CanWel Building Materials Announces First Quarter 2014 Financial Results

NOT FOR RELEASE OR DISSEMINATION INTO THE UNITED STATES

CanWel Building Materials Group Ltd. ("CanWel" or "the Company") (TSX:CWX)
announced today its first quarter financial results(1) for the three-month
period ended March 31, 2014.


For the three-month period ended March 31, 2014(1), revenues amounted to $150
million compared to $162 million in the same period in 2013. Despite positive
contributions from recent acquisitions, the overall decrease in revenue relates
primarily to weaker market conditions for construction materials and the impact
of the inclement weather in most of CanWel's customers' markets during the first
quarter. During the same period, gross margin amounted to $16 million compared
to $17 million during the corresponding period in 2013. Gross margin percentage
was 10.5 percent of revenues, representing only a slight decrease when compared
to 10.6 percent of revenues in 2013. The decrease in gross margin dollars and
percentage is also mainly due to weather related and weaker market conditions
during the reported period. 


EBITDA(2) for the three months ended March 31, 2014 amounted to $1.2 million
compared to $3.6 million in the same quarter of 2013. However, as a result of
the foregoing, the Company incurred a net loss(3) of $1.1 million during the
first quarter of 2014, compared to net earnings of $1.1 million in 2013.


"Despite severe winter weather, some of the worst on record, which negatively
impacted construction activity and caused transportation bottlenecks well into
the spring, I am pleased with the impact of our growth strategy on our results.
The contribution from our recent acquisitions and our operating discipline has
enabled us to protect our gross margin in face of the pressures bestowed on us
during the quarter," noted Amar S. Doman, Chairman and CEO of the Company. "With
weather gradually improving in our customers' markets, we expect the overall
activity in the new home, renovation and construction markets to return to more
normalized levels which should favorably impact our business going into our
seasonally busy quarters." 


Reconciliation of Net Earnings (Loss) to Earnings before Interest, Tax,
Depreciation and Amortization (EBITDA):




                                                                            
                                                Three months ended March 31 
(in thousands of dollars)                               2014           2013 
                                                                            
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Net earnings (loss)                                 $ (1,147)      $  1,095 
                                                                            
(Recovery of) provision for income taxes                (412)           405 
Finance costs                                          1,654          1,509 
Depreciation of property, plant and equipment            788            386 
Amortization of intangible assets                        288            250 
Amortization of leasehold inducements                     44            (57)
Share-based compensation                                   -             10 
                                                                            
EBITDA                                              $  1,215       $  3,598 
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About CanWel Building Materials 

CanWel Building Materials trades on the Toronto Stock Exchange under the symbol
CWX and is one of Canada's largest national distributors in the building
materials and related products sector, operating distribution centres coast to
coast in all major cities and strategic locations across Canada. CanWel
distributes a wide range of building materials, lumber and renovation products.
Further information can be found in the disclosure documents filed by CanWel
with the securities regulatory authorities, available at www.sedar.com. 


Certain statements in this press release may constitute "forward-looking"
statements. When used in this press release, such statements use words,
including but not limited to, "may", "will", "would", "should", "expect",
"believe", "plan", "intend", "anticipate", "future" and other similar
terminology. These forward-looking statements reflect the current expectations
of CanWel's management regarding future events and operating performance, but
involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of CanWel, including the cash
flow from operations, dividends or EBITDA(2) generated or paid by CanWel, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Actual events could differ materially from those projected herein
and depend on a number of factors. These factors include (i) the risk that the
integration of the acquisition of Pastway Planing Limited ("Pastway") in quarter
3, 2013, the assets of North American Wood Preservers ("NAWP"), completed in
quarter 2, 2013, Northwest Wood Preservers ("NWP"), completed in quarter 1, 2012
or Broadleaf Logistics Company ("BLC") completed on February 1, 2010
(collectively the "Acquisition") may result in significant challenges, and
management of CanWel may be unable to accomplish the integration of the
Acquisition smoothly or successfully or without spending significant amounts of
time, money or other resources thereon; any inability of management to
successfully integrate the operations of the combined business, including, but
not limited to, information technology and financial reporting systems, any of
which could have a material adverse effect on the business, financial condition
and results of operations of CanWel; (ii) the risk that revenues, profits and
margins of the Company may not remain consistent with historical levels, (iii)
the risk that competing firms which manufacture or distribute competitive
product lines will aggressively defend or seek market share, or that existing
customers or suppliers of Pastway, NAWP, NWP or BLC (some of whom are
competitors of CanWel) will cease doing business with the Company, in each case
reducing, eliminating or reversing any potential positive economic impact on
CanWel of the Acquisition; (iv) the risk that any increased sales, margin,
profit or distributable cash resulting from the Acquisition may not be fully
realized, realized at all or may take longer to realize than expected; 

(v) the risk of disruption from the integration of the Acquisition making it
more difficult to maintain relationships with customers, employees or suppliers.
Factors also include, but are not limited to, dependence on market and economic
conditions, sales and margin risk, competition, information system risks,
availability of supply of products, risks associated with the introduction of
new product lines, product design risk, environmental risks, regulatory risk,
differing law or regulations across jurisdictions, volatility of commodity
prices, inventory risks, customer and vendor risks, acquisition and integration
risks, availability of credit, credit risks, litigation risks and interest rate
risks. A further description of these and other risks which could cause results
to differ materially from those described in these forward-looking statements
can be found in the periodic and other reports filed by CanWel with Canadian
securities commissions and available on SEDAR (http://www.sedar.com). In
addition, a number of material factors or assumptions were utilized or applied
in making the forward-looking statements, and may include, but are not limited
to, assumptions regarding the performance of the Canadian economy, the relative
stability of interest rates, volatility of commodity prices, more limited
availability of access to equity and debt capital markets to fund, at acceptable
costs, the Company's future growth plans, the implementation and success of the
integration of the Acquisition, the ability of the Company to refinance its
debts as they mature, the Canadian housing and building materials market; the
amount of the Company's cash flow from operations; tax laws; and the extent of
the Company's future acquisitions and capital spending requirements or planning
as well as the general level of economic activity, in Canada, and abroad,
discretionary spending, uptake of the Company's NCIB program (4)  and
unemployment levels.


These forward-looking statements speak only as of the date of this press
release. CanWel does not undertake, and specifically disclaims, any obligation
to update or revise any forward looking information, whether as a result of new
information, future developments or otherwise, except as required by applicable
law. 


(1) Please refer to our Q1 2014 MD&A and Financial Statements for further
information. Our Q1 2014 filings are reported under International Financial
Reporting Standards ("IFRS").


(2) In the discussion, reference is made to EBITDA, which represents earnings
from continuing operations before interest, provision for income taxes, gain or
loss on sale of fixed assets, depreciation and amortization, goodwill impairment
loss and stock-based compensation. This is not a generally accepted earnings
measure under IFRS and does not have a standardized meaning under IFRS, the
measure as calculated by the Company may not be comparable to similarly-titled
measures reported by other companies. EBITDA is presented as we believe it is a
useful indicator of relative operating performance. EBITDA should not be
considered by an investor as an alternative to net income or cash flows as
determined in accordance with IFRS.


(3) Before accounting for "Other Comprehensive Income"; please refer to our Q1
2014 Financial Statements for further information.


(4) Please also refer to the forward looking statement information in our
November 19, 2013 news release for additional forward looking statement
information and cautions pertaining to the Company's Normal Course Issuer Bid
("NCIB"), which are hereby incorporated by reference, and as may also be
applicable to the Plan or NCIB as the case may be. Although CanWel intends to
purchase common shares and or convertible debentures for cancellation under its
NCIB and / or the Plan, there can be no assurances that any such purchases will
be completed. Please refer to our public disclosure filings for the latest
information on the NCIB.


FOR FURTHER INFORMATION PLEASE CONTACT: 
CanWel Building Materials
Ali Mahdavi
Investor Relations
416-962-3300
[e-mail]