CanWel Building Materials Announces Fourth Quarter & Full Year 2010 Financial Results

CanWel Building Materials Group Ltd. ("CanWel" or "the Company") (TSX:CWX)
announced today its fourth quarter and 2010 year-end financial results for the
period ended December 31, 2010. A significant factor when comparing the results
for the three and twelve month periods ended December 31, 2010 to those for the
corresponding periods in 2009, is that the 2010 periods include the results of
the operations of the Broadleaf Logistics division ("BLC") for the quarter and
for eleven months of the year. In addition, due to the sale of the Company's
hardware division on November 15, 2010, the current and prior period results of
this division have been reclassified in these results per GAAP(2), and will be
in the Company's subsequent public filings (as may be applicable), as
discontinued operations. 


For the year ended December 31, 2010, revenues amounted to $1,032 million
compared to $408 million in 2009. The increase in revenue related to both the
inclusion of the operations of BLC for eleven months and an increase overall in
the selling prices of lumber and panel products for this year versus 2009.
Further, sales volume increased due to the inclusion of BLC's business as well
as increases in sales at the Company's legacy business operations, reflecting an
improvement in the overall Canadian economy compared to 2009. Gross margin
increased by 93 percent on a year-over-year basis to $106.5 million or 10.3
percent of revenues, versus $55.1 million or 13.5 percent of revenues in 2009.
The year-over-year decrease in gross margin percentage is mainly due to the
increase in construction materials in the Company's sales mix, flowing from the
BLC operations. 


Excluding the impact of one-time items incurred during the year related to the
Company's acquisition of BLC and reorganization costs as well as foreign
exchange, Adjusted EBITDA(4) and net earnings from continuing operations for the
twelve-month period ended December 31, 2010 were $32.9 million and $17.1
million, respectively, compared to $19.4 million and $17.3 million in 2009,
respectively. Including such costs and foreign exchange, EBITDA(3) for the year
amounted to $30.8 million and net earnings from continuing operations amounted
to $15.7 million. Adjusted EBITDA(4) inclusive of results from discontinued
operations amounted to $38.5 million in 2010, versus $24.2 million in 2009.


As at December 31, 2010, CanWel had $19.1 million in cash and cash equivalents,
with long-term debt of $51.4 million.


For the three month period ended December 31, 2010(1), CanWel reported revenues
of $177.8 million compared to $85.5 million for the same period in 2009. Gross
margin during the fourth quarter of 2010 amounted to 10.7 percent or $19.1
million versus 14.5 percent or $12.4 million in 2009. Excluding the impact of
one-time charges, Adjusted EBITDA(4) and net earnings from continuing operations
for the three-month period ended December 31, 2010 amount to $1.4 million and a
loss of $1.5 million respectively, compared to Adjusted EBITDA(4) of $3.9
million and net earnings of $2.0 million for the comparable period last year.
Including such one-time costs, EBITDA(3) and net loss for the fourth quarter
amounted to a negative $915 thousand and $3.1 million.


"2010 was a period of positive change for CanWel with BLC's contribution to the
business, and our decision to divest our hardware division to focus on the roots
of our business. These strategic decisions were complemented by a number of
initiatives throughout 2010, which have resulted in our stronger balance sheet,"
noted Amar S. Doman, Chairman and CEO of the Company. "In 2011, we intend to
continue our integration efforts at a pace that will allow us to fine tune the
new and larger CanWel family with the objective of operating from a fully
integrated company-wide business platform, which we expect to be more fully
demonstrable as we go through the year. We expect the result of these endeavours
to solidify our position as Canada's building materials distributor of choice
and an attractive investment for shareholders." 


Reconciliation of Net Income to EBITDA:



                                     Three months ended      Year ended     
                                        December 31         December 31     
                                                                            
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(in thousands of dollars)                2010      2009      2010      2009 
                                                                            
Net Earnings from continuing                                                
 operations                          $ (3,091) $  1,966  $ 15,744  $ 15,727 
Income tax provision (recovery)          (349)     (661)    7,127    (1,696)
Cash interest expense                     708       146     3,419       917 
Depreciation of property plant and                                          
 equipment                                568       454     2,283     1,904 
Amortization of intangible and other                                        
 assets                                   930         -       930         - 
Amortization of deferred gain             (18)      (19)      (73)      (74)
Amortization of financing costs           313        65     1,096       253 
Amortization of promissory notes            -        33        11       129 
Loss on disposal and write down of                                          
 fixed assets                               -        17         -       953 
Stock-based compensation                   24        40       247       383 
                                                                            
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EBITDA                               $   (915) $  2,024  $ 30,784  $ 17,544 
                                                                            
Acquisition and conversion costs            -     1,904       993     1,904 
Reorganization costs                    2,268         -     2,268         - 
Realized foreign exchange gain              -         -    (1,102)        - 
                                                                            
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Adjusted EBITDA                      $  1,353  $  3,928  $ 32,943  $ 19,448 
                                                                            
EBITDA from discontinued operations       938       406     5,535     4,771 
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Adjusted EBITDA as previously                                               
 defined in 2010                     $  2,291  $  3,522  $ 38,478  $ 24,219 



The Company also announced on March 22, 2011, its first quarter dividend of 10
cents per common share. The dividend will be paid on April 15, 2011 to
shareholders of record at the close of business on March 31, 2011.


About CanWel Building Materials

CanWel Building Materials trades on the Toronto Stock Exchange under the symbol
CWX and is Canada's largest national distributor 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 hardware, building materials, lumber, and renovation products. Further
information can be found in the disclosure documents filed by CanWel (and its
predecessor, CanWel Building Materials Income Fund) 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", "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(3) 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 Broadleaf Logistics Company completed on February 1, 2010
(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 Broadleaf Logistics
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 Broadleaf Logistics Company (some of whom are competitors of
CanWel) will cease doing business with the Broadleaf Logistics Company or
CanWel, 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, 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,
relatively stable interest rates, volatility of commodity prices, more limited
availability of access to equity and debt capital markets to fund, at acceptable
costs, the Corporation's future growth plans, the implementation and success of
the integration of the Acquisition, and to enable the Corporation 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 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. 




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(1)  Please refer to our Q4 and Full Year 2010 MD&A for further information.
                                                                            
(2)  GAAP is defined as Generally Accepted Accounting Principles in Canada. 
                                                                            
(3)  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.   
     EBITDA is not a measure of earnings or financial performance recognized
     by GAAP and does not have standardized meanings prescribed by GAAP.    
     This is a non-GAAP measure and, as there is no generally accepted      
     method of calculating EBITDA, 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 a Company's ability to meet debt service and capital expenditure    
     requirements and because we interpret trends in EBITDA as an 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 GAAP.                                               
                                                                            
(4)  In the discussion, reference is made to Adjusted EBITDA, which is      
     EBITDA as defined in (3) above, before certain one time or unusual     
     items and foreign exchange losses or gains. This is a non-GAAP measure 
     and, as there is no generally accepted method of calculating Adjusted  
     EBITDA, the measure as calculated by the Company may not be comparable 
     to similarly-titled measures reported by other companies. Adjusted     
     EBITDA is presented as we believe it is a useful indicator of the      
     Company's ability to meet debt service and capital expenditure         
     requirements from its regular business, before non-recurring items.    
     Adjusted EBITDA should not be considered by an investor as an          
     alternative to net income or cash flows as determined in accordance    
     with GAAP.