DRX ADF Group Inc

TERREBONNE, QC, April 12, 2012 /CNW Telbec/ - ADF Group Inc. ("ADF" or the "Corporation") recorded revenues of $48.4 million for the 2012 fiscal year compared with $55.3 million the previous fiscal year. This decrease reflects the economic conditions prevailing in the Corporation's markets. In addition, during the fourth quarter ended January 31, 2012, the Corporation recorded a backcharge from its client relating to a project at the World Trade Center in New York. U.S.A., which reduced the revenues previously recognized by about $3.5 million, thereby reducing the gross margin by the same amount. The gross margin in dollar value declined during the 2012 fiscal year compared with the 2011 fiscal year, which is in line with the revenue decrease. As a percentage of revenues, the gross margin decreased from 25.6% during the fiscal year ended January 31, 2011 to 19.2% in fiscal 2012. This decrease is also explained by the new contracts awarded during the 2012 fiscal year, which generate lower profit margins than those posted by ADF in previous years. Net income for the fiscal year ended January 31, 2012, amounted to $1.8 million or $0.06 basic per share ($0.05 diluted per share), compared with a net income of $5.4 million or $0.16 per share (basic and diluted) in 2011. In addition to the factors previously mentioned, this decline reflects the foreign exchange variations, which generated a lesser gain during the 2012 fiscal year than in 2011 year, whereas the profit mix generated mostly by the Corporation's U.S. subsidiaries, was subject to a higher tax rate than in recent years. As at January 31, 2012, the Corporation had $24.5 million in liquidities (consisting of cash, cash equivalents and short-term investments), up by 14% from the previous year, exceeding ADF Group's total debt by $18.3 million. Cash flows provided by operations allowed to further improve the financial position of the Corporation, which, as at January 31, 2012, had $42.6 million in working capital, up by 15.9% compared with 2011. Outlook During the 2012 fiscal year, ADF Group obtained various mandates in Canada. Although carrying lower profit margins than the major projects executed in previous years, these new contracts enabled the Corporation to increase its fabrication capacity utilization rate and make use of its qualified labour force. ADF Group's order backlog was valued at $48 million as at January 31, 2012. "We will be active on the Canadian market where the short-term outlook is brighter than in the United States. We are primarily targeting industrial facilities in Western Canada, and public infrastructures in Ontario and Quebec. To this end, we have recently invested in the acquisition of specialized equipment to enhance our competitiveness in the construction and rehabilitation of bridges" said Mr. Jean Paschini, Chairman of the Board and Chief Executive Officer. Management foresees that the launch of new major projects in the commercial and industrial sectors in the United States will continue to incur some delays in the short-term. Prospects for the U.S. public infrastructures market are more encouraging. In fact, the current state of public infrastructures will require important investments in the near future. "In light of this opportunity, we are analyzing the possibilities to set up a fabrication plant in the United States, which would give us access to this market, and provide us with a greater market access south of the border. Over the medium and long term, the American market will remain ADF's target market" added Mr. Paschini. "We are confident as we look to ADF Group's future, considering the Corporation's healthy financial position, its leading expertise and the quality of its assets" concluded Mr. Paschini. Dividend The Corporation's Board of Directors approved a semi-annual dividend payment. Consequently, ADF Group announces the payment of a semi-annual dividend of $0.01 per share, payable on May 17, 2012 to shareholders of record as at April 30, 2012. Annual Meeting of Shareholders ADF Group Inc. Annual Meeting of Shareholders will be held on: Date: Wednesday, June 13, 2012 Time: 11:00 a.m. Place: Hilton Montreal-Laval Hotel Laval, Quebec Financial results for the first quarter ending April 30, 2012, will also be disclosed at the Corporation's shareholders' meeting. 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 nonresidential 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. 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 fiscal year ended January 31,| | 2012 | | | | Thursday April 12, 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 | | April 12, 2012 at 1:00 p.m. until midnight April 19, 2012, | | by dialing 1-855-859-2056; access code 66290573 | | | | 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 Fiscal Years Ended January 31, 2012 2011 (In thousands of Canadian dollars and in dollars per share) $ $ Revenues 48,431 55,268 Cost of goods sold 39,128 41,132 Gross Margin 9,303 14,136 Selling and administrative expenses 6,690 6,598 Financial revenue (345) (293) Financial expenses 233 392 Foreign exchange gain (1,043) (2,486) 5,535 4,211 Income before income tax expense 3,768 9,925 Income tax expense 1,956 4,534 Net income for the year 1,812 5,391 Earnings per share Basic per share 0.06 0.16 Diluted per share 0.05 0.16 Average number of outstanding shares (in thousands) 32,771 33,642 Average number of outstanding diluted shares (in thousands) 33,309 34,301 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Years Ended January 31, 2012 2011 (In thousands of Canadian dollars) $ $ Net income for the year 1,812 5,391 Other comprehensive income: Exchange differences on translation of foreign operations (a) (53) (1,621) Changes in value of available-for-sale financial assets (b) (56) — (109) (1,621) Comprehensive income for the year 1,703 3,770 (a) Net of hedging activities and of $24,000 in related income taxes for the fiscal year ended January 31, 2012 (nil for the fiscal year ended January 31, 2011). (b) Net of $9,000 in related income taxes. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY Accumulated Other Capital Contributed Comprehensive Retained Stock Surplus Income Income Total (In thousands of Canadian dollars) $ $ $ $ $ Balance, February 1, 2010 75,436 3,659 144 13,348 92,587 Net income for the year — — — 5,391 5,391 Other comprehensive income — — (1,621) — (1,621) Comprehensive income for the year — — (1,621) 5,391 3,770 Share-based compensation — 237 — — 237 Options exercised 277 (101) — — 176 Subordinate voting share redemption (5,681) 1,945 — — (3,736) Balance, January 31, 2011 70,032 5,740 (1,477) 18,739 93,034 Accumulated Other Capital Contributed Comprehensive Retained Stock Surplus Income Income Total (In thousands of Canadian dollars) $ $ $ $ $ Balance, February 1, 2011 70,032 5,740 (1,477) 18,739 93,034 Net income for the year — — — 1,812 1,812 Other comprehensive income — — (109) — (109) Comprehensive income for the year — — (109) 1,812 1,703 Share-based compensation — 107 — — 107 Options exercised 20 (7) — — 13 Subordinate voting share redemption (966) 528 — — (438) Dividends — — — (656) (656) Balance, January 31, 2012 69,086 6,368 (1,586) 19,895 93,763 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at January 31, 2012 January 31, 2011 February 1, 2010 (In thousands of Canadian dollars) $ $ $ ASSETS Current assets Cash and cash equivalents 18,976 18,677 5,770 Short-term investments 5,562 2,787 11,652 Accounts receivable 14,189 22,215 13,421 Holdbacks on contracts 5,082 167 2,692 Work in progress 5,263 403 1,574 Inventories 3,613 3,865 3,093 Income tax assets — — 442 Prepaid expenses and other current assets 782 985 2,299 Derivative financial instruments — 741 832 Total current assets 53,467 49,840 41,775 Non-current assets Holdbacks on contracts — 3,562 1,297 Property, plant and equipment 45,089 46,871 47,438 Intangible assets 2,618 2,601 2,590 Other non-current assets 2,796 2,852 2,312 Deferred income tax assets 4,549 6,960 11,569 Total assets 108,519 112,686 106,981 LIABILITIES Current liabilities Accounts payable and other current liabilities 5,551 5,365 5,649 Income tax liabilities 77 159 — Deferred revenues 2,618 4,994 1,274 Derivative financial instruments 75 45 — Current portion of long-term debt 2,526 2,513 2,422 Total current liabilities 10,847 13,076 9,345 Non-current liabilities Long-term debt 3,676 6,151 4,645 Deferred income tax liabilities 233 425 404 Total liabilities 14,756 19,652 14,394 SHAREHOLDERS' EQUITY Retained income 19,895 18,739 13,348 Accumulated other comprehensive income (1,586) (1,477) 144 18,309 17,262 13,492 Capital stock 69,086 70,032 75,436 Contributed surplus 6,368 5,740 3,659 Total shareholders' equity 93,763 93,034 92,587 Total liabilities and shareholders' equity 108,519 112,686 106,981 CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended January 31, 2012 2011 (In thousands of Canadian dollars) $ $ OPERATING ACTIVITIES Net income for the year 1,812 5,391 Non-cash items: Amortization of property, plant and equipment 3,063 3,045 Amortization of intangible assets 356 339 Loss (gain) on disposal of property, plant and equipment 8 (52) Unrealized loss on derivative financial instruments 771 136 Non-cash exchange gain (63) (600) Share-based compensation 107 237 Income tax expense 1,956 4,534 Financial revenue (345) (293) Financial expenses 233 392 Net income adjusted for non-cash items 7,898 13,129 Changes in non-cash working capital items (1) 243 (4,324) Income tax expense paid (15) (393) Cash flows from (used in) operating activities 8,126 8,412 INVESTING ACTIVITIES (Acquisition) disposal of short-term investments (2,807) 8,596 Net acquisition of property, plant and equipment (1,230) (2,302) Acquisition of intangible assets (373) (350) Reduction in other non-current assets (9) (4) Interest received 380 629 Cash flows from (used in) investing activities (4,039) 6,569 FINANCING ACTIVITIES Issuance of long-term debt — 4,370 Repayment of long-term debt (2,491) (2,333) Issuance of subordinate voting shares 13 176 Redemption of subordinate voting shares (438) (3,736) Dividends paid (656) — Interest paid on the interest rate swap (33) (35) Interest paid (199) (290) Cash flows from (used in) financing activities (3,804) (1,848) Impact of fluctuations in foreign exchange rate on cash 16 (226) Net increase in cash and cash equivalents 299 12,907 Cash and cash equivalents, beginning of year 18,677 5,770 Cash and cash equivalents, end of year(2) 18,976 18,677 Non-cash financing and investing activities were as follows: Obligation under a capital lease 37 134 Property, plant and equipment given in exchange for new property, plant and equipment 56 139 (1) Details on the components of the "Changes in non-cash working capital items": Fiscal Years Ended January 31, 2012 2011 (In thousands of Canadian dollars) $ $ Accounts receivable 7,825 (10,236) Holdbacks on contracts (1,324) 23 Income tax 144 476 Work in progress (4,764) 1,114 Inventories 252 (772) Prepaid expenses and other current assets 203 774 Accounts payable and other current liabilities 240 1,295 Deferred revenues (2,333) 3,002 Changes in non-cash working capital items 243 (4,324) (2) For the purpose of the consolidated statements of cash flows, cash and cash equivalents are disclosed as follows: As at January 31, 2012 January 31, 2011 February 1, 2010 (In thousands of Canadian dollars) $ $ $ Cash 18,976 15,918 5,770 Cash equivalents - term deposits — 2,759 — 18,976 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. Fiscal years ended January 31, 2012 2011 (In thousands of Canadian dollars) $ $ Revenues Canada 6,371 698 United States 42,060 54,570 48,431 55,268 As at January 31, 2012 January 31, 2011 February 1, 2010 (In thousands of Canadian dollars) $ $ $ Property, Plant and Equipment Canada 44,410 46,767 47,293 United States 679 104 145 45,089 46,871 47,438 All intangible assets and investment tax credits included in "Other non-current assets" at February 1, 2010, January 31, 2011 and January 31, 2012, originated from Canada. During the fiscal year ended January 31, 2012, one client accounted for 83% of the Corporation's revenues (one client accounted for 90% of the revenues during the fiscal year ended January 31, 2011), and was therefore the only one that accounted for more than 10% of revenues.    ADF GROUP INC. CONTACT: Source:ADF Group Inc.Contact:Jean Paschini, Chairman of the Board of Directors and Chief ExecutiveOfficerJean-Francois Boursier, CA, Chief Financial OfficerTelephone: (450) 965-1911 / 1 (800) 263-7560Web Site: www.adfgroup.com

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