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Q3 2007 ARMTEC INFRASTRUCTURE INCOME FUND Earnings Conference Call - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good day, ladies and gentlemen, and welcome to the Armtec Infrastructure Income Fund Third Quarter 2007 Results Conference Call. At this time, all participants are only in a listen-only mode, but following the presentation we will conduct a question-and-answer session (OPERATOR INSTRUCTIONS) Please note that this conference is being recorded today, November 1, 2007. It is now my pleasure to introduce your host, Mr. Chuck Phillips, President and Chief Executive Officer. Please go ahead.

CHUCK PHILLIPS, PRESIDENT AND CEO, ARMTEC INFRASTRUCTURE INCOME FUND: Thanks, Elle. Good morning, everyone and thanks for joining us on this conference call to discuss our third quarter results for the period ended September 30, 2007. Joining me this morning is Carrie Boutcher, our Vice President of Finance and Interim Chief Financial Officer. The third quarter news release and the financial statements were issued yesterday. The release, the MD&A, the financial statement and this call can all be accessed through our Web site at www.armtecincomefund.com.

I also note that this conference call is being webcast live. I would like to remind you that our remarks and answers to your questions today may contain forward-looking information about future events or the Fund's future performance. This information is subject to the risks and uncertainties, which may cause actual events or results to differ materially. I would ask you all to read the forward-looking statements and risk factors at our MD&A as these outline the material factors which could cause or would cause actual results to differ.

As you all know, the third quarter was particularly noteworthy because of Armtec's strategic acquisition of Con-Force. Based in Calgary, this company is a leading manufacturer and installer of precast and pre-stressed concrete structures, such as bridges and building applications and also has complementary product lines to Armtec. The Con-Force acquisition is a transformational step for Armtec and its unitholders. It builds on the Fund's growth momentum, increases consolidated revenues by about two-thirds and expands our range of products and services. It's an excellent fit for our Company and it strengthens Armtec's presence in the fast-growing infrastructure markets in Western Canada and positions the Fund for expansion in infrastructure markets across North America. In addition, the Fund's Board of Trustees declared an increase of $0.01 per unit to the monthly cash distribution, taking us to $0.14 per month or $1.68 annualized. The new distribution is effective for unitholders of record on October 31, 2007. The increase reflects the continued strength of Armtec's growth strategy and our ability to deliver returns to our unitholders.

Turning now to our results, year-to-date, the Fund has recorded revenue growth of $5.2 million or 3.9% over 2006 to $135.5 million. The increase was primarily due to improved sales into infrastructure, agricultural and residential markets. Large infrastructure projects in Western Canada have offset declines in our international project activity. Agricultural installation conditions have improved in 2007 compared to 2006 and due to increased commodity prices, overall demand for drainage has also improved. Residential installations, particularly in Western Canada, have also contributed to growth. The Fund's growth in these two markets offset declines we experienced in natural resources, when compared to 2006 levels. As we have said before, the decline is due in part to the timing of some shipments of a larger project work associated with new investments in mining and oil and gas. Forestry shipments are also down due to the difficult conditions facing that industry. In terms of gross margins, these grew in the first nine months to $42.3 million, an improvement of $3.5 million over the $38.8 million for the same period in 2006. The improvement...