CanWel Building Materials Announces Second 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 second quarter financial results(1) for the three-month
period ended June 30, 2014. 


For the three-month period ended June 30, 2014(1), revenues increased to $226
million compared to $210 million in the same period in 2013 as a result of
increased activity levels and pent-up demand for the Company's products
following the particularly inclement winter. During this second quarter period,
gross margin amounted to $27.7 million, representing a 28 percent increase when
compared to $21.7 million during the corresponding period in 2013. Gross margin
percentage increased to 12.2 percent of revenues versus 10.6 percent during the
same period in 2013. The increase in gross margin dollars and percentage is also
mainly due to weather related sales recoveries, improved market conditions and
contribution from the Company's acquisitions.


EBITDA(2) for the three months ended June 30, 2014 increased by 71 percent to
$12.6 million compared to $7.4 million in the same quarter of 2013. As a result,
the Company nearly doubled its net earnings(3) at $6.9 million during the second
quarter of 2014, compared to net earnings of $3.6 million in 2013.


"I am very pleased with our focused ability to overcome the impact of the first
quarter's inclement weather during the second quarter, with strong performance
across all of our key financial metrics, demonstrating our discipline, and
resilience of our business model," noted Amar S. Doman, Chairman and CEO of the
Company. "We also continue to try to optimize growth opportunities during our
seasonally busy period of the year and are encouraged with the pick-up in the
level of activity in our customers' markets, reflected in our second quarter
results. Our strategic plan involving growth via acquisition continues to unfold
favourably for our shareholders." 


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




----------------------------------------------------------------------------
                                     Three months ended    Six months ended 
                                               June 30,            June 30, 
(in thousands of dollars)                2014      2013      2014      2013 
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings                           $6,939    $3,609    $5,792    $4,704 
                                                                            
Provision for income taxes              2,611     1,139     2,199     1,544 
Finance costs                           1,925     1,738     3,578     3,247 
Depreciation of property, plant and                                         
 equipment                                790       562     1,578       948 
Amortization of intangible assets         289       250       577       500 
Amortization of leasehold                                                   
 inducements                               11        30        55       (25)
Share-based compensation                   53        53        53        63 
----------------------------------------------------------------------------
                                                                            
EBITDA                                $12,618    $7,381   $13,832   $10,981 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



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 Q2 2014 MD&A and Financial Statements for further
information. Our Q2 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 Q2
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 Group Ltd.
Ali Mahdavi
Investor Relations
416-962-3300
[e-mail]