this Guideline, the Company must
maintain proper documentation concerning its risk management objective
and strategy under which hedging activities are derived as well as for
the relationships between the various hedging instruments and the hedged
items. This process consists of matching all derivative hedging
instruments to specific assets and liabilities, to firm commitments or
specific anticipated transactions. When a hedging relationship is put in
place and there must be a reasonable assurance that the relationship
will remain effective for its duration, and in accordance with the
Company's risk management objective and strategy as initially
documented. When hedging instruments mature or become ineffective before
their maturity and are not replaced within the Company's documented
hedging strategy, deferred gains or losses on such instruments must
continue to be deferred and charged to income in the same period as for
the corresponding gains or losses for the hedged items, and gains and
losses subsequently realized must be charged directly to earnings. If
the hedged item ceases to exist due to its maturity, cancellation or
exercise before the hedging instrument expires, deferred gains or losses
must be charged to earnings. The Emerging Issues Committee also issued
EIC-128, Accounting for trading speculative or non-hedging derivative
financial instruments. EIC-128 establishes that a derivative financial
instrument that does not quality for hedge accounting under AcG-13
should be recognized on the balance sheet at fair value, with changes in
fair value recognized in net earnings. Since the Company is in
compliance with the requirements of AcG-13 for its derivative financial
instruments, the adoption of these new recommendations had no impact on
the consolidated financial statements.

3. FUTURE ACCOUNTING CHANGES

Variable interest entities

Accounting Guideline 15, Consolidation of Variable Interest Entities,
provides clarification on the consolidation of those entities defined as
variable interest entities, when equity investors are not considered to
have a controlling financial interest or they have not invested enough
equity to allow the entity to finance its activities without additional
subordinated financial support from other parties. Variable interest
entities are commonly referred to as special purpose entities. The
guideline comes into effect for interim periods beginning on or after
November 1, 2004. The adoption of this guideline should not have any
impact on the consolidated financial statements.

Financial instruments

On January 27, 2005, the Canadian Accounting Standards Board (AcSB) has
issued new accounting standards for financial instruments. The AcSB
presently has standards in place for disclosures of a company's use of
financial instruments and for presentation of financial instruments when
included in the balance sheet. However, new standards address when a
company should recognize a financial instrument on its balance sheet and
how it should measure the financial instrument once recognized. To this
effect, three new Handbook Sections were adopted.

New Handbook Section 3855, Financial Instruments - Recognition and
Measurement, prescribes when a financial instrument is to be recognized
on the balance sheet and at what amount. Sometimes the fair value is
used and other times cost-based measures will be used. It also specifies
how financial instrument gains and losses are to be presented.

New Handbook Section 3865, Hedges, provides alternative treatments to
Section 3855, Financial Instruments - Recognition and Measurement, for
entities which choose to designate qualifying transactions as hedges for
accounting purposes. It builds on existing Accounting Guideline AcG-13,
Hedging Relationships, and Section 1650, Foreign Currency Translation,
by specifying how hedge accounting is applied and what disclosures are
necessary when it is applied. Application of this Section is optional.

New Handbook Section 1530, Comprehensive Income, introduces a new
requirement to temporarily present certain gains and losses outside net
earnings.

The mandatory effective date is for annual and interim periods beginning
on or after October 1, 2006. However, early adoption is permitted.

The Company is currently evaluating the impact of those new
recommendations.



4. CONTINUITY OF THE PROVISION FOR RESTRUCTURING EXPENSES

The following table sets forth the changes in the provision for
restructuring expenses:

Other
Workforce restructuring
reduction expenses Total
---------------------------------------------------------------------
$ $ $
Balance as at December 26, 2003 659 278 937
Amounts paid (358) (177) (535)
---------------------------------------------------------------------
Balance as at March 26, 2004 301 101 402
Amounts paid (111) (44) (155)
Revaluation of the provision (24) (47) (71)
---------------------------------------------------------------------
Balance as at June 25, 2004 166 10 176
Amounts paid (87) (4) (91)
---------------------------------------------------------------------
Balance as at September 24, 2004 79 6 85
Amounts paid (10) - (10)
Revaluation of the provision (69) (6) (75)
---------------------------------------------------------------------
Balance as at December 31, 2004 - - -
---------------------------------------------------------------------


5. INVESTMENT IN SUBSIDIARIES AND JOINT VENTURE

Disposal

During the fourth quarter of 2004, the Company sold its interest in the
joint venture Sico-Becker S.A.S. for cash consideration of $425,000, net
of cash disposed. The Company has recorded a loss on disposal of
$589,000.

Change in the purchase price allocation of Para Inc.

During the three-month period ended December 31, 2004, the Company has
decreased the provision related to the integration and acquisition costs
of Para Inc. for an amount of $102,000. After this revaluation, the
Company has modified the purchase price allocation and made adjustments
relating to this business acquisition done during the year ended
December 26, 2003. The revaluation, net of income taxes of $33,000, has
been applied in reduction of goodwill for an amount of $69,000.

6. IMPAIRMENT LOSS ON GOODWILL OF THE JOINT VENTURE SICO-BECKER S.A.S.

During the three-month period ended September 24, 2004, the Company has
decreased by $1 million the value of the goodwill of its French joint
venture Sico-Becker S.A.S. following an impairment test due to
accumulated losses and significant uncertainty on its future
profitability.

7. PROPERTY HELD FOR SALE

Following the operational infrastructure plan, the property where was
established the customer service of Toronto is now available for sale.
The sale of this property, which is assigned to the architectural
segment, should occur in the course of 2005. No loss has been accounted
for following the reclassification of the property as property held for
sale.



8. CAPITAL STOCK

a) Issued

Year ended Year ended
December 31, 2004 December 26, 2003
---------------------------------------------------------------------
$ $
6,813,886 common shares
(6,754,634 in 2003) 43,600 42,577
---------------------------------------------------------------------
---------------------------------------------------------------------
1,381,819 Class B preferred shares,
classified as liabilities 3,800 3,800
---------------------------------------------------------------------
---------------------------------------------------------------------

b) Summary of common share transactions

Number Amount
---------------------------------------------------------------------
$
Shares issued, December 27, 2002 5,725,379 21,622
Issued for cash from the public offering 1,000,000 20,400
Exercise of stock options 29,989 331
Stock purchase plan for employees,
executives and directors 12,266 306
Redemption of shares (1) (13,000) (82)
---------------------------------------------------------------------
Shares issued, December 26, 2003 6,754,634 42,577
Exercise of stock options 81,445 900
Stock purchase plan for employees,
executives and directors 13,307 349
Redemption of shares (1) (35,500) (226)
---------------------------------------------------------------------
Shares issued, December 31, 2004 6,813,886 43,600
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) During the year ended December 31, 2004, the Company repurchased
and cancelled 35,500 common shares (13,000 common shares during
the year ended December 26, 2003) for a net cash consideration of
$798,000 ($326,000 in 2003), including redemption fees. The
excess of $572,000 ($244,000 in 2003) over paid-up capital of
the shares was recorded as a decrease in retained earnings.

c) Stock option plan

Under the stock option plan for senior management of the Company, the
Board of Directors may, at its discretion, grant options to purchase
common shares of the Company to certain officers and designated
executives. The exercise price is established by the Board of
Directors but may not be lower than the closing price of a regular
lot of the Company's common shares on the Toronto Stock Exchange on
the last trading day preceding the grant date. Options vest over a
four-year period from the date of grant at a rate of 20% per year and
must be exercised within a ten-year period, except in the event of
retirement, termination of employment or death. At year-end, 148,205
common shares (182,305 common shares as at December 26, 2003) have
been reserved for issuance under this plan.

The following table presents information concerning all stock options
granted by the Company for the years ended December 31, 2004 and
December 26, 2003.

2004 2003
---------------------------------------------------------------------
Weighted Weighted
average average
exercise exercise
Number of price Number of price
options per share options per share
---------------------------------------------------------------------
$ $
Outstanding at
beginning 349,082 15.15 247,896 11.03
Granted 34,000 21.75 131,175 21.99
Exercised (81,445) 11.04 (29,989) 11.01
---------------------------------------------------------------------
Outstanding at end 301,637 17.00 349,082 15.15
---------------------------------------------------------------------
---------------------------------------------------------------------

The outstanding stock options granted to certain members of senior
management of the Company at December 31, 2004 are as follows:

Weighted average
Weighted average remaining
Options exercise price contractual
Options issued exercisable per share life (years)
---------------------------------------------------------------------
$
18,601 18,601 8.88 0.6
25,900 25,900 6.55 1.6
48,000 48,000 10.50 2.3
20,042 20,042 13.25 2.6
10,812 10,812 16.00 4.1
13,512 13,512 17.50 4.6
130,770 52,065 21.99 8.4
34,000 6,800 21.75 9.4
---------------------------------------------------------------------
301,637 195,732 17.00 5.8
---------------------------------------------------------------------
---------------------------------------------------------------------

The stock-based compensation cost charged to earnings only reflects
the impact of the awards granted to employees after January 1, 2002.
The stock-based compensation cost has been calculated using the Black
and Scholes option pricing model using the following assumptions:

Options granted in 2004:

Weighted-average fair value of options at the date
of the grant $4.84

Assumptions:
Risk-free interest rate 3.77%
Dividend yield 2.20%
Expected volatility 25%
Expected life 5 years

Options granted in 2003:

Weighted-average fair value of options at the date
of the grant $6.14

Assumptions:
Risk-free interest rate 3.85%
Dividend yield 2.01%
Expected volatility 32%
Expected life 5 years

The stock-based compensation cost charged to earnings for the awards
granted to employees is as follows :

Three-month periods Twelve-month periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $
49 40 183 120

The counterpart has been accounted for in the contributed surplus.
There was no option granted in 2002.

d) Stock purchase plan for employees, executives and directors

This stock purchase plan was set up to allow employees, executives
and directors of the Company to purchase shares of the Company's
capital stock. The subscription price of the common shares is equal
to the average market closing price during the last five days of
trading prior to the issue date of the common shares offered. Under
the plan, the maximum number of shares offered annually is 25,000
shares, and the remaining number of shares available for issuance
under the stock purchase plan as at December 31, 2004 is 83,067
shares (96,374 shares as at December 26, 2003).

e) Earnings per share

The following table sets forth the computation of basic and diluted
earnings per share:

Three-month Three-month
period ended period ended
December 31, 2004 December 26, 2003
---------------------------------------------------------------------
$ $
(restated)
Numerator:
Net loss (246) (923)
---------------------------------------------------------------------
Denominator:
Denominator for basic earnings per
share - weighted average number of
shares 6,796,179 6 756 327
Dilutive
effect of stock options (1) 76,750 137 527
---------------------------------------------------------------------
Denominator for diluted earnings per
share - weighted average number of
shares and assumed conversions 6,872,929 6 893 854
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic earnings per share (0.04) (0.14)
---------------------------------------------------------------------
---------------------------------------------------------------------
Diluted earnings per share (0.04) (0.13)
---------------------------------------------------------------------
---------------------------------------------------------------------


Year ended Year ended
December 31, 2004 December 26, 2003
---------------------------------------------------------------------
$ $
(restated)
Numerator:
Net earnings 15,455 11,041
---------------------------------------------------------------------
Denominator:
Denominator for basic earnings per
share - weighted average number
of shares 6,802,820 6,580,369
Dilutive effect of stock options (1) 81,997 141,910
---------------------------------------------------------------------
Denominator for diluted earnings per
share - weighted average number of
shares and assumed conversions 6,884,817 6,722,279
---------------------------------------------------------------------
---------------------------------------------------------------------
Basic earnings per share 2.27 1.68
---------------------------------------------------------------------
---------------------------------------------------------------------
Diluted earnings per share 2.24 1.64
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) The calculation of the dilutive effects excludes the anti-
dilutive options that would not be exercised because their price
adjusted to their fair value (for options granted on or after
January 1, 2002) is higher than the average market value of share
for each of the periods shown. The number of excluded options
is 164,770 for the year ended December 31, 2004 (none in 2003).

9. DEPRECIATION AND AMORTIZATION


Three-month Twelve-month
periods periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Property, plant and equipment 1,020 917 3,936 4,037
Deferred charges (1) 767 721 2,513 1,893
Customer relationships 94 94 375 250
Deferred credits (9) (9) (37) (38)
---------------------------------------------------------------------
1,872 1,723 6,787 6,142
---------------------------------------------------------------------
---------------------------------------------------------------------
(1) During the three-month period and the twelve-month period ended
December 31, 2004, amounts of $143,000 ($88,000 as at December
26, 2003) and $522,000 ($346,000 as at December 26, 2003)
respectively, representing amortization related to deferred
charges were applied as a reduction of sales.

10. FINANCIAL EXPENSES

Three-month Twelve-month
periods periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $
(restated)

Interest 93 433 1,249 1,922
Dividends on preferred Class B shares 37 43 153 180
Foreign currency translation (gain)
loss (38) 123 (7) (1,200)
---------------------------------------------------------------------
92 599 1,395 902
---------------------------------------------------------------------
---------------------------------------------------------------------

11. RESEARCH EXPENSES

Three-month Twelve-month
periods periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Research expenses 991 937 3,887 4,036
Tax credits (115) (116) (379) (382)
---------------------------------------------------------------------
876 821 3,508 3,654
---------------------------------------------------------------------
---------------------------------------------------------------------

Research expenses are shown under "Cost of sales and operating
expenses". Some of these expenses qualify for tax credits, which are
applied against these expenses.

12. NET CHANGE IN NON-CASH WORKING CAPITAL ITEMS

Three-month Twelve-month
periods periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $

Accounts receivable 12,984 10,781 3,690 (3,057)
Inventories (2,690) 3,430 3,017 2,688
Prepaid expenses 587 525 1,693 1,448
Accounts payable and accrued
liabilities (2,985) (3,365) (116) (12,634)
Income taxes (1,753) (2,727) 2,383 (1,556)
---------------------------------------------------------------------
6,143 8,644 10,667 (6,997)
---------------------------------------------------------------------
---------------------------------------------------------------------

13. EMPLOYEE FUTURE BENEFITS

The Company maintains primarily defined benefit pension plans for
most of its employees. The other plans relate to other retirement
benefits, primarily life insurance, offered by the Company to its
employees.

The net expense recognized during the three-month period and the
twelve-month period ended December 31, 2004 and December 26, 2003 is
as follows:

Three-month Twelve-month
periods periods
2004 2003 2004 2003
$ $ $ $
Pension plans 670 453 1,674 1,833
Other plans 154 50 289 205


14. SEGMENTED INFORMATION

The Company has two business units organized by products. The Company
assesses the performance of the business units based on the following
items: sales, operating earnings before depreciation and
amortization, financial expenses and income taxes and operating
earnings before financial expenses and income taxes. Each business
unit, except for the Head Office segment, includes activities related
to development, manufacturing, sales and distribution of paints and
coatings. Management of cash and cash equivalents, as well as other
activities related to the corporate strategies with regard to
manufacturing and market development are part of the Head Office
segment. The allocation of the expenses of this segment would not
assist in the evaluation of the contribution of the other segments.

The accounting policies used to determine results and measure
segmented assets are the same as those described in Note 1.

Head
Architectural Industrial Office Total
---------------------------------------------------------------------
$ $ $ $
As at and for the
three-month period
ended December 31, 2004
Sales 53,457 8,873 - 62,330
Restructuring
expenses (67) (8) - (75)
Operating earnings
before depreciation
and amortization,
financial expenses,
loss on disposal of
the joint venture and
income taxes 6,533 (67) (5,182) 1,284
Depreciation and
amortization 1,310 153 266 1,729
Operating earnings
before financial
expenses, loss on
disposal of the joint
venture and income
taxes 5,223 (220) (5,448) (445)
Loss on disposal of
the joint venture - 589 - 589
Total assets 134,992 28,733 7,008 170,733
Acquisitions of
property, plant
and equipment 1,026 208 216 1,450


As at and for the
three-month period
ended December 26,
2003
Sales 48,856(1) 8,563(1) - 57,419(1)
Restructuring
expenses 928 11 150 1,089
Operating earnings
before depreciation
and amortization,
financial expenses
and income taxes 5,887(1) (482)(1) (4,630)(1) 775(1)
Depreciation and
amortization 1,202 193 240 1,635
Operating earnings
before financial
expenses and income
taxes 4,685(1) (675)(1) (4,870)(1) (860)(1)
Total assets 141,850(1) 34,801(1) 11,925(1) 188,576(1)
Acquisitions of
property, plant and
equipment 2,919 399 737 4,055
Acquisition of
goodwill 650 - - 650


As at and for the
twelve-month period
ended December 31, 2004
Sales 263,447 39,999 - 303,446
Restructuring
expenses (129) (17) - (146)
Operating earnings
before depreciation
and amortization,
financial expenses,
impairment loss on
goodwill of the joint
venture, loss on
disposal of the joint
venture and income
taxes 50,903 1,986 (20,636) 32,253
Depreciation and
amortization 4,579 633 1,053 6,265
Operating earnings
before financial
expenses, impairment
loss on goodwill of
the joint venture,
loss on disposal of
the joint venture and
income taxes 46,324 1,353 (21,689) 25,988
Impairment loss on
goodwill of the
joint venture - 1,000 - 1,000
Loss on disposal
of the joint venture - 589 - 589
Total assets 134,992 28,733 7,008 170,733
Acquisitions of
property, plant
and equipment 3,514 837 1,035 5,386


As at and for
the twelve-month
period ended
December 26, 2003
Sales 240,470(1) 40,048(1) - 280,518(1)
Restructuring
expenses 2,269 2,017 364 4,650
Operating earnings
before depreciation
and amortization,
financial expenses
and income taxes 42,465(1) (890)(1)(17,946)(1) 23,629(1)
Depreciation
and amortization 4,098 837 861 5,796
Operating earnings
before financial
expenses and
income taxes 38,367(1) (1,727)(1)(18,807)(1) 17,833(1)
Total assets 141,850(1) 34,801(1) 11,925(1) 188,576(1)
Acquisitions of
property, plant
and equipment 4,018 771 1,606 6,395
Acquisition of
goodwill 17,621 - - 17,621


Geographical Information

Three-month Twelve-month
periods periods
---------------------------------------------------------------------
2004 2003 2004 2003
---------------------------------------------------------------------
$ $ $ $
Sales
Canada 58,828 54,359(1) 289,573 264,777
Other countries 3,502 3,060 13,873 15,741
---------------------------------------------------------------------
62,330 57,419(1) 303,446 280,518
---------------------------------------------------------------------
---------------------------------------------------------------------



As at December 31, 2004
---------------------------------------------------------------------
Property, Property
Total plant and held for
assets equipment sales Goodwill
---------------------------------------------------------------------
$ $ $ $
Canada 161,773 30,177 2,048 27,680
United States 7,956 668 - 5,943
France - - - -
Other countries 1,004 123 - 28
---------------------------------------------------------------------
170,733 30,968 2,048 33,651
---------------------------------------------------------------------
---------------------------------------------------------------------


As at December 26, 2003
---------------------------------------------------------------------
Property,
Total plant and
assets equipment Goodwill
---------------------------------------------------------------------
$ $ $
Canada 168,854(1) 32,880 27,749
United States 11,276 702 5,943
France 7,028 75 3,408
Other countries 1,418 158 28
---------------------------------------------------------------------
188,576(1) 33,815 37,128
---------------------------------------------------------------------
---------------------------------------------------------------------
(1)Restated


15. WEATHER AND SEASONALITY

Exterior architectural paint products are subject to specific
application requirements related to weather conditions. The sales of
such products, which account for approximately 20% of the paint sales of
the Company's Architectural Sector, are dependent upon weather
conditions and may be materially adversely affected by unfavourable
weather conditions persisting for several days or several weeks.
Furthermore, the sale of exterior products is seasonal in nature. Sales
of such products in the second and third quarters are historically
significantly higher than sales in the first and fourth quarters and,
consequently, net earnings are significantly higher in those quarters.
Variable costs may be managed according to the seasonal pattern.
However, a significant portion of the Company's costs may not be
adjusted for seasonality.

16. LONG-TERM DEBT

During the second quarter of 2004, the Company revised its
interpretation of the clauses of repayment of the long-term debt, and
accordingly, the current portion of long-term debt as at December 26,
2003 was modified from $11,875,000 to $4,750,000 and the long-term
portion of the debt was increased from $23,993,000 to $31,118,000.

17. COMPARATIVE FIGURES

Certain comparative figures have been reclassified in order to conform
to the presentation adopted in 2004. For the three-month and the
twelve-month periods ended December 26, 2003, the Company has
reclassified customer cash discounts amounting to respectively $715,000
and $3,126,000 in reduction of sales. Those cash discounts were
previously presented in cost of sales and operating expenses.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    SICO INC.
    Pierre Dufresne, CA
    President and Chief Executive Officer
    (514) 527-5111
    or
    SICO INC.
    Jean Ouellet, CA
    Vice President, Finance and Treasurer
    (514) 527-5111
    www.sico.com