Results for the third quarter ended October 31, 2014

TERREBONNE, QC, Dec. 4, 2014 /CNW Telbec/ – ADF GROUP INC. (“ADF” or the “Corporation”) (TSX: DRX), closed the third quarter of the 2015 fiscal year with revenues of $12.5 million, down from those for the same quarter of the previous fiscal year, which benefited from the additional volume generated by the Syncrude project, in Western Canada. For the nine-month period ended October 31, 2014, ADF Group recorded revenues of $57.3 million, compared with $63.7 million during the same period of the previous year. In addition to the Syncrude project, the variation in revenues is explained by the completion of the Quebec City and Trois-Rivières’ amphitheaters projects.

The third-quarter gross margin, as a percentage of revenues, stood at 6.2% compared with 25.9% for the corresponding quarter the previous year, whereas the gross margin for the nine-month period ended October 31, 2014 stood at 10.1% compared with 22.5% a year earlier. These decreases are mainly explained by the impact of the Syncrude project a year ago, by the completion of the aforementioned projects, and the start-up of the new fabrication plant in Great Falls, Montana.

ADF posted a third-quarter net loss of $1.1 million ($0.04 per share, basic and diluted), compared with a net income of $4.4 million ($0.13 per share, basic and diluted) a year ago. For the first nine months, the net loss was $1.0 million ($0.03 per share, basic and diluted), compared with a net income of $5.3 million ($0.16 per share, basic and diluted) for the corresponding period of the previous year.

The Corporation’s operating activities generated cash flows of $4.4 million in the third quarter ended October 31, 2014, and used cash flows of $6.9 million during the nine-month period ended October 31, 2014. As at October 31, 2014, the Corporation had a working capital of $24.5 million, including short-term available liquidities (cash, cash equivalents and short-term investments) of $5.1 million. The Corporation remains in a solid position to support its ongoing operations, pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy.

As at October 31, 2014, the Corporation backlog stood at $46 million. These projects will be completed by the second quarter of the Corporation’s 2016 fiscal year.

Financial Highlights

Three Months

Nine Months

Periods ended October 31,

2014

2013

2014

2013

(In thousands of dollars, and dollars per share)

$

$

$

$

Revenues

12,471

33,781

57,308

63,706

EBITDA

(511)

6,789

1,391

9,826

Net income

(1,140)

4,380

(1,016)

5,330

– Per share (basic and diluted)

(0.04)

0.13

(0.03)

0.16

Cash flows from (used in) operating activities

4,411

9,223

(6,869)

7,741

Average number of outstanding shares (basic, in thousands)

32,501

32,463

32,495

32,456

Average number of outstanding shares (diluted, in thousands)

32,501

33,088

32,495

32,987

 

New Orders

On December 3, 2014, the Corporation announced the award of new orders totalling $22 million. The largest of these contracts includes the fabrication, the shop drawings, the supply of raw material (steel), surface treatment and the delivery of the steel structure of a industrial building in Saskatchewan. The other contracts involve the fabrication of steel structures for industrial buildings for different projects in New York, Ontario and U.S West coast. Work will be carried out at both of ADF’s fabrication plants in Terrebonne, Quebec and in Great Falls, Montana.

Outlook

“As announced in previous quarters, we are very active with regard to bidding activities and encouraged by the award of new contracts in recent months, totalling more than $60 million. This being said, we remain committed to our prudent and selective approach adopted in the past years and continue to privilege profitable and long-term growth” indicated Mr. Jean Paschini, Co-Chairman of the Board and Chief Executive Officer.

The 2015 fiscal year results will continue to be affected by the commissioning of both our fabrication plant in Great Falls at the beginning of the current fiscal year and our new industrial paint shop in the coming days, as well as the continued pressure on prices in the markets served by the Corporation”, concluded Mr. Paschini.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non residential construction industry. ADF Group Inc. is one of the few players in the industry capable of handling highly technically complex mega projects on fast-track schedules in the commercial, institutional, industrial and public sectors. The Corporation operates two fabrication plants, one in Canada and one in the United States.

Forward-Looking Information

This press release contains forward-looking statements reflecting ADF objectives and expectations. These statements are identified by the use of verbs such as “expect” as well as by the use of future or conditional tenses. By their very nature these types of statements involve risks and uncertainty. Consequently, reality may differ from ADF’s expectations.

Non-IFRS Measures

Earnings before interest, taxes, depreciation and amortization (“EBITDA”) is not a performance measure recognized by IFRS standards, and is not likely to be comparable to similar measures presented by other issuers. Management, as well as investors, consider this to be useful information to assist them in assessing the Corporation’s profitability and ability to generate funds to finance its operations. Refer to Section 9 “Non-GAAP Measures” of the Corporation’s interim Management’s Discussion and Analysis for the nine-month period ended October 31, 2014 for the definition of this metric and reconciliation to the most comparable IRFS measures.

All amounts are in Canadian dollars, unless otherwise indicated.

CONFERENCE CALL WITH INVESTORS

 

To discuss ADF Group’s results for the three-month and nine-month periods ended October 31, 2014,
December 4, 2014 at 10:00 a.m. (Montreal time)


To participate in the conference call, please dial 1-866-865-3087 a few minutes before the start of the call.

For those unable to participate, a taped rebroadcast will be available from
Thursday, December 4, 2014 at 1:00 p.m. until midnight Thursday, December 11, 2014,
by dialing 1-855-859-2056; access code 42002971.


The conference call (audio) will also be available at www.adfgroup.com

Members of the media are invited to listen in.

 

SOURCE ADF Group Inc

Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer; Jean-François Boursier, CPA, CA, Chief Financial Officer; Telephone: (450) 965-1911 / 1 (800) 263-7560; Web Site: www.adfgroup.com