DRX ADF Group Inc

TERREBONNE, QC, June 15, 2011 /CNW/ -- FINANCIAL HIGHLIGHTS FOR THE FIRST QUARTER ENDED APRIL 30, 2011 The results are disclosed in accordance with the new International Financial Reporting Standards ("IFRS"). -- Revenues amounted to $13.2 million compared with $13.6 million for the same quarter of fiscal 2011. -- The Corporation closed the quarter with a net income of $1.1 million or $0.03 per share (basic and diluted), compared with a net income of $2.0 million or $0.06 per share (basic and diluted) in the same period of fiscal 2011. -- As at April 30, 2011, ADF's posted a cash surplus of more than $17 million over its total debt of, representing a significant increase of 35% compared with January 31, 2011. -- Operating cash flows improved considerably, compared with the quarter ended on April 30, 2010, reaching $5.0 million during the first quarter of fiscal 2012. TERREBONNE, QC, June 15, 2011 /CNW Telbec/ - For the three-month period ended April 30, 2011, ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) revenues were comparable to those for the same period of the previous year, and even posted a slight increase notwithstanding the increase in relative value of more than 5% of the Canadian dollar against the U.S. dollar between the two reporting periods. Revenues thus amounted to $13.2 million for the first quarter of the current fiscal year, compared with $13.6 million for the same quarter of last year. The gross margin as a percentage of revenues stood at 24%, versus the high of 29% achieved in the first quarter of the previous year. This change is primarily explained by the fact that the supply of steel accounted for a larger proportion of the revenue mix this year. However, it should be noted that the gross margin achieved during the first quarter of the 2012 fiscal year corresponds to the average margin posted by ADF over the last eight quarters. Income before interest, income taxes, depreciation and amortization (or EBITDA) amounted to $2.1 million, compared with $3.2 million the previous year. Net income totalled $1.1 million or $0.03 per share, compared with a net income of $2.0 million or $0.06 per share in the same period last year. Notwithstanding the reversal of provisions and a gain on disposal of property, plant and equipment recognized in the first quarter of fiscal 2011, the results for the first quarter ended April 30, 2011 would have been similar to those for the corresponding period a year ago. In addition, a lesser exchange gain than in the previous year and a slightly higher tax rate, have also reduced the first quarter's net income. ADF closed the first quarter of the 2012 fiscal year with working capital of $38.4 million, of which $29.4 million in short-term available liquidities (cash, cash equivalents and short-term investments), provided notably by the cash flows from operating activities of $5.0 million. Consequently as at April 30, 2011, ADF Group's short-term available liquidities exceeded its total interest-bearing debt by $17.3 million. Jean Paschini, Chairman of the Board and Chief Executive Officer indicated that "these results reflect the added value of our contracts in progress, our rigorous operating practices and the positive impact of our recent investments on the overall efficiency of our fabrication activities. They also reflect efficient cost control and a profit margin that remains above the industry average." Implementation of a Dividend Policy As announced in April 2011, the Corporation's Board of Directors approved the payment of a semi-annual dividend policy. Consequently, on May 16, 2011, ADF Group paid a first semi-annual dividend of $0.01 per share to shareholders of record as at April 29, 2011. Order Backlog As at April 30, 2011, the Corporation's order backlog stood at $62 million, extending over an execution period of 12 months. However, the order backlog at that date does not reflect all the revenues likely to be recognized in upcoming quarters as it only includes a portion of the contractual changes requested by clients over the past months in connection with its current mandates. Outlook In regard to business development, the Corporation expects Western Canada to offer the greatest opportunities within the short term, considering the increase in bidding activity it is currently witnessing in this region. It is therefore carrying on its plans to establish its local presence through a joint venture with a Manitoba-based partner. The goal of the new entity will be to build and operate an ultramodern fabrication plant that will enable the Corporation to serve all of Western Canada, in particular the energy and potash sectors and the public infrastructures segment, where significant investments are expected in the coming years. Furthermore, it will provide ADF with greater access to the large American Midwest market. Over the longer term, the regions in the Eastern and Midwest U.S., and especially New York City, remain natural and high-potential markets for ADF Group, where it is strongly positioned and enjoys an excellent reputation. Based on its current order backlog and considering its development targets as well as a certain stability of the Canadian dollar, management expects ADF Group's revenues within the next few quarters to be comparable to, or up slightly over previous quarters. "Today, with an enhanced fabrication capacity, very healthy financial position and development projects well on their way, ADF Group is embarking on a new profitable growth phase, having all the resources in hand to achieve a solid performance once the economy is back on track" concluded Mr. Jean Paschini. Annual Meeting of Shareholders ADF Group's Annual Meeting of Shareholders will take place this morning, June 15, 2011 at 11:00 am at the Omni Mount-Royal Hotel in Montreal. 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 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 Information This 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. Transition to International Financial Reporting Standards (IFRS) All financial information, including comparative figures pertaining to ADF Group's 2011 results, has been prepared in accordance with International Financial Reporting Standards (IFRS). In previous periods, the Corporation prepared its consolidated financial statements and interim financial statements in accordance with Canadian generally accepted accounting principles ("Previous GAAP"), in effect prior to February 1, 2011. Comparative figures presented pertaining to ADF's results have been restated to be in accordance with IFRS. A reconciliation of net income, gross margin and EBITDA reported under the previous GAAP and the IFRS is provided in the table below: 2011 Fiscal Year Annual Q4 Q3 Q2 Q1 12 months 3 months 3 months 3 months 3 months ended ended ended ended ended 2011.01.31 2011.01.31 2010.10.31 2010.07.31 2010.04.30 (In thousands of $) $ $ $ $ $ Net Income Previous GAAP 3,743 1,037 630 878 1,198 Impact of IFRS standards, after income taxes - Exchange differences on translation of the foreign operations 1,623 639 308 (70) 746 - Share-based 4 (28) 31 44 compensation 51 - Amortization of property, plant and equipment and intangible assets (26) (6) (7) (6) (7) 1,648 637 273 (45) 783 IFRS 5,391 1,674 903 833 1,981 Gross Margin Previous GAAP 17,072 5,146 3,495 3,850 4,581 Impact of IFRS standards : - Reclassification of amortization of property, plant and equipment and intangible assets (2,936) (735) (739) (782) (680) IFRS 14,136 4,411 2,756 3,068 3,901 Gross Margin (as a % of revenues) Previous GAAP 31% 34% 26% 30% 34% IFRS 26% 29% 20% 24% 29% EBITDA Previous GAAP 10,871 3,122 2,069 2,525 3,155 Impact of IFRS standards : - Share-based 4 (28) 31 44 compensation 51 IFRS 10,922 3,126 2,041 2,556 3,199 Non-IFRS Measures EBITDA 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 INVESTORS | | | |To discuss ADF Group's results for the first quarter ended April 30,| | 2011, | | Wednesday, June 15, 2011 at 09:30 a.m. (Montreal time) | | | |To participate in the conference call, please dial 1-800-731-5319 a | | few minutes before the start of the call. | | | | For those unable to participate, a taped rebroadcast will be | | available from June 15, 2011 at 12:30 p.m. | |until midnight June 21, 2011, by dialing 1-877-289-8525; access code| | 4445591#. | | | | The conference call (audio) will also be available at | | www.adfgroup.com | | | | Members of the media are invited to listen in. | |____________________________________________________________________| CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 3-Month Periods Ended April 30, 2011 2010 (In thousands of $, except per-share amounts) $ $ Revenues 13,229 13,641 Cost of goods sold 10,123 9,740 Gross margin 3,106 3,901 Selling and administrative expenses 1,892 1,478 Financial revenues (95) (22) Finance charges 60 72 Foreign exchange gain (755) (1,167) 1,102 361 Income before income tax expense 2,004 3,540 Income tax expense 923 1,559 Net income for the period 1,081 1,981 Earnings per share Basic per share 0.03 0.06 Diluted per share 0.03 0.06 Average number of outstanding shares (in thousands) 32,775 34,494 Average number of outstanding diluted shares (in 33,390 35,341 thousands) CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 3-Month Periods Ended April 30, 2011 2010 (In thousands of $) $ $ Net income for the period 1,081 1,981 Other comprehensive income Exchange differences on translation of foreign (749) operations (1,495) Comprehensive income for the period (414) 1,232 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) Capital Contributed Accumulated Retained Total stock surplus other income comprehensive income (In thousands $ $ $ $ $ of $) Balance, 75,436 3,659 144 13,348 92,587 February 1, 2010 Net income for the period — — — 1,981 1,981 Other — — (749) — (749) comprehensive income for the period Comprehensive — — (749) 1,981 1,232 income for the period Share-base — 56 — — 56 compensation Options 255 (93) — — 162 exercised Subordinate (182) 32 — — (150) voting share redemption Balance, April 75,509 3,654 (605) 15,329 93,887 30, 2010 Capital Contributed Accumulated Retained Total stock surplus other income comprehensive income (In thousands $ $ $ $ $ of $) Balance, 70,032 5,740 (1,477) 18,739 93,034 February 1, 2011 Net income for the period — — — 1,081 1,081 Other — — (1,495) — (1,495) comprehensive income for the period Comprehensive — — (1,495) 1,081 (414) income for the period Share-based — 59 — — 59 compensation Dividends — — — (328) (328) Balance, April 70,032 5,799 (2,972) 19,492 92,351 30, 2011 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) As at April 30, 2011 January 31, 2011 February 1, 2010 (In thousands of $) $ $ $ ASSETS Current assets Cash and cash 19,394 18,677 5,770 equivalents Short-term 5,547 2,787 11,652 investments Accounts receivable 21,725 22,215 13,421 Income tax assets 174 — 442 Holdbacks on 1,128 167 2,692 contracts Work in progress 539 403 1,574 Inventories 3,923 3,865 3,093 Prepaid expenses and 711 985 2,299 other current assets Derivative financial 1,088 741 832 instruments Total current assets 54,229 49,840 41,775 Non-current assets Holdbacks on 2,391 3,562 1,297 contracts Property, plant and 46,103 46,871 47,438 equipment Intangible assets 2,600 2,601 2,590 Other non-current 2,850 2,852 2,312 assets Deferred income tax 5,661 6,960 11,569 assets Total assets 113,834 112,686 106,981 LIABILITIES Current liabilities Accounts payable and 5,336 5,365 5,649 other current liabilities Income tax — 159 — liabilities Deferred revenues 7,989 4,994 1,274 Derivative financial 166 45 — instruments Current portion of 2,379 2,513 2,422 long-term debt Total current 15,870 13,076 9,345 liabilities Non-current liabilities Long-term debt 5,247 6,151 4,645 Deferred income tax 366 425 404 liabilities Total liabilities 21,483 19,652 14,394 SHAREHOLDERS' EQUITY Retained income 19,492 18,739 13,348 Accumulated other (2,972) (1,477) 144 comprehensive income 16,520 17,262 13,492 Capital stock 70,032 70,032 75,436 Contributed surplus 5,799 5,740 3,659 Total shareholders' 92,351 93,034 92,587 equity Total liabilities and 113,834 112,686 106,981 shareholders' equity CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 3-Month Periods Ended 2011 2010 April 30, (In thousands of $) $ $ OPERATING ACTIVITIES Net income 1,081 1,981 Non-cash items: Amortization of 792 692 property, plant and equipment Amortization of 89 84 intangible assets Gain on disposal — (52) of property, plant and equipment Unrealized gain on (226) (379) derivative financial instruments Non-cash exchange (244) (496) gain Share-based 59 56 compensation Income tax expense 923 1,559 Financial revenues (95) (22) Finance charges 60 72 Net income adjusted 2,439 3,495 for non-cash items Changes in non-cash 2,961 (3,101) working capital items (1) Income tax expense (368) (191) paid Cash flows from (used 5,032 203 in) operating activities INVESTING ACTIVITIES Acquisition of (2,905) (131) short-term investments Acquisition of (29) (1,649) property, plant and equipment Acquisition of (88) (120) intangible assets Reduction in other 1 3 non-current assets Interest received 77 94 Cash flows from (used (2,944) (1,803) in) investing activities FINANCING ACTIVITIES Issuance of long-term — 4,370 debt Repayment of long-term (600) (411) debt Issuance of — 162 subordinate voting shares Redemption of — (150) subordinate voting shares Interest paid on the (9) — interest rate swap Interest paid (53) (61) Cash flows from (used (662) 3,910 in) financing activities Impact of fluctuations (709) (178) in foreign exchange rate on cash Net increase in cash 717 2,132 and cash equivalents Cash and cash 18,677 5,770 equivalents, beginning of period Cash and cash equivalents, end of period (2) 19,394 7,902 1. The following table sets out in detail the components of the "Changes in non-cash working capital items": 3-Month Periods Ended April 30, 2011 2010 (In thousands of $) $ $ Accounts receivable (749) (5,051) Holdbacks on contracts 5 1,473 Current tax (12) 415 Work in progress (166) (212) Inventories (58) (395) Prepaid expenses and other current assets 273 (586) Accounts payable and other current liabilities 233 754 Deferred revenues 3,435 501 Changes in non-cash working capital items 2,961 (3,101) Financing and investing activities without impact on cash were nil as at April 30, 2011, and $139,000 as at April 30, 2010, relating to the disposal of property, plant and equipment given in exchange for new ones. 2. For the purpose of the Consolidated Statements of Cash Flows, cash and cash equivalents are disclosed as follows: April 30, 2011 January 31, 2011 February 1, 2010 (In thousands of $) $ $ $ Cash 19,394 15,918 5,770 Cash equivalents - — 2,759 — term deposits 19,394 18,677 5,770 Segmented Information The 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. 3-Month Periods 2011 2010 Ended April 30, (In thousands of $ $ CA$) Revenues Canada 225 440 United States 13,004 13,201 13,229 13,641 As at April 30, 2011 January 31, 2011 February 1, 2010 (In thousands of $ $ $ CA$) Property, Plant and Equipment Canada 46,010 46,767 47,293 United States 93 104 145 46,103 46,871 47,438 All intangible assets and investment tax credits included under "Other non-current assets" at February 1, 2010, January 31, 2011 and April 30, 2011, originated from Canada. During the three-month period ended April 30, 2011, one client accounted for 94% of the Corporation's revenues (one client accounted for 90% of the revenues during the three-month period ended April 30, 2010), and therefore accounted for more than 10% of revenues.           To view this news release in HTML formatting, please use the following URL: http://www.cnw.ca/en/releases/archive/June2011/15/c6051.html table border="0" valign="top" tr td align="left" valign="top" Source:  /td td bADF Group Inc./b /td /tr tr td   /td td   /td /tr tr td align="left" valign="top" Contact: br/ /td td bJean Paschini/b, Chairman of the Board of Directors and Chief Executive Officerbr/ bJea/bbn-François Boursier/b, CA, Chief Financial Officer /td /tr tr td   /td td   /td /tr tr td align="left" valign="top" Telephone:   /td td (450) 965-1911 / 1 (800) 263-7560 /td /tr tr td   /td td   /td /tr tr td align="left" valign="top" Web Site:   /td td a cr="true" href="http://www.adfgroup.com"www.adfgroup.com/a /td /tr tr td   /td td   /td /tr tr td align="left" valign="top" Medias: br/ br/ /td td Caroline Couillardbr/ Morin Public Relationsbr/ (514) 289-8688, ext. 233 /td /tr /table

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