CFM Majestic Announces Record Revenues and Operating Income for 1999.

MISSISSAUGA, Ontario--(BUSINESS WIRE)--Nov. 23, 1999--

CFM Majestic Inc. (TSE:CFM) announced today the results for the year ended October 2, 1999.

Sales for the 1999 fiscal year rose 30% to $356 million from $273 million last year as a result of strong demand for its expanded line of hearth and leisure products. Income from operations before unusual items and income taxes rose 33% to $46.9 million from $35.3 million in 1998.

As a result of the Company's rapid expansion, recent acquisitions and future growth expectations, the Company established a business realignment program to streamline operations, rationalize certain product lines and eliminate redundant assets. A charge to income was incurred in the fourth quarter to provide for this program. The total one-time charge amounted to $23.0 million, which included unusual legal costs incurred during the year of $4.4 million. The cash component of the charge amounts to $6.7 million. As a result of the charge, net income for the year was $16.5 million or $0.39 per common share. Net income before the unusual items increased 24% to $32.6 million or $0.78 per common share from $26.2 million or $0.63 per common share in 1998.

"CFM has generated significant top line growth over the past three years due the strength of our product line, innovations resulting from our research and development program, the expansion of our distribution channels, and the successful integration of a number of acquisitions," commented Colin Adamson, Chairman and Chief Executive Officer. "With the completion of our new facilities and offices in Mississauga, Ontario and Stoke-on-Trent, England, we determined that there was an opportunity to streamline and realign operations to generate enhanced returns going forward."

The changes in the Company's balance sheet as at October 2, 1999 compared to the prior year reflect the acquisitions made during the period and the write-offs and provisions resulting from the one-time charge incurred in the fourth quarter. Operating cash flow before working capital requirements increased 11% to $45.7 million from $41.2 million last year. Debt financing rose marginally to 34% of total capitalization from 31% in 1998 due primarily to the financing of an acquisition during the year.

"We have accomplished a great deal in 1999," commented James Lutes, President and Chief Operating Officer. "We expanded capacity with the completion of our two new manufacturing facilities. We launched a number of new products, including a combined heating and cooling unit, an electric fireplace, a series of unvented gas fireplaces and revamped a significant portion of our wood-burning line. We enhanced our product offering with the acquisition of RMC International's line of indoor and outdoor space heating and home comfort products. We augmented our line of hearth accessories and added a new offering of garden products with the purchase of the assets of Jomoco. We significantly expanded our trade and distribution coverage in the retrofit market and continue to make gains in the new home building market. We also laid the groundwork for a growing participation in the barbeque market."

"As a result of our acquisitions and product development programs, CFM now possesses the most complete line of hearth products available in the industry," concluded Mr. Adamson. "Looking ahead, we will capitalize on this strong position to grow our market share in North America and Europe, and utilize our manufacturing capacity and strong distribution channels to expand further into complementary home leisure products." -0-

Financial Highlights (audited statements follow)
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Year Ended,
($,000, except per share amounts)  Oct. 2, 1999  Sept. 30, 1998
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Sales                                   355,742         272,740
EBITDA before unusual items              66,309          51,379
Income before unusual items & income
 taxes                                   46,857          35,311
Unusual items before tax                 23,005              -
Net Income                               16,487          26,216
Earnings per share                        $0.39           $0.63
Net income before unusual items          32,610          26,216
Earnings per share before unusual
 items                                    $0.78           $0.63
---------------------------------------------------------------
Average shares outstanding           41,945,000      41,885,000

CFM Majestic Inc. is a leading vertically integrated manufacturer of gas and wood-burning fireplaces, free standing stoves and other hearth products in North America and the United Kingdom. The Company designs, develops and manufactures North America's most complete line of hearth products and maintains an ongoing program of research and development aimed at continually improving the quality, design, features and efficiency of its products.

This press release contains forward looking statements that involve certain risks and uncertainties which could cause actual results to differ materially from future results expressed or implied by such forward looking statements. Important factors that could affect these statements include, without limitation, general economic conditions, consumer confidence and the level of housing starts, the Company's ability to develop new products, the seasonality of the demand for the Company's products, competition, and foreign currency fluctuations. These factors and other risks and uncertainties are discussed in the Company's Registration Statement on Form 40-F and in the subsequent reports filed by the Company with the U.S. Securities and Exchange Commission. -0-

CFM MAJESTIC INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the year ended
(In thousands of dollars, audited)

                                             YEAR ENDED

                                      October 2,  September 30,
                                           1999            1998
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Sales                                   355,742         272,740
Cost of sales                           232,695         178,897
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Gross profit                            123,047          93,843

Expenses
Selling and administrative               52,621          38,843
Research and development                  4,117           3,621
Depreciation and amortization            10,019           8,012
Amortization of goodwill                  5,007           4,582
Interest expense (net)                    4,426           3,474
---------------------------------------------------------------

                                         76,190          58,532

Income from operations before unusual
 items and income taxes                  46,857          35,311
Unusual items                            23,005
---------------------------------------------------------------

Income before income taxes               23,852          35,311

Provision for income tax                  7,365           9,095
---------------------------------------------------------------

Net income for the period                16,487          26,216
===============================================================

CFM MAJESTIC INC.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(In thousands of dollars, audited)


                                      As at             As at
                                October 2, 1999   September 30, 1998

ASSETS

Current
Cash and equivalents                      7,561           8,895
Accounts receivable                      97,362          76,251
Income taxes recoverable                                  5,090
Inventory                                61,858          61,801
Pre-paid and other expenses               1,166           1,100
Deferred income taxes                    13,186          12,309
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Total current assets                    181,133         165,446

Capital assets, net                      79,059          81,818
Deferred income taxes                     1,281           1,118
Deferred financing costs and other assets 1,890             868
Goodwill                                155,057         111,219
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                                        418,420         360,469
================================================================

LIABILITIES AND SHAREHOLDERS' EQUITY

Current

Bank indebtedness and current debt       39,621          52,115
Accounts payable and accrued liabilities 63,352          38,708
Income taxes                                494             138
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Total current liabilities               103,467          90,961

Long-term debt                           76,947          44,039
Deferred income taxes                    11,934          13,067
Total liabilities                       192,348         148,067
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Minority interest                           366             390

Shareholders' equity
Share capital                           142,833         135,691
Retained earnings                        71,507          57,935
Cumulative translation adjustment        11,366          18,386
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Total shareholders' equity              225,706         212,012

                                        418,420         360,469
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CFM MAJESTIC INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Fiscal year ended
(In thousands of dollars, audited)


                                         October 2,   September 30,
                                           1999           1998
Cash flows from operating activities
Net income for the period                16,487          26,216
Add (deduct) items not involving cash
Depreciation and amortization            15,055          12,594
Deferred income taxes                   (2,167)           2,405
Unusual items                            16,283

Change in non-cash working capital     (11,410)        (28,412)
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Cash flows provided by operating
 activities                             34,248          12,803

Cash flows from investing activities
Acquisitions                           (35,031)        (39,471)
Purchase of capital assets             (16,464)        (13,019)
----------------------------------------------------------------
Cash flows used in investing
 activities                            (51,495)        (52,490)

Cash flows from financing activities
Bank indebtedness and long-term debt     20,245          38,280
Repurchase of common shares             (2,357)
Options repurchased                     (1,673)         (3,466)
Other                                      (82)             529
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Cash flows provided by (used in)
 financing activities                    16,133          35,343

Effect of foreign currency
 translation on cash and cash
 equivalents                              (220)           5,280
Net (decrease) increase in cash
 and cash equivalents during the year   (1,334)             936
Cash and cash equivalents,
 beginning of period                      8,895           7,959
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Cash and cash equivalents,
 end of period                            7,561           8,895
================================================================