ADF GROUP INC. ANNOUNCES THE RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2023
- Revenues up 18% to $80.3 million compared to the same period last year.
- Cash flows from operations at $41.2 million for the quarter ended April 30, 2023.
- Net income of $5.4 million, up 26.2%.
- Order backlog (1) at $312.4 million as at April 30, 2023, excluding new contracts worth $142.0 million announced on May 30, 2023.
TERREBONNE, QC, June 7, 2023 /CNW/ -
(All amounts are in Canadian dollars unless otherwise noted.)
ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), a North American leader in the fabrication of steel superstructures, recorded revenues of $80.3 million in the first quarter ended April 30, 2023, compared with $68.0 million for the same period a year earlier.
Gross margin, as a percentage of revenue (1), went from 12.1% during the three-month period ended April 30, 2022, to 16.8% for the same period ended April 30, 2023. Gross margin for the quarter ended April 30, 2023, benefited from improvements stemming from operational efficiencies driven by the commissioning of the all-new robotic production line and new programmable and automated equipment at ADF's fabrication facility in Terrebonne, Quebec.
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (2) at $10.0 million, is $4.4 million higher or 79% than as at April 30, 2022.
For the first quarter ended April 30, 2023, ADF recorded a net income of $5.4 million ($0.16 per share, basic and diluted) compared with a net income of $4.3 million ($0.13 per share, basic and diluted) for the same period last year.
As at April 30, 2023, the Corporation's order backlog (1) reached $312.4 million, excluding the new contracts worth a total of $142.0 million announced on May 30, 2023.
As at April 30, 2023, the Corporation had a working capital (1) of $73.7 million while cash flows from operating activities generated liquidities of $41.2 million for the quarter ended April 30, 2023.
The Corporation remains in sound position to continue its day-to-day operations and pursue its development projects.
Three-Month Periods Ended April 30 | 2023 | 2022 |
(In thousands of Canadian dollars and in dollars per share) | $ | $ |
Revenues | 80,271 | 68,008 |
Adjusted EBITDA (2) | 10,031 | 5,602 |
Income before income tax expense | 7,925 | 3,890 |
Net income for the period | 5,371 | 4,256 |
— Basic and diluted per share | 0.16 | 0.13 |
(In thousands) | Number | Number |
Average number of outstanding shares (basic and diluted) | 32,640 | 32,635 |
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(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. |
On April 28, 2023, the Corporation entered into a new agreement with its Canadian financial institution for its Canadian operating credit facility which increased from $30.0 million to $40.0 million. This amount remains subject to a margination calculation, but only when the Corporation needs to draw over $20.0 million. All other terms and conditions remain similar to the previous terms.
"Building on our backlog, in addition to the new contracts worth a total of $142.0 million announced on May 30, 2023, we are starting the 2024 fiscal year on the right foot" indicated Mr. Jean Paschini, Chairman of the Board of administration and Chief Executive officer.
"The addition of robotization and new programmable automated equipment to our fabrication plant in Terrebonne, Quebec, continues to bring increased efficiency, thereby improving our profitability" concluded Mr. Paschini."
An investor conference call will be held this morning, June 7, 2023, at 10 a.m. (EST) to discuss results for the first quarter ended April 30, 2023.
To join the conference call without operator assistance, you can register with your phone number on https://emportal.ink/40D7CuB to receive an instant automated call back. You can also join the conference call with operator assistance by dialing 1 (888) 390-0620 a few minutes prior to the conference call scheduled start time.
A replay of the conference call will be available from 1:00 p.m, Wednesday, June 7, 2023, until midnight, Wednesday, June 14, 2023, by dialing 1 (888) 259-6562; followed by the access code 020433 #.
The conference call (audio) will also be available at www.adfgroup.com. Members of the media are invited to join in listening mode.
ANNUAL GENERAL MEETING OF SHAREHOLDERS FOR THE FISCAL YEAR ENDED JANUARY 31, 2023
ADF Group Inc. will hold its Annual General Meeting of Shareholders by way of a webcast, today, June 7, 2023, at 11 a.m. (EST) which will also be available by way of webcast at https://app.webinar.net/9K2PYLZrLVm.
Shareholders are encouraged to vote on the matters before the meeting by proxy and to view the meeting online by way of a live webcast. Shareholders will be able to submit questions to management of the Corporation through the webcast at any time and at the conclusion of the Meeting. To this end, a dialogue box will be available at the bottom of the screen allowing registered shareholders to write their questions.
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 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 loss (gain), 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:
Three (3) Month Periods Ended April 30, | 2023 | 2022 |
(In thousands of dollars) | $ | $ |
Net income | 5,371 | 4,256 |
Income tax expense (recovery) | 2,554 | (366) |
Net financial expenses | 839 | 198 |
Amortization | 1,444 | 1,183 |
Foreign exchange (gain) loss | (177) | 331 |
Adjusted EBITDA | 10,031 | 5,602 |
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.
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.
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.
Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer; Jean-François Boursier, CPA, Chief Financial Officer, Telephone: (450) 965-1911, Website: www.adfgroup.com