Results for the fiscal year ended January 31, 2015

HIGHLIGHTS

  • New contracts totalling $62 million signed in Fiscal 2015
  • Commissioning of the new fabrication plant in Montana, USA
  • Construction of a new paint shop in Montana, USA
  • Available liquidities of $9 million
  • Order backlog of $48 million as at January 31, 2015

TERREBONNE, QC, April 9, 2015 /CNW Telbec/ - ADF Group Inc. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $76.1 million for the 2015 fiscal year compared with $93.0 million the previous fiscal year, and recorded a negative net income of $1.6 million compared with a net income of $7.7 million a year earlier. It is important to point out that the Syncrude project, in Alberta, significantly contributed to the 2014 fiscal year results, and that the fabrication of the steel structures for the Quebec City's new amphitheater project was then in full swing. Therefore, for the 2015 fiscal year, the progressive decrease in the fabrication hours required to complete these two projects was partially offset by the gradual implementation of our new fabrication plant in Great Falls, Montana, which generated new revenues, as well as by the new projects signed during the 2015 fiscal year.

The gross margin as a percentage of revenues went from 21.7% during the fiscal year ended January 31, 2014 to 9.6% during the fiscal year ended January 31, 2015. In addition to the impact of the Syncrude project mentioned above, this decrease is also explained by the fact that, even with a successful start-up, the first year of operations of our new Great Falls' fabrication plant was characterized by the usual learning curve.

On January 31, 2015, cash, cash equivalents and short-term investments totalled $8.7 million, down by $10.7 million compared with January 31, 2014. This decrease in available cash is explained by the fact that the Corporation invested more than $13.0 million during fiscal 2015 mainly to build a new paint shop, previously mentioned. Since the beginning of fiscal 2014, the Corporation invested close to $40.0 million in its new facilities in Montana from its own funds and through new U.S. denominated debts totalling CA$10.3 million.

Financial Highlights


Fiscal Years Ended January 31,

2015

2014

(In thousands of dollars, and dollars per share)

$

$

Revenues

76,058

92,997

EBITDA

1,594

14,234

Net income for the year

(1,570)

7,682

Basic per share

(0.05)

0.24

Diluted per share

(0.05)

0.23

Average number of outstanding shares (basic, in thousands)

32,499

32,463

Average number of outstanding shares (diluted, in thousands)

32,499

33,060

 

Outlook

During the fiscal year ended January 31, 2015, ADF Group announced the award of new contracts totalling $62.0 million. The largest of these contracts is part of a major real estate project in New York City. The other contracts involve the fabrication of steel structures for various industrial buildings for different projects, from Eastern Canada to Western USA.

ADF Group's order backlog totalled $48 million, on January 31, 2015, with a schedule extending to the third quarter of the 2016 fiscal year.

The Corporation started the 2016 fiscal year with 260,000 fabrication hours in hand, across its operational units in Terrebonne and Great Falls, which is twice as much fabrication hours than at the same date a year ago. This represents a very good level of activity and attests to the contribution of our new fabrication plant during its first year of operations.

"Today, we look forward to the future with solid financial and operational bases. Indeed, our financial situation, our three state-of-the-art plants equipped with cutting-edge machinery and our experienced staff, allows us to see the coming years with a renewed optimism. Our main markets are growing and several major projects are in our line of sight. Despite a constant downward pressure on prices, we are confident that the 2016 fiscal year will allow ADF to be profitable again and to achieve a sustainable growth" said Mr. Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer.

Dividend

ADF Group announces the payment of a semi-annual dividend of $0.01 per subordinate voting share and multiple voting share to be paid on May 15, 2015 to shareholders of record as at April 30, 2015.

Annual Meeting of Shareholders

ADF Group Inc. Annual Meeting of Shareholders will be held on:

Date:

Wednesday, June 10, 2015

Time:

10:30 a.m.

Place:

ADF Group Inc., Headquarters, Terrebonne, Quebec

 

Financial results for the first quarter ending April 30, 2015, will also be disclosed at the Corporation's shareholder meeting.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication, including industrial coating, 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, as well as a paint shop 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 10 "Non-GAAP Measures" of the Corporation's Management's Discussion and Analysis for Fiscal Year Ended January 31, 2015, 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 Fiscal Year Ended January 31, 2015,
Thursday, April 9, 2015 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, April 9, 2015 at 1:00 p.m. until midnight Thursday, April 16, 2015, by dialing 1-855-859-2056; access code 9274143.

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

Members of the media are invited to listen in.

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION



As at January 31,

2015

2014

(In thousands of Canadian dollars)

$

$




ASSETS



Current assets




Cash and cash equivalents

7,946

18,675


Short-term investments

789

798


Accounts receivable

14,143

12,935


Holdbacks on contracts

4,309

3,572


Income tax assets

29

32


Work in progress

6,834

6,139


Inventories

5,769

5,609


Prepaid expenses and other current assets

1,679

1,195


Total current assets

41,498

48,955




Non-current assets




Property, plant and equipment

83,000

68,476


Intangible assets

2,781

2,713


Other non-current assets

3,969

3,255


Deferred income tax assets

6,567

4,585

Total assets

137,815

127,984




LIABILITIES



Current liabilities




Accounts payable and other current liabilities

15,971

13,510


Deferred revenues

4,173

4,121


Derivative financial instruments

1,115

3


Current portion of long-term debt

763

1,706


Total current liabilities

22,022

19,340




Non-current liabilities




Long-term debt

9,374

4,315


Deferred income tax liabilities

2,461

2,496

Total liabilities

33,857

26,151

SHAREHOLDERS' EQUITY




Capital stock

69,185

69,139


Contributed surplus

6,433

6,407


Accumulated other comprehensive income

5,835

1,562


Retained income

22,505

24,725

Total shareholders' equity

103,958

101,833

Total liabilities and shareholders' equity

137,815

127,984

 

CONSOLIDATED STATEMENTS OF INCOME


Fiscal Years Ended January 31,

2015

2014

(In thousands of Canadian dollars and in dollars per share)

$

$




Revenues

76,058

92,997

Cost of goods sold

68,791

72,778

Gross Margin

7,267

20,219

Selling and administrative expenses

9,854

9,431

Financial revenues

(151)

(155)

Financial expenses

399

189

Foreign exchange loss (gain)

(58)

144


10,044

9,609

Income before income tax expense (recovery)

(2,777)

10,610

Income tax expense (recovery)

(1,207)

2,928

Net income for the year

(1,570)

7,682

Earnings per share




Basic per share

(0.05)

0.24


Diluted per share

(0.05)

0.23

Average number of outstanding shares (in thousands)

32,499

32,463

Average number of outstanding diluted shares (in thousands)

32,499

33,060

 

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


Fiscal Years Ended January 31,

2015

2014

(In thousands of Canadian dollars)

$

$

Net income for the year

(1,570)

7,682

Other comprehensive income (a) :




Exchange differences on translation of foreign operations (b)

4,273

3,244


Change in value of available-for-sale financial assets (c)

51


4,273

3,295

Comprehensive income for the year

2,703

10,977

(a)

Will subsequently be reclassified to net income.

(b)

Net of hedging activities and an immaterial related income tax expense for the fiscal year ended January 31, 2015 (net of $30,000 in related income tax recovery for the fiscal year ended January 31, 2014).

(c)

Net of an immaterial amount related income tax expense for the fiscal year ended January 31, 2014.

 

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY



Capital
Stock

Contributed
Surplus

Accumulated Other
Comprehensive
Income

Retained
Income

Total

(In thousands of Canadian dollars)

$

$

$

$

$

Balance, February 1, 2013

69,035

6,432

(1,733)

17,692

91,426


Net income for the year

7,682

7,682


Other comprehensive income

3,295

3,295


Comprehensive income for the year

3,295

7,682

10,977


Share-based compensation

23

23


Options exercised

104

(48)

56


Dividends

(649)

(649)

Balance, January 31, 2014

69,139

6,407

1,562

24,725

101,833

 




Capital
Stock

Contributed
Surplus

Accumulated Other
Comprehensive
Income

Retained
Income

Total

(In thousands of Canadian dollars)

$

$

$

$

$

Balance, February 1, 2014

69,139

6,407

1,562

24,725

101,833


Net income for the year

(1,570)

(1,570)


Other comprehensive income

4,273

4,273


Comprehensive income for the year

4,273

(1,570)

2,703


Share-based compensation

41

41


Options exercised

46

(15)

31


Dividends

(650)

(650)

Balance, January 31, 2015

69,185

6,433

5,835

22,505

103,958

 

CONSOLIDATED STATEMENTS OF CASH FLOWS


Fiscal Years Ended January 31,

2015

2014

(In thousands of Canadian dollars)

$

$




OPERATING ACTIVITIES




Net income for the year

(1,570)

7,682


Non-cash items:





Amortization of property, plant and equipment

3,874

3,084



Amortization of intangible assets

307

362



Gain on disposal of property, plant and equipment

(2)



Unrealized loss (gain) on derivative financial instruments

1,115

(12)



Non-cash exchange loss (gain)

(119)

707



Share-based compensation

41

23



Income tax expense (recovery)

(1,207)

2,928



Financial revenues

(151)

(155)



Financial expenses

399

189


Net income adjusted for non-cash items

2,689

14,806


Changes in non-cash working capital items

(1,273)

(1,032)


Income tax expense recovery (paid)

4

(30)

Cash flows from (used in) operating activities

1,420

13,744




INVESTING ACTIVITIES




Net disposal of short-term investments

2,482


Net acquisition of property, plant and equipment

(13,860)

(22,683)


Acquisition of intangible assets

(373)

(488)


Increase in other non-current assets

(608)

(204)


Interest received

160

156

Cash flows from (used in) investing activities

(14,681)

(20,737)




FINANCING ACTIVITIES




Issuance of long-term debt

5,516

4,819


Repayment of long-term debt

(1,857)

(2,619)


Issuance of subordinate voting shares

31

56


Dividends paid

(650)

(649)


Interest paid on the interest rate swap

(2)

(13)


Interest paid

(371)

(174)

Cash flows from (used in) financing activities

2,667

1,420

Impact of fluctuations in foreign exchange rate on cash flow

(135)

334

Net change in cash and cash equivalents during the fiscal year

(10,729)

(5,239)

Cash and cash equivalents, beginning of year

18,675

23,914

Cash and cash equivalents, end of year

7,946

18,675

 

The following table sets out in detail the components of the "Changes in non-cash working capital items":


Fiscal Years Ended January 31,

2015

2014

(In thousands of CA$)

$

$


Accounts receivable

(881)

2,842


Holdbacks on contracts

(682)

(2,523)


Work in progress

(683)

(5,863)


Inventories

(44)

(825)


Prepaid expenses and other current assets

(475)

(567)


Accounts payable and other current liabilities

1,508

7,983


Deferred revenues

(16)

(2,079)

Changes in non-cash working capital items

(1,273)

(1,032)

 

Segmented Information

The Corporation operates in the non-residential construction sector, primarily in the United States and Canada. Its operations include the design and engineering of connections, fabrication, including industrial coating, and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork.


Fiscal Years Ended January 31,

2015

2014

(In thousands of CA$)

$

$

Revenues




Canada

59,879

91,532


United States

16,179

1,465


76,058

92,997

 


As at January 31,

2015

2014

(In thousands of CA$)

$

$

Non-current assets (1)




Canada

45,218

45,255


United States

44,532

29,189


89,750

74,444

(1)

The non-current assets mainly include property, plant and equipment, intangible assets, investment tax credits and others non-current assets.

 

During the fiscal year ended January 31, 2015, 47% of the Corporation's revenues were realized with two (2) clients, for respective amounts of $27,526,000 and $8,313,000 (both from Canada), one (1) of which was part of the revenues' concentration during the fiscal year ended January 31, 2014 (86% of the revenues were realized with two (2) clients during the fiscal year ended January 31, 2014, for amounts of $55,240,000 and $24,558,000 respectively, all coming from Canada), and therefore each client accounted for more than 10% of the Corporation's revenues.

 

SOURCE ADF Group Inc

For further information: 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

RELATED LINKS
http://www.adfgroup.com

Organization Profile

ADF Group Inc

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890