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.

Copyright 2022 Canada NewsWire

ADF (TSX:DRX)
Historical Stock Chart
Von Sep 2022 bis Okt 2022 Click Here for more ADF Charts.
ADF (TSX:DRX)
Historical Stock Chart
Von Okt 2021 bis Okt 2022 Click Here for more ADF Charts.