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While reporting increased revenues and earnings for its third quarter (ended Dec. 31), Groupe Laperriere & Verreault Inc. (GL&V) of Trois Rivières, QC, pointed out that it will continue to take advantage of the consolidation trend in the pulp and paper industry. Laurent Verreault, president and CEO, explained that "in recent weeks, we have taken decisive steps to acquire two major business units of Beloit, a leading manufacturer of papermaking equipment whose technology and know-how are world-renowned. This acquisition could add more than $170 million annually to our revenues and is an ideal complement to our papermaking technologies." The transaction is expected to close in the next quarter.

GL&V further restructured its Process Group's operations, which now include the activities of GL&V/Dorr-Oliver Canada Inc. (formerly GL&V Process Equipment Group Inc.) and the Dorr-Oliver Group (acquired in September 1999). In December the company sold the Dorr-Oliver Group's starch manufacturing centrifugation business to the Swedish company Alfa-Laval, which has recognized expertise in the world starch production market.

At the end of December, GL&V pursued its expansion by acquiring various assets of National Refiner Plate Co. in Georgia, which specializes in the manufacture of refiner plates used in pulping. Although smaller than the previous ones, this acquisition enables GL&V to integrate high-wear consumable products in great demand in the pulp and paper industry.

GL&V Pulp and Paper Group stated that its fourth quarter priorities are to close the acquisition of Beloit's two pulping and finishing business units, which it plans to integrate into the Pulp and Paper Group, and to pursue the integration of the Process Group's operations. The company also intends to finish restructuring its financing.

The company says it is better positioned than ever to take advantage of a gradual market recovery, pointing out that the fourth quarter is traditionally the most active period of its fiscal year. In addition, the synergies of the Dorr-Oliver acquisition should be further reflected in the results for the quarter ending March 31. For fiscal 1999-2000, GL&V is therefore expected to post solid growth in revenues and net earnings compared with previous year.

Third quarter results
For the third quarter, GL&V achieved revenues of $69.7 million, compared with $57.9 million from continuing operations for the corresponding period of the previous fiscal year, an increase of 20.3%. Earnings before interest, income taxes, depreciation, and amortization (EBITDA) grew by 17.3% to reach $5.4 million, compared with $4.6 million for the third quarter ended Dec. 31, 1998. Net earnings rose 18.0% to $1.8 million or $0.21/share ($0.18 fully diluted), up from $1.5 million or $0.19/share ($0.16 fully diluted) for the corresponding quarter of fiscal 1998.

For the first nine months of the fiscal year, GL&V recorded a 39.1% increase in revenues, which totaled $152.2 million, compared with $109.4 million for the same period in 1998. EBITDA rose 51.9% to $13.0 million from $8.6 million. Net earnings grew by 50.5% to reach $3.9 million or $0.46/share ($0.39 fully diluted), up from $2.6 million or $0.31/share ($0.26 fully diluted). The company generated cash flow from operations of $7.8 million or $0.94/share, compared with $6.4 million or $0.78/share for the first nine months of fiscal 1998.

The growth in revenues was attributed to the contribution of the GL&V/Celleco subsidiaries for the full nine months, as opposed to three months for the corresponding period in 1998, the third quarter contributions from the Dorr-Oliver Group companies acquired at the end of September 1999, and the performance of GL&V Manufacturing, which met its annual revenue forecasts for the first nine months of the fiscal year. The operating and sales synergies in the company's two growth segments and its important spare parts operations largely contributed to the sharp rise in net earnings for the first nine months of the fiscal year. The integration of Dorr-Oliver has progressed on track, enabling it to contribute to the net earnings for the third quarter, earlier than expected, GL&V emphasized.

Founded in 1975, GL&V is a leader in the design and manufacture of engineered proprietary equipment for the pulp and paper industry and other industrial markets, mostly chemical products, mining, metallurgy, energy, and the environment. The company holds the proprietary rights to most of the equipment used in its customized technological solutions. Its equipment is manufactured mainly in plants in North America and Europe as well as by a network of subcontractor partners. GL&V's sales network extends over all five continents.

The company has operating centers and/or sales representatives in Canada, the U.S., six European countries, Australia, Africa, Asia, and South America, as well as sales agents in most industrialized regions. GL&V currently employs more than 1,000 people worldwide.

Edited by Ken Patrick