Results for the First Quarter Ended April 30, 2010 - ADF Group maintains its
focus

    
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    Highlights of the Quarter Ended April 30, 2010:

    - Revenues totalled $13.6 million compared with $16.8 million during the
      same quarter in 2009.
    - The Corporation maintained high profit margins, of which a gross margin
      of 34%, an EBITDA margin of 23% and a net profit margin of 9%.
    - ADF closed the first quarter of the 2011 fiscal year with net earnings
      of $1.2 million or $0.03 per share (basic and diluted), compared with
      $2.2 million or $0.06 per share (basic and diluted) in the first
      quarter of 2009.
    - As at April 30, 2010, ADF had a current ratio of 5.15:1 and a
      $9 million liquidities surplus over its long-term debt (including the
      current portion).
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TERREBONNE, QC, June 9 /CNW Telbec/ - For the three-month period ended April 30, 2010, ADF Group ("ADF" or the "Corporation") (ticker symbol: DRX/TSX) recorded revenues of $13.6 million, compared with $16.8 million for the same quarter of the previous year. The first-quarter gross margin stood at $4.6 million, representing 34% of revenues, compared with $5.4 million or 32% of revenues for the same period the previous year.

The relative strong operational performance was in part impacted by the delays attributable to clients on certain projects and the sharp increase in the Canadian dollar in relation to the U.S. dollar between the two comparable periods ended April 30, 2010 and 2009.

EBITDA (earnings before interest, taxes, depreciation and amortization) margin also remained high, standing at 23.1%, compared with 24.4% in the same quarter of the previous year.

ADF closed the quarter with net earnings of $1.2 million or $0.03 per share (basic and diluted), compared with $2.2 million or $0.06 per share (basic and diluted) in the first quarter of the previous year. Besides the unfavourable impact of the appreciation in the Canadian dollar and the decrease in revenues due to delays caused by clients on certain projects, this variation reflects an increase in certain costs, including amortization and interest expenses resulting from the investments programs carried out over the past two fiscal years in order to expand, diversify and optimize ADF's production infrastructure.

Finally, as at April 30, 2010, the Corporation remains in an excellent financial position, as attested to by its 5.15:1 current ratio, its $9 million liquidities surplus comprised of cash (including cash, cash equivalents and short term investments) over its long-term debt (including the current portion), and a long-term debt to equity ratio of just 0.12:1.

"During the first quarter of fiscal 2011, ADF Group continued to address the challenges of a difficult business environment with efficiency and discipline. By keeping our focus on ADF's quality and profitability objectives, we were able to maintain and even increase our profit margins, regardless of the delays in connection with certain projects, and despite an unfavourable exchange rate" said Jean Paschini, Chairman of the Board and Chief Executive Officer.

Order Backlog

ADF Group's order backlog stood at approximately $100 million as at April 30, 2010, up 8% over $90 million at the same date a year earlier. Taking into account the various contractual additions brought to its existing contracts over the past months, the execution period of orders in hand will extend over a period of 15 to 18 months.

Redemption of Subordinate Voting Shares in the Normal Course of Business

As at April 30, 2010, the Corporation redeemed 62,100 subordinate voting shares under the NCIB program announced on April 15, 2010, for a net consideration of $0.15 million, representing an average price of $2.41 per share.

Outlook

Until such time as the economic recovery starts to have a tangible positive impact on our industry, ADF Group will strive to further enhance its competitive and technological edge in its current market segments, while seeking new growth avenues compatible with its targeted development, niche positioning and value-added objectives. "We will continue to make the Corporation's financial health our number one priority through structured and prudent management of its profit margins, liquidity, capital structure and business risks" said Mr. Jean Paschini.

Annual Shareholders' Meeting

ADF Group Inc.'s Annual General and Special Meeting of Shareholders will be held on June 9, 2010 at 11:00 a.m. at the Omni Mont-Royal Hotel in Montreal.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the design, engineering, fabrication and selective installation in the non-residential construction industry of complex steel structures, heavy built-ups, as well as in miscellaneous and architectural metals. 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 in Canadian dollars.

    
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                       CONFERENCE CALL WITH INVESTORS

                       TO DISCUSS ADF GROUP'S RESULTS
                 FOR THE FIRST QUARTER ENDED APRIL 30, 2010

                 June 9, 2010 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 Wednesday, June 9, 2010 at 1:00 p.m. until midnight Tuesday,
         June 15, 2010, by dialing 1-800-642-1687; access code 78897320

      The conference call (audio) will also be available at www.cnw.ca.

               Members of the media are invited to listen in.
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    Consolidated Statements of Earnings and Comprehensive Income

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    3-Month Periods Ended April 30,                       2010          2009
    -------------------------------------------------------------------------
    (In thousands of $ except per-share amounts)             $             $

    Revenues                                            13,641        16,752
    Cost of goods sold                                   9,060        11,368
    -------------------------------------------------------------------------
    Gross margin before foreign exchange variation       4,581         5,384
    Gain on foreign exchange                              (424)         (561)
    -------------------------------------------------------------------------
    Gross margin                                         5,005         5,945
    Selling and administrative expenses                  1,426         1,304
    -------------------------------------------------------------------------
    Earnings before undernoted items:                    3,579         4,641
    Amortization
      Amortization of property, plant and equipment        686           664
      Amortization of intangible assets                     84            73
    -------------------------------------------------------------------------
                                                           770           737
    -------------------------------------------------------------------------
    Earnings before financial charges (interest
     income) and income taxes                            2,809         3,904
    -------------------------------------------------------------------------
    Financial charges (interest income)
      Interest on long-term debt                            61            60
      Interest income                                      (22)         (159)
      Other interest                                        11            18
    -------------------------------------------------------------------------
                                                            50           (81)
    -------------------------------------------------------------------------
    Earnings before income taxes                         2,759         3,985
    -------------------------------------------------------------------------
    Income taxes
      Current                                              121           168
      Future                                             1,440         1,577
    -------------------------------------------------------------------------
                                                         1,561         1,745
    -------------------------------------------------------------------------
    Net earnings and comprehensive income                1,198         2,240
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Basic earnings per share                              0.03          0.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Diluted earnings per share                            0.03          0.06
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Average number of outstanding shares
     (in thousands)                                     34,494        36,196
    -------------------------------------------------------------------------
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    Average number of outstanding diluted shares
     (in thousands)                                     35,311        36,890
    -------------------------------------------------------------------------
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    Consolidated Statements of Retained Earnings

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    3-Month Periods Ended April 30,                       2010          2009
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $
    Retained earnings, beginning of period               9,799         2,807
    Net earnings                                         1,198         2,240
    -------------------------------------------------------------------------
    Retained earnings, end of period                    10,997         5,047
    -------------------------------------------------------------------------
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    Consolidated Statements of Contributed Surplus

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    3-Month Periods Ended April 30,                       2010          2009
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $
    Contributed surplus, beginning of period             3,371         2,175
    Stock-based compensation                               100            61
    Exercise of options                                    (94)           (7)
    Excess of the book value over the acquisition
     cost of redeemed subordinate voting shares             32           144
    -------------------------------------------------------------------------
    Contributed surplus, end of period                   3,409         2,373
    -------------------------------------------------------------------------
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    Consolidated Balance Sheets

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            At            At
                                                      April 30,   January 31,
                                                          2010          2010
                                                                    (Audited)
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $

    ASSETS
    Current
      Cash and cash equivalents                          7,902         5,770
      Short-term investments                            11,562        11,652
      Accounts receivable                               19,552        14,850
      Income taxes                                         103           442
      Holdbacks on contracts                             1,698         2,692
      Investment tax credits                               536           536
      Work in progress                                   1,706         1,574
      Inventories                                        3,488         3,093
      Prepaid expenses                                     523           334
      Derivative financial instruments                   1,211           832
      Future income tax assets                           3,211         3,182
    -------------------------------------------------------------------------
                                                        51,492        44,957

    Holdbacks on long-term contracts                       664         1,297
    Investment tax credits                               2,065         2,065
    Property, plant and equipment                       43,775        42,760
    Intangible assets                                    2,625         2,590
    Other assets                                           244           247
    Future income tax assets                             7,742         9,452
    -------------------------------------------------------------------------
                                                       108,607       103,368
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    LIABILITIES
    Current
      Accounts payable                                   2,978         1,955
      Accrued charges                                      876           994
      Salaries and fringe benefits payable               1,963         1,732
      Deferred revenues                                  1,682         2,242
      Current portion of long-term debt                  2,508         2,422
    -------------------------------------------------------------------------
                                                        10,007         9,345
    Long-term debt                                       8,034         4,645
    Future income tax liabilities                          591           713
    -------------------------------------------------------------------------
                                                        18,632        14,703
    -------------------------------------------------------------------------
    Shareholders' equity
      Retained earnings                                 10,997         9,799
      Accumulated other comprehensive income               144           144
    -------------------------------------------------------------------------
                                                        11,141         9,943

      Capital stock                                     75,425        75,351
      Contributed surplus                                3,409         3,371
    -------------------------------------------------------------------------
                                                        89,975        88,665
    -------------------------------------------------------------------------
                                                       108,607       103,368
    -------------------------------------------------------------------------
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    Consolidated Statements of Cash Flows

    -------------------------------------------------------------------------
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    3-Month Periods Ended April 30,                       2010          2009
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $

    OPERATING ACTIVITIES
      Net earnings                                       1,198         2,240
      Adjustments for:
        Amortization of property, plant and equipment      686           664
        Amortization of intangible assets                   84            73
        Gain on disposal of property, plant and
         equipment                                         (52)            -
        Unrealized gain on derivative financial
         instruments                                      (379)       (1,183)
        Non-cash exchange (gain) loss                     (191)          292
        Interest capitalized on long-term debt               4             5
        Stock-based compensation                           100            61
        Future income taxes                              1,440         1,577
    -------------------------------------------------------------------------
      Net earnings adjusted for non-monetary items       2,890         3,729
    -------------------------------------------------------------------------
      Changes in non-cash operating items
        Accounts receivable                             (4,702)       (5,324)
        Short-term and long-term holdbacks on
         contracts                                       1,627           633
        Income taxes                                       339           (33)
        Work in progress                                  (132)         (942)
        Inventories                                       (395)           23
        Prepaid expenses                                  (189)          340
        Accounts payable, accrued charges, salaries
         and fringe benefits payable                     1,136        (3,410)
        Deferred revenues                                 (560)        1,161
    -------------------------------------------------------------------------
                                                        (2,876)       (7,552)
    -------------------------------------------------------------------------
    Cash flows from operating activities                    14        (3,823)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
      Disposal of short-term investments                    90           600
      Acquisition of property, plant and equipment      (1,649)         (390)
      Acquisition of intangible assets                    (119)         (338)
      Decrease in other assets                               3             -
    -------------------------------------------------------------------------
      Cash flows applied to investing activities        (1,675)         (128)
    -------------------------------------------------------------------------
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    FINANCING ACTIVITIES
      Issuances of subordinate voting shares               162            17
      Issuance of long-term debt                         4,370             -
      Repayment of long-term debt                         (411)         (764)
      Redemption of subordinate voting shares             (150)         (366)
    -------------------------------------------------------------------------
    Cash flows from financing activities                 3,971        (1,113)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Impact of fluctuations in foreign exchange
     rate on cash                                         (178)          (74)
    -------------------------------------------------------------------------
    Net cash inflows (outflows)                          2,132        (5,138)
    Cash and cash equivalents, beginning of period       5,770        22,490
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of period(1)          7,902        17,352
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplemental cash flow information
      Income taxes paid                                   (191)         (204)
      Interest received                                     33            18
      Non-cash financing and investing activities:
        Property, plant and equipment given in
         exchange for new equipment                        139             -
    -------------------------------------------------------------------------
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    1. At April 30, 2010, cash and cash equivalents were composed of
       $7,902,000 in cash ($4,016,000 in cash and $13,336,000 in cash
       equivalents as at April 30, 2009.)
    

SEGMENTED INFORMATION

The Corporation operates in the non-residential construction sector, primarily in North America. Its operations include the connections design and engineering, fabrication and selective installation of complex steel structures, heavy built-ups as well as miscellaneous and architectural metal work.

    
    -------------------------------------------------------------------------
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    3-Month Periods Ended April 30,                       2010          2009
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $

    Revenues
      - Canada                                             440         3,941
      - United States                                   13,201        12,811
    -------------------------------------------------------------------------
                                                        13,641        16,752
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
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                                                         As at         As at
                                                      April 30,   January 31,
                                                          2010          2010
                                                                    (Audited)
    -------------------------------------------------------------------------
    (In thousands of $)                                      $             $
    Property, plant and equipment
      - Canada                                          43,649        42,620
      - United States                                      126           140
    -------------------------------------------------------------------------
                                                        43,775        42,760
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

During the three-month ended April 30, 2010, 90% of the Corporation's revenues were recorded with one client (93% with five clients during the same period in 2009, each of which accounted for more than 10% of revenues).

SOURCE ADF Group Inc.

For further information: For further information: Jean Paschini, Chairman of the Board and Chief Executive Officer, (450) 965-1911, 1-800-263-7560 , www.adfgroup.com; Media: Amély Tremblay, Morin Relations Publiques, (514) 289-8688, ext. 226; Source: ADF Group Inc.


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