TERREBONNE, QC, April 11, 2013 /CNW Telbec/ - ADF Group Inc. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $41.4 million for the 2013 fiscal year compared with $48.4 million the previous fiscal year, and recorded a negative net income of $1.6 million compared with a net income of $1.8 million a year earlier.
Despite this loss, the Corporation generated operating cash flows of over $11 million. Consequently, ADF's short-term available liquidities (including cash, cash equivalents and short-term investments) exceeded its total debt by $23.5 million as at January 31, 2013, increasing it net position by $5.1 million over January 31, 2012.
Financial Highlights
| Fiscal Years Ended January 31, | 2013 | 2012 | ||
| (In thousands of dollars, and dollars per share) | $ | $ | ||
| Revenues | 41,412 | 48,431 | ||
| EBITDA | 1,221 | 6,032 | ||
| Net income | (1,554) | 1,812 | ||
| — Basic per share | (0.05) | 0.06 | ||
| — Diluted per share | (0.05) | 0.05 | ||
| Average number of outstanding shares (basic, in thousands) | 32,458 | 32,771 | ||
| Average number of outstanding shares (diluted, in thousands) | 32,458 | 33,309 |
Authorization From the Autorité des Marchés Financiers (AMF)
On March 13, 2013, ADF announced that it was one of the first Quebec companies to obtain from the AMF the authorization required under the new Bill on the integrity in public contracts. It should be noted that this new authorization is mandatory for all corporations that wish to work on any public construction or services contract of $40 million or greater.
New Order
On March 20, 2013, ADF announced the award of the prestigious contract, worth $46.6 million, for the fabrication and installation of the steel structure of Quebec City's future multi-purpose amphitheater.
Outlook
The Corporation's order backlog stood at $34 million as of January 31, 2013 (excluding the recently awarded contract previously mentioned), and should be progressively executed between now and the third quarter of the 2014 fiscal year.
During the last fiscal year, ADF was awarded contracts totalling almost $28 million in the public infrastructures, industrial and recreational market segments in Canada.
"In early 2014, we will inaugurate our new a 9,290-square-metre (100,000-square-foot) fabrication plant that will be build on a 100-acre lot in the State of Montana, U.S.A. This new site will also be fitted out with a large structural steel fabrication and pre-assembly yard adjacent to the new plant. This strategic investment will allow ADF to expand its North American geographic footprint from coast to coast and will provide the Corporation with the ability to service new Canadian and American markets, efficiently and profitably" said Mr. Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer. Mr. Paschini added that the site layout work is currently underway.
Since the beginning of the 2014 fiscal year, ADF reinforced its sales team to increase its Terrebonne plant's order backlog, while developing the markets and customer base targeted by its new plant in Great Falls, Montana.
The Corporation is encouraged by current trends and considers that other developments will materialize in the months to come that will provide it with new momentum. While carrying out its important investment project, ADF Group will remain focused on its primary objective which is to promote sustainable and profitable growth of its operations, backed by prudent and rigorous management.
Dividend
The Corporation announces today a semi-annual dividend of $0.01 per subordinate and multiple voting share payable on May 17, 2013 to shareholders of record as at April 30, 2013.
Annual Meeting of Shareholders
ADF Group Inc. Annual Meeting of Shareholders will be held on:
| Date: | Wednesday, June 12, 2013 | |
| Time: | 11:00 a.m. | |
| Place: | Sheraton Hotel, Laval, Quebec |
Financial results for the first quarter ending April 30, 2013, 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, engineering, fabrication and 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 key 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 fiscal year ended January 31, 2013 Thursday April 11, 2013 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 April 11, 2013 at 1:00 p.m. until midnight April 18, 2013, by dialing 1-855-859-2056; access code 28147072. The conference call (audio) will also be available at www.adfgroup.com Members of the media are invited to listen in. |
CONSOLIDATED STATEMENTS OF INCOME
| Fiscal Years Ended January 31, | 2013 | 2012 | ||
| (In thousands of Canadian dollars and in dollars per share) | $ | $ | ||
| Revenues | 41,412 | 48,431 | ||
| Cost of goods sold | 36,706 | 39,128 | ||
| Gross Margin | 4,706 | 9,303 | ||
| Selling and administrative expenses | 6,910 | 6,690 | ||
| Financial revenues | (186) | (345) | ||
| Financial expenses | 168 | 233 | ||
| Foreign exchange gain | (407) | (1,043) | ||
| 6,485 | 5,535 | |||
| Income before income tax expense (recovery) | (1,779) | 3,768 | ||
| Income tax expense (recovery) | (225) | 1,956 | ||
| Net income for the year | (1,554) | 1,812 | ||
| Earnings per share | ||||
| Basic per share | (0.05) | 0.06 | ||
| Diluted per share | (0.05) | 0.05 | ||
| Average number of outstanding shares (in thousands) | 32,458 | 32,771 | ||
| Average number of outstanding diluted shares (in thousands) | 32,458 | 33,309 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
| Fiscal Years Ended January 31, | 2013 | 2012 | |||
| (In thousands of Canadian dollars) | $ | $ | |||
| Net income for the year | (1,554) | 1,812 | |||
| Other comprehensive income: | |||||
| Exchange differences on translation of foreign operations (a) | (147) | (53) | |||
| Change in value of available-for-sale financial assets (b) | — | (56) | |||
| (147) | (109) | ||||
| Comprehensive income for the year | (1,701) | 1,703 | |||
| (a) | Net of hedging activities and $4,000 in related income tax expense for the fiscal year ended January 31, 2013 (income tax recovery of $24,000 for the fiscal year ended January 31, 2012). | |
| (b) | Net of $ 9,000 related income tax recovery for the fiscal year ended January 31, 2012. |
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, 2011 | 70,032 | 5,740 | (1,477) | 18,739 | 93,034 | ||||||
| Net income for the year | — | — | — | 1,812 | 1,812 | ||||||
| Other comprehensive income | — | — | (109) | — | (109) | ||||||
| Comprehensive income for the year | — | — | (109) | 1,812 | 1,703 | ||||||
| Share-based compensation | — | 107 | — | — | 107 | ||||||
| Options exercised | 20 | (7) | — | — | 13 | ||||||
| Subordinate voting shares redemption | (966) | 528 | — | — | (438) | ||||||
| Dividends | — | — | — | (656) | (656) | ||||||
| Balance, January 31, 2012 | 69,086 | 6,368 | (1,586) | 19,895 | 93,763 | ||||||
| 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 year | — | — | — | (1,554) | (1,554) | ||||||
| Other comprehensive income | — | — | (147) | — | (147) | ||||||
| Comprehensive income for the year | — | — | (147) | (1,554) | (1,701) | ||||||
| Share-based compensation | — | 34 | — | — | 34 | ||||||
| Options exercised | 3 | (1) | — | — | 2 | ||||||
| Subordinate voting shares redemption | (54) | 31 | — | — | (23) | ||||||
| Dividends | — | — | — | (649) | (649) | ||||||
| Balance, January 31, 2013 | 69,035 | 6,432 | (1,733) | 17,692 | 91,426 | ||||||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
| As at January 31, | 2013 | 2012 | |||
| (In thousands of Canadian dollars) | $ | $ | |||
| ASSETS | |||||
| Current assets | |||||
| Cash and cash equivalents | 23,914 | 18,976 | |||
| Short-term investments | 3,228 | 5,562 | |||
| Accounts receivable | 15,469 | 14,189 | |||
| Holdbacks on contracts | 708 | 5,082 | |||
| Work in progress | 272 | 5,263 | |||
| Inventories | 4,771 | 3,613 | |||
| Prepaid expenses and other current assets | 623 | 782 | |||
| Total current assets | 48,985 | 53,467 | |||
| Non-current assets | |||||
| Holdbacks on contracts | 333 | — | |||
| Property, plant and equipment | 47,067 | 45,089 | |||
| Intangible assets | 2,586 | 2,618 | |||
| Other non-current assets | 2,992 | 2,796 | |||
| Deferred income tax assets | 4,567 | 4,549 | |||
| Total assets | 106,530 | 108,519 | |||
| LIABILITIES | |||||
| Current liabilities | |||||
| Accounts payable and other current liabilities | 5,310 | 5,551 | |||
| Income tax liabilities | 12 | 77 | |||
| Deferred revenues | 6,105 | 2,618 | |||
| Derivative financial instruments | 15 | 75 | |||
| Current portion of long-term debt | 2,505 | 2,526 | |||
| Total current liabilities | 13,947 | 10,847 | |||
| Non-current liabilities | |||||
| Long-term debt | 1,157 | 3,676 | |||
| Deferred income tax liabilities | — | 233 | |||
| Total liabilities | 15,104 | 14,756 | |||
| SHAREHOLDERS' EQUITY | |||||
| Capital stock | 69,035 | 69,086 | |||
| Contributed surplus | 6,432 | 6,368 | |||
| Accumulated other comprehensive income | (1,733) | (1,586) | |||
| Retained income | 17,692 | 19,895 | |||
| Total shareholders' equity | 91,426 | 93,763 | |||
| Total liabilities and shareholders' equity | 106,530 | 108,519 | |||
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Fiscal Years Ended January 31, | 2013 | 2012 | ||||
| (In thousands of Canadian dollars) | $ | $ | ||||
| OPERATING ACTIVITIES | ||||||
| Net income for the year | (1,554) | 1,812 | ||||
| Non-cash items: | ||||||
| Amortization of property, plant and equipment | 3,034 | 3,063 | ||||
| Amortization of intangible assets | 391 | 356 | ||||
| Loss (gain) on disposal of property, plant and equipment | 8 | |||||
| Unrealized (gain) loss on derivative financial instruments | (60) | 771 | ||||
| Non-cash exchange gain | (149) | (63) | ||||
| Share-based compensation | 34 | 107 | ||||
| Income tax expense (recovery) | (225) | 1,956 | ||||
| Financial revenues | (186) | (345) | ||||
| Financial expenses | 168 | 233 | ||||
| Net income adjusted for non-cash items | 1,453 | 7,898 | ||||
| Changes in non-cash working capital items | 10,076 | 243 | ||||
| Income tax paid | (152) | (15) | ||||
| Cash flows from (used in) operating activities | 11,377 | 8,126 | ||||
| INVESTING ACTIVITIES | ||||||
| Net disposal (acquisition) of short-term investments | 2,305 | (2,807) | ||||
| Net acquisition of property, plant and equipment | (5,004) | (1,230) | ||||
| Acquisition of intangible assets | (359) | (373) | ||||
| Reduction in other non-current assets | (196) | (9) | ||||
| Interest received | 229 | 380 | ||||
| Cash flows from (used in) investing activities | (3,025) | (4,039) | ||||
| FINANCING ACTIVITIES | ||||||
| Repayment of long-term debt | (2,513) | (2,491) | ||||
| Issuance of subordinate voting shares | 2 | 13 | ||||
| Redemption of subordinate voting shares | (23) | (438) | ||||
| Dividends paid | (649) | (656) | ||||
| Interest paid on the interest rate swap | (23) | (33) | ||||
| Interest paid | (139) | (199) | ||||
| Cash flows from (used in) financing activities | (3,345) | (3,804) | ||||
| Impact of fluctuations in foreign exchange rate on cash flow | (69) | 16 | ||||
| Net increase in cash and cash equivalents | 4,938 | 299 | ||||
| Cash and cash equivalents, beginning of year | 18,976 | 18,677 | ||||
| Cash and cash equivalents, end of year | 23,914 | 18,976 | ||||
The following table sets out in detail the components of the "Changes in non-cash working capital items":
| Fiscal Years Ended January 31, | 2013 | 2012 | |||
| (In thousands of CA$) | $ | $ | |||
| Accounts receivable | (1,283) | 7,825 | |||
| Holdbacks on contracts | 4,079 | (1,324) | |||
| Income tax | 35 | 144 | |||
| Work in progress | 5,032 | (4,764) | |||
| Inventories | (1,158) | 252 | |||
| Prepaid expenses and other current assets | 159 | 203 | |||
| Accounts payable and other current liabilities | (278) | 240 | |||
| Deferred revenues | 3,490 | (2,333) | |||
| Changes in non-cash working capital items | 10,076 | 243 | |||
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 and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork.
| Fiscal Years Ended January 31, | 2013 | 2012 | |||
| (In thousands of CA$) | $ | $ | |||
| Revenues | |||||
| Canada | 19,056 | 6,371 | |||
| United States | 22,356 | 42,060 | |||
| 41,412 | 48,431 | ||||
| As at January 31, | 2013 | 2012 | |||
| (In thousands of CA$) | $ | $ | |||
| Property, Plant and Equipment | |||||
| Canada | 42,622 | 44,410 | |||
| United States | 4,445 | 679 | |||
| 47,067 | 45,089 | ||||
All intangible assets and investment tax credits included in "Other non-current assets" at January 31, 2013 and January 31, 2012, originated from Canada.
During the fiscal year ended January 31, 2013, three clients accounted for 70% of the Corporation's revenues (one client accounted for 83% of the revenues during the fiscal year ended January 31, 2012), and therefore each client accounted for more than 10% of revenues.
SOURCE: ADF Group Inc.
Jean Paschini, 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