ADF GROUP INC. ANNOUNCES THE RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2025

HIGHLIGHTS

• Revenues of $339.6 million, up by $8.6 million from the previous fiscal year.
• Net income of $56.8 million, up by $19.2 million or 50.9% from the previous fiscal year.
• Cash flow from operations of $55.1 million for the fiscal year ended January 31, 2025.
• The Corporation's order backlog ⁽¹⁾ totalled $293.1 million as at January 31, 2025, excluding the new orders totalling $120.0 million announced on February 26, 2025.

TERREBONNE, QC, April 10, 2025 /CNW/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $339.6 million during the fiscal year ended January 31, 2025, compared with $331.0 million the previous fiscal year. 

Gross margin, as a percentage of revenues ⁽¹⁾, went from 22.0% for the fiscal year ended January 31, 2024, to 31.6% for the fiscal year ended January 31, 2025. This variation as a percentage of revenues is explained by the level of fabrication activity compared to the previous fiscal year, thus generating a better absorption of fixed costs and also by the improvement in internal efficiency gained by the investments in automation made in recent years at ADF's plant in Terrebonne, Quebec.

Adjusted earning before interest, taxes, depreciation, and amortization ⁽²⁾ (adjusted EBITDA) for the fiscal year ended January 31, 2025, totalled $91.3 million, which is $35.4 million or 63.2% higher than at the same date a year earlier.

For the fiscal year ended January 31, 2025, ADF posted net income of $56.8 million ($1.84 per share basic and diluted) compared with net income of $37.6 million ($1.15 per share, basic and diluted) a year earlier.

As at January 31, 2025, the Corporation had a working capital ⁽¹⁾ of $109.2 million, practically unchanged from the same date a year earlier. In addition, the Corporation generated cash flow from operating activities totalling $55.1 million during the fiscal year ended January 31, 2025. The Corporation closed the fiscal year ended January 31, 2025, with $60.0 million in liquidity compared to $72.4 million on January 31, 2024, including the full buyback for cancellation of 3,487,589 Subordinated Voting Shares, for a total cash consideration of $54.6 million during the fiscal year ended January 31, 2025.

As at January 31, 2025, the Corporation's order backlog ⁽¹⁾ stood at $293.1 million excluding the new orders totaling $120.0 million announced on February 26, 2025, compared with $510.9 million as at January 31, 2024. The majority of projects in hand will be progressively carried out by the second semester of the fiscal year ending January 31, 2027.

Financial Highlights

 

1. The order backlog, gross margin as a percentage of revenues and working capital are additional financial measures. Refer to the "Non-IFRS and Other Financial Measures" section herein for the definition of these indicators.
2. Adjusted EBITDA is a non-IFRS financial measure.  Refer to the "Non-IFRS Financial Measures and Other Financial Measures" section of this press release for the definition of this indicator

Work-Sharing Program

Given the projects in the pipeline and the fabrication schedule, the Corporation has applied for and will soon received authorization from Service Canada to implement a Work-Sharing program for some of its employees at its fabrication plant in Terrebonne, Quebec. The program would come into effect on April 14, 2025, and would allow some employees to benefit from the Employment Insurance program to compensate for reduced working hours. This program, as already discussed with the union executive, will be submitted to a vote of its unionized employees on April 12, 2025. This program would allow ADF to closely manage its costs until the fabrication phase of the recently announced projects begins. As a result, approximately 200 employees would see their working hours reduced between 50% and 60% ; hours which would be compensated by the government program.

Outlook

"Although we announced $120.0 million in new contracts at the very beginning of the current fiscal year, the uncertainty caused by the imposition of U.S. tariffs is delaying the conclusion of new commercial agreements, and in this context, we are compelled to analyze certain contingency measures, including the implementation of the Work-Sharing Program at our plant located in Terrebonne, Quebec. In this sense, we can already confirm that revenues for the fiscal year ending January 31, 2026, will be down, mainly in the first quarters, and that our margins will also be affected by the direct and indirect impacts of U.S. tariffs," said Mr. Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer.

"Rest assured, as ADF has always done for nearly 70 years now, that our decisions will be made based on the Corporation's continued sound and prudent growth," concluded Mr. Paschini.

Dividend

On April 9, 2025, ADF Group announced the payment of a semi-annual dividend of $0.02 per subordinate voting share and per multiple voting shares, which will be paid on May 15, 2025, to Shareholders of Record as at April 24, 2025.

Conference Call with Investors

A conference call with investors is scheduled for Thursday, April 10, 2025, at 10 a.m. (Montreal time) to discuss the results of fiscal year ended January 31, 2025.

To join the conference call without operator assistance, you can register with your phone number on https://emportal.ink/42IwHZF to receive an instant automatic reminder.

You can also join the conference call with operator assistance by dialing 1-800-990-4777 a few minutes prior to the conference call scheduled start time.

A replay of this conference call will be available from 1:00 p.m. on April 10, 2025, until April 17, 2025, by dialing 1-888-660-6345, followed by access code 49276 #. The conference call (audio) will also be available at the 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, 2025

ADF Group Inc.'s Annual Meeting of Shareholders will be held on:

Date:           June 10, 2025
Time:           11 a.m.
Location:     Imperia Hotel and Suites
                    2935 de La Pinière Boulevard, Terrebonne, Quebec

Results for the first quarter ended April 30, 2025, will also be released at the Annual Meeting of Shareholders.

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 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 IFRS. In addition, readers should avoid comparing these non-IFRS 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 measures issued by the International Accounting Standards Board ("IFRS Accounting Standards") 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 taxes 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:

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. It is therefore equal to current assets, less current liabilities.

All amounts are in Canadian dollars unless otherwise specified.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

CONSOLIDATED STATEMENTS OF INCOME

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

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.

 

Revenues from external clients were allocated to each country on the basis of the project's location.

During the fiscal year ended January 31, 2025, 78% of the Corporation's revenues was realized with two (2) clients, each representing 10% and more of its revenues (69% with four (4) clients during the fiscal year ended January 31, 2024).

The following table presents the breakdown of revenues for each of these clients:

 

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