Wednesday’s small-cap stocks to watch

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Our roundup of Canadian small-caps making news and on the move today.

Vancouver-based Ballard Power Systems (BLD-T; BLDP-Q) said it has signed a framework agreement with Tangshan Railway Vehicle Co. Ltd. for development of a new fuel cell module designed to meet the requirements of tram or Ground Transport Vehicle (GTV) applications.

The framework agreement contemplates that TRC trams will use Ballard fuel cell power modules designed specifically for this application. Initial work is expected to involve technology solutions provided by Ballard to assist in the design and integration of a fuel cell power module into TRC tram equipment, with the goal of powering a GTV prototype in 2016.

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Reno, Nevada-based Western Lithium USA Corp. (WLC-T) said its wholly owned subsidiary Hectatone Inc. "is now a certified vendor with a Fortune 500 industrial group to sell Hectabind products internationally to the animal feed market as mycotoxin binders." The Hectabind products will be manufactured at the company's new Hectatone organoclay facility in Fernley, Nevada, the company said. The first shipment of Hectabind product is planned for delivery in June, 2015.

"Hectatone continues to innovate to target the entry into established markets for agriculture and industrial applications offering our clay and organoclay based products. In these higher value markets, potentially much larger than the oilfield market, we are planning to deploy products from our Fernley plant, which is now fully operational," said Frank Wright, president of Hectatone.

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Terrebonne, Que.-based ADF Group Inc. (DRX-T) reported revenues of $28.7-million for the first quarter ended April 30, up from $24.4-million for the comparable period a year ago. ADF recorded a net income of $57,000, or zero cents per share compared with net income of $500,000, or one cent per share a year ago.

During the three-month period ended April 30, 2015, gross margin totalled $3.6-million, up $700,000 from a year ago mainly due to the revenue mix and a better absorption of the fixed costs related to fabrication, in line with the volume at both our fabrication plants, said the company, which designs and builds complex steel structures. As a percentage of revenues, the gross margin went from 11.6 per cent in the first quarter last year to 12.4 per cent this year.

The order backlog totalled $65.3-million as at April 30, and working capital was $18.3-million.

ADF Group's board approved a semi-annual dividend of one cent per share that was paid on May 15, to shareholders of record as at April 30.

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Carmanah Technologies Corp. (CMH-T) said it has entered into an agreement to acquire Sabik Group of Companies, a Finland-based company that manufactures visual aids to navigation. The purchase price will be €21.5-million, or about $29.9-million Canadian based on current exchange rates. The deal will see Carmanah acquire 100-per-cent interest in Sabik's entities in Finland, Germany, and Singapore, as well as an 81-per-cent interest in Sabik's U.K. operations and 80 per cent of Sabik Offshore Ltd. The two companies specialize in complementary products and have collaborated in on product development as well as sales and distribution in the past. "The acquisition of Sabik accomplishes two important steps in our growth strategy," said John Simmons, Carmanah's CEO. "With Sabik's marine aids to navigation business we begin to realize our vision to be the prime consolidator in the signals market space. Of equal importance, the acquisition catapults Carmanah into the offshore wind industry - an industry that is set for substantial growth."

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Diversified Royalty Corp. (DIV-T) announced a $30.6-million royalty acquisition, as well as an increase to its annual dividend of 6 per cent. The deal with Sutton Group Realty Services Ltd. gets DIV the Canadian and U.S. trademarks and certain other intellectual property rights utilized by Sutton. Immediately following the closing of the deal, DIV will license the trademarks back to Sutton for 99 years, in exchange for an initial royalty payment of $3.5 million per annum. "Sutton is a market leader with a strong national brand, an attractive business model and experienced leadership – all of which are key success factors for a royalty acquisition," said Sean Morrison, DIV's CEO. "Following the successful completion of the Sutton royalty purchase, DIV will continue to focus its efforts, in a patient and disciplined manner, on acquiring additional royalties from a diverse group of multi-location businesses and franchisors."

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Currency Exchange International Corp (CXI-T) posted financial results for its second quarter, which showed a revenue increase of 18-per-cent, as well as a 20-per-cent increase in earnings. For the three months ended April 30, CXI generated revenues of $5.3-million, compared to $4.5-million in the same quarter last year. Net income increased to $0.7-million, up from $0.5-million over the same period. "The company's revenue has grown due to the addition of new branch locations and over 3,600 transacting locations since April 30," the company said. "Certain expenses, including salaries and benefits, rent, and postage and shipping were higher during the period to support the expansion and revenue growth detailed above."