ADF Group Inc. announces the results for the three-month and six-month periods ended July 31, 2018

HIGHLIGHTS

  • Revenues and net income down compared with the same periods a year ago.
  • Order backlog at $141.1 million as at July 31, 2018, which is $55.6 million more than as at January 31, 2018.

TERREBONNE, QC, Sept. 13, 2018 /CNW Telbec/ – ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), recorded revenues of $32.2 million and $ 60.7 million respectively during the three-month and six-month periods ended July 31, 2018, down from the same periods a year earlier.

Gross margin as a percentage of revenue went from 9.5% for the three-month period ended July 31, 2017, to 6.4% for the same period ended July 31, 2018. For six-month periods ended on the same dates, the gross margin as a percentage of revenue decreased from 10.1% to 4.7%. These decreases, as a percentage of revenues, are mainly attributable to the lower level of activity. While some projects are nearing completion at the time of writing these lines, the projects that were signed during the first quarter have barely started. The initiatives announced during the first quarter, including temporary layoffs and a work-sharing program, helped reduce the costs, and reducing by the same token the impact on second-quarter margins compared to the first quarter ended April 30, 2018.

For the second quarter ended July 31, 2018, ADF recorded a net loss of $532,000 (-$0.02 per share, basic and diluted) compared to a net income of $1.9 million ($0.06 per share, basic and diluted) a year earlier. After the first six months, the Corporation recorded a net loss of $1.4 million (-$0.04 per share, basic and diluted) compared to a net income of $2.3 million ($0.07 per share, basic and diluted).

On July 31, 2018, the Corporation’s working capital stood at $30.6 million. The Corporation remains well positioned to support its ongoing operations and pursue its development projects, despite the current pressure on its liquidities.

The order backlog of the Corporation stood at $141.1 million as at July 31, 2018, compared with $85.5 million as at January 31, 2018. The current order backlog will extend until the third quarter of the fiscal year ending January 31, 2020.

 

Financial Highlights

Three (3) Months

Six (6) Months

Periods ended July 31,

2018

2017

2018

2017

(In thousands of dollars, and dollars per share)

$

$

$

$

Revenues

32,220

45,278

60,697

93,916

EBITDA

109

2,102

(1,077)

5,183

Net income (loss)

(532)

1,927

(1,442)

2,281

—    Per share (basic and diluted)

(0.02)

0.06

(0.04)

0.07

Cash flows from (used in) operating activities

4,187

8,420

(24)

6,231

Average number of outstanding shares (basic, in thousands)

32,635

32,635

32,635

32,631

Average number of outstanding shares (diluted, in thousands)

32,635

32,671

32,635

32,666

 

Outlook

"As in the previous quarter, ADF’s results as at July 31, 2018 were tinged with the uncertainty surrounding customs tariffs. Despite these uncertainties, we continue our efforts to grow the order book" said Mr. Jean Paschini, Co-Chairman of the Board and Chief Executive Officer.

Dividend

On September 12, 2018, ADF Group’s Board of Directors approved the payment of a semi-annual dividend of $0.01 per share, which will be paid on October 16, 2018 to shareholders of record as at September 28, 2018.

Conference Call with Investors

A conference call with investors is scheduled for today, September 13, 2018 at 10 a.m. (Eastern time) to discuss the results of Corporation three-month and six-month periods ended July 31, 2018.

To take part in the conference call, dial 1-888-390-0549, a few minutes prior to the conference call scheduled start time. A replay of this conference call will be available from 1:00 p.m. today until 11:59 p.m., Thursday, September 20, 2018, by dialing 1-888-259-6562, followed by the access code 199213#.

The conference call (audio) will also be available at www.adfgroup.com. Members of the media are invited to listen in.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication, including industrial coatings, 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 and two paint shops, in Canada and in the United States.

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 the section "Non-GAAP Measures" of the Corporation’s Management’s Discussion and Analysis for the definition of this metric and reconciliation to the most comparable IRFS measures.

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.

All amounts are in Canadian dollars, unless otherwise indicated.

Website: www.adfgroup.com

 

SOURCE ADF Group Inc.

ADF GROUP INC., Mr. Jean Paschini, Co-Chair of the Board of Directors and Chief Executive Officer, Mr. Jean-François Boursier, CPA, CA, Chief Financial Officer, Telephone: (450) 965-1911