HIGHLIGHTS
- Revenues and net income down compared with the same period a
year ago.
- $95 million worth of new
contracts signed in the first quarter.
- Order backlog reached $158.7
million as at April 30, 2018,
which is $73 million more than as at
January 31, 2018.
TERREBONNE, QC, June 13, 2018 /CNW Telbec/ - ADF GROUP
INC. ("ADF" or the "Corporation") (Ticker symbol: TSX: DRX),
recorded revenues of $28.5 million
during the first quarter ended April 30, 2018, compared
with $48.6 million for the same
quarter a year ago.
The gross margin, as a percentage of revenues, went from 10.7%
during the quarter ended April 30,
2017, to 2.8% during the three-month period ended
April 30, 2018. This decrease, as a percentage of
revenues, is attributable to the drop in business volume. While
fabrication on certain projects is almost completed, work on the
newly signed contracts has not yet started. Because of the low
level of costs incurred, paired with an ineffective absorption of
fixed costs, the margins, as a percentage of revenues, were
penalized twice over. In addition, the temporary layoffs announced
at the end of March 2018 had little
impact on the results of the first quarter ended April 30, 2018.
For the first quarter ended April 30,
2018, ADF recorded a negative net income of $910,000 (($0.03)
basic and diluted per share) compared with a net income of
$354,000 ($0.01 basic and diluted per share) a year
ago.
The order backlog of the Corporation stood at $158.7 million as at April
30, 2018, compared with $85.5
million as at January 31, 2018. The current order
backlog will extend until the third quarter of the fiscal year
ending January 31, 2020. On April
30, 2018, working capital stood at $32.7 million. The Corporation takes
appropriate measures in order to support the growth of its order
backlog. To that effect, the Corporation has reached agreements
with its financial institutions, and has implemented other measures
to proactively managing its liquidity.
Financial Highlights
|
|
|
Three-Month Periods
Ended April 30,
|
2018
|
2017
|
(In thousands of
dollars, and dollars per share)
|
$
|
$
|
Revenues
|
28,477
|
48,638
|
Earnings before
interest, tax, depreciation and amortization (EBITDA)
|
(1,186)
|
3,081
|
Net income for the
period
|
(910)
|
354
|
—
Per share (basic and diluted)
|
(0.03)
|
0.01
|
Average number of
outstanding shares (basic, in thousands)
|
32,635
|
32,627
|
Average number of
outstanding shares (diluted, in thousands)
|
32,635
|
32,660
|
New Orders
On April 23, 2018, the Corporation
announced the award of major contracts in the United States worth a total of
$95 million. These new orders are
part of new construction projects of commercial and industrial
buildings, and call for the fabrication, encompassing shop
drawings, the supply of raw material (steel) and industrial
coating, and the installation of complex steel structures and heavy
steel components. These new orders will be carried out at both of
ADF's fabrication plants.
Outlook
"We are not satisfied with the results achieved during the first
quarter ended April 30, 2018, even
though that period was impacted by a series of factors, among
which, the talks regarding the new tariffs on steel imports.
Although this situation is constantly evolving, we are closely
monitoring it, and we will analyze the potential impacts thereof on
our operations" indicated Mr. Jean Paschini,
Co-Chairman of the Board of Directors and Chief Executive Officer.
"Despite this, and although selling prices in the markets served by
ADF stay low, the number of potential projects remains interesting,
and encourages us to pursue our efforts. It is with this in mind
that we continue our efforts to renew our order backlog all the
while maintaining our operational excellence" concluded Mr.
Paschini.
Work-Sharing Program
Given the projects currently included the order book and the
fabrication schedules thereof, the Corporation applied and received
the approval from Service Canada to implement a Work-Sharing
program for a certain number of its Terrebonne plant employees. The program, which
came into effect on June 11, 2018,
will allow certain employees to receive Employment Insurance
benefits to make up for the reduced work hours. The Corporation and
its union employees reached an agreement to put this program in
place. This program will enable ADF to closely manage its costs
until the fabrication work on the recently awarded projects begins.
Thus, approximately 120 employees will have their working hours
reduced from 40% to 60%, and these hours will be compensated by the
Government program.
Conference Call with Investors
A conference call with investors is scheduled for today,
June 13, 2018 at 10 a.m. (Eastern time) to discuss the results of
Corporation first quarter results ended April 30, 2018.
To take part in the conference call, dial 1-888-390-0549, a few
minutes prior to the conference call scheduled start time.
A replay of this conference call will be available from
June 13, 2018 at 1:00 p.m. until 11:59 p.m., June 20, 2018, by dialing 1-888-259-6562,
followed by the access code 620166#.
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
today, June 13, 2018, at 11:00 a.m., at the Imperia Hotel & Suites,
located at 2935 de la Pinière Boulevard, Terrebonne, Quebec.
About ADF Group Inc.
ADF Group Inc. is a North American leader in the design and
engineering of connections, fabrication, including industrial
coatings, 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. The
Corporation operates two fabrication plants and two paint shops, in
Canada and in the United States.
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.
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.
All amounts are in Canadian dollars, unless otherwise
indicated.
Website : www.adfgroup.com
SOURCE ADF Group Inc.