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Press release from CNW Group

ADF Group Inc. - Results for the first quarter ended April 30, 2012

Wednesday, June 13, 2012

ADF Group Inc. - Results for the first quarter ended April 30, 201207:00 EDT Wednesday, June 13, 2012TERREBONNE, QC, June 13, 2012 /CNW Telbec/ - For the three-month period ended April 30, 2012, ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $12.5 million compared with $13.2 million for the same period last year.The gross margin as a percentage of revenues stood at 14.7% compared with 23.5% in the first quarter of the previous year. This decrease, which started in the third quarter of the 2012 fiscal year, is explained by the different mix of the projects currently underway.Income before interest, income taxes, depreciation and amortization (EBITDA) amounted to $0.9 million, compared with $2.1 million the previous year.The Corporation recorded a slight profit of $0.1 million (0.00$ per share) during the first quarter ended April 30, 2012, compared with a net income of $1.1 million ($0.03 per share) in the same period the previous year.ADF closed the first quarter of the 2013 fiscal year with working capital of $42.3 million, of which $23.6 million in short-term available liquidities (cash, cash equivalents and short-term investments), As at April 30, 2012, ADF Group's short-term available liquidities exceeded its total debt by $18.1 million, whereas the current ratio stood at 4.44:1.ADF Group's order backlog stood at $43 million on April 30, 2012, compared with $48 million on January 31, 2012. This decrease is mostly attributable to the gradual execution of contracts, net of contract changes and new contracts.Mr. Jean Paschini, Chairman of the Board and Chief Executive Officer indicated that "the results for the first quarter followed a similar trend as observed in the past quarters, reflecting a still difficult economic environment in our markets. Although ADF Group has maintained a sound performance overall, we are not satisfied with these results. We are very keen on pursuing our goals to provide the Corporation with all the necessary tools to seize the opportunities that arise in this challenging context and to position ADF Group advantageously for the next economic upturn, while seeking to limit exposure to risks associated with our market segments."Mr. Paschini added that the Corporation is currently analyzing the possibility of setting up a fabrication plant in the United States, which would provide ADF access to the US public infrastructure market for which growth is expected in the coming years.On April 11, 2012, the Corporation's Board of Directors approved the payment of a semi-annual dividend. Consequently, on May 17, 2012, ADF Group paid a semi-annual dividend of $0.01 per share to shareholders of record as at April 30, 2012.Annual Meeting of ShareholdersADF Group's Annual Meeting of Shareholders will take place this morning, June 13, 2012 at 11:00 am at the Hilton Montreal/Laval Hotel in Laval.About ADF Group Inc.ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non residential construction industry. 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.Forward-Looking InformationThis press release contains forward-looking statements reflecting ADF 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 MeasuresEBITDA 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.All amounts are in Canadian dollars, unless otherwise indicated.CONFERENCE CALL WITH INVESTORSTo discuss ADF Group's results for the first quarter ended April 30, 2012,June 13, 2012 at 10:00 a.m. (Montreal time)To participate in the conference call, please dial 1-888-231-8191 a few minutes before the start of the call.For those unable to participate, a taped rebroadcast will be available from Wednesday, June 13, 2012 at 1:00 p.m.until midnight June 20, 2012, by dialing 1-855-859-2056; access code 83424725.The conference call (audio) will also be available at www.adfgroup.comMembers of the media are invited to listen in. CONSOLIDATED STATEMENT OF INCOME (unaudited)Three-Month Periods Ended April 30,2012 2011(In thousands of Canadian dollars and in dollars per share)$ $    Revenues12,464 13,229Cost of goods sold10,634 10,123Gross Margin1,830 3,106Selling and administrative expenses1,729 1,892Financial revenues(45) (95)Financial expenses44 60Foreign exchange gain(76) (755) 1,652 1,102Income before income tax expense178 2,004Income tax expense87 923Net income for the period91 1,081Earnings per share   Basic per share0.00 0,03Diluted per share0.00 0,03Average number of outstanding shares (in thousands)32,464 32,775Average number of outstanding diluted shares (in thousands)32,928 33,390        CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)Three-Month Periods Ended April 30,2012 2011(In thousands of Canadian dollars)$ $    Net income for the period91 1,081Other comprehensive income:    Exchange differences on translation of foreign operations (a)(366) (1,495)Comprehensive income for the period(275) (414)(a)  Net of hedging activities and $12,000 in related income tax for the three-month period ended April 30, 2012 (nil for the three-month period ended April 30, 2011).CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited) Capital Stock ContributedSurplus AccumulatedOtherComprehensive Income RetainedIncome Total(In thousands of Canadian dollars)$ $ $ $ $          Balance, February 1, 201170,032 5,740 (1,477) 18,739 93,034 Net income for the year- - - 1,081 1,081 Other comprehensive income- - (1,495) - (1,495) Comprehensive income for the period- - (1,495) 1,081 (414) Share-based compensation- 59 - - 59 Dividends- - - (328) (328)Balance, April 30, 201170,032 5,799 (2,972) 19,492 92,351                     Capital Stock ContributedSurplus AccumulatedOtherComprehensiveIncome Retained Income Total(In thousands of Canadian dollars)$ $ $ $ $          Balance, February 1, 201269,086 6,368 (1,586) 19,895 93,763 Net income for the period- - - 91 91 Other comprehensive income- - (366) - (366) Comprehensive income for the period- - (366) 91 (275) Share-based compensation- 11 - - 11 Options exercised1 - - - 1 Dividends- - - (325) (325)Balance, April 30, 201269,087 6,379 (1,952) 19,661 93,175CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As atApril 30, 2012January 31, 2012 (unaudited)(audited)(In thousands of Canadian dollars)$$ ASSETS  Current assets   Cash and cash equivalents18,20918,976 Short-term investments5,4405,562 Accounts receivable14,17114,189 Holdbacks on contracts4,2315,082 Work in progress7,8585,263 Inventories3,9853,613 Prepaid expenses and other current assets676782 Derivative financial instruments66- Total current assets54,63653,467Non-current assets   Property, plant and equipment44,39645,089 Intangible assets2,6302,618 Other non-current assets2,8012,796 Deferred income tax assets4,1784,549Total assets108,641108,519   LIABILITIES  Current liabilities   Accounts payable and other current liabilities6,3995,551 Income tax liabilities2177 Deferred revenues3,3602,618 Derivative financial instruments2975 Current portion of long-term debt2,4922,526 Total current liabilities12,30110,847Non-current liabilities   Long-term debt3,0153,676 Deferred income tax liabilities150233Total liabilities15,46614,756   SHAREHOLDERS' EQUITY   Retained income19,66119,895 Accumulated other comprehensive income(1,952)(1,586) 17,70918,309 Capital stock69,08769,086 Contributed surplus6,3796,368Total shareholders' equity93,17593,763Total liabilities and shareholders' equity108,641108,519    CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)Three-Month Periods Ended April 30,20122011(In thousands of Canadian dollars)$$ OPERATING ACTIVITIES   Net income for the period911,081 Non-cash items:    Amortization of property, plant and equipment747792  Amortization of intangible assets8989  Unrealized gain on derivative financial instruments(112)(226)  Non-cash exchange loss (gain)161(244)  Share-based compensation1159  Income tax expense87923  Financial revenues(45)(95)  Financial expenses4460 Net income adjusted for non-cash items1,0732,439 Changes in non-cash working capital items (1)(790)2,961 Income tax expense paid(152)(368)Cash flows from (used in) operating activities1315,032   INVESTING ACTIVITIES   Disposal (acquisition) of short-term investments62(2,905) Net acquisition of property, plant and equipment(64)(29) Acquisition of intangible assets(101)(88) Reduction in other non-current assets(5)1 Interest received5977Cash flows from (used in) investing activities(49)(2,944)   FINANCING ACTIVITIES   Repayment of long-term debt(613)(600) Issuance of subordinate voting shares1- Interest paid on the interest rate swap(6)(9) Interest paid(44)(53)Cash flows from (used in) financing activities(662)(662)Impact of fluctuations in foreign exchange rate on cash(187)(709)Net (decrease) increase in cash and cash equivalents(767)717Cash and cash equivalents, beginning of period18,97618,677Cash and cash equivalents, end of period 18,20919,394(1)Detail the components of the "Changes in non-cash working capital items":      Periods Ended April 30,2012 2011 (In thousands of Canadian dollars)$ $        Accounts receivable(116) (749)  Holdbacks on contracts785 5  Income tax77 (12)  Work in progress(2,693) (166)  Inventories(372) (58)  Prepaid expenses and other current assets106 273  Accounts payable and other current liabilities645 233  Deferred revenues778 3,435 Changes in non-cash working capital items(790) 2,961   For the purpose of the consolidated statements of cash flows, cash and cash equivalents in the amount of $18,209,000 as at April 30, 2012 and $19,394,000 as at April 30, 2011 were only composed of cash.SEGMENTED INFORMATIONThe Corporation operates in the non-residential construction sector, primarily in the United States and Canada. Its operations include the connections design and engineering, fabrication and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork.   Periods Ended April 30,20122011(In thousands of Canadian dollars)$$   Revenues   Canada2,521225 United States9,94313,004 12,46413,229      As atApril 30, 2012January 31, 2012(In thousands of Canadian dollars)$$   Property, Plant and Equipment   Canada43,73744,410 United States659679 44,39645,089All intangible assets and investment tax credits included under "Other non-current assets" at April 30, 2012 and January 31, 2012 originated from Canada.During the three-month period ended April 30, 2012, two clients accounted for 84% of the Corporation's revenues (one client accounted for 94% of the revenues during the three-month period ended April 30, 2011), and therefore were the only ones that accounted for more than 10% of revenues. For further information: Source:  ADF Group Inc. Contact:  Jean Paschini, Chairman of the Board of Directors and Chief Executive OfficerJean-François Boursier, CA, Chief Financial Officer Telephone:  (450) 965-1911 / 1 (800) 263-7560 Web Site:  www.adfgroup.com