HIGHLIGHTS

  • Net results of $6.9 million, compared with net loss during the fiscal year ended January 31, 2020.
  • The Corporation's order backlog stood at $436.2 million as at January 31, 2021, up $107.5 million from January 31, 2020.
  • Revenues of $172.6 million, down 4% from the previous fiscal year.
  • At the date hereof, there is no significant impact from COVID-19 on the Corporation's operations.

TERREBONNE, QC, April 8, 2021 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $172.6 million during the fiscal year ended January 31, 2021, compared with $179.7 million the previous fiscal year. This decrease in revenues is mainly attributable to the production schedule, as the recently signed projects have not yet reached the fabrication phase.

It should be noted that had it not been for the $7.7 million write-off recorded in the third quarter of the 2020 fiscal year resulting from a out of court settlement in a commercial dispute in Florida, the 2020 fiscal year revenues would have been $187.4 million.

Gross margin, as a percentage of revenues, increased from 9.2% for the fiscal year ended January 31, 2020, to 15.2% for the fiscal year ended January 31, 2021. This increase, as the percentage of revenues, was largely due to a better overall price on projects completed during the year, and the recognition for COVID-19-related grants in the fourth quarter of the fiscal year ended January 31, 2021.

For the fiscal year ended January 31, 2021, the Corporation benefited from grants related to COVID-19 from the Canadian and US governments. The total amount included in the results, and thus having mainly improved the gross margin, and to a lesser extent the selling and administrative expenses, and therefore the earnings before interest, taxes, depreciation and amortization (EBITDA), totaled $6.3 million. This amount does not, however, take into account the direct costs incurred by the Corporation in order to put in place the health and physical distancing measures required by the local government authorities, nor does it take into account the operational efficiency losses due to these same measures.

For the fiscal year ended January 31, 2021, ADF posted a net income of $6.9 million ($0.21 basic and diluted per share) compared with a net loss of $2.1 million (-$0.07 basic and diluted per share) a year ago.

On January 31, 2021, the Corporation had $38.5 million in working capital, The Corporation remains in a sound position to support its ongoing operations and pursue its development projects.

During the fiscal year ended January 31, 2021, the Corporation was able to secure new contracts, including certain contractual changes, valued at over $280 million, bringing its order backlog to $436.2 million on that date, compared with a backlog of $328.7 million as at January 31, 2020. Most contracts will be progressively completed by the end of the fiscal year ending January 31, 2023.

Financial Highlights







Fiscal Years Ended January 31,

2021

2020

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

$

$

Revenues

172,593

179,710

EBITDA

16,341

5,225

Income (loss) before income tax expense

9,019

(1,986)

Net income (loss) for the year

6,867

(2,132)

—      Basic and diluted per share

0.21

(0.07)

Cash flows from (used in) operating activities

28,842

(894)

Average number of outstanding shares (basic and diluted, in thousands)

32,635

32,635




COVID-19

At the date hereof, the impact of COVID-19 on ADF's operations is limited. We have taken all necessary steps to protect our employees and business partners, and we will continue to follow the advice and recommendations of local authorities wherever we conduct business. These measures have resulted in operational costs and inefficiencies that have been offset by the government incentives previously mentioned. This situation is changing rapidly and we will continue to monitor and mitigate development affecting our staff, suppliers, customers and the general public to the extent we can.

Outlook

"The fiscal year that just ended is a good example of the Corporation's resilience. Despite the pandemic's impacts and its effects, not only on the economy in general but also on the way we operate, we have been able to continue to grow our order backlog and greatly improve our cash position added Mr. Jean Paschini, Co-Chair of the Board of Directors and Chief Executive Officer.

"Despite the pressure on the prices of the projects currently in the backlog that could reduce margins in coming quarters, we welcome the recent announcements regarding investments in infrastructure projects that should reduce this pressure," concluded Mr. Paschini.

Dividend

On April 7, 2021, ADF Group's Board of Directors approved the payment of a semi-annual dividend of $0.01 per share, which will be paid on May 17, 2021, to shareholders of record as at April 30, 2021.

Conference Call with Investors

A conference call with investors is scheduled for Thursday, April 8, 2021 at 10 a.m. (Montreal time) to discuss the results of Corporation fiscal year ended January 31, 2021.

To take part in the conference call, dial 1-888-390-0620, a few minutes prior to the conference call scheduled start time. A replay of this conference call will be available from Thursday, April 8, 2021 at 1:00 p.m. until 11:59 p.m., Thursday, April 15, 2021, by dialing 1-888-390-0541, followed by the access code 583306#.

The conference call (audio) will also be available at www.adfgroup.com. Members of the media are invited to listen in.

ANNUAL GENERAL MEETING OF SHAREHOLDERS

In these exceptional circumstances, and amongst the several preventative health measures adopted by the Provincial and Federal Governments and by the Corporation to slow the spread of COVID-19, ADF Group Inc. will hold its Annual Meeting of Shareholders via webcasting, on Wednesday, June 9, 2021 at 11 :00 a.m.

Financial results for the first quarter ending April 30, 2021, will also be disclosed during this Shareholders' Meeting.

Shareholders' meeting details and webcasting connection instructions will be made available in the coming weeks.

About ADF Group Inc. | ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication, including the application of industrial coatings, and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non-residential infrastructure sector. 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 and two paint shops, in Canada and in the United States, and a Construction Division in the United States, which specializes in the installation of steel structures and other related products.

Forward-Looking Information | This press release contains forward-looking statements reflecting ADF'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-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 the section "Non-GAAP Measures" of the Corporation's Management's Discussion and Analysis for the definition of this metric and reconciliation to the most comparable IFRS measures.

All amounts are in Canadian dollars, unless otherwise indicated.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION




As at January 31,

2021

2020

(In thousands of Canadian dollars)

$

$

ASSETS



Current assets



Cash and cash equivalents

17,806

3,983

Accounts receivable

50,234

39,555

Holdbacks on contracts

10,785

11,628

Current income tax assets

834

882

Contract assets

8,790

14,435

Inventories

6,960

7,898

Derivative financial instruments

517

Prepaid expenses and other current assets

4,670

1,581

Total current assets

100,596

79,962

Non-current assets



Property, plant and equipment

62,223

64,967

Right-of-use assets

22,478

23,818

Intangible assets

3,266

3,354

Other non-current assets

1,388

1,443

Total assets

189,951

173,544

LIABILITIES



Current liabilities



Credit facilities

13,105

Accounts payable and other current liabilities

34,562

30,788

Current income tax liabilities

1,161

216

Contract liabilities

23,278

3,444

Derivative financial instruments

123

Current portion of lease liabilities

1,143

1,070

Current portion of long-term debt

1,904

1,903

Total current liabilities

62,048

50,649

Non-current liabilities



Long-term debt

18,368

19,156

Lease liabilities

4,166

4,930

Deferred income tax liabilities

5,627

4,215

Other non-current liabilities

177

187

Total liabilities

90,386

79,137

SHAREHOLDERS' EQUITY



Capital stock

68,120

68,120

Contributed surplus

6,435

6,435

Accumulated other comprehensive income (loss)

5,886

6,942

Retained income

19,124

12,910

Total shareholders' equity

99,565

94,407

Total liabilities and shareholders' equity

189,951

173,544




CONSOLIDATED STATEMENTS OF INCOME (LOSS)




Fiscal Years Ended January 31,

2021

2020

(In thousands of Canadian dollars, except the number of shares and the amounts per share)

$

$

Revenues

172,593

179,710

Cost of goods sold

146,388

163,203

Gross Margin

26,205

16,507

Selling and administrative expenses

14,779

16,005

Net financial expenses

1,663

2,082

Foreign exchange loss

744

406


17,186

18,493

Income (loss) before income tax expense

9,019

(1,986)

Income tax expense

2,152

146

Net income (loss) for the year

6,867

(2,132)

Earnings per share



-     Basic and diluted per share

0.21

(0.07)

Average number of outstanding basic and diluted shares (in thousands)

32,635

32,635




CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)




Fiscal Years Ended January 31,

2021

2020

(In thousands of Canadian dollars)

$

$

Net income (loss) for the year

6,867

(2,132)

Other comprehensive income (loss):



Exchange differences on translation of foreign operations (a)

(1,056)

294

Comprehensive income (loss) for the year

5,811

(1,838)




a)    Will subsequently be reclassified to net income (loss).

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY


Capital
Stock

Contributed
Surplus

Accumulated Other
Comprehensive
Income (Loss)

Retained
Income

Total

(In thousands of Canadian dollars)

$

$

$

$

$

Balance, February 1, 2019

68,120

6,432

6,648

15,695

96,895

Net loss for the year

(2,132)

(2,132)

Other comprehensive income (loss)

294

294

Comprehensive income (loss) for the year

294

(2,132)

(1,838)

Share-based compensation

3

3

Dividends

(653)

(653)

Balance, January 31, 2020

68,120

6,435

6,942

12,910

94,407

 


Capital
Stock

Contributed
Surplus

Accumulated Other
Comprehensive
Income (Loss)

Retained
Income

Total

(In thousands of Canadian dollars)

$

$

$

$

$

Balance, February 1, 2020

68,120

6,435

6,942

12,910

94,407

Net income for the year

6,867

6,867

Other comprehensive income (loss)

(1,056)

(1,056)

Comprehensive income (loss) for the year

(1,056)

6,867

5,811

Dividends

(653)

(653)

Balance, January 31, 2021

68,120

6,435

5,886

19,124

99,565

CONSOLIDATED STATEMENTS OF CASH FLOWS





Fiscal Years Ended January 31,

2021

2020

(In thousands of Canadian dollars)

$

$

OPERATING ACTIVITIES



Net income (loss) for the year

6,867

(2,132)

Non-cash items:



Amortization of property, plant and equipment

3,465

3,387

Amortization of right-of-use assets

1,001

926

Amortization of intangible assets

449

410

Unrealized gain on derivative financial instruments

(640)

(61)

Unrealized foreign exchange loss (gain)

359

(134)

Share-based compensation

998

491

Income tax expense

2,152

146

Government grants

(6,158)

(243)

Net financial expenses

1,663

2,082

Others

49

(111)

Net income adjusted for non-cash items

10,205

4,761

Change in non-cash working capital items  (1)

18,637

(5,655)

Cash flows from (used in) operating activities

28,842

(894)

INVESTING ACTIVITIES



Acquisition of property, plant and equipment

(1,460)

(1,186)

Acquisition of intangible assets

(361)

(452)

Government grants

826

Others

68

142

Cash flows used in investing activities

(1,753)

(670)

FINANCING ACTIVITIES



Variation in credit facilities

(13,105)

6,500

Issuance of long-term debt

5,654

Repayment of long-term debt

(1,918)

(1,884)

Payment of lease liabilities

(961)

(771)

Dividends paid

(653)

(653)

Interest paid

(1,460)

(1,827)

Cash flows (used in) from financing activities

(12,443)

1,365

Impact of fluctuations in foreign exchange rate on cash flow

(823)

18

Net change in cash and cash equivalents during the year

13,823

(181)

Cash, and cash equivalents, beginning of year

3,983

4,164

Cash and cash equivalents, end of year

17,806

3,983




(1)   The following table sets out in detail the components of the "Change in non-cash working capital items":




Fiscal Years Ended January 31,

2021

2020

(In thousands of Canadian dollars)

$

$

Accounts receivable

(11,378)

(10,360)

Holdbacks on contracts

508

(5,491)

Contract assets

5,236

3,660

Inventories

830

554

Prepaid expenses and other current assets

(922)

74

Accounts payable and other current liabilities

3,580

13,597

Contract liabilities

20,793

(7,679)

Other

(10)

(10)

Change in non-cash working capital items

18,637

(5,655)




Segmented Information

The Corporation operates one operational sector, being, the non-residential construction industry, primarily in the United States and Canada. This sector includes the following areas of expertise: 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,

2021

2020

(In thousands of Canadian dollars)

$

$

Revenues



Canada

32,025

13,906

United States

140,568

165,804


172,593

179,710




 




As at January 31,

2021

2020

(In thousands of Canadian dollars)

$

$

Non-current assets (1)



Canada

46,794

48,281

United States

42,561

45,301


89,355

93,582




(1)  The non-current assets mainly include property, plant and equipment, intangible assets, right-of-use assets. investment tax credits and others non-current assets.

Revenues from external clients were allocated to each country on the basis of the project's location.

During the fiscal year ended January 31, 2021, 66% of the Corporation's revenues was realized with three (3) clients, each representing 10 % and more of its revenues (72% with four (4) clients during the fiscal year ended January 31, 2020).

The following table presents the breakdown of revenues for each of these clients:




Fiscal Years Ended January 31,

2021 (1)

2020 (2)

(In thousands of Canadian dollars)

$

$

Client A

20,518

Client B

32,812

Client C

43,415

Client D

31,894

Client E

63,613

Client F

28,141

Client G

21,517


113,271

128,639




(1) All from the United States, except for an amount of $21,517,000 from Canada.

(2) All from the United States.

SOURCE ADF Group Inc.

Copyright 2021 Canada NewsWire

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