HIGHLIGHTS
(All amounts are in Canadian dollars,
unless otherwise indicated.)
- Revenues, gross margin and net income for the 3-month and
9-month periods ended October 31,
2020, all up from the same periods in 2019.
- Order backlog at $282.5 million
as at October 31, 2020, excluding new
contracts totalling $101.0 million
signed since October 31, 2020.
- Limited impact of COVID-19 on ADF's operations during the first
nine months ended October 31,
2020.
TERREBONNE, QC, Dec. 9, 2020 /CNW Telbec/ - ADF GROUP
INC. ("ADF" or the "Corporation") (TSX:
DRX), recorded revenues of $47.2
million during the third quarter ended October 31, 2020, compared with $42.1 million for the same period in 2019. After
the first nine months of the fiscal year, revenues totalled
$135.5 million, which is $2.1 million more than during the same period a
year earlier. It should be noted that results for the quarter and
nine-month period ended October 31,
2019, were impacted by a downward adjustment of $7.7 million, with no impact on income tax,
resulting from an out-of-court settlement related to a commercial
dispute in Florida, U.S.A. This
adjustment also impacted both the gross margin and net income
(loss).
Gross margin, as a percentage of revenues, went from 2.4% for
the three months ended October 31,
2019, to 15.9% for the same period ended October 31, 2020. Gross margin, as a percentage
of revenues, increased from 9.4% in the nine months ended
October 31, 2019, to 14.6% for the same period ended
October 31, 2020. In addition to the
impact of the aforementioned out-of-course settlement, these
increases are for the most part attributable to the mix of projects
carried out during the periods analyzed, and a better absorption of
fixed costs resulting from the internal efficiencies gained at our
production plants.
For the quarter ended October 31,
2020, ADF Group recorded net income of $2.6 million ($0.08
per basic and diluted share) compared with a negative net income of
$4.1 million (-$0.12 per share, basic and diluted) a year
earlier. After nine months, net income as at October 31, 2020, totalled $4.8 million ($0.15
per share, basic and diluted) compared with a negative net income
of $2.0 million (-$0.06 per share, basic and diluted) for the same
period a year ago.
The Corporation's backlog stood at $282.5
million as at October 31,
2020, compared with $328.7
million as at January 31,
2020, excluding the new contracts, worth a total of
$101.0 million, announced on
November 25, 2020. Projects currently
included in the order backlog will extend until the end of the
fiscal year ending January 31,
2023.
As of October 31, 2020, the
Corporation's working capital stood at $37.5
million. Operating activities generated $27.8 million in cash during the first nine
months ended October 31, 2020.
Consequently, the Corporation's net cash position as at
October 31, 2020 improved by
$27.9 million compared with
January 31, 2020. The Corporation
remains in a good position to continue its current operations and
carry out its development projects.
Financial Highlights
|
3 Months
|
9 Months
|
|
|
|
|
|
Periods ended October
31,
|
2020
|
2019
|
2020
|
2019
|
(In thousands of
dollars, and dollars per share)
|
$
|
$
|
$
|
$
|
Revenues
|
47,158
|
42,103
|
135,451
|
133,368
|
Earnings before
interest, taxes, depreciation and amortization (EBITDA)
|
5,020
|
(2,424)
|
12,564
|
3,607
|
Net income
(loss)
|
2,579
|
(4,059)
|
4,759
|
(2,022)
|
— Per share (basic
and diluted)
|
0.08
|
(0.12)
|
0.15
|
(0.06)
|
Cash flows from
operating activities
|
6,193
|
4,571
|
27,815
|
5,325
|
|
|
|
|
|
(In
thousands)
|
Number
|
Number
|
Number
|
Number
|
Average number of
outstanding shares (basic and diluted)
|
32,635
|
32,635
|
32,635
|
32,635
|
|
|
|
|
|
New Contracts
As previously mentioned, on November 25,
2020, the Corporation announced the award of two new
contracts in the commercial building sector in the U.S.A., worth a total of $101.0 million.
The scope of the largest of these contracts, in terms of value
and tonnage, relates to the design and engineering of connections,
fabrication, which also includes industrial coating and the supply
of raw material (steel), and the installation of the steel
structure of a new building with a commercial vocation in the
Northwestern U.S.A. This project
is characterized not only by its high tonnage, but also by a
fast-track construction schedule. Fabrication is expected to start
in the first months of 2021 at ADF's plant located in Terrebonne, Quebec, and will run until the
third quarter of the year 2021.
The other contract won by ADF is located in the Northeastern U.S.A. and consists in, among
other things, the supply of raw material (steel) and shop drawings,
and the fabrication of the steel structure used in the construction
of a new government building. This new contract will take off in
January 2021 with the design and
engineering of connections and shop drawings. Fabrication is
expected to begin later in 2021 and will run until mid-2022.
Outlook
"Despite the uncertainties associated with the pandemic, the
Corporation's results are adequate. Results are up and we have
announced new contracts totalling $101.0
million after the end of the quarter ended October 31, 2020. We have continued to improve
our cash position and are well positioned to undertake the last
stretch of our fiscal year ending January
31, 2021" said Jean
Paschini, Co-Chairman of the Board of Directors and
Chief Executive Officer.
COVID-19
Since the beginning of this Coronavirus pandemic and at the date
hereof, all of our facilities, including all of our job sites,
remained open and operational. However, in order for our
fabrication plant in Terrebonne,
Quebec, to remain in operation, and in addition to the
required sanitary and physical distancing measures, the Corporation
initially had to limit the number of employees per work shift.
While this has resulted in some operational limitations, the
Corporation has nevertheless been able to maintain a sufficient
level of fabrication in order to adequately serve its customers.
However, as at the date hereof, the number of employees per shift
has virtually returned to the pre-pandemic levels. The Corporation
introduced the telework program and implemented strategies to
support appropriate physical distancing techniques for its staff
who cannot work remotely. It should be noted that the various
measures taken in response to the pandemic have also resulted in
some additional costs. This situation is evolving rapidly and the
Corporation continues to monitor and mitigate developments
affecting its staff, suppliers, customers and the general public as
much as it can.
Although the impact of COVID-19 on ADF's operations is limited
for the time being, the extent to which the virus can have an
impact on our results will depend on future developments, which are
very uncertain and cannot be predicted at this time, including new
information that may emerge regarding the severity of COVID-19 and
the measures taken to contain it or address its impact, among
others.
Conference Call
with Investors
A conference call
with investors is scheduled for this morning, December 9, 2020, at
10 a.m. (Montreal time) to discuss the results of periods ended
October 31, 2020. 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 call will be available from 1:00 p.m. today, until midnight,
December 16, 2020, by dialing 1-888-390-0541 followed by the
access code 296258 #.
The conference
call (audio) will also be available at www.adfgroup.com. Members of
the media are invited to listen in.
|
About ADF
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.
SOURCE ADF Group Inc.