MAAX announces its Q4-08 and FY-08 Results

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

Source: MAAX Holdings, Inc.

CONTACT: Paul Golden, President and Chief Executive Officer, (514)
844-4155 ext. 222; Denis Aubin, Executive Vice-President and Chief Financial
Officer, (514) 844-4155 ext. 231; Source: MAAX Corporation

2008-05-09 17:14:14 0358037 PRNEWSWIRE