TERREBONNE, QC, June 13, 2012 /CNW Telbec/ - For the three-month period ended April 30, 2012, ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $12.5 million compared with $13.2 million for the same period last year.
The gross margin as a percentage of revenues stood at 14.7% compared with 23.5% in the first quarter of the previous year. This decrease, which started in the third quarter of the 2012 fiscal year, is explained by the different mix of the projects currently underway.
Income before interest, income taxes, depreciation and amortization (EBITDA) amounted to $0.9 million, compared with $2.1 million the previous year.
The Corporation recorded a slight profit of $0.1 million (0.00$ per share) during the first quarter ended April 30, 2012, compared with a net income of $1.1 million ($0.03 per share) in the same period the previous year.
ADF closed the first quarter of the 2013 fiscal year with working capital of $42.3 million, of which $23.6 million in short-term available liquidities (cash, cash equivalents and short-term investments), As at April 30, 2012, ADF Group's short-term available liquidities exceeded its total debt by $18.1 million, whereas the current ratio stood at 4.44:1.
ADF Group's order backlog stood at $43 million on April 30, 2012, compared with $48 million on January 31, 2012. This decrease is mostly attributable to the gradual execution of contracts, net of contract changes and new contracts.
Mr. Jean Paschini, Chairman of the Board and Chief Executive Officer indicated that "the results for the first quarter followed a similar trend as observed in the past quarters, reflecting a still difficult economic environment in our markets. Although ADF Group has maintained a sound performance overall, we are not satisfied with these results. We are very keen on pursuing our goals to provide the Corporation with all the necessary tools to seize the opportunities that arise in this challenging context and to position ADF Group advantageously for the next economic upturn, while seeking to limit exposure to risks associated with our market segments."
Mr. Paschini added that the Corporation is currently analyzing the possibility of setting up a fabrication plant in the United States, which would provide ADF access to the US public infrastructure market for which growth is expected in the coming years.
On April 11, 2012, the Corporation's Board of Directors approved the payment of a semi-annual dividend. Consequently, on May 17, 2012, ADF Group paid a semi-annual dividend of $0.01 per share to shareholders of record as at April 30, 2012.
Annual Meeting of Shareholders
ADF Group's Annual Meeting of Shareholders will take place this morning, June 13, 2012 at 11:00 am at the Hilton Montreal/Laval Hotel in Laval.
About ADF Group Inc.
ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication 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.
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
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.
All amounts are in Canadian dollars, unless otherwise indicated.
| CONFERENCE CALL WITH INVESTORS To discuss ADF Group's results for the first quarter ended April 30, 2012, June 13, 2012 at 10:00 a.m. (Montreal time) To participate in the conference call, please dial 1-888-231-8191 a few minutes before the start of the call. For those unable to participate, a taped rebroadcast will be available from Wednesday, June 13, 2012 at 1:00 p.m. until midnight June 20, 2012, by dialing 1-855-859-2056; access code 83424725. The conference call (audio) will also be available at www.adfgroup.com Members of the media are invited to listen in. |
| CONSOLIDATED STATEMENT OF INCOME (unaudited) | ||||
| Three-Month Periods Ended April 30, | 2012 | 2011 | ||
| (In thousands of Canadian dollars and in dollars per share) | $ | $ | ||
| Revenues | 12,464 | 13,229 | ||
| Cost of goods sold | 10,634 | 10,123 | ||
| Gross Margin | 1,830 | 3,106 | ||
| Selling and administrative expenses | 1,729 | 1,892 | ||
| Financial revenues | (45) | (95) | ||
| Financial expenses | 44 | 60 | ||
| Foreign exchange gain | (76) | (755) | ||
| 1,652 | 1,102 | |||
| Income before income tax expense | 178 | 2,004 | ||
| Income tax expense | 87 | 923 | ||
| Net income for the period | 91 | 1,081 | ||
| Earnings per share | ||||
| Basic per share | 0.00 | 0,03 | ||
| Diluted per share | 0.00 | 0,03 | ||
| Average number of outstanding shares (in thousands) | 32,464 | 32,775 | ||
| Average number of outstanding diluted shares (in thousands) | 32,928 | 33,390 | ||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) | ||||
| Three-Month Periods Ended April 30, | 2012 | 2011 | ||
| (In thousands of Canadian dollars) | $ | $ | ||
| Net income for the period | 91 | 1,081 | ||
| Other comprehensive income: | ||||
| Exchange differences on translation of foreign operations (a) | (366) | (1,495) | ||
| Comprehensive income for the period | (275) | (414) | ||
| (a) | Net of hedging activities and $12,000 in related income tax for the three-month period ended April 30, 2012 (nil for the three-month period ended April 30, 2011). |
| CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) | ||||||||||
| Capital Stock | Contributed Surplus | Accumulated Other Comprehensive Income | Retained Income | Total | ||||||
| (In thousands of Canadian dollars) | $ | $ | $ | $ | $ | |||||
| Balance, February 1, 2011 | 70,032 | 5,740 | (1,477) | 18,739 | 93,034 | |||||
| Net income for the year | - | - | - | 1,081 | 1,081 | |||||
| Other comprehensive income | - | - | (1,495) | - | (1,495) | |||||
| Comprehensive income for the period | - | - | (1,495) | 1,081 | (414) | |||||
| Share-based compensation | - | 59 | - | - | 59 | |||||
| Dividends | - | - | - | (328) | (328) | |||||
| Balance, April 30, 2011 | 70,032 | 5,799 | (2,972) | 19,492 | 92,351 | |||||
| Capital Stock | Contributed Surplus | Accumulated Other Comprehensive Income | Retained Income | Total | ||||||
| (In thousands of Canadian dollars) | $ | $ | $ | $ | $ | |||||
| Balance, February 1, 2012 | 69,086 | 6,368 | (1,586) | 19,895 | 93,763 | |||||
| Net income for the period | - | - | - | 91 | 91 | |||||
| Other comprehensive income | - | - | (366) | - | (366) | |||||
| Comprehensive income for the period | - | - | (366) | 91 | (275) | |||||
| Share-based compensation | - | 11 | - | - | 11 | |||||
| Options exercised | 1 | - | - | - | 1 | |||||
| Dividends | - | - | - | (325) | (325) | |||||
| Balance, April 30, 2012 | 69,087 | 6,379 | (1,952) | 19,661 | 93,175 | |||||
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | ||||
| As at | April 30, 2012 | January 31, 2012 | ||
| (unaudited) | (audited) | |||
| (In thousands of Canadian dollars) | $ | $ | ||
| ASSETS | ||||
| Current assets | ||||
| Cash and cash equivalents | 18,209 | 18,976 | ||
| Short-term investments | 5,440 | 5,562 | ||
| Accounts receivable | 14,171 | 14,189 | ||
| Holdbacks on contracts | 4,231 | 5,082 | ||
| Work in progress | 7,858 | 5,263 | ||
| Inventories | 3,985 | 3,613 | ||
| Prepaid expenses and other current assets | 676 | 782 | ||
| Derivative financial instruments | 66 | - | ||
| Total current assets | 54,636 | 53,467 | ||
| Non-current assets | ||||
| Property, plant and equipment | 44,396 | 45,089 | ||
| Intangible assets | 2,630 | 2,618 | ||
| Other non-current assets | 2,801 | 2,796 | ||
| Deferred income tax assets | 4,178 | 4,549 | ||
| Total assets | 108,641 | 108,519 | ||
| LIABILITIES | ||||
| Current liabilities | ||||
| Accounts payable and other current liabilities | 6,399 | 5,551 | ||
| Income tax liabilities | 21 | 77 | ||
| Deferred revenues | 3,360 | 2,618 | ||
| Derivative financial instruments | 29 | 75 | ||
| Current portion of long-term debt | 2,492 | 2,526 | ||
| Total current liabilities | 12,301 | 10,847 | ||
| Non-current liabilities | ||||
| Long-term debt | 3,015 | 3,676 | ||
| Deferred income tax liabilities | 150 | 233 | ||
| Total liabilities | 15,466 | 14,756 | ||
| SHAREHOLDERS' EQUITY | ||||
| Retained income | 19,661 | 19,895 | ||
| Accumulated other comprehensive income | (1,952) | (1,586) | ||
| 17,709 | 18,309 | |||
| Capital stock | 69,087 | 69,086 | ||
| Contributed surplus | 6,379 | 6,368 | ||
| Total shareholders' equity | 93,175 | 93,763 | ||
| Total liabilities and shareholders' equity | 108,641 | 108,519 | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | ||||
| Three-Month Periods Ended April 30, | 2012 | 2011 | ||
| (In thousands of Canadian dollars) | $ | $ | ||
| OPERATING ACTIVITIES | ||||
| Net income for the period | 91 | 1,081 | ||
| Non-cash items: | ||||
| Amortization of property, plant and equipment | 747 | 792 | ||
| Amortization of intangible assets | 89 | 89 | ||
| Unrealized gain on derivative financial instruments | (112) | (226) | ||
| Non-cash exchange loss (gain) | 161 | (244) | ||
| Share-based compensation | 11 | 59 | ||
| Income tax expense | 87 | 923 | ||
| Financial revenues | (45) | (95) | ||
| Financial expenses | 44 | 60 | ||
| Net income adjusted for non-cash items | 1,073 | 2,439 | ||
| Changes in non-cash working capital items (1) | (790) | 2,961 | ||
| Income tax expense paid | (152) | (368) | ||
| Cash flows from (used in) operating activities | 131 | 5,032 | ||
| INVESTING ACTIVITIES | ||||
| Disposal (acquisition) of short-term investments | 62 | (2,905) | ||
| Net acquisition of property, plant and equipment | (64) | (29) | ||
| Acquisition of intangible assets | (101) | (88) | ||
| Reduction in other non-current assets | (5) | 1 | ||
| Interest received | 59 | 77 | ||
| Cash flows from (used in) investing activities | (49) | (2,944) | ||
| FINANCING ACTIVITIES | ||||
| Repayment of long-term debt | (613) | (600) | ||
| Issuance of subordinate voting shares | 1 | - | ||
| Interest paid on the interest rate swap | (6) | (9) | ||
| Interest paid | (44) | (53) | ||
| Cash flows from (used in) financing activities | (662) | (662) | ||
| Impact of fluctuations in foreign exchange rate on cash | (187) | (709) | ||
| Net (decrease) increase in cash and cash equivalents | (767) | 717 | ||
| Cash and cash equivalents, beginning of period | 18,976 | 18,677 | ||
| Cash and cash equivalents, end of period | 18,209 | 19,394 | ||
| (1) | Detail the components of the "Changes in non-cash working capital items": | ||||
| Periods Ended April 30, | 2012 | 2011 | |||
| (In thousands of Canadian dollars) | $ | $ | |||
| Accounts receivable | (116) | (749) | |||
| Holdbacks on contracts | 785 | 5 | |||
| Income tax | 77 | (12) | |||
| Work in progress | (2,693) | (166) | |||
| Inventories | (372) | (58) | |||
| Prepaid expenses and other current assets | 106 | 273 | |||
| Accounts payable and other current liabilities | 645 | 233 | |||
| Deferred revenues | 778 | 3,435 | |||
| Changes in non-cash working capital items | (790) | 2,961 | |||
For the purpose of the consolidated statements of cash flows, cash and cash equivalents in the amount of $18,209,000 as at April 30, 2012 and $19,394,000 as at April 30, 2011 were only composed of cash.
SEGMENTED INFORMATION
The Corporation operates in the non-residential construction sector, primarily in the United States and Canada. Its operations include the connections design and engineering, fabrication and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork.
| Periods Ended April 30, | 2012 | 2011 | |
| (In thousands of Canadian dollars) | $ | $ | |
| Revenues | |||
| Canada | 2,521 | 225 | |
| United States | 9,943 | 13,004 | |
| 12,464 | 13,229 | ||
| As at | April 30, 2012 | January 31, 2012 | |
| (In thousands of Canadian dollars) | $ | $ | |
| Property, Plant and Equipment | |||
| Canada | 43,737 | 44,410 | |
| United States | 659 | 679 | |
| 44,396 | 45,089 | ||
All intangible assets and investment tax credits included under "Other non-current assets" at April 30, 2012 and January 31, 2012 originated from Canada.
During the three-month period ended April 30, 2012, two clients accounted for 84% of the Corporation's revenues (one client accounted for 94% of the revenues during the three-month period ended April 30, 2011), and therefore were the only ones that accounted for more than 10% of revenues.
Source: ADF Group Inc.
Contact:
Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer
Jean-François Boursier, CA, Chief Financial Officer
Telephone: (450) 965-1911 / 1 (800) 263-7560
Web Site: www.adfgroup.com