HIGHLIGHTS
- Revenues up by 75% compared with the previous year, reaching
$180.5 million.
- Revenues before income tax expense of $2.2 million, down by $0.3
million compared with a year ago.
- Negative net result of $7.2
million, including a non-recurring non cash income tax
expense totalling $9.2 million.
- The Corporation's backlog stood at $85.5
million on January 31,
2018.
TERREBONNE, QC, April 12, 2018 /CNW Telbec/ - ADF GROUP
INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues
of $180.5 million during the fiscal
year ended January 31, 2018, compared with $102.8 million the previous fiscal year. This
increase in revenues results from the rise in fabrication
activities across both of the Corporation's plants.
The gross margin as a percentage of revenues went from 16.7%
during the fiscal year ended January 31, 2017, to 8.9%
during the fiscal year ended January 31,
2018. This drop in gross margin was mainly lead by the
current pressure on price in the markets served by ADF.
The Corporation recorded a $9.2
million non-recurrent non-cash income tax expense, resulting
almost entirely from the decrease of deferred U.S. subsidiaries
income tax assets. This decrease had to be taken because of the
change to the U.S. federal tax rates for the Corporation's U.S.
subsidiaries which had an impact of $1.7
million, and the non-recognition of deferred U.S.
subsidiaries income tax assets following a tax settlement,
resulting in an additional impact of $7.5
million. However, it is important to point out that once the
Corporation has a better outlook on its U.S. subsidiaries' future
profitability, the written off assets may be recognized when it
becomes more likely than not that these assets will be
realized.
In light of this one-time charge, ADF recorded a negative net
income of $7.2 million (-$0.22 basic and diluted per share) during the
fiscal year ended January 31, 2018, compared with a net income
of $1.5 million ($0.05 basic and diluted per share) a year ago. It
is also important to underline that had it not been for the change
to the U.S. federal tax rates and the write-off of deferred income
tax assets, the Corporation's net income for the fiscal year ended
January 31, 2018, would have amounted
to $2.0 million or $0.06 basic and diluted per share.
On January 31, 2018, the Corporation had $34.8 million in working capital, up from
January 31, 2017. On January 31, 2018, cash and cash equivalents
totalled $4.9 million, up by
$4.6 million compared with
January 31, 2017.
The Corporation remains in a solid position to support its
ongoing operations and pursue its development projects and
remunerate its shareholders in accordance with the dividend payment
policy.
As at January 31, 2018, the
Corporation order backlog totalled $85.5
million, compared with $194.5
million as at January 31, 2017. These contracts
will be progressively completed by the end of the fiscal year
ending January 31, 2020.
|
Financial
Highlights
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2018
|
2017
|
|
(In thousands of CA$,
and dollars per share)
|
$
|
$
|
|
|
|
|
Revenues
|
180,474
|
102,846
|
|
EBITDA
|
8,436
|
8,462
|
|
Income before income
tax expense
|
2,172
|
2,513
|
|
Net income for the
year
|
(7,213)
|
1,499
|
|
— Basic per
share
|
(0,22)
|
0,05
|
|
— Diluted per
share
|
(0,22)
|
0,05
|
|
Average number of
outstanding shares (basic, in thousands)
|
32,633
|
32,624
|
|
Average number of
outstanding shares (diluted, in thousands)
|
32,633
|
32,686
|
Outlook
"Despite the negative net income which was driven by this
one-time non-cash tax adjustment and the uncertainties in our
markets, our revenues for fiscal 2018 increased by about
$80 million compared with fiscal
2017, and when we exclude this tax adjustment, the net income also
improved " indicated Mr. Jean Paschini, Co-Chairman of
the Board of Directors and Chief Executive Officer.
"Despite this uncertain environment, we continue focusing on our
growth objectives" concluded Mr. Paschini.
Dividend
On April 11, 2018, 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 16, 2018 to shareholders
of record as at April 30, 2018.
Conference Call with Investors
A conference call with investors is scheduled for April 12, 2018 at 10 a.m.
(Eastern time) to discuss the results of Corporation fiscal
year ended January 31, 2018.
To take part in the conference call, dial 1 (866) 865-3087, a
few minutes prior to the conference call scheduled start time. A
replay of this conference call will be available from Thursday, April 12, 2018 at 1:00 p.m. until 11:59 p.m., Thursday, April 19, 2018, by dialing 1 (855)
859-2056, followed by the access code 5199297.
The conference call (audio) will also be available at
www.adfgroup.com. Members of the media are invited to listen
in.
Annual Meeting of Shareholders
ADF Group Inc. Annual Meeting of Shareholders will be held
on:
|
Date:
|
Wednesday, June 13,
2018
|
|
|
|
Time:
|
11:00 a.m.
|
|
|
|
Place:
|
Imperia Hotel &
Suites
|
|
2935 de la Pinière
Boulevard, Terrebonne, Québec, Canada
|
Financial results for the first quarter ending April 30, 2018, will also be disclosed at the
Corporation's shareholders 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 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
IRFS measures.
All amounts are in Canadian dollars, unless otherwise
indicated.
|
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
|
As at January
31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
4,905
|
334
|
|
Accounts
receivable
|
33,099
|
22,326
|
|
Holdbacks on
contracts
|
4,933
|
3,613
|
|
Income tax
assets
|
927
|
842
|
|
Work in
progress
|
30,314
|
21,077
|
|
Inventories
|
5,150
|
6,957
|
|
Derivative financial
instruments
|
300
|
696
|
|
Prepaid expenses and
other current assets
|
2,428
|
1,137
|
|
Total current
assets
|
82,056
|
56,982
|
|
Non-current
assets
|
|
|
|
Property, plant and
equipment
|
88,378
|
90,060
|
|
Intangible
assets
|
3,197
|
2,920
|
|
Other non-current
assets
|
1,627
|
3,406
|
|
Deferred income tax
assets
|
―
|
5,316
|
|
Total
assets
|
175,258
|
158,684
|
|
|
|
|
LIABILITIES
|
|
|
|
Current
liabilities
|
|
|
|
Bank
overdraft
|
1,907
|
―
|
|
Credit
facilities
|
10,150
|
13,336
|
|
Accounts payable and
other current liabilities
|
29,308
|
16,585
|
|
Income tax
liability
|
422
|
184
|
|
Deferred
revenues
|
3,435
|
1,264
|
|
Current portion of
long-term debt
|
2,066
|
844
|
|
Total current
liabilities
|
47,288
|
32,213
|
|
Non-current
liabilities
|
|
|
|
Long-term
debt
|
26,135
|
17,870
|
|
Deferred income tax
liabilities
|
6,053
|
2,951
|
|
Total
liabilities
|
79,476
|
53,034
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
Capital
stock
|
68,120
|
68,088
|
|
Contributed
surplus
|
6,423
|
6,422
|
|
Accumulated other
comprehensive income (loss)
|
4,706
|
6,741
|
|
Retained
income
|
16,533
|
24,399
|
|
Total shareholders'
equity
|
95,782
|
105,650
|
|
Total liabilities and
shareholders' equity
|
175,258
|
158,684
|
|
CONSOLIDATED
STATEMENTS OF INCOME
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars and in dollars per share)
|
$
|
$
|
|
|
|
|
Revenues
|
180,474
|
102,846
|
|
Cost of goods
sold
|
164,352
|
85,635
|
|
Gross
Margin
|
16,122
|
17,211
|
|
Selling and
administrative expenses
|
12,109
|
13,436
|
|
Financial
revenues
|
(30)
|
(49)
|
|
Financial
expenses
|
1,638
|
1,057
|
|
Foreign exchange
loss
|
233
|
254
|
|
13,950
|
14,698
|
|
Income before income
tax expense
|
2,172
|
2,513
|
|
Income tax
expense
|
9,385
|
1,014
|
|
Net income for the
year
|
(7,213)
|
1,499
|
|
Income per
share
|
|
|
|
Basic and diluted per
share
|
(0.22)
|
0.05
|
|
Average number of
outstanding shares (in thousands)
|
32,633
|
32,624
|
|
Average number of
outstanding diluted shares (in thousands)
|
32,633
|
32,686
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
Net income for the
year
|
(7,213)
|
1,499
|
|
Other comprehensive
income (loss) (a) :
|
|
|
|
Exchange differences
on translation of foreign operations
|
(2,035)
|
(2,816)
|
|
Change in value of
available-for-sale financial assets (b)
|
―
|
50
|
|
(2,035)
|
(2,766)
|
|
Comprehensive income
(loss) for the year
|
(9,248)
|
(1,267)
|
|
|
|
|
a)
|
Will subsequently be
reclassified to net income.
|
|
b)
|
Net of an immaterial
amount related income tax expense for the fiscal year ended January
31, 2017.
|
|
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,
2016
|
68,077
|
6,397
|
9,507
|
23,552
|
107,533
|
|
Net income for the
year
|
―
|
―
|
―
|
1,499
|
1,499
|
|
Other comprehensive
income (loss)
|
―
|
―
|
(2,766)
|
―
|
(2,766)
|
|
Comprehensive income
(loss) for the year
|
―
|
―
|
(2,766)
|
1,499
|
(1,267)
|
|
Share-based
compensation
|
―
|
30
|
―
|
―
|
30
|
|
Options
exercised
|
11
|
(5)
|
―
|
―
|
6
|
|
Dividends
|
―
|
―
|
―
|
(652)
|
(652)
|
|
Balance,
January 31, 2017
|
68,088
|
6,422
|
6,741
|
24,399
|
105,650
|
|
|
|
|
|
|
|
Capital
Stock
|
Contributed
Surplus
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Retained
Income
|
Total
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
Balance, February 1,
2017
|
68,088
|
6,422
|
6,741
|
24,399
|
105,650
|
|
Net income for the
year
|
―
|
―
|
―
|
(7,213)
|
(7,213)
|
|
Other comprehensive
income (loss)
|
―
|
―
|
(2,035)
|
―
|
(2,035)
|
|
Comprehensive income
(loss) for the year
|
―
|
―
|
(2,035)
|
(7,213)
|
(9,248)
|
|
Share-based
compensation
|
―
|
16
|
―
|
―
|
16
|
|
Options
exercised
|
32
|
(15)
|
―
|
―
|
17
|
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
|
Balance,
January 31, 2018
|
68,120
|
6,423
|
4,706
|
16,533
|
95,782
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
|
Net income for the
year
|
(7,213)
|
1,499
|
|
Non-cash
items:
|
|
|
|
|
Amortization of
property, plant and equipment
|
4,029
|
4,326
|
|
|
Amortization of
intangible asset
|
394
|
361
|
|
|
Gain on disposal of
property, plant and equipment
|
(39)
|
―
|
|
|
Unrealized loss
(gain) on derivative financial instruments
|
396
|
(1,099)
|
|
|
Non-cash exchange
loss
|
1,744
|
683
|
|
|
Share-based
compensation
|
―
|
951
|
|
|
Income tax
expense
|
9,385
|
1,014
|
|
|
Inventories
depreciation allowance
|
(55)
|
209
|
|
|
Financial
revenues
|
(30)
|
(49)
|
|
|
Financial
expenses
|
1,638
|
1,057
|
|
Net income adjusted
for non-cash items
|
10,249
|
8,952
|
|
Change in non-cash
working capital items (1)
|
(7,243)
|
(18,686)
|
|
Income tax recovery
(paid)
|
656
|
(901)
|
|
Cash flows from (used
in) operating activities
|
3,662
|
(10,635)
|
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
|
Net acquisition of
property, plant and equipment
|
(4,831)
|
(6,809)
|
|
Revenues from
disposals of property, plant and equipment
|
175
|
―
|
|
Acquisition of
intangible assets
|
(671)
|
(410)
|
|
Increase in other
non-current assets
|
(21)
|
(12)
|
|
Interest
received
|
30
|
49
|
|
Cash flows used in
investing activities
|
(5,318)
|
(7,182)
|
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
|
Variation in credit
facilities
|
(3,159)
|
13,329
|
|
Issuance of long-term
debt
|
10,702
|
5,000
|
|
Repayment of
long-term debt
|
(945)
|
(816)
|
|
Issuance of
subordinate voting shares
|
17
|
6
|
|
Dividends
paid
|
(653)
|
(652)
|
|
Interest
paid
|
(1,603)
|
(1,040)
|
|
Cash flows from
financing activities
|
4,359
|
15,827
|
|
Impact of
fluctuations in foreign exchange rate on cash flow
|
(39)
|
(53)
|
|
Net change in cash
and cash equivalents during the year
|
2,664
|
(2,043)
|
|
Cash, and cash
equivalents, beginning of year (2)
|
334
|
2,377
|
|
Cash and cash
equivalents, end of year (2)
|
2,998
|
334
|
|
|
|
|
(1)
|
The following
table sets out in detail the components of the "Changes in non-cash
working capital items":
|
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
|
|
|
Accounts
receivable
|
(11,514)
|
13
|
|
|
Holdbacks on
contracts
|
(1,516)
|
(1,895)
|
|
|
Work in
progress
|
(10,121)
|
(13,688)
|
|
|
Inventories
|
1,760
|
(1,057)
|
|
|
Prepaid expenses and
other current assets
|
(1,330)
|
688
|
|
|
Accounts payable and
other current liabilities
|
13,203
|
(1,310)
|
|
|
Deferred
revenues
|
2,275
|
(1,437)
|
|
Changes in non-cash
working capital items
|
(7,243)
|
(18,686)
|
|
|
|
(2)
|
Net of the $1.9
million bank overdraft as at January 31, 2018 (none as at January
31, 2017).
|
SEGMENTED INFORMATION
The Corporation operates in the non-residential construction
industry, primarily in the United
States and Canada. Its
operations include 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,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
|
Revenues
|
|
|
|
Canada
|
16,027
|
17,957
|
|
United
States
|
164,447
|
84,889
|
|
180,474
|
102,846
|
|
|
|
|
As at January
31,
|
2018
|
2017
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
|
Non-current assets
(1)
|
|
|
|
Canada
|
49,508
|
50,110
|
|
United
States
|
43,694
|
46,276
|
|
93,202
|
96,386
|
|
|
|
|
(1)
|
The non-current
assets mainly include property, plant and equipment, intangible
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, 2018, 85% of
the Corporation's revenues were realized with three (3) clients,
each representing 10 % and more of its revenues (60% with two (2)
clients during the fiscal year ended January
31, 2017).
The following table, presents the breakdown of revenues for each
these clients:
|
|
|
|
Fiscal Years
Ended
|
January 31,
2018
|
January 31,
2017
|
|
Canada
|
United
States
|
Total
|
Canada
|
United
States
|
Total
|
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
|
|
Client A
|
―
|
―
|
―
|
8,412
|
15,892
|
24,304
|
|
Client B
|
―
|
29,375
|
29,375
|
―
|
36,825
|
36,825
|
|
Client C
|
―
|
81,120
|
81,120
|
―
|
―
|
―
|
|
Client D
|
―
|
43,106
|
43,106
|
―
|
―
|
―
|
|
―
|
153,601
|
153,601
|
8,412
|
52,717
|
61,129
|
SOURCE ADF Group Inc.