HIGHLIGHTS
(All amounts are in Canadian dollars,
unless otherwise indicated.)
- Revenues of $65.0 million and
$199.4 million recorded in the
3-month and 9-month periods ended October
31, 2022,
respectively.
- Net income of $12.6 million, for
the 9-month period ended October 31,
2022, up 45% from the same period a year earlier.
- Order backlog of $344.0 million
as at October 31, 2022.
TERREBONNE, QC, Dec. 7, 2022
/CNW Telbec/ -
ADF GROUP INC. ("ADF" or the "Corporation") (Ticker
symbol: (TSX: DRX), recorded revenues of $65.0 million during the third quarter ended
October 31, 2022, compared with
$110.2 million for the same period a
year earlier. After the first 9 months of the fiscal year, revenues
totaled $199.4 million, compared with
$233.7 million for same period a year
earlier.
Gross margin, as a percentage of revenues (1), went
from 5.6% for the 3-month period ended October 31, 2021, to 15.0% for the same period
ended October 31, 2022. Gross margin,
as a percentage of revenues (1), went from 8.4%, during
the 9-month period ended October 31, 2021, to 13.3% for the
same period ended October 31,
2022.
The improvement in margins for the quarter and the 9-month
period ended October 31, 2022,
compared to the corresponding periods a year earlier, is explained
by the fabrication of high-volume projects with lower margins
during the prior year; the type of projects as well as the level of
margins for the periods ended October 31,
2022, which are now returning to more usual levels.
Adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) (2) for the 9-month
period ended October 31, 2022, at $20.2 million, is $6.4
million higher than as at October 31, 2021. The 9-month
period ended October 31, 2022,
benefited from a $0.8 million gain on
disposal of assets which was recognized during the quarter ended
July 31, 2022, whereas the 9-month
period ended October 31, 2021,
benefited from a $1.9 million
COVID-related grant which improved gross margin by $1.6 million, and reduced selling and
administrative expenses by $0.3 million.
For the quarter ended October 31,
2022, ADF recorded a net income of $2.9 million ($0.09
per share, basic and diluted) compared with a net income of
$2.8 million ($0.09 per share, basic and diluted) a year
earlier. At the close of the 9-month period, that is October
31, 2022, net income totaled $12.6
million ($0.39 per share,
basic and diluted) compared to net income of $8.7 million ($0.27
per share, basic and diluted) for the same period one year
earlier.
The Corporation's order backlog (1) stood at
$344.0 million as at October 31, 2022, compared with $373.1 million as at January 31, 2022.
The current order backlog will extend until end of the fiscal year
ending January 31, 2024.
As of October 31, 2022, the
Corporation's working capital (1) stood at $58.0 million. Operating activities generated
$7.7 million in cash during the first
9-month period ended October 31,
2022. 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,
|
2022
|
2021
|
2022
|
2021
|
(In thousands of
dollars, and dollars per share)
|
$
|
$
|
$
|
$
|
Revenues
|
64,999
|
110,189
|
199,389
|
233,747
|
Adjusted EBITDA
(2)
|
7,543
|
4,698
|
20,246
|
13,884
|
Income before income
tax expense
|
3,300
|
3,247
|
12,936
|
9,105
|
Net income for the
period
|
2,910
|
2,788
|
12,592
|
8,681
|
— Per share (basic and
diluted)
|
0.09
|
0.09
|
0.39
|
0.27
|
(In
thousands)
|
Number
|
Number
|
Number
|
Number
|
Average number of
outstanding shares (basic and diluted)
|
32,640
|
32,635
|
32,640
|
32,635
|
|
|
|
|
|
(1)
|
Gross margin, as a
percentage of revenues, working capital, as well as 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.
|
Outlook
"The results of the three (3) months and nine (9) months ended
October 31, 2022, are in line with
our expectations and are in continuity with the last quarters"
mentioned Mr. Jean Paschini,
Chairman of the Board of Directors and Chief Executive Officer. "We
are also starting to see the positive impacts of our automation
investments at our Terrebonne
plant, which will allow us to generate better margins in the coming
quarters," concluded Mr. Paschini.
Dividend
On September 7, 2022, ADF Group
announced the payment of a semi-annual dividend of $0.01 per subordinate voting share and per
multiple voting shares, which was paid on October 18, 2022, to Shareholders of Record as of
September 29, 2022.
Conference Call with Investors
A conference call with investors is scheduled for this morning,
December 7, 2022, at 10 a.m. (Montreal time) to discuss the results of
Corporation's third quarter and 9-month period ended October 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.
Members of the media are invited to listen in.
A replay of this conference call will be available from
1:00 p.m. today, until Wednesday, December 14, 2022, by dialing
1 (888) 259- 6562, followed by the access code
128614 #. The conference call (audio) will also be available at
www.adfgroup.com.
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.
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 financial measures to
similarly titled measures provided or used by other issuers. 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:
- Net financial expenses;
- Income tax expense (recovery);
- Foreign exchange (gains) 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:
|
3 months
|
9 months
|
|
|
|
|
|
Periods Ended October
31,
|
2022
|
2021
|
2022
|
2021
|
|
(In thousands of
dollars)
|
$
|
$
|
$
|
$
|
|
Net income
|
2,910
|
2,788
|
12,592
|
8,681
|
|
Income tax
expense
|
390
|
459
|
344
|
424
|
|
Net financial
expenses
|
377
|
333
|
1,014
|
930
|
|
Amortization
|
1,408
|
1,268
|
3,826
|
3,722
|
|
Foreign exchange (gain)
loss
|
2,458
|
(150)
|
2,470
|
127
|
|
Adjusted
EBITDA
|
7,543
|
4,698
|
20,246
|
13,884
|
|
|
|
|
|
|
|
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.
Working Capital
The working capital indicator is used by the Corporation to
assess whether current assets are sufficient to meet current
liabilities. Working capital is equal to current assets, less
current liabilities.
SOURCE ADF Group Inc.