HIGHLIGHTS
- Revenues of $280.7 million,
$108.1 million more than last
year.
- Net income of $9.6 million,
representing 39.3% more than for the year ended January 31, 2021.
- The Corporation's backlog (1) was $373.1 million as at January 31, 2022.
- Capital Investment program progressing as
planned.
TERREBONNE, QC, April 12,
2022 /CNW Telbec/ - ADF
GROUP INC. ("ADF" or the "Corporation") (TSX: DRX)
recorded revenues of $280.7 million
during the fiscal year ended January 31, 2022, compared with
$172.6 million the previous fiscal
year. This increase in revenues is mainly attributable
to the fabrication schedule, including projects with accelerated
production schedules.
Gross margin, as a percentage of revenues (1),
went from 15.2% for the fiscal year ended January 31, 2021, to 8.8% for the year ended
January 31, 2022. This decrease, as a
percentage of revenues, is mainly due to the projects mentioned
above, which, given their lower complexity had lower margins, and
to the recognition of COVID-19-related subsidies during the fourth
quarter of the fiscal year ended January 31,
2021.
In this regard, and for the fiscal years ended
January 31, 2022 and 2021, the
Corporation has benefited from COVID-19-related grants from both
the Canadian and U.S. governments. The total amounts which are
included in the results, and having therefore mainly improved gross
margin, and to a lesser extent, selling and administrative
expenses, and therefore earnings before interest, taxes,
depreciation and amortization adjusted (adjusted EBITDA
(2)), totalled $1.9
million and $6.3 million for
the fiscal years ended January 31, 2022 and 2021,
respectively.
For the fiscal year ended January
31, 2022, ADF posted net income of $9.6 million (or $0.29 per share, basic and diluted) compared to a
net income of $6.9 million (or
$0.21 per share, basic and diluted) a
year earlier.
As at January 31, 2022, the
Corporation had a working capital of $38.7
million. The Corporation remains in a sound position to
continue its ongoing operations and pursue its development
projects.
The Corporation was able to secure new contracts totalling
nearly $220.0 million during the
fiscal year ended January 31, 2022,
including contractual changes, which brought the order backlog
(1) to $373.1 million at
that date, compared with $436.2
million as at January 31,
2021. The majority of projects in hand will be completed
progressively by the end of the fiscal year ending January 31, 2024.
Financial
Highlights
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of Canadian dollars, and dollars per share)
|
$
|
$
|
|
|
|
Revenues
|
280,740
|
172,593
|
Adjusted EBITDA
(2)
|
17,759
|
16,341
|
Income before income
tax expense
|
11,059
|
9,019
|
Net income for the
year
|
9,563
|
6,867
|
― Basic
and diluted per share
|
0.29
|
0.21
|
Cash flows from
operating activities
|
2,669
|
28,842
|
Average number of
outstanding shares (basic and
diluted, in thousands)
|
32,635
|
32,635
|
|
|
|
New Contracts
On January 31, 2022, the
Corporation announced the award of a series of new contracts
totalling $100.0 million.
Specifically, the Corporation has been selected to participate in
new construction projects in the commercial building sector in
Southeast and Western USA, as well
as in the industrial sector in Eastern
Canada. The scope of the largest of these contracts, in
terms of value and tonnage, covers all the services offered by ADF,
namely, the design and engineering of connections, fabrication,
which also encompasses industrial coatings, the production of shop
drawings and the procurement of steel, as well as the installation
of the steel structures for commercial buildings in Southeastern USA.
____________________
(1)
|
Gross margin, as a
percentage of revenues, and the order backlog are additional
financial measures. Refer to the "Non-GAAP Financial Measures and
Other Financial Measures" section of this press release for the
definition of these indicators.
|
(2)
|
Adjusted EBITDA is a
non-GAAP financial measure. Refer to the "Non-GAAP Financial
Measures and Other Financial Measures" section of this press
release for the definition of this indicator.
|
New Financing
On November 9, 2021, the
Corporation obtained from the Business Development Bank of
Canada a $30.0 million bank loan, of which $16.2 million was used for the repayment of
an existing loan, and $13.8 million
to increase the Corporation's working capital. This loan was
entirely drawn as at January 31, 2022.
On January 14, 2022 and
January 18, 2022, the Corporation
obtained two bank loans from Investissement Québec totalling
$20.0 million. These amounts, which
were not drawn as at January 31,
2022, will be used to finance the capital investment program
that begun during the fiscal year ended January 31, 2022, as already announced by the
Corporation.
Outlook
"We added new contracts totalling $50.0 million at the very beginning of the third
quarter ended October 31, 2021, and
announced new contracts worth a total of $100.0 million at the end of the fiscal year,
that allowed us to close fiscal 2022 with an order
backlog (1) of $373.1
million. The pipeline of projects under negotiation is
encouraging and we are currently finalizing negotiations on several
projects we bid on" said Jean
Paschini, Chairman of the Board of Directors
and Chief Executive Officer.
"The elements are therefore in place for ADF to continue
its development, including growing markets, capital investments
that will allow ADF to stand out and continue to improve its
business processes, as well as the financing required to support
these investments, and the growth and execution of the order
backlog" concluded Mr. Paschini.
Dividend
On April 11, 2022, 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, 2022, to
shareholders of record as at April 29,
2022.
Conference Call with
Investors
A conference call with investors is scheduled for
Tuesday, April 12, 2022 at
10 a.m. (Montreal time) to discuss the results of
Corporation fiscal year ended January 31,
2022.
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
Tuesday, April 12, 2022 at
1:00 p.m. until 11:59 p.m., Tuesday,
April 19, 2022, by dialing 1-888-259-6562, followed by
the access code 372743#.
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 FOR THE FISCAL YEAR ENDED JANUARY 31, 2022
ADF Group Inc. will hold its Annual General Meeting of
Shareholders via webcast, on Wednesday, June
8, 2022, at 11 a.m. (EST).
Results for the first quarter ending April 30, 2022, will also be disclosed during the
Shareholders' meeting. Shareholders' meeting details and webcasting
connection instructions will be made available in the weeks
preceding the meeting.
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.
____________________
(1)
|
The order backlog is an
additional financial measure. Refer to the "Non-GAAP Financial
Measures and Other Financial Measures" section of this press
release for the definition of these indicators.
|
Non-GAAP Financial Measures and Other Financial
Measures | Are measures
derived primarily from the consolidated financial statements,
but are not a standardized financial measure under the financial
reporting framework used to prepare the Corporation's financial
statements. Therefore, readers should be careful not to confuse or
substitute them with performance measures prepared in accordance
with GAAP. In addition, readers should avoid comparing these
non-GAAP measures to similarly titled measures provided or used by
other issuers.s. The definition of these indicators
and their reconciliation with comparable International Financial
Reporting Standards measure is as follows:
Adjusted
EBITDA
Adjusted EBITDA shows the extent to which the Corporation
generates profits from operations, without considering the
following items:
- Financial revenues and financial expenses;
- Income tax expense;
- Foreign exchange losses, and
- Depreciation and amortization of property, plant and
equipment, intangible assets and right-of-use assets.
Net income is reconciled with adjusted EBITDA in the table
below:
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
dollars)
|
$
|
$
|
|
|
|
Net income
|
9,563
|
6,867
|
Income tax
expense
|
1,496
|
2,152
|
Net financial
expenses
|
1,174
|
1,663
|
Amortization
|
5,054
|
4,915
|
Foreign exchange
loss
|
472
|
744
|
Adjusted EBITDA
|
17,759
|
16,341
|
|
|
|
Gross Margin as a Percentage
of Revenues
Gross margin as a percentage of revenue indicator is used
by the Corporation to assess the level of profitability for a given
period based on the project mix for that same period. This
indicator is subject to fluctuations in project prices and also in
the operational efficiency of the Corporation. The indicator of
gross margin as a percentage of revenues results from dividing
gross margin by revenues.
Order
Backlog
The order backlog is a measure used by the Corporation to
assess future revenue levels. The order backlog includes firm
orders obtained by the Corporation, either through a firm contract
or a formal notice to proceed confirmed by the client. The order
backlog disclosed by the Corporation therefore includes the portion
of confirmed contracts that have not been put into
production.
All amounts are in Canadian dollars, unless otherwise
indicated.
CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
|
|
|
As at January
31,
|
2022
|
2021
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
7,130
|
17,806
|
Accounts
receivable
|
40,424
|
61,019
|
Current income tax
assets
|
1,548
|
834
|
Contract
assets
|
29,998
|
8,790
|
Inventories
|
9,690
|
6,960
|
Prepaid expenses and
other current assets
|
2,312
|
5,187
|
Total current
assets
|
91,102
|
100,596
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
83,629
|
62,223
|
Right-of-use
assets
|
21,587
|
22,478
|
Intangible
assets
|
3,357
|
3,266
|
Other non-current
assets
|
1,375
|
1,388
|
Total
assets
|
201,050
|
189,951
|
LIABILITIES
|
|
|
Current
liabilities
|
|
|
Accounts payable and
other current liabilities
|
34,421
|
34,562
|
Current income tax
liabilities
|
―
|
1,161
|
Contract
liabilities
|
13,770
|
23,278
|
Current portion of
lease liabilities
|
841
|
1,143
|
Current portion of
long-term debt
|
3,357
|
1,904
|
Total current
liabilities
|
52,389
|
62,048
|
Non-current
liabilities
|
|
|
Long-term
debt
|
28,702
|
18,368
|
Lease
liabilities
|
3,772
|
4,166
|
Deferred income tax
liabilities
|
7,571
|
5,627
|
Other non-current
liabilities
|
166
|
177
|
Total
liabilities
|
92,600
|
90,386
|
SHAREHOLDERS' EQUITY
|
|
|
Capital
stock
|
68,120
|
68,120
|
Contributed
surplus
|
6,435
|
6,435
|
Accumulated other
comprehensive income
|
5,861
|
5,886
|
Retained
income
|
28,034
|
19,124
|
Total shareholders'
equity
|
108,450
|
99,565
|
Total
liabilities and shareholders' equity
|
201,050
|
189,951
|
|
|
|
CONSOLIDATED STATEMENTS OF
INCOME
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
Canadian dollars, except the number of shares and the amounts per
share)
|
$
|
$
|
|
|
|
Revenues
|
280,740
|
172,593
|
Cost of goods
sold
|
256,046
|
146,388
|
Gross Margin
|
24,694
|
26,205
|
Selling and
administrative expenses
|
11,989
|
14,779
|
Net financial
expenses
|
1,174
|
1,663
|
Foreign exchange
loss
|
472
|
744
|
|
13,635
|
17,186
|
Income before income
tax expense
|
11,059
|
9,019
|
Income tax
expense
|
1,496
|
2,152
|
Net income for the
fiscal year
|
9,563
|
6,867
|
Earnings per
share
|
|
|
Basic and diluted per
share
|
0.29
|
0.21
|
Average number of
outstanding basic and diluted shares (in thousands)
|
32,635
|
32,635
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
Net income for the
fiscal year
|
9,563
|
6,867
|
Other comprehensive
income (loss):
|
|
|
Exchange differences on
translation of foreign operations (a)
|
(25)
|
(1,056)
|
Comprehensive income
for the fiscal year
|
9,538
|
5,811
|
|
|
|
a)
|
Will subsequently be
reclassified to net income.
|
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,
2020
|
68,120
|
6,435
|
6,942
|
12,910
|
94,407
|
Net income for the
fiscal year
|
―
|
―
|
―
|
6,867
|
6,867
|
Other comprehensive
income (loss)
|
―
|
―
|
(1,056)
|
―
|
(1,056)
|
Comprehensive income
(loss) for the fiscal year
|
―
|
―
|
(1,056)
|
6,867
|
5,811
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2021
|
68,120
|
6,435
|
5,886
|
19,124
|
99,565
|
|
Capital Stock
|
Contributed Surplus
|
Accumulated Other
Comprehensive
Income
|
Retained Income
|
Total
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
Balance, February 1,
2021
|
68,120
|
6,435
|
5,886
|
19,124
|
99,565
|
Net income for the
fiscal year
|
―
|
―
|
―
|
9,563
|
9,563
|
Other comprehensive
income (loss)
|
―
|
―
|
(25)
|
―
|
(25)
|
Comprehensive income
(loss) for the fiscal year
|
―
|
―
|
(25)
|
9,563
|
9,538
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2022
|
68,120
|
6,435
|
5,861
|
28,034
|
108,450
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
OPERATING ACTIVITIES
|
|
|
Net income
for the fiscal year
|
9,563
|
6,867
|
Non-cash
items:
|
|
|
Amortization of
property, plant and equipment
|
3,543
|
3,465
|
Amortization of
right-of-use assets
|
1,013
|
1,001
|
Amortization of
intangible assets
|
498
|
449
|
Gain on disposal of
property, plant and equipment
|
(2,111)
|
―
|
Unrealized loss (gain)
on derivative financial instruments
|
513
|
(640)
|
Unrealized foreign
exchange loss
|
705
|
359
|
Share-based
compensation
|
361
|
998
|
Income tax
expense
|
1,496
|
2,152
|
Government
grants
|
―
|
(6,158)
|
Net financial
expenses
|
1,174
|
1,663
|
Others
|
(148)
|
49
|
Net income adjusted for
non-cash items
|
16,607
|
10,205
|
Change in non-cash
working capital items (1)
|
(12,511)
|
18,637
|
Income tax
paid
|
(1,427)
|
―
|
Cash flows from
operating activities
|
2,669
|
28,842
|
INVESTING ACTIVITIES
|
|
|
Acquisition of
property, plant and equipment
|
(21,477)
|
(1,460)
|
Acquisition of
intangible assets
|
(589)
|
(361)
|
Others
|
77
|
68
|
Cash flows used in
investing activities
|
(21,989)
|
(1,753)
|
FINANCING ACTIVITIES
|
|
|
Variation in credit
facilities
|
―
|
(13,105)
|
Issuance of long-term
debt
|
30,000
|
5,654
|
Repayment of long-term
debt
|
(17,878)
|
(1,918)
|
Payment of lease
liabilities
|
(963)
|
(961)
|
Dividends
paid
|
(653)
|
(653)
|
Interest
paid
|
(988)
|
(1,460)
|
Others
|
(316)
|
―
|
Cash flows from (used
in) financing activities
|
9,202
|
(12,443)
|
Impact of fluctuations
in foreign exchange rate on cash flow
|
(558)
|
(823)
|
Net change in cash and
cash equivalents during the fiscal year
|
(10,676)
|
13,823
|
Cash, and cash
equivalents, beginning of fiscal year
|
17,806
|
3,983
|
Cash and cash
equivalents, end of fiscal year
|
7,130
|
17,806
|
|
|
|
(1)
|
The following table
sets out in detail the components of the "Change in non-cash
working capital items":
|
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Accounts
receivable
|
20,342
|
(10,870)
|
Contract
assets
|
(21,099)
|
5,236
|
Inventories
|
(2,714)
|
830
|
Prepaid expenses and
other current assets
|
2,382
|
(922)
|
Accounts payable and
other current liabilities
|
(2,041)
|
3,580
|
Contract
liabilities
|
(9,366)
|
20,793
|
Others
|
(15)
|
(10)
|
Change in non-cash
working capital items
|
(12,511)
|
18,637
|
|
|
|
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,
|
2022
|
2021
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Revenues
|
|
|
Canada
|
39,810
|
32,025
|
United
States
|
240,930
|
140,568
|
|
280,740
|
172,593
|
|
|
|
|
|
|
As at January
31,
|
2022
|
2021
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Non-current assets (1)
|
|
|
Canada
|
68,907
|
46,794
|
United
States
|
41,041
|
42,561
|
|
109,948
|
89,355
|
|
|
|
(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, 2022,
86% of the Corporation's revenues was realized with three (3)
clients, each representing 10 % and more of its revenues (66%
with three (3) clients during the fiscal year ended January 31, 2021).
The following table presents the breakdown of revenues for
each of these clients:
|
|
|
Fiscal Years Ended
January 31,
|
2022
|
2021
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Client A
(1)
|
168,950
|
63,613
|
Client B
(1)
|
40,610
|
28,141
|
Client C
(2)
|
31,381
|
21,517
|
|
240,941
|
113,271
|
|
|
|
(1)
|
From the United
States
|
(2)
|
From Canada
|
SOURCE ADF Group Inc.