HIGHLIGHTS
- Net results of $6.9 million,
compared with net loss during the fiscal year ended January 31, 2020.
- The Corporation's order backlog stood at $436.2 million as at January 31, 2021, up $107.5 million from
January 31, 2020.
- Revenues of $172.6 million, down
4% from the previous fiscal year.
- At the date hereof, there is no significant impact from
COVID-19 on the Corporation's operations.
TERREBONNE, QC, April 8, 2021 /CNW Telbec/ - ADF GROUP
INC. ("ADF" or the "Corporation") (TSX: DRX) recorded
revenues of $172.6 million during the
fiscal year ended January 31, 2021, compared with $179.7 million the previous fiscal year. This
decrease in revenues is mainly attributable to the production
schedule, as the recently signed projects have not yet reached the
fabrication phase.
It should be noted that had it not been for the $7.7 million write-off recorded in the third
quarter of the 2020 fiscal year resulting from a out of court
settlement in a commercial dispute in Florida, the 2020 fiscal year revenues would
have been $187.4 million.
Gross margin, as a percentage of revenues, increased from 9.2%
for the fiscal year ended January 31,
2020, to 15.2% for the fiscal year ended January 31, 2021. This increase, as the
percentage of revenues, was largely due to a better overall price
on projects completed during the year, and the recognition for
COVID-19-related grants in the fourth quarter of the fiscal year
ended January 31, 2021.
For the fiscal year ended January 31,
2021, the Corporation benefited from grants related to
COVID-19 from the Canadian and US governments. The total amount
included in the results, and thus having mainly improved the gross
margin, and to a lesser extent the selling and administrative
expenses, and therefore the earnings before interest, taxes,
depreciation and amortization (EBITDA), totaled $6.3 million. This amount does not, however, take
into account the direct costs incurred by the Corporation in order
to put in place the health and physical distancing measures
required by the local government authorities, nor does it take into
account the operational efficiency losses due to these same
measures.
For the fiscal year ended January 31,
2021, ADF posted a net income of $6.9
million ($0.21 basic and
diluted per share) compared with a net loss of $2.1 million (-$0.07 basic and diluted per share) a year
ago.
On January 31, 2021, the Corporation had $38.5 million in working capital, The Corporation
remains in a sound position to support its ongoing operations and
pursue its development projects.
During the fiscal year ended January 31,
2021, the Corporation was able to secure new contracts,
including certain contractual changes, valued at over $280 million, bringing its order backlog to
$436.2 million on that date, compared
with a backlog of $328.7 million as
at January 31, 2020. Most contracts will be progressively
completed by the end of the fiscal year ending January 31,
2023.
Financial Highlights
|
|
|
|
|
|
Fiscal Years Ended
January 31,
|
2021
|
2020
|
(In thousands of
Canadian dollars, and dollars per share)
|
$
|
$
|
Revenues
|
172,593
|
179,710
|
EBITDA
|
16,341
|
5,225
|
Income (loss) before
income tax expense
|
9,019
|
(1,986)
|
Net income (loss) for
the year
|
6,867
|
(2,132)
|
— Basic and diluted per
share
|
0.21
|
(0.07)
|
Cash flows from (used
in) operating activities
|
28,842
|
(894)
|
Average number of
outstanding shares (basic and diluted, in thousands)
|
32,635
|
32,635
|
|
|
|
COVID-19
At the date hereof, the impact of COVID-19 on ADF's operations
is limited. We have taken all necessary steps to protect our
employees and business partners, and we will continue to follow the
advice and recommendations of local authorities wherever we conduct
business. These measures have resulted in operational costs and
inefficiencies that have been offset by the government incentives
previously mentioned. This situation is changing rapidly and we
will continue to monitor and mitigate development affecting our
staff, suppliers, customers and the general public to the extent we
can.
Outlook
"The fiscal year that just ended is a good example of the
Corporation's resilience. Despite the pandemic's impacts and its
effects, not only on the economy in general but also on the way we
operate, we have been able to continue to grow our order backlog
and greatly improve our cash position added Mr.
Jean Paschini, Co-Chair of the
Board of Directors and Chief Executive Officer.
"Despite the pressure on the prices of the projects currently in
the backlog that could reduce margins in coming quarters, we
welcome the recent announcements regarding investments in
infrastructure projects that should reduce this pressure,"
concluded Mr. Paschini.
Dividend
On April 7, 2021, 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, 2021, to shareholders
of record as at April 30, 2021.
Conference Call with Investors
A conference call with investors is scheduled for Thursday, April 8, 2021 at 10 a.m. (Montreal time) to discuss the results of
Corporation fiscal year ended January 31,
2021.
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
Thursday, April 8, 2021 at
1:00 p.m. until 11:59 p.m., Thursday,
April 15, 2021, by dialing 1-888-390-0541, followed by
the access code 583306#.
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
In these exceptional circumstances, and amongst the several
preventative health measures adopted by the Provincial and Federal
Governments and by the Corporation to slow the spread of COVID-19,
ADF Group Inc. will hold its Annual Meeting of Shareholders via
webcasting, on Wednesday, June 9,
2021 at 11 :00 a.m.
Financial results for the first quarter ending April 30, 2021, will also be disclosed during
this Shareholders' Meeting.
Shareholders' meeting details and webcasting connection
instructions will be made available in the coming weeks.
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-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.
All amounts are in Canadian dollars, unless otherwise
indicated.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
As at January
31,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
17,806
|
3,983
|
Accounts
receivable
|
50,234
|
39,555
|
Holdbacks on
contracts
|
10,785
|
11,628
|
Current income tax
assets
|
834
|
882
|
Contract
assets
|
8,790
|
14,435
|
Inventories
|
6,960
|
7,898
|
Derivative financial
instruments
|
517
|
―
|
Prepaid expenses and
other current assets
|
4,670
|
1,581
|
Total current
assets
|
100,596
|
79,962
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
62,223
|
64,967
|
Right-of-use
assets
|
22,478
|
23,818
|
Intangible
assets
|
3,266
|
3,354
|
Other non-current
assets
|
1,388
|
1,443
|
Total assets
|
189,951
|
173,544
|
LIABILITIES
|
|
|
Current
liabilities
|
|
|
Credit
facilities
|
―
|
13,105
|
Accounts payable and
other current liabilities
|
34,562
|
30,788
|
Current income tax
liabilities
|
1,161
|
216
|
Contract
liabilities
|
23,278
|
3,444
|
Derivative financial
instruments
|
―
|
123
|
Current portion of
lease liabilities
|
1,143
|
1,070
|
Current portion of
long-term debt
|
1,904
|
1,903
|
Total current
liabilities
|
62,048
|
50,649
|
Non-current
liabilities
|
|
|
Long-term
debt
|
18,368
|
19,156
|
Lease
liabilities
|
4,166
|
4,930
|
Deferred income tax
liabilities
|
5,627
|
4,215
|
Other non-current
liabilities
|
177
|
187
|
Total
liabilities
|
90,386
|
79,137
|
SHAREHOLDERS'
EQUITY
|
|
|
Capital
stock
|
68,120
|
68,120
|
Contributed
surplus
|
6,435
|
6,435
|
Accumulated other
comprehensive income (loss)
|
5,886
|
6,942
|
Retained
income
|
19,124
|
12,910
|
Total shareholders'
equity
|
99,565
|
94,407
|
Total
liabilities and shareholders' equity
|
189,951
|
173,544
|
|
|
|
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
|
|
|
Fiscal Years Ended
January 31,
|
2021
|
2020
|
(In thousands of
Canadian dollars, except the number of shares and the amounts per
share)
|
$
|
$
|
Revenues
|
172,593
|
179,710
|
Cost of goods
sold
|
146,388
|
163,203
|
Gross
Margin
|
26,205
|
16,507
|
Selling and
administrative expenses
|
14,779
|
16,005
|
Net financial
expenses
|
1,663
|
2,082
|
Foreign exchange
loss
|
744
|
406
|
|
17,186
|
18,493
|
Income (loss) before
income tax expense
|
9,019
|
(1,986)
|
Income tax
expense
|
2,152
|
146
|
Net income (loss) for
the year
|
6,867
|
(2,132)
|
Earnings per
share
|
|
|
- Basic and diluted per
share
|
0.21
|
(0.07)
|
Average number of
outstanding basic and diluted shares (in thousands)
|
32,635
|
32,635
|
|
|
|
CONSOLIDATED STATEMENTS OF COMPREHENSIVE
INCOME (LOSS)
|
|
|
Fiscal Years Ended
January 31,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Net income (loss) for
the year
|
6,867
|
(2,132)
|
Other comprehensive
income (loss):
|
|
|
Exchange differences on
translation of foreign operations (a)
|
(1,056)
|
294
|
Comprehensive income
(loss) for the year
|
5,811
|
(1,838)
|
|
|
|
a)
Will subsequently be reclassified to net income
(loss).
|
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
|
Capital
Stock
|
Contributed
Surplus
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Retained
Income
|
Total
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
Balance, February 1,
2019
|
68,120
|
6,432
|
6,648
|
15,695
|
96,895
|
Net loss for the
year
|
―
|
―
|
―
|
(2,132)
|
(2,132)
|
Other comprehensive
income (loss)
|
―
|
―
|
294
|
―
|
294
|
Comprehensive income
(loss) for the year
|
―
|
―
|
294
|
(2,132)
|
(1,838)
|
Share-based
compensation
|
―
|
3
|
―
|
―
|
3
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2020
|
68,120
|
6,435
|
6,942
|
12,910
|
94,407
|
|
Capital
Stock
|
Contributed
Surplus
|
Accumulated
Other
Comprehensive
Income (Loss)
|
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
year
|
―
|
―
|
―
|
6,867
|
6,867
|
Other comprehensive
income (loss)
|
―
|
―
|
(1,056)
|
―
|
(1,056)
|
Comprehensive income
(loss) for the year
|
―
|
―
|
(1,056)
|
6,867
|
5,811
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2021
|
68,120
|
6,435
|
5,886
|
19,124
|
99,565
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
Fiscal Years Ended
January 31,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
OPERATING
ACTIVITIES
|
|
|
Net income (loss) for
the year
|
6,867
|
(2,132)
|
Non-cash
items:
|
|
|
Amortization of
property, plant and equipment
|
3,465
|
3,387
|
Amortization of
right-of-use assets
|
1,001
|
926
|
Amortization of
intangible assets
|
449
|
410
|
Unrealized gain on
derivative financial instruments
|
(640)
|
(61)
|
Unrealized foreign
exchange loss (gain)
|
359
|
(134)
|
Share-based
compensation
|
998
|
491
|
Income tax
expense
|
2,152
|
146
|
Government
grants
|
(6,158)
|
(243)
|
Net financial
expenses
|
1,663
|
2,082
|
Others
|
49
|
(111)
|
Net income adjusted
for non-cash items
|
10,205
|
4,761
|
Change in non-cash
working capital items (1)
|
18,637
|
(5,655)
|
Cash flows from (used
in) operating activities
|
28,842
|
(894)
|
INVESTING
ACTIVITIES
|
|
|
Acquisition of
property, plant and equipment
|
(1,460)
|
(1,186)
|
Acquisition of
intangible assets
|
(361)
|
(452)
|
Government
grants
|
―
|
826
|
Others
|
68
|
142
|
Cash flows used in
investing activities
|
(1,753)
|
(670)
|
FINANCING
ACTIVITIES
|
|
|
Variation in credit
facilities
|
(13,105)
|
6,500
|
Issuance of long-term
debt
|
5,654
|
―
|
Repayment of long-term
debt
|
(1,918)
|
(1,884)
|
Payment of lease
liabilities
|
(961)
|
(771)
|
Dividends
paid
|
(653)
|
(653)
|
Interest
paid
|
(1,460)
|
(1,827)
|
Cash flows (used in)
from financing activities
|
(12,443)
|
1,365
|
Impact of
fluctuations in foreign exchange rate on cash flow
|
(823)
|
18
|
Net change in cash
and cash equivalents during the year
|
13,823
|
(181)
|
Cash, and cash
equivalents, beginning of year
|
3,983
|
4,164
|
Cash and cash
equivalents, end of year
|
17,806
|
3,983
|
|
|
|
(1) The
following table sets out in detail the components of the "Change in
non-cash working capital items":
|
|
|
|
Fiscal Years Ended
January 31,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Accounts
receivable
|
(11,378)
|
(10,360)
|
Holdbacks on
contracts
|
508
|
(5,491)
|
Contract
assets
|
5,236
|
3,660
|
Inventories
|
830
|
554
|
Prepaid expenses and
other current assets
|
(922)
|
74
|
Accounts payable and
other current liabilities
|
3,580
|
13,597
|
Contract
liabilities
|
20,793
|
(7,679)
|
Other
|
(10)
|
(10)
|
Change in non-cash
working capital items
|
18,637
|
(5,655)
|
|
|
|
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,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Revenues
|
|
|
Canada
|
32,025
|
13,906
|
United
States
|
140,568
|
165,804
|
|
172,593
|
179,710
|
|
|
|
|
|
|
As at January
31,
|
2021
|
2020
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Non-current
assets (1)
|
|
|
Canada
|
46,794
|
48,281
|
United
States
|
42,561
|
45,301
|
|
89,355
|
93,582
|
|
|
|
(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, 2021, 66% of
the Corporation's revenues was realized with three (3) clients,
each representing 10 % and more of its revenues (72% with four (4)
clients during the fiscal year ended January
31, 2020).
The following table presents the breakdown of revenues for each
of these clients:
|
|
|
Fiscal Years Ended
January 31,
|
2021
(1)
|
2020
(2)
|
(In thousands of
Canadian dollars)
|
$
|
$
|
Client A
|
―
|
20,518
|
Client B
|
―
|
32,812
|
Client C
|
―
|
43,415
|
Client D
|
―
|
31,894
|
Client E
|
63,613
|
―
|
Client F
|
28,141
|
―
|
Client G
|
21,517
|
―
|
|
113,271
|
128,639
|
|
|
|
(1) All from the
United States, except for an amount of $21,517,000 from
Canada.
|
(2) All from the
United States.
|
SOURCE ADF Group Inc.