ADF Group Inc. announces the results of the first quarter ended April 30, 2007



    TERREBONNE, QC, June 4 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the
"Company") (TSX: DRX) announces that the contract revenues have posted a
slight increase during the first quarter ended April 30, 2007, to stand at
$10.9 million compared with $10.5 million during the corresponding period a
year ago. The Company's revenues will post a noticeable growth as of the third
quarter of the current fiscal year, given the increase in the rate of the
fabrication output arising from the significant increase of its backlog since
the end of the first quarter.
    ADF was awarded $36 million worth in new contracts in Canada and the
United States during the first quarter and an additional $43.3 million since
the end of the first quarter. The backlog went from $64 million on April 30,
2007 to $103 million on June 4, 2007, representing a 62% increase. The current
backlog will be executed between 6 to 14 months.
    Gross margin rose from $2.7 million, or 26% of sales on April 30, 2006 to
$3.5 million or 32% of sales on April 30, 2007, representing a 30% increase.
    Earnings before interest, taxes and amortization ("EBITDA") increased by
51% compared with the corresponding period in 2006 rising from $1.5 million or
14.2 % of sales, to $2.3 million or 20.6% of sales on April 30, 2007.
    ADF Group posted net earnings of $1.4 million ($0.05 basic earning per
share and $0.04 diluted earning per share), 13% of revenues or a 9.1% return
on shareholders' equity on non annualized basis, compared to net earnings of
$2.7 million ($0.10 basic and diluted earning per share) or 26% of revenues on
April 30, 2006. It is important to note that the Company would have posted net
earnings of $530,000 or 4.9% of revenues during the first quarter of 2006, had
it not been for the $ 2.5 million gain on forgiveness of interest.
    ADF Group also announces today an investment of approximately
$3.0 million at its Terrebonne fabrication plant, for the acquisition of new
state-of-the-art semi-automated fabrication equipment, and to convert one of
the plant's areas currently used for the storage of raw material, into a
50,000 square feet (4,650 m2) fabrication bay. With the plant's new layout,
the Company will be able to improve its plant's overall effectiveness and
fabrication capacity. The funds will come from the proceeds from the bought
deal treasury issue of Subordinate Voting Shares of the Company, which is
expected to close by June 20, 2007, as announced by the Company on May 31,
2007.
    Jean Paschini, Chairman of the board and Chief executive officer adds,
"We are pleased with the results posted in the first quarter ended April 30,
2007, which are in line with our forecasts and have progressed according to
the Company's three-year business plan. Fiscal year 2007-2008 begins well,
both in terms of contract awards and profitability of operations".
    The disclosure of the Company's first quarter results initially scheduled
for June 12, 2007 at the Annual Shareholders General Assembly, has been
advanced to June 4, 2007, due to the bought deal previously announced.

    About ADF

    ADF Group Inc. is a North American leader in the design, engineering,
fabrication and selective installation of complex steel superstructures, as
well as in architectural metal work. ADF 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.

    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 expressed in Canadian dollars.


    
    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
    (In thousands of $, except per-share amounts) (Unaudited)

                                                           Three (3) Months
                                                        April 30,   April 30,
                                                            2007        2006
                                                      -----------------------
                                                               $           $
    Revenues                                              10,919      10,467
    Cost of goods sold                                     6,989       7,704
    -------------------------------------------------------------------------
    Gross margin before exchange rate fluctuation          3,930       2,763
    Loss on foreign exchange                                 439          65
    -------------------------------------------------------------------------
    Gross margin                                           3,491       2,698
    Selling and administrative expenses                    1,240       1,204
    -------------------------------------------------------------------------
    Income from continuing operations before the
     undernoted items                                      2,251       1,494
    -------------------------------------------------------------------------
    Amortization
      Amortization of intangible assets                      124         202
      Amortization of property, plant and equipment          566         549
    -------------------------------------------------------------------------
                                                             690         751
    -------------------------------------------------------------------------
    Income from continuing operations before
     financial charges, unusual items and income taxes     1,561         743
    -------------------------------------------------------------------------
    Financial charges
      Interest on long-term debt                             507          61
      Interest income                                        (39)        (25)
      Other interest                                          25         177
    -------------------------------------------------------------------------
                                                             493         213
    -------------------------------------------------------------------------
    Income from continuing operations before unusual
     items and income taxes                                1,068         530
    -------------------------------------------------------------------------
    Unusual items
      Gain on forgiveness of interest                          -      (2,548)
    -------------------------------------------------------------------------
                                                               -      (2,548)
    -------------------------------------------------------------------------
    Income from continuing operations, before income
     taxes                                                 1,068       3,078
    -------------------------------------------------------------------------
    Income taxes
      Current                                                 40           -
      Future                                                (375)          -
    -------------------------------------------------------------------------
                                                            (335)          -
    -------------------------------------------------------------------------
    Net income from continuing operations                  1,403       3,078
    Loss from discontinued operations                          -        (405)
    -------------------------------------------------------------------------
    Net income and comprehensive income                    1,403       2,673
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic earnings (loss) per share
      From continuing operations                            0.05        0.12
      From discontinued operations                             -       (0.02)
    -------------------------------------------------------------------------
                                                            0.05        0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted earnings (loss) per share
      From continuing operations                            0.04        0.11
      From discontinued operations                             -       (0.01)
    ------------------------------------------------------------------------
                                                            0.04        0.10
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of outstanding shares (in thousands)   30,862      26,760
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF DEFICIT
    (In thousands of $) (Unaudited)

                                                           Three (3) Months
                                                        April 30,   April 30,
                                                            2007        2006
                                                      -----------------------
                                                               $           $
    Deficit, beginning of the period                    (108,365)   (118,709)
    Net income                                             1,403       2,673
    -------------------------------------------------------------------------
    Deficit, end of the period                          (106,962)   (116,036)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS
    (In thousands of $) (Unaudited)

                                                           Three (3) Months
                                                        April 30,   April 30,
                                                            2007        2006
                                                      -----------------------
                                                               $           $
    Contributed surplus, beginning of the period           1,988         273
    Employee stock options                                    44          35
    Maturity of warrants                                       -       1,880
    -------------------------------------------------------------------------
    Contributed surplus, end of the period                 2,032       2,188
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED BALANCE SHEETS
    (In thousands of $)

                                                              At          At
                                                        April 30, January 31,
                                                            2007        2007
                                                      (Unaudited)   (Audited)
                                                      -----------------------
                                                               $           $

    ASSETS
      Current assets
      Cash and cash equivalents                            3,804       6,016
      Accounts receivable                                 10,036       7,908
      Holdbacks on contracts                               4,316       3,519
      Work in progress                                       326       2,178
      Inventories                                          2,579       3,278
      Prepaid expenses                                       594         874
      Future income tax assets                             1,375       1,000
    -------------------------------------------------------------------------
                                                          23,030      24,773

    Holdbacks on long-term contracts                           -         880
    Property, plant and equipment                         30,524      30,521
    Intangible assets                                        328         382
    Other assets                                              26         168
    -------------------------------------------------------------------------
                                                          53,908      56,724
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES
      Current liabilities
        Bank indebtedness                                      -         263
        Accounts payable and accrued charges               5,245       8,043
        Billing in excess of cost and recognized
         income on work in progress                        7,360       8,154
        Income taxes                                         107         104
        Current portion of long-term debt                  2,575       2,606
    -------------------------------------------------------------------------
                                                          15,287      19,170

    Long-term debt                                        23,217      23,612
    -------------------------------------------------------------------------
                                                          38,504      42,782
    -------------------------------------------------------------------------

    SHAREHOLDERS' EQUITY
      Capital stock                                      120,334     120,319
      Contributed surplus                                  2,032       1,988
      Deficit                                           (106,962)   (108,365)
    -------------------------------------------------------------------------
                                                          15,404      13,942
    -------------------------------------------------------------------------
                                                          53,908      56,724
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In thousands of $)

                                                           Three (3) Months
                                                        April 30,   April 30,
                                                            2007        2006
                                                      -----------------------
                                                               $           $

    OPERATING ACTIVITIES
      Net income from continuing operations                1,403       3,078
      Adjustments for:
        Amortization of property, plant and equipment        566         549
        Amortization of intangible assets                    124         202
        Amortization of other assets                         140          17
        Gain on forgiveness of interest                        -      (2,548)
        Non-cash exchange gain                                 -          (7)
        Future income taxes                                 (375)          -
        Capitalized interest on interest-free
         long-term debt                                        2           -
        Stock option-based compensation                       44          35
    -------------------------------------------------------------------------
                                                           1,904       1,326
    -------------------------------------------------------------------------
      Changes in non-cash operating working capital
       items from continuing operations
        Accounts receivable                               (2,128)      3,442
        Short-term and long-term holdbacks on contracts       83        (681)
        Work in progress                                   1,852         119
        Inventories                                          699       1,764
        Income taxes                                           3         111
        Prepaid expenses                                     280         376
        Accounts payable and accrued liabilities          (2,798)     (1,229)
        Billing in excess of cost and recognized income
         on work in progress                                (794)     (4,503)
    -------------------------------------------------------------------------
                                                          (2,803)       (601)
    -------------------------------------------------------------------------
    Cash flows applied to operating activities of
     continuing operations                                  (899)        725
    Cash flows applied to operating activities of
     discontinued operations                                   -        (696)
    -------------------------------------------------------------------------
                                                            (899)         29
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    INVESTING ACTIVITIES
      Acquisition of property, plant and equipment          (662)        (93)
      Acquisition of intangible assets                       (70)          -
      Decrease (increase) in other assets                      2          (2)
    -------------------------------------------------------------------------
    Cash flows applied to investing activities              (730)        (95)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    FINANCING ACTIVITIES
      Repayment of bank indebtedness                        (263)          -
      Repayment of credit facility                             -        (100)
      Repayment of long-term debt                           (605)        (31)
      Increase in long-term debt                             270           -
      Share issue                                             15           -
    -------------------------------------------------------------------------
    Cash flows applied to financing activities              (583)       (131)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Net cash outflow                                      (2,212)       (197)
    Cash and cash equivalents, at the beginning of
     the period                                            6,016         170
    -------------------------------------------------------------------------
    Cash and cash equivalents, at the end of the
     period                                                3,804         (27)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Supplemental cash flows information
      Income taxes paid on continuing operations              23           -
      Interest paid on continuing operations                 515         373
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    SEGMENTED REPORTING

    The Company operates in the non-residential construction sector, primarily
in Canada and the United States. Its operations include the design,
engineering, fabrication and installation of complex steel structures, as well
as architectural metal works. During the first quarter ended April 30, 2007,
69% of the Company's revenues was achieved with two clients, each of which
accounted for more than 10% of revenues.


                                       Revenues            Property, plant
                                                            and equipment
                               ----------------------------------------------
                                April 30,   April 30,         At          At
                                    2007        2006    April 30, January 31,
                                  (Three      (Three        2007        2007
                                  months)     months)               (Audited)
                               ----------------------------------------------
                                       $           $           $           $
    Continuing operations
      Canada                       1,019         337      30,347      30,331
      United States                9,900       9,497         177         190
      Trinidad                         -         395           -           -
      Other countries                  -         238           -           -
    -------------------------------------------------------------------------
                                  10,919      10,467      30,524      30,521
    -------------------------------------------------------------------------
    Discontinued operations
      Canada                           -       1,118           -           -
      United States                    -           -           -           -
      Trinidad                         -           -           -           -
      Other countries                  -           -           -           -
    -------------------------------------------------------------------------
                                       -       1,118           -           -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: ADF Group Inc.: Jean Paschini, Chairman of the
Board and Chief Executive Officer; Louis Potvin, Chief Financial Officer,
(450) 965-1911, 1 (800) 263-7560, www.adfgroup.com


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