DRX ADF Group Inc

TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER ENDED JULY 31, 2011 All results are disclosed in accordance with the new International Financial Reporting Standards ("IFRS"). -- Revenues amounted to $13.1 million, posting a slight increase over the same quarter of the 2011 fiscal year. -- ADF Group closed the quarter with net earnings comparable to those for the second quarter of the 2011 fiscal year, being $0.8 million or $0.02 per share (basic and diluted). -- The Corporation declares the payment of a second semi-annual dividend for the 2012 fiscal year. TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- TERREBONNE, QC, Sept. 7, 2011 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) closed the second quarter of the 2012 fiscal year with revenues of $13.1 million, posting a slight increase over the same quarter of the 2011 fiscal year, despite an appreciation of approximately 7% in the Canadian dollar against the U.S. dollar between the two reporting periods. For the six-month period ended July 31, 2011, ADF Group recorded year-to-date revenues of $26.3 million, compared with $26.6 million the previous year. The second-quarter gross profit margin as a percentage of revenues was 24%, being the same level as in the corresponding quarter of the previous year, whereas the gross margin for the six-month period ended July 31, 2011 also stood at 24% compared with 26% a year earlier. ADF posted second-quarter net earnings of $0.8 million or $0.02 per share (basic and diluted), which compares to those for the second-quarter of the previous year. For the first six month period, net earnings amounted to $1.9 million or $0.06 per share (basic and diluted), compared with $2.8 million or $0.08 per share (basic and diluted) for the first half of the previous year. Besides the negative impact of currency fluctuations and a different revenue mix, this decline is attributable to the non-recurrence of certain favourable items recognized last year, the realization of lower exchange gains than the previous year and a higher tax rate. The Corporation's operating activities provided cash flows of $4.2 million in the second quarter and $9.3 million for the first six months ended July 31, 2011. As at July 31, 2011, the Corporation had working capital of $42.2 million, including short-term available liquidities (cash, cash equivalents and short-term investments) of $27.8 million. Therefore, available liquidities exceeded ADF Group's total debt by $20.7 million, placing the Corporation in a solid position to support its ongoing operations, pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy implemented at the beginning of fiscal 2012. Dividend The Corporation announces today the payment of a second semi-annual dividend of $0.01 per subordinate and multiple voting shares, which will be paid on October 17, 2011 to shareholders of record as at September 22, 2011. Outlook As at July 31, 2011, ADF Group's order backlog stood at $53 million, the execution schedule of which should extend until the end of the second quarter of the Corporation's 2013 fiscal year. Jean Paschini, Chairman of the Board and Chief Executive Officer indicated that "although current economic conditions are still a concern in the United States, the major mandates on which we are presently working as part of the restoration of the World Trade Center, in New York City, will provide a stream of profits for ADF Group over the next quarters". In the near term, in order to replenish its order backlog, the Corporation will be mostly focusing its development efforts on the Canadian market where the economic outlook is more favourable. The joint venture to set up a fabrication plant in Manitoba is proceeding as planned and the Corporation is confident that this facility will be operational in 2012. The Corporation also remains on the lookout for business opportunities in the public and industrial infrastructures segments in Eastern Canada, including in Quebec. 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 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 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 CA$) $ $ $ $ $ Net Income Previous GAAP 3,743 1,037 630 878 1,198 Impact of IFRS standards, after income taxes - Exchange differences on translation of foreign operations 1,623 639 308 (70) 746 - Share-based compensation 51 4 (28) 31 44 - 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(1) Previous GAAP 10,871 3,122 2,069 2,525 3,155 Impact of IFRS standards : - Share-based compensation 51 4 (28) 31 44 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. TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- ____________________________________________________________________ | CONFERENCE CALL WITH INVESTORS | | | | TO DISCUSS ADF GROUP'S RESULTS | | FOR THE SECOND QUARTER ENDED JULY 31, 2011 | | | | September 7, 2011 at 10:00 a.m. (Montreal Time) | | | |To participate in the conference call, please dial 1-877-974-0445 a | | few minutes before the start of the call. | | | | For those unable to participate, a taped rebroadcast will be | | available from September 7, 2011 at 1:00 p.m. | |until midnight September 14, 2011, by dialing 1-877-289-8525; access| | code 4466244#. | | | | The conference call (audio) will also be available at | | www.adfgroup.com | | | | Members of the media are invited to listen in. | |____________________________________________________________________| TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- CONSOLIDATED STATEMENTS OF INCOME (Unaudited) 3 Months 6 Months Periods Ended July 31, 2011 2010 2011 2010 (In thousands of CA$, except for per-share amounts) $ $ $ $ Revenues 13,118 12,967 26,347 26,608 Cost of goods sold 9,995 9,899 20,118 19,639 Gross margin 3,123 3,068 6,229 6,969 Selling and administrative expenses 1,447 1,420 3,339 2,898 Financial revenues (113) (160) (208) (182) Finance charges 59 124 119 196 Foreign exchange loss (gain) 17 172 (738) (995) 1,410 1,556 2,512 1,917 Income before income tax expense 1,713 1,512 3,717 5,052 Income tax expense 939 679 1,862 2,238 Net income for the period 774 833 1,855 2,814 Earnings per share Basic and diluted per share 0.02 0.02 0.06 0.08 Average number of outstanding shares (in thousands) 32,787 34,335 32,781 34,413 Average number of outstanding diluted shares (in thousands) 33,376 34,984 33,365 35,165 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) 3 Months 6 Months Periods Ended July 31, 2011 2010 2011 2010 (In thousands of CA$) $ $ $ $ Net income for the period 774 833 1,855 2,814 Other comprehensive income Exchange differences on translation of (673) foreign operations 229 76 (1,266) Comprehensive income for the period 1,003 909 589 2,141 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) Accumulated other Capital Contributed comprehensive Retained stock surplus income income Total (In thousands of CA$) $ $ $ $ $ Balance, February 1, 2010 75,436 3,659 144 13,348 92,587 Net income for — — — 2,814 2,814 the period Other comprehensive income for the period — — (673) — (673) Comprehensive income for the period — — (673) 2,814 2,141 Share-base compensation — 113 — — 113 Options exercised 257 (93) — — 164 Subordinate voting share redemption (4,224) 1,438 — — (2,786) Balance, July 31, 2010 71,469 5,117 (529) 16,162 92,219 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- Accumulated other Capital Contributed comprehensive Retained stock surplus income income Total (In thousands of CA$) $ $ $ $ $ Balance, February 1, 2011 70,032 5,740 (1,477) 18,739 93,034 Net income for — — — 1,855 1,855 the period Other comprehensive income for the period — — (1,266) — (1,266) Comprehensive income for the period — — (1,266) 1,855 589 Share-base compensation — 71 — — 71 Options exercised 20 (7) — — 13 Dividends — — — (328) (328) Balance, July 31, 2011 70,052 5,804 (2,743) 20,266 93,379 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Unaudited) AS AT July 31, 2011 January 31, 2011 (In thousands of CA$) $ $ ASSETS Current assets Cash and cash equivalents 22,203 18,677 Short-term investments 5,580 2,787 Accounts receivable 14,053 22,215 Holdbacks on contracts 4,562 167 Work in progress 1,436 403 Inventories 3,778 3,865 Prepaid expenses and other current assets 1,298 985 Derivative financial instruments 201 741 Total current assets 53,111 49,840 Non-current assets Holdbacks on contracts — 3,562 Property, plant and equipment 45,935 46,871 Intangible assets 2,586 2,601 Other non-current assets 2,850 2,852 Deferred income tax assets 4,771 6,960 Total assets 109,253 112,686 LIABILITIES Current liabilities Accounts payable and other current liabilities 6,138 5,365 Income tax liabilities 194 159 Deferred revenues 2,022 4,994 Derivative financial instruments 136 45 Current portion of long-term debt 2,400 2,513 Total current liabilities 10,890 13,076 Non-current liabilities Long-term debt 4,682 6,151 Deferred income tax liabilities 302 425 Total liabilities 15,874 19,652 SHAREHOLDERS' EQUITY Retained income 20,266 18,739 Accumulated other comprehensive income (2,743) (1,477) 17,523 17,262 Capital stock 70,052 70,032 Contributed surplus 5,804 5,740 Total shareholders' equity 93,379 93,034 Total liabilities and shareholders' equity 109,253 112,686 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) 3 Months 6 Months Periods Ended July 31, 2011 2010 2011 2010 (In thousands of CA$) $ $ $ $ OPERATING ACTIVITIES Net income 774 833 1,855 2,814 Non-cash items: Amortization of property, plant and equipment 762 827 1,554 1,519 Amortization of intangible assets 89 81 178 165 Gain on disposal of property, plant and equipment ― ― ― (52) Unrealized gain on derivative financial instruments 857 701 631 322 Non-cash exchange (gain) loss (41) 117 (230) (343) Share-based compensation 12 57 71 113 Income tax expense 939 679 1,862 2,238 Financial revenues (113) (160) (208) (182) Finance charges 59 124 119 196 Net income adjusted for non-cash items 3,338 3,259 5,832 6,790 Changes in non-cash working capital items 670 (3,474) 3,631 (6,575) Income tax expense received (paid) 194 ― (174) (191) Cash flows from (used in) operating 4,202 (215) 9,289 24 activities INVESTING ACTIVITIES (Acquisition) disposal of short-term investments (23) 4,065 (2,928) 3,934 Acquisition of property, plant and equipment (609) (504) (638) (2,153) Acquisition of intangible assets (75) (80) (163) (200) Reduction in other non-current assets ― 1 1 4 Interest received 133 64 210 158 Cash flows from (used in) investing activities (574) 3,546 (3,518) 1,743 FINANCING ACTIVITIES Issuance of long-term debt ― ― ― 4,370 Repayment of long-term debt (619) (656) (1,219) (1,067) Issuance of subordinate voting shares 13 2 13 164 Redemption of subordinate voting shares ― (2,636) ― (2,786) Dividends paid (328) ― (328) ― Interest paid on the interest rate swap (8) ― (17) ― Interest paid (49) (60) (102) (121) Cash flows from (used in) financing activities (991) (3,350) (1,653) 560 Impact of fluctuations in foreign exchange rate on cash 172 77 (592) (137) Net increase in cash and cash equivalents 2,809 58 3,526 2,190 Cash and cash equivalents, beginning of period 19,394 7,902 18,677 5,770 Cash and cash equivalents, end of period 22,203 7,960 22,203 7,960 The following table sets out in detail the components of the "Changes in non-cash working capital items": 3 Months 6 Months Periods ended July 31, 2011 2010 2011 2010 (In thousands of CA$) $ $ $ $ Accounts receivable 8,102 (6,047) 7,353 (11,098) Holdbacks on contracts (1,036) (299) (1,031) 1,174 Income tax 140 (81) 128 334 Work in progress (910) 887 (1,076) 675 Inventories 145 (191) 87 (586) Prepaid expenses and other current (589) 111 (316) (475) assets Accounts payable and other current 1,034 130 1,267 1,852 liabilities Deferred revenues (6,216) 2,016 (2,781) 1,549 Changes in non-cash working capital 670 (3,474) 3,631 (6,575) items Financing and investing activities without impact on cash were nil as at July 31, 2011, and $139,000 as at July 31, 2010, relating to the disposal of property, plant and equipment given in exchange for new ones. For the purpose of the Consolidated Statements of Cash Flows, cash and cash equivalents are disclosed as follows: As at July 31, 2011 January 31, 2011 (In thousands of CA$) $ $ Cash 22,203 15,918 Cash equivalents - term deposits ― 2,759 22,203 18,677 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 Months 6 Months Periods ended July 31, 2011 2010 2011 2010 (In thousands of CA$) $ $ $ $ Revenues Canada 250 123 475 563 United States 12,868 12,844 25,872 26,045 13,118 12,967 26,347 26,608 TERREBONNE, QC, Sept. 7, 2011 /CNW/ -- As at July 31, 2011 January 31, 2011 (In thousands of CA$) $ $ Property, Plant and Equipment Canada 45,297 46,767 United States 638 104 45,935 46,871 All intangible assets and investment tax credits included under "Other non-current assets" at, January 31, 2011 and July 31, 2011, originated from Canada. During the six-month period ended July 31, 2011, one client accounted for 94% of the Corporation's revenues (one client accounted for 90% of the revenues during the six-month period ended July 31, 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/September2011/07/c8796.html table valign="top" border="0" tr td valign="top" align="left" Source: /td td  bADF Group Inc./bbr/ br/ /td /tr tr td valign="top" align="left" Contact: br/ /td td bJean Paschini/b, Chairman of the Board of Directors and Chief Executive Officerbr/ bJean/bb-François Boursier/b, CA, Chief Financial Officer /td /tr tr td valign="top" align="left" Telephone:  br/ Web Site:   /td td (450) 965-1911 / 1 (800) 263-7560br/ a cr="true" href="http://www.adfgroup.com"www.adfgroup.com/abr/ br/ /td /tr tr td valign="top" align="left" Medias: br/ br/ /td td Caroline Couillardbr/ Morin Public Relationsbr/ (514) 289-8688, ext. 233 /td /tr /table

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