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 |
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 |
Contributed |
Accumulated Other |
Retained |
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 |
Contributed |
Accumulated Other |
Retained |
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
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
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