ADF GROUP ANNOUNCES ITS RESULTS FOR THE THREE-MONTH AND NINE-MONTH PERIODS<br>ENDED OCTOBER 31, 2010

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Highlights:

• Revenues of $40.3 million for the nine months ended October 31, 2010.
  
  
• Gross margin of 29.6% of revenues for the nine-month period ended October 31, 2010 compared with 27.1% at the same date last year.
  
  
• Net earnings of $0.6 million for the quarter ended October 31, 2010 and $2.7 million for the nine-month period ended at the same date.
  
  
• Available liquidities (including cash, cash equivalents and short term investments) of $20.3 million as at October 31, 2010 exceeded the total debt by $11 million.

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TERREBONNE, QC, Dec. 9 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (ticker symbol: DRX/TSX) closed the third quarter ended October 31, 2010, with revenues of $13.7 million compared with $15.8 million for the same quarter of the previous fiscal year. This decrease is primarily attributable to the different revenue mix and the increase in the Canadian dollar in relation to the U.S. dollar. For the nine-month period ended October 31, 2010, revenues totalled $40.3 million compared with $51.3 million for the same period last year.

Gross margin as a percentage of revenues rose from 24.9% in the third quarter of fiscal 2010 to 25.5% in the third quarter of fiscal 2011. For the nine-month period ended October 31, 2010, the gross margin represented 29.6% of revenues versus 27.1% last year. "This performance is attributable to the quality of the contracts awarded to ADF — the complexity of which notably carries strong added value — combined with the investments made over the past two years to optimize our facilities, and the know-how of our personnel" said Jean Paschini, Chairman of the Board and Chief Executive Officer.

The third-quarter earnings before interest, taxes, depreciation and amortization ("EBITDA") amounted to $2.1 million, or 15% of revenues compared with $3.3 million or 21% of revenues in the third quarter of the previous fiscal year. For the first nine months of the current fiscal year, EBITDA totalled $7.7 million, or 19% of revenues versus $10.9 million or 21% of revenues last year.

ADF Group closed the quarter with net earnings of $0.6 million or $0.02 per share (basic and diluted), compared with net earnings of $1.4 million or $0.04 per share (basic and diluted) in the same period of the previous year. For the first nine months ended October 31, 2010, net earnings amounted to $2.7 million or $0.08 per share (basic and diluted) compared with net earnings of $5.5 million or $0.15 per share (basic and diluted) in the same period a year earlier. Besides a lower business volume and unfavourable currency fluctuations, this decrease is explained by an increase in the effective tax rate. For information purposes, the higher effective tax rate had a negative impact of $0.01 on third-quarter earnings per share (basic and diluted), although it did not affect the Corporation's cash outflows.

Operating activities generated cash flows of $6.5 million since the beginning of the current fiscal year, contributing to maintain ADF Group in an excellent financial position. As at October 31, 2010, ADF Group had a working capital of $39.2 million for a current ratio of 3.45:1 and total cash (including cash, cash equivalents and short-term investments) of $20.3 million. The Corporation's available short-term liquidities exceeded its total interest-bearing debt by $11 million.

"ADF Group's business environment was practically the same in the third quarter than in the first half of fiscal 2011. We were faced with the slow economic recovery in the United States and the strength of the Canadian dollar against the U.S. dollar. Despite this challenging context, ADF Group remained profitable and financially solid" said Mr. Paschini.

Outlook

As at October 31, 2010, ADF's order backlog amounted to $83 million, compared with $137 million on the same date in 2009. It should be noted that ADF's order backlog as at October 31, 2010 does not entirely reflect the revenues likely to be recognized in upcoming quarters, as it includes a portion only of the contractual changes brought to existing orders at the request of customers during the previous months. Thus, based on ADF's order backlog as at October 31, 2010 and the contractual changes underway, the Corporation estimates that it will be busy with profitable work for the next 12 to 15 months at least.

"Although we remain cautious in light of current market conditions, we are confident as to ADF Group's outlook for the short, medium and long term. We are witnessing increased activity in the non-residential construction sector in Western Canada where we have teamed up with a partner in order to set up an operational centre. In the United States, we believe it will take some time for the industry's activity to return to a more normal level. With this in mind, we will keep our focus on our vision of value creation and niche positioning by bidding exclusively on projects meeting our strict criteria in terms of differentiation, profit margins and cash flow generation, and that fully leverage our expertise. It is by pursuing this strategy that we managed to maintain a good profitability and preserve an excellent financial position during the worst economic crisis of the past 80 years. Likewise, our strategy will best serve the interests of our shareholders when our markets recover, especially since the investments we have made in recent years — in the midst of the economic turmoil — have enhanced our lead over the competition and our ability not only to meet the highest criteria in our industry, but to set new standards" concluded Mr. Jean Paschini.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the connections design and engineering, fabrication and installation of complex steel structures, heavy built-ups, as well as miscellaneous and architectural metals for the non-residential construction industry. ADF is one of the few players in the industry capable of handling highly technically complex mega projects, as well as projects subject to fast-track schedules, in the commercial, institutional, industrial and public sectors.

Forward-Looking Information

This press release contains forward-looking statements reflecting ADF Group's 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-GAAP Measures

EBITDA is a financial measure not prescribed by Canadian generally accepted accounting principles ("GAAP") 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.

All amounts are in Canadian dollars.

CONFERENCE CALL WITH INVESTORS

To discuss ADF Group's results
for the third quarter and first nine months ended October 31, 2010

Thursday, December 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
Thursday, December 9, 2010 at 1:00 p.m. until midnight Wednesday, December 15, 2010, by dialing
1-800-642-1687; access code 27883045.

The conference call (audio) will also be available at www.cnw.ca,
and archived for a 90-day period.

Members of the media are invited to listen in.

CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE INCOME

			Three	Months	Nine	Months
Periods Ended October 31,			2010	2009	2010	2009
(In thousands of $ except per-share amounts)			$	$	$	$
Revenues			13,687	15,769	40,295	51,269
Cost of goods sold			10,192	11,837	28,369	37,367
Gross margin before foreign exchange variation			3,495	3,932	11,926	13,902
Gain on foreign exchange			(517)	(120)	(842)	(1,446)
Gross margin			4,012	4,052	12,768	15,348
Selling and administrative expenses			1,426	656	4,177	2,965
Earnings before undernoted items:			2,586	3,396	8,591	12,383
Amortization
	Amortization of property, plant and equipment		758	686	2,265	2,017
	Amortization of intangible assets		86	84	251	238
			844	770	2,516	2,255
Earnings before financial charges (interest income) and income taxes			1,742	2,626	6,075	10,128
Financial charges (interest income)			24	(48)	38	(263)
Earnings before income taxes			1,718	2,674	6,037	10,391
Income taxes
	Current		171	108	352	283
	Future		917	1,186	2,979	4,643
			1,088	1,294	3,331	4,926
Net earnings and comprehensive income			630	1,380	2,706	5,465
Basic earnings per share			0.02	0.04	0.08	0.15
Diluted earnings per share			0.02	0.04	0.08	0.15
Average number of outstanding shares (in thousands)			32,997	35,322	33,936	35,498
Average number of outstanding diluted shares (in thousands)			33,595	36,187	34,624	36,323

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

		Three	Months	Nine	Months
Periods Ended October 31,		2010	2009	2010	2009
(In thousands of $)		$	$	$	$
Retained earnings, beginning of period		11,875	5,857	9,799	1,772
Net earnings		630	1,380	2,706	5,465
Retained earnings, end of period		12,505	7,237	12,505	7,237

CONSOLIDATED STATEMENTS OF CONTRIBUTED SURPLUS

		Three	Months	Nine	Months
Periods Ended October 31,		2010	2009	2010	2009
(In thousands of $)		$	$	$	$
Contributed surplus, beginning of period		4,903	2,653	3,371	2,175
Stock-based compensation		31	89	219	216
Exercise of options		-	(5)	(94)	(29)
Excess of the book value over the acquisition cost of redeemed subordinate voting shares		507	415	1,945	790
Contributed surplus, end of period		5,441	3,152	5,441	3,152

CONSOLIDATED BALANCE SHEETS

			At October 31, 2010	At January 31, 2010   (Audited)
(In thousands of $)			$	$
ASSETS
Current
	Cash and cash equivalents		12,712	5,770
	Short-term investments		7,596	11,652
	Accounts receivable		24,744	14,850
	Income taxes		66	442
	Holdbacks on contracts		667	2,692
	Investment tax credits		536	536
	Work in progress		428	1,574
	Inventories		3,574	3,093
	Prepaid expenses		615	334
	Derivative financial instruments		703	832
	Future income tax assets		3,488	3,182
			55,129	44,957
Holdbacks on long-term contracts			2,876	1,297
Investment tax credits			2,065	2,065
Property, plant and equipment			42,811	42,760
Intangible assets			2,599	2,590
Other assets			253	247
Future income tax assets			5,622	9,452
			111,355	103,368
LIABILITIES
Current
	Accounts payable		3,118	1,955
	Accrued charges		1,146	994
	Salaries and fringe benefits payable		896	1,732
	Deferred revenues		8,219	2,242
	Derivative financial instruments		66	-
	Current portion of long-term debt		2,516	2,422
			15,961	9,345
Long-term debt			6,818	4,645
Future income tax liabilities			554	713
			23,333	14,703
Shareholders' equity
Retained earnings			12,505	9,799
Accumulated other comprehensive income			144	144
			12,649	9,943
Capital stock			69,931	75,351
Contributed surplus			5,442	3,371
			88,022	88,665
			111,355	103,368

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Three	Months	Nine	Months
Periods Ended October 31,				2010	2009	2010	2009
(In thousands of $)				$	$	$	$
OPERATING ACTIVITIES
	Net earnings			630	1,380	2,706	5,465
	Adjustments for:
		Amortization of property, plant and equipment		758	686	2,265	2,017
		Amortization of intangible assets		86	84	251	238
		Gain on disposal of property, plant and equipment		-	-	(52)	-
		Change in the fair value of derivative financial instruments		(127)	689	195	(2,839)
		Non-cash exchange loss		166	2	128	1,178
		Interest capitalized on long-term debt		3	5	11	15
		Stock-based compensation		31	89	219	216
		Future income taxes		917	1,186	2,979	4,643
	Net earnings adjusted for non-monetary items			2,464	4,121	8,702	10,933
	Changes in non-cash operating items
		Accounts receivable		543	(2,499)	(9,894)	(7,524)
		Short-term and long-term holdbacks on contracts		(853)	135	446	949
		Income taxes		57	109	376	(137)
		Work in progress		419	127	1,146	(654)
		Inventories		105	335	(481)	381
		Prepaid expenses		270	311	(281)	38
		Accounts payable, accrued charges, salaries and fringe benefits payable		(991)	(2,331)	479	(7,249)
		Deferred revenues		4,518	(1,321)	5,977	(441)
				4,068	(5,134)	(2,232)	(14,637)
				6,532	(1,013)	6,470	(3,704)
INVESTING ACTIVITIES
	Disposal (acquisition) of short-term investments			14	-	4,056	(6,400)
	Acquisition of property, plant and equipment			(111)	(1,060)	(2,264)	(1,782)
	Acquisition of intangible assets			(60)	(98)	(260)	(563)
	Decrease in other assets			(10)	(60)	(6)	(56)
				(167)	(1,218)	1,526	(8,801)
FINANCING ACTIVITIES
	Issuances of subordinate voting shares			4	10	168	57
	Issuance of long-term debt			-	-	4,370	-
	Repayment of long-term debt			(625)	(217)	(1,692)	(1,684)
	Redemption of subordinate voting shares			(950)	(2,234)	(3,736)	(3,687)
				(1,571)	(2,441)	(890)	(5,314)
Impact of fluctuations in foreign exchange rate on cash				(42)	7	(164)	(233)
Net cash inflows (outflows)				4,752	(4,665)	6,942	(18,052)
Cash and cash equivalents, beginning of period				7,960	9,103	5,770	22,490
Cash and cash equivalents, end of period ^1				12,712	4,438	12,712	4,438
Supplemental cash flow information
	Income taxes paid			102	2	393	206
	Interest (paid) received			(32)	(6)	5	107
	Non-cash financing and investing activities:
		Property, plant and equipment given in exchange for new equipment		-	-	139	-

1. At October 31, 2010, cash and cash equivalents were composed of $12,712,000 in cash ($4,416,000 in cash and $22,000 in cash equivalents as at October 31, 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 installation of complex steel structures, heavy built-ups, as well as miscellaneous and architectural metals.

		Three	Months	Nine	Months
Periods ended October 31,		2010	2009	2010	2009
(In thousands of $)		$	$	$	$
Revenues
— Canada		4	1,413	567	9,106
— United States		13,683	14,356	39,728	42,163
		13,687	15,769	40,295	51,269

	At October 31, 2010	At January 31,2010   (Audited)
(In thousands of $)	$	$
Property, plant and equipment
— Canada	42,705	42,620
— United States	106	140
	42,811	42,760

During the nine-month period ended October 31, 2010, 89% of the Corporation's revenues were recorded with one client (72% with four clients during the same period in 2009, each of which accounted for more than 10% of revenues.). However, revenues were recorded on five distinct contracts with one client during fiscal year 2011.