MAAX announces its Q4-08 and FY-08 Results

MONTREAL, May. 09 /PRNewswire/ --

MONTREAL, May 9 /PRNewswire/ - MAAX Holdings, Inc. ("the Company") announced today its earnings for the fourth quarter and fiscal year ended February 29, 2008.

The following presents a comparison of the Company's results of operations for the quarterly and annual periods ended February 29, 2008 against the results for the same periods ended February 28, 2007.

Net sales for the fourth quarter ended February 29, 2008 decreased 10.8% to $76.9 million from net sales of $86.2 million for the fourth quarter ended February 28, 2007. Net sales were mainly impacted by the decline in the U.S. housing industry. Operating losses decreased from $62.0 million for the quarter ended February 28, 2007 to $59.3 million for the quarter ended February 29, 2008 including a non cash impairment charge of $49.7 million incurred on our goodwill and trademarks, compared to a similar charge of $60.7 million during the fourth quarter of the previous fiscal year ended February 28, 2007.

Net sales for the fiscal year ended February 29, 2008 decreased 11.8% to $375.5 million from net sales of $425.9 million for the fiscal year ended February 28, 2007. Operating losses for the same period increased $60.2 million, from a loss of $44.6 million for the fiscal year ended February 28, 2007 to a loss of $104.8 million for the fiscal year ended February 29, 2008, including a non cash impairment charge of $99.4 million incurred on our goodwill and trademarks, compared to a similar charge of $60.7 million for the previous fiscal year ended February 28, 2007.

Financial position

Free cash flow (cash flow related to operating activities minus capital spending net of asset disposal) for the twelve months ended February 29, 2008 was $(23.6) million. Total debt amounted to $540.9 million as of February 29, 2008 compared to $479.8 million as of February 28, 2007, an increase of $61.1 million.

Recent Developments

On April 1, 2008, the parties to the forbearance agreement signed on January 7, 2008, which was subsequently amended and extended, entered into an amendment and restatement of the forbearance agreement (the "Amendment"). Pursuant to the Amendment, Brookfield Bridge Lending Fund Inc. and HSBC agreed to extend the forbearance period under the forbearance agreement until June 12, 2008, and further agreed to increase by $35.0 million the Canadian revolving commitments available to the Company, for a total increase of $45.0 million of the Canadian revolving commitments over the initial amount agreed to by the parties at inception of the credit facility.

The Company also recently announced that it has developed and is pursuing a sales process to market the entire Company in the pursuit of its overall objective of reducing its debt and improving its capital structure. In parallel with that sales process, the Company is also continuing its discussions with its key stakeholders, and continues to operate in the normal course.

"We continue to face adverse market conditions, particularly in the United States. In the meantime, our focus remains on improving operating efficiencies, on-time delivery, new innovative product development and introduction, as well as on restructuring our balance sheet to improve liquidity and financial flexibility. This focus will allow us to protect and improve our market position, and take advantage of any growth opportunity that would result from an eventual rebound in our market environment", stated Paul Golden, President of the Company, and President and Chief Executive Officer of MAAX Corporation.

About MAAX

MAAX Corporation is a leading North American manufacturer of award-winning bathroom products, and spas for the residential housing market. The Company is committed to offering its customers an enjoyable experience: distinctive, stylish and innovative products and the best customer service practices in the industry. MAAX offerings are available through plumbing wholesalers, bath, and spa specialty boutiques and home improvement centers.

The corporation employs over 2000 people and currently operates 16 manufacturing facilities and independent distribution centers throughout North America and Europe. MAAX Corporation is a subsidiary of Beauceland Corporation, itself a wholly owned subsidiary of MAAX Holdings, Inc. Visit us at www.maax.com.

Forward Looking Statements

This press release may contain implicit or explicit forecasts and forward-looking statements within the meaning of the U.S. federal securities laws about MAAX's objectives, strategies, financial position, operating results and business. These statements are forward-looking in that they are based on management's expectations for the markets in which the corporation does business as well as on various estimates and assumptions. These expectations seemed reasonable at of the date of this press release on May 9, 2008. However, actual results could differ materially from these expectations if known or unknown risks affect results or if management's estimates or assumptions prove inaccurate. Accordingly, management cannot guarantee the realization of the forward-looking statements.

MAAX HOLDINGS, INC. Consolidated Balance Sheets (In thousands of US dollars) ------------------------------------------------------------------------- ------------------------------------------------------------------------- February 29, February 28, 2008 2007 ------------------------------------------------------------------------- Audited Audited Assets Current assets: Cash and cash equivalents (note 3) $ - $ 4,818 Accounts receivable, less allowance for doubtful accounts of $826; $644 (note 4) 40,347 36,396 Income taxes receivable 865 2,028 Inventories (note 5) 25,033 29,169 Prepaid expenses 1,775 3,169 Assets held for sale (note 9) 7,538 15,128 Deferred income taxes 3,475 4,368 ------------------------------------------------------------------------- Total current assets 79,033 95,076 Property, plant and equipment 65,368 66,289 Intangible assets 130,292 123,600 Goodwill (note 9) 95,784 176,565 Other assets (note 3 & 6) 7,120 19,323 Restricted cash 2,792 - Assets held for sale (note 9) 3,993 3,587 ------------------------------------------------------------------------- Total assets $ 384,382 $ 484,440 ------------------------------------------------------------------------- ------------------------------------------------------------------------- Liabilities and Shareholders' Equity Current liabilities: Bank overdraft $ 2,230 $ - Accounts payable 19,221 19,861 Accrued liabilities 32,737 31,059 Current liabilities held for sale 4,466 4,421 Current portion of long-term debt (note 6) 540,023 1,161 ------------------------------------------------------------------------- Total current liabilities 598,677 56,502 Long-term debt (note 6) 914 478,658 Deferred income taxes 23,290 34,763 ------------------------------------------------------------------------- Total liabilities 622,881 569,923 Redeemable preferred stock (note 6) 7,000 7,000 Shareholders' equity (deficiency in assets) Capital Stock (note 7) 47,670 47,670 Additional paid-in capital 3,078 3,097 Deficit (340,702) (164,202) Accumulated other comprehensive income, net of income taxes of ($1,380); ($607) 44,455 20,952 ------------------------------------------------------------------------- Total shareholders' equity (deficiency in assets) (245,499) (92,483) ------------------------------------------------------------------------- Total liabilities and shareholders' equity (deficiency in assets) $ 384,382 $ 484,440 ------------------------------------------------------------------------- ------------------------------------------------------------------------- MAAX HOLDINGS, INC. Consolidated Statements of Operations (In thousands of US dollars) Unaudited ------------------------------------------------------------------------- ------------------------------------------------------------------------- Twelve-month Twelve-month period ended period ended February 29, February 28, 2008 2007 ------------------------------------------------------------------------- Net sales $ 375,544 $ 425,880 Operating costs and expenses Cost of goods sold 274,806 308,601 Selling, general and administrative expenses (notes 2, 3, 8 & 9) 84,468 81,637 Depreciation and amortization 21,647 19,535 Impairment of goodwill (note 9) 99,437 60,726 ----------------------------------------------------------------------- 480,358 470,499 Operating income (loss) from continuing operations (104,814) (44,619) Interest expense (note 6) 75,385 51,990 ------------------------------------------------------------------------- Loss before income taxes from continuing operations (180,199) (96,609) Income taxes (recovery) Current 317 (2,021) Deferred (10,214) (10,170) ----------------------------------------------------------------------- (9,897) (12,191) Loss from continuing operations (170,302) (84,418) Loss from discontinued operations (note 10) (6,198) (30,781) ------------------------------------------------------------------------- Net loss $ (176,500) $ (115,199) ------------------------------------------------------------------------- ------------------------------------------------------------------------- BEAUCELAND CORPORATION Consolidated Statements of Operations (In thousands of US dollars) Unaudited ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three-month Three-month period ended period ended February 29, February 28, 2008 2007 ------------------------------------------------------------------------- Net sales $ 76,884 $ 86,167 Operating costs and expenses Cost of goods sold 58,216 63,126 Selling, general and administrative expenses (notes 2, 3, 8 & 9) 22,882 19,312 Depreciation and amortization 5,464 5,078 Impairment of goodwill (note 9) 49,651 60,726 ------------------------------------------------------------------------- 136,213 148,242 Operating income (loss) from continuing operations (59,329) (62,075) Interest expense (note 6) 20,817 16,750 ----------------------------------------------------------------------- Loss before income taxes from continuing operations (80,146) (78,825) Income taxes (recovery) Current 1,405 (1,384) Deferred (10,429) (6,094) ------------------------------------------------------------------------- (9,024) (7,478) Loss from continuing operations (71,122) (71,347) Loss from discontinued operations (note 10) (2,204) (5,777) ------------------------------------------------------------------------- Net loss $ (73,326) $ (77,124) ------------------------------------------------------------------------- ------------------------------------------------------------------------- MAAX HOLDINGS, INC. Consolidated Statements of Cash Flows (In thousands of US dollars) Unaudited ------------------------------------------------------------------------- ------------------------------------------------------------------------- Twelve-month Twelve-month period ended period ended February 29, February 28, 2008 2007 ------------------------------------------------------------------------- Cash flows related to operating activities : Net loss $ (176,500) $ (115,199) Items not affecting cash : Discontinued operations 6,198 30,781 Impairment of goodwill and long-lived assets (note 9) 99,437 60,726 Depreciation and amortization 21,647 19,535 Amortization of financial expenses (note 6) 16,122 6,877 Accreted interest on Senior Discount notes 16,236 14,552 Loss on translation of foreign currency long-term debt 280 - Loss (gain) on disposal of property, plant and equipment and other assets 162 (391) Loss on investment 503 - Stock-based compensation (20) (224) Deferred income taxes (10,214) (10,170) Net change in non-cash balances related to operations Accounts receivable (24) 6,481 Income taxes receivable 1,207 (434) Inventories 7,125 4,178 Prepaid expenses 1,493 1,299 Assets held for sale - 1,296 Accounts payable (6,082) (1,518) ------------------------------------------------------------------------- Net cash from operating activities of continuing operations (22,430) 17,789 Net cash from operating activities of discontinued operations 2,952 (17,198) ------------------------------------------------------------------------- (19,478) 591 Cash flows related to financing activities : Net increase in revolving credit 25,547 219,842 Repayment of long-term debt (1,214) (211,864) Proceeds from issuance of shares - 7,000 Debt issuance cost (284) (6,303) ------------------------------------------------------------------------- Net cash from financing activities of continuing operations 24,049 8,675 Cash flows related to investing activities : Reclassification of investment from cash equivalents to other investment in other assets (2,031) - Reclassification of investment from cash equivalents to restictive cash (2,792) - Additions to property, plant and equipment (3,989) (6,175) Additions to intangibles assets (212) (652) Proceeds from disposal of property, plant and equipment 95 1,932 Other assets (2,159) (4,995) ------------------------------------------------------------------------- Net cash from investing activities of continuing operations (11,088) (9,890) Net cash from investing activities of discontinued operations (304) 5,531 ------------------------------------------------------------------------- (11,392) (4,359) ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (6,821) 4,907 Translation adjustement on cash denominated in foreign currencies (227) 84 Cash and cash equivalents (bank overdraft), beginning of period 4,818 (173) ------------------------------------------------------------------------- Cash and cash equivalents (bank overdraft), end of period $ (2,230) $ 4,818 ------------------------------------------------------------------------- ------------------------------------------------------------------------- BEAUCELAND CORPORATION Consolidated Statements of Cash Flows (In thousands of US dollars) Unaudited ------------------------------------------------------------------------- ------------------------------------------------------------------------- Three-month Three-month period ended period ended February 29, February 28, 2008 2007 ------------------------------------------------------------------------- Cash flows related to operating activities : Net loss $ (73,326) $ (77,124) Items not affecting cash : Discontinued operations 2,204 5,777 Impairment of goodwill (note 9) 49,651 60,726 Depreciation and amortization 5,464 5,078 Amortization of financial expenses (note 6) 94 4,931 Accreted interest on Senior Discount notes 4,266 3,823 Loss on translation of foreign currency long-term debt 55 - Loss on disposal of property, plant and equipment 30 100 Loss on investment 203 - Stock-based compensation (50) (294) Deferred income taxes (10,429) (6,094) Net change in non-cash balances related to operations Accounts receivable 812 7,957 Income taxes receivable 1,027 (1,014) Inventories 758 2,217 Prepaid expenses 1,849 1,305 Assets held for sale - - Accounts payable (4,628) (4,274) ------------------------------------------------------------------------- Net cash from operating activities of continuing operations (22,020) 3,114 Net cash from operating activities of discontinued operations (1,579) (4,505) ------------------------------------------------------------------------- (23,599) (1,391) Cash flows related to financing activities : Net increase in revolving credit 26,772 194,658 Repayment of long-term debt (277) (185,031) Proceeds from issurance of shares - - Debt issuance cost (82) (6,004) ------------------------------------------------------------------------- Net cash from financing activities of continuing operations 26,413 3,623 Cash flows related to investing activities : Reclassification of investment from cash equivalents to other investment in other assets (31) - Restricted cash (2,792) - Additions to property, plant and equipment (1,353) (1,165) Additions to intangibles assets (2) (636) Proceeds from disposal of property, plant and equipment 60 104 Other assets (327) (1,015) ------------------------------------------------------------------------- Net cash from investing activities of continuing operations (4,445) (2,712) Net cash from investing activities of discontinued operations (127) 699 ------------------------------------------------------------------------- (4,572) (2,013) ------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (1,758) 219 Translation adjustement on cash denominated in foreign currencies 29 24 Cash and cash equivalents (bank overdraft), beginning of period (501) 4,575 ------------------------------------------------------------------------- Cash and cash equivalents (bank overdraft), end of period $ (2,230) $ 4,818 ------------------------------------------------------------------------- -------------------------------------------------------------------------