HIGHLIGHTS
(All amounts are in Canadian dollars
unless otherwise noted.)
- Revenue of $242.6 million
recorded during the 9-month period ended October 31, 2023, up 21.7% compared with the same
period a year earlier.
- Net income of $11.2 million and
$27.1 million recorded for the
3-month and 9-month periods ended October
31, 2023, respectively, up by $8.3
million and $14.5 million,
respectively from the same periods a year ago.
- Cash flow from operating activities of $45.7 million for the 9-month period ended
October 31, 2023.
- Order backlog (1) at $339.3
million as at October 31,
2023.
- Ratification of a 5-year collective bargaining agreement by the
unionized employees at ADF's Terrebonne plant, on December 3, 2023.
TERREBONNE, QC, Dec. 7, 2023
/CNW/ - ADF GROUP INC. ("ADF" or the "Company") (TSX:
DRX), recorded revenues of $82.1
million during the third quarter ended October 31,
2023, compared with $65.0 million for
the same period a year earlier. After the first nine months of
the fiscal year, revenues totalled $242.6
million, which is $43.2
million or 21.7% more than for the same period a year
earlier.
Gross margin, as a percentage of revenues (1) went
from 15.0% for the 3-month period ended October 31, 2022, to 24.4% for the same period
ended October 31, 2023. Gross margin,
as a percentage of revenue (1) went from 13.3% during
the 9-month period ended October 31, 2022, to 21.1% in the
same period ended October 31,
2023.
These variances are mainly explained by the operational
efficiency generated by the commissioning of the new robotic
production line and the new programmable and automated equipment at
ADF's plant in Terrebonne, Quebec,
and also by the improvement in margins of projects recently signed
and now in fabrication. It is also important to note that gross
margins for the quarter and the 9-month periods ended October 31, 2022, were positively impacted by the
forgiveness of a $1.3 million
(US$1.0 million) loan issued to a
U.S. subsidiary as part of a U.S. pandemic relief program.
Adjusted earnings before interest, taxes, depreciation, and
amortization (adjusted EBITDA) (2) for the 9-month
period ended October 31, 2023, at $40.4 million, were $20.2
million higher than at the same date a year ago. Adjusted
EBITDA for the 9-month period ended October
31, 2022, benefited from an $0.8
million gain on disposal of assets.
For the quarter ended October 31,
2023, ADF recorded net income of $11.2 million ($0.34 per basic and diluted share) compared with
net income of $2.9 million
($0.09 per share, basic and diluted)
a year earlier. At the close of the 9-month period ended on
October 31, 2023, net income totalled $27.1 million ($0.83 per share, basic and diluted) compared with
net income of $12.6 million
($0.39 per share, basic and diluted)
for the same period a year ago.
The Corporation's order backlog (1) stood at
$339.3 million as at October 31, 2023, compared with $376.5 million as at January 31, 2023.
Projects currently in the order backlog will extend until the end
of the fiscal year ending January 31,
2025.
As at October 31, 2023, the
Corporation had working capital (1) of $94.5 million. The Corporation's operating
activities generated cash of $45.7
million during the 9-month period ended October 31, 2023. The Corporation remains in a
good position to continue its current operations and carry out its
development projects.
______________
|
(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.
|
Financial Highlights
|
3 Months
|
9 Months
|
|
|
|
|
|
Periods ended October
31,
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
dollars, and dollars per share)
|
$
|
$
|
$
|
$
|
Revenues
|
82,143
|
64,999
|
242,629
|
199,389
|
Adjusted EBITDA
(1)
|
17,769
|
7,543
|
40,444
|
20,246
|
Income before income
tax expense
|
13,277
|
3,300
|
32,151
|
12,936
|
Net income for the
period
|
11,198
|
2,910
|
27,111
|
12,592
|
— Per share (basic and
diluted)
|
0.34
|
0.09
|
0.83
|
0.39
|
(In
thousands)
|
Number
|
Number
|
Number
|
Number
|
Average number of
outstanding shares (basic and diluted)
|
32,640
|
32,640
|
32,640
|
32,640
|
|
|
|
|
|
(1)
|
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.
|
Outlook
"The good performance of the last few quarters continued in the
quarter ended October 31, 2023. The
number of projects under negotiation remains very active and we are
confident that we will be able to continue to grow our order
backlog" said Mr. Jean
Paschini, Chairman of the Board and Chief Executive
Officer.
Dividend
On September 6, 2023, ADF Group
announced the payment of a semi-annual dividend of $0.01 per subordinate voting share and per
multiple voting share, paid on October 17,
2023, to Shareholders of Record as of September 29, 2023.
Ratification of the Collective Bargaining Agreement for
Unionized Employees at ADF's Plant in Terrebonne, Quebec
On December 3, 2023, unionized
employees at ADF's plant in Terrebonne,
Quebec, ratified the renewal of the collective agreement for
a period of five (5) years, following an agreement in principle
reached on November 13, 2023. The
agreement covers 189 employees.
Conference Call with Investors
An investor conference call will be held this morning,
December 7, 2023, at 10 a.m. (EST) to discuss results for the third
quarter and nine-month period ended October
31, 2023.
To join the conference call without operator assistance, you can
register with your phone number on
https://emportal.ink/40oMbin 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,
December 7, 2023, until midnight,
December 14, 2023, by dialing 1 (888)
259-6562; followed by the access code 107524 #.
The conference call (audio) will also be available at
www.adfgroup.com. Members of the media are invited to join in
listening mode.
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
Adjusted EBITDA shows the extent to which the Corporation
generates profits from operations, without considering the
following items:
- Net financial expenses;
- Income tax 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:
|
3 Months
|
9 Months
|
|
|
|
|
|
Periods Ended October
31,
|
2023
|
2022
|
2023
|
2022
|
(In thousands of
dollars)
|
$
|
$
|
$
|
$
|
Net income
|
11,198
|
2,910
|
27,111
|
12,592
|
Income tax
expense
|
2,079
|
390
|
5,040
|
344
|
Net financial
expenses
|
354
|
377
|
1,821
|
1,014
|
Amortization
|
1,460
|
1,408
|
4,338
|
3,826
|
Foreign exchange
loss
|
2,678
|
2,458
|
2,134
|
2,470
|
Adjusted EBITDA
|
17,769
|
7,543
|
40,444
|
20,246
|
|
|
|
|
|
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. Working capital is equal to current assets, less
current liabilities.
SOURCE ADF Group Inc.