HIGHLIGHTS
- Third quarter revenues and net income up compared with the
corresponding period a year ago.
- Cash flow generation from operations of $13.0 million for the three-month period ended
October 31, 2018.
- The order backlog stood at $215.8
million as at October 31,
2018, which is $130.0 million
more than as at January 31,
2018.
TERREBONNE, QC, Dec. 5, 2018 /CNW Telbec/ - ADF GROUP INC.
("ADF" or the "Corporation") (TSX: DRX) recorded revenues of
$45.6 million and $106.3 million for the third quarter and the
nine-month periods ended October 31,
2018, respectively. The 22% increase in revenues during the
third quarter compared with the same quarter a year ago, partially
reduced the cumulative shortfall in revenues during the first half
of the 2019 fiscal year, which is attributable to the uncertainty
from the import tariffs introduced at the beginning of the year in
markets served by the Corporation.
During the third quarter ended October
31, 2018, the gross margin, in percentage of revenues, stood
at 10.2% compared with 6.5% for the corresponding period ended
October 31, 2017. For the nine-month
periods ended at the same dates, the gross margin went from 7.0% of
revenues to 9.1%. The improvement in gross margin during the
quarter ended October 31, 2018, is
for the most part attributable to the increase in the fabrication
volume that drove to a better absorption of costs.
The Corporation posted a third-quarter net income of
$1.9 million or ($0.06 per share, basic and diluted) compared with
a negative net income of $0.7 million
(-$0.02 per share, basic and diluted)
a year ago. After the first nine months, the Corporation posted a
net income of $0.5 million
($0.01 per share, basic and diluted)
compared with a net income of $1.6 million ($0.05 per share, basic and diluted) during the
same period last year.
Given that ADF's U.S. subsidiaries have returned to
profitability, the Corporation was able to recognize certain
deferred tax assets which had been written-off in the fourth
quarter of the fiscal year that ended on January 31, 2018, thus improving the net income
for the three-month and nine-month periods ended October 31, 2018, by $1.2
million and $1.4 million,
respectively.
On October 31, 2018, the Corporation's working capital
stood at $32.1 million. The
Corporation's operations generated cash flows of more than
$13.0 million during the quarter
ended October 31, 2018, which
significantly reduced the use of its credit facility. The
Corporation remains well-positioned to support its ongoing
operations and pursue its development projects.
As at October 31, 2018, the
Corporation's order backlog stood at $215.8
million, compared with $85.5
million on January 31, 2018. The contracts on hand
on October 31, 2018, will be progressively carried out
between now and the end of the fiscal year ending January 31, 2021.
Financial
Highlights
|
|
|
Three (3)
Months
|
Nine (9)
Months
|
|
|
|
|
|
Periods ended October
31,
|
2018
|
2017
|
2018
|
2017
|
(In thousands of
dollars, and dollars per share)
|
$
|
$
|
$
|
$
|
|
|
|
|
|
Revenues
|
45,570
|
37,212
|
106,267
|
131,128
|
EBITDA
|
2,594
|
468
|
1,517
|
5,651
|
Net income
|
1,900
|
(698)
|
458
|
1,583
|
—
Per share (basic and diluted)
|
0.06
|
(0.02)
|
0.01
|
0.05
|
Cash flows from (used
in) operating activities
|
13,247
|
(1,971)
|
13,119
|
4,421
|
Average number of
outstanding shares (basic, in thousands)
|
32,635
|
32,635
|
32,635
|
32,632
|
Average number of
outstanding shares (diluted, in thousands)
|
32,636
|
32,635
|
32,636
|
32,664
|
Outlook
"While our cumulative results continue to be affected by the
uncertainty related to tariffs on imports introduced at the
beginning of the year, we have however maintained our growth target
of our order backlog, and the third-quarter results are a step in
the right direction" said Mr. Jean
Paschini, Co-Chairman of the Board of Directors and
Chief Executive Officer.
Conference Call with Investors
A conference call with investors is scheduled for today,
December 5, 2018 at 10 a.m. (Eastern time) to discuss the results of
Corporation three-month and nine-month periods ended October 31, 2018.
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
1:00 p.m. today until 11:59 p.m., Wednesday,
December 12, 2018, by dialing 1-888-259-6562, followed by
the access code 112053 #.
The conference call (audio) will also be available at
www.adfgroup.com. Members of the media are invited to listen
in.
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
IFRS 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.