TERREBONNE, QC,
April 10, 2014 /CNW Telbec/ - ADF
Group Inc. ("ADF" or the "Corporation") (TSX: DRX) recorded
revenues of $93.0 million for the
2014 fiscal year compared with $41.4
million the previous fiscal year, and recorded a net income
of $7.7 million compared with a
negative net income of $1.6 million a
year earlier. The contracts signed in Western Canada as well as in Quebec, have contributed to the Corporation's
revenue growth and consequently the increase in net income.
The gross margin as a percentage of revenues
increased from 11.4% during the fiscal year ended January 31, 2013 to 21.7% during the
fiscal year ended January 31, 2014.
This increase is mainly explained by productivity improvements
attributable to the additional volume of work brought by new
contracts and the acceleration of the project in Alberta, as well as by the completion of
certain smaller-scale projects with less favorable gross margins
which have negatively impacted last fiscal year's margin. It should
be noted that the fabrication hours in the Terrebonne plant have increased by more than
20% during the 2014 fiscal year compared with the previous
year.
During the 2014 fiscal year, the Corporation
generated operating cash flows of over $13.7
million. Despite investing more than $20 million for the construction of its new plant
in Montana, U.S.A., ADF's
short-term available liquidities (including cash, cash equivalents
and short-term investments) exceeded its total debt by over
$13 million as at January 31, 2014.
Financial Highlights
|
|
|
|
Fiscal Years Ended January 31, |
2014 |
|
2013 |
(In thousands of dollars, and dollars per
share) |
$ |
|
$ |
Revenues |
92,997 |
|
41,412 |
EBITDA |
14,234 |
|
1,221 |
Net income for the year |
7,682 |
|
(1,554) |
- Basic per share |
0.24 |
|
(0.05) |
- Diluted per share |
0.23 |
|
(0.05) |
Average number of outstanding shares (basic, in
thousands) |
32,463 |
|
32,458 |
Average number of outstanding shares (diluted, in
thousands) |
33,060 |
|
32,458 |
In March 2013, ADF
Group announced that it obtained from the Autorité des marchés
financiers ("AMF") the authorization required under the new Bill no
1 on the integrity in public contracts, which is mandatory for all
corporations wishing to work on any public construction or services
contract in Quebec of $10 million or greater.
In February 2014,
the Corporation announced a US$6.0
million investment to build a new 3,900-square-meter
(42,000-square-foot) paint shop at its new fabrication plant site
in Great Falls, Montana. The
construction thereof started in March
2014 and commissioning is scheduled for September 2014.
In 2013, ADF Group was a job creator. In
addition to increasing the workforce at its Terrebonne plant, since its implementation in
Great Falls, the Corporation
created to date 70 new local jobs. The Corporation expects this
number to continue to increase during the year as the plant ramps
up its production.
Outlook
The Corporation's order backlog stood at
$36 million as of January 31, 2014 and should be
progressively executed between now and the end of the third quarter
of the 2015 fiscal year.
Over recent months Management has started to see
encouraging signs of improvement in the conditions prevailing in
ADF's markets. This positive trend, as evidenced by the increased
number and size of tenders, allows the Corporation to foresee the
coming months with certain optimism, although because prices remain
weak, it remains cautious as to the short-term outlook.
"The 2014 fiscal year led the Corporation to
record its best financial results in the last five years, and also
allowed ADF to significantly expand its geographic reach with the
implementation of a new plant in Montana. As planned, our new fabrication plant
is operational since the beginning of 2014. One of our main
challenges and objectives for the current year will be to develop
ADF's presence in promising and emerging markets targeted by this
plant, in the Midwestern U.S.A.
and Western Canada" said Mr.
Jean Paschini, Co-Chairman of
the Board of Directors and Chief Executive Officer.
Dividend
The Corporation announces today a semi-annual
dividend of $0.01 per subordinate and
multiple voting share payable on May 16,
2014 to shareholders of record as at April 30, 2014.
Annual Meeting of Shareholders
ADF Group Inc. Annual Meeting of Shareholders
will be held on:
Date: Wednesday, June 11, 2014
Time: 11:00 a.m.
Place: Hilton Montreal/Laval Hotel, Laval, Quebec
Financial results for the first quarter ending
April 30, 2014, will also be
disclosed at the Corporation's shareholder meeting.
About ADF Group Inc.
ADF Group Inc. is a North American leader in the
design, engineering, fabrication and installation in the
non-residential construction industry of complex steel structures,
heavy built-ups, as well as in miscellaneous and architectural
metals. ADF is one of the key 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, 2014
Thursday April 10, 2014 at 10:00 a.m. (Montreal Time)
To participate in the conference call, please dial
1-866-865-3087 a few minutes before the start of the
call.
For those unable to participate, a taped rebroadcast will be
available from
April 10, 2014 at 1:00 p.m. until midnight April 17, 2014,
by dialing 1-855-859-2056; access code 15436849.
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, |
2014 |
|
2013 |
(In thousands of Canadian dollars and
in dollars per share) |
$ |
|
$ |
Revenues |
92,997 |
|
41,412 |
Cost of goods sold |
72,778 |
|
36,706 |
Gross Margin |
20,219 |
|
4,706 |
Selling and administrative
expenses |
9,431 |
|
6,910 |
Financial revenues |
(155) |
|
(186) |
Financial expenses |
189 |
|
168 |
Foreign exchange loss (gain) |
144 |
|
(407) |
|
9,609 |
|
6,485 |
Income before income tax expense
(recovery) |
10,610 |
|
(1,779) |
Income tax expense (recovery) |
2,928 |
|
(225) |
Net income for the year |
7,682 |
|
(1,554) |
Earnings per share |
|
|
|
|
Basic per share |
0.24 |
|
(0.05) |
|
Diluted per share |
0.23 |
|
(0.05) |
Average number of outstanding shares
(in thousands) |
32,463 |
|
32,458 |
Average number of outstanding diluted
shares (in thousands) |
33,060 |
|
32,458 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
|
|
|
|
Fiscal Years Ended January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
Net income for the year |
7,682 |
|
(1,554) |
Other comprehensive income
(a): |
|
|
|
|
Exchange differences on translation of foreign
operations (b) |
3,244 |
|
(147) |
|
Change in value of available-for-sale financial
assets (c) |
51 |
|
― |
|
3,295 |
|
(147) |
Comprehensive income for the year |
10,977 |
|
(1,701) |
(a) |
Will subsequently be reclassified to net income. |
(b) |
Net of hedging activities and $30,000 in related income tax
recovery for the fiscal year ended January 31, 2014 (net
of $4,000 in related income tax expense for the fiscal year ended
January 31, 2013) |
(c) |
Net of $8,000 related income tax expense for the fiscal year
ended January 31, 2014 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
Capital Stock |
Contributed
Surplus |
Accumulated Other
Comprehensive
Income |
Retained
Income |
Total |
(In thousands of
Canadian dollars) |
$ |
$ |
$ |
$ |
$ |
Balance, February 1, 2012 |
69,086 |
6,368 |
(1,586) |
19,895 |
93,763 |
|
Net income for the year |
― |
― |
― |
(1,554) |
(1,554) |
|
Other comprehensive income |
― |
― |
(147) |
― |
(147) |
|
Comprehensive income for the year |
― |
― |
(147) |
(1,554) |
(1,701) |
|
Share-based compensation |
― |
34 |
― |
― |
34 |
|
Options exercised |
3 |
(1) |
― |
― |
2 |
|
Redemption of subordinate voting shares |
(54) |
31 |
― |
― |
(23) |
|
Dividends |
― |
― |
― |
(649) |
(649) |
Balance,
January 31, 2013 |
69,035 |
6,432 |
(1,733) |
17,692 |
91,426 |
|
|
|
|
|
|
|
Capital Stock |
Contributed
Surplus |
Accumulated Other
Comprehensive
Income |
Retained
Income |
Total |
(In thousands of
Canadian dollars) |
$ |
$ |
$ |
$ |
$ |
Balance, February 1, 2013 |
69,035 |
6,432 |
(1,733) |
17,692 |
91,426 |
|
Net income for the year |
― |
― |
― |
7,682 |
7,682 |
|
Other comprehensive income |
― |
― |
3,295 |
― |
3,295 |
|
Comprehensive income for the year |
― |
― |
3,295 |
7,682 |
10,977 |
|
Share-based compensation |
― |
23 |
― |
― |
23 |
|
Options exercised |
104 |
(48) |
― |
― |
56 |
|
Dividends |
― |
― |
― |
(649) |
(649) |
Balance,
January 31, 2014 |
69,139 |
6,407 |
1,562 |
24,725 |
101,833 |
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
|
|
|
|
As at January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
ASSETS |
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
18,675 |
|
23,914 |
|
Short-term investments |
798 |
|
3,228 |
|
Accounts receivable |
12,935 |
|
15,469 |
|
Holdbacks on contracts |
3,572 |
|
708 |
|
Income tax assets |
32 |
|
― |
|
Work in progress |
6,139 |
|
272 |
|
Inventories |
5,609 |
|
4,771 |
|
Prepaid expenses and other current assets |
1,195 |
|
623 |
|
Total current assets |
48,955 |
|
48,985 |
Non-current assets |
|
|
|
|
Holdbacks on contracts |
― |
|
333 |
|
Property, plant and equipment |
68,476 |
|
47,067 |
|
Intangible assets |
2,713 |
|
2,586 |
|
Other non-current assets |
3,255 |
|
2,992 |
|
Deferred income tax assets |
4,585 |
|
4,567 |
Total assets |
127,984 |
|
106,530 |
LIABILITIES |
|
|
|
Current liabilities |
|
|
|
|
Accounts payable and other current
liabilities |
13,510 |
|
5,310 |
|
Income tax liabilities |
― |
|
12 |
|
Deferred revenues |
4,121 |
|
6,105 |
|
Derivative financial instruments |
3 |
|
15 |
|
Current portion of long-term debt |
1,706 |
|
2,505 |
|
Total current liabilities |
19,340 |
|
13,947 |
Non-current liabilities |
|
|
|
|
Long-term debt |
4,315 |
|
1,157 |
|
Deferred income tax liabilities |
2,496 |
|
― |
Total liabilities |
26,151 |
|
15,104 |
SHAREHOLDERS' EQUITY |
|
|
|
|
Capital stock |
69,139 |
|
69,035 |
|
Contributed surplus |
6,407 |
|
6,432 |
|
Accumulated other comprehensive income |
1,562 |
|
(1,733) |
|
Retained income |
24,725 |
|
17,692 |
Total shareholders' equity |
101,833 |
|
91,426 |
Total liabilities and shareholders'
equity |
127,984 |
|
106,530 |
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
Fiscal Years Ended January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
OPERATING ACTIVITIES |
|
|
|
|
Net income for the year |
7,682 |
|
(1,554) |
|
Non-cash items: |
|
|
|
|
|
Amortization of property, plant and equipment |
3,084 |
|
3,034 |
|
|
Amortization of intangible assets |
362 |
|
391 |
|
|
Gain on disposal of property, plant and
equipment |
(2) |
|
― |
|
|
Unrealized gain on derivative financial
instruments |
(12) |
|
(60) |
|
|
Non-cash exchange loss (gain) |
707 |
|
(149) |
|
|
Share-based compensation |
23 |
|
34 |
|
|
Income tax expense (recovery) |
2,928 |
|
(225) |
|
|
Financial revenues |
(155) |
|
(186) |
|
|
Financial expenses |
189 |
|
168 |
|
Net income adjusted for non-cash
items |
14,806 |
|
1,453 |
|
Changes in non-cash working capital
items |
(1,032) |
|
10,076 |
|
Income tax expense paid |
(30) |
|
(152) |
|
Cash flows from (used in) operating
activities |
13,744 |
|
11,377 |
INVESTING ACTIVITIES |
|
|
|
|
Disposal of short-term
investments |
2,482 |
|
2,305 |
|
Net acquisition of property, plant and
equipment |
(22,683) |
|
(5,004) |
|
Acquisition of intangible assets |
(488) |
|
(359) |
|
Increase in other non-current
assets |
(204) |
|
(196) |
|
Interest received |
156 |
|
229 |
|
Cash flows from (used in) investing
activities |
(20,737) |
|
(3,025) |
FINANCING ACTIVITIES |
|
|
|
|
Issuance of long-term debt |
4,819 |
|
― |
|
Repayment of long-term debt |
(2,619) |
|
(2,513) |
|
Issuance of subordinate voting
shares |
56 |
|
2 |
|
Redemption of subordinate voting
shares |
― |
|
(23) |
|
Dividends paid |
(649) |
|
(649) |
|
Interest paid on the interest rate
swap |
(13) |
|
(23) |
|
Interest paid |
(174) |
|
(139) |
Cash flows from (used in) financing
activities |
1,420 |
|
(3,345) |
Impact of fluctuations in foreign
exchange rate on cash flow |
334 |
|
(69) |
Net change in cash and cash
equivalents |
(5,239) |
|
4,938 |
Cash and cash equivalents, beginning
of year |
23,914 |
|
18,976 |
Cash and cash equivalents, end of
year |
18,675 |
|
23,914 |
The following table sets out in detail the
components of the "Changes in non-cash working capital items":
|
|
|
|
Fiscal Years Ended January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
|
Accounts receivable |
2,842 |
|
(1,283) |
|
Holdbacks on contracts |
(2,523) |
|
4,079 |
|
Income tax |
― |
|
35 |
|
Work in progress |
(5,863) |
|
5,032 |
|
Inventories |
(825) |
|
(1,158) |
|
Prepaid expenses and other current assets |
(567) |
|
159 |
|
Accounts payable and other current
liabilities |
7,983 |
|
(278) |
|
Deferred revenues |
(2,079) |
|
3,490 |
Changes in non-cash working capital
items |
(1,032) |
|
10,076 |
SEGMENTED INFORMATION
The Corporation operates in the non-residential
construction sector, primarily in the
United States and Canada.
Its operations include the design and engineering of connections
fabrication and installation of complex steel structures, heavy
steel built-ups, as well as miscellaneous and architectural
metalwork.
|
|
|
|
Fiscal Years Ended January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
Revenues |
|
|
|
|
Canada |
91,532 |
|
19,056 |
|
United States |
1,465 |
|
22,356 |
|
92,997 |
|
41,412 |
|
|
|
|
As at January 31, |
2014 |
|
2013 |
(In thousands of Canadian
dollars) |
$ |
|
$ |
Property. plant and
equipment |
|
|
|
|
Canada |
39,287 |
|
42,622 |
|
United States |
29,189 |
|
4,445 |
|
68,476 |
|
47,067 |
All intangible assets and investment tax credits
included in "Other non-current assets" at January 31, 2014 and January 31, 2013, originated from
Canada.
During the fiscal year ended January 31, 2014, two (2) clients
accounted for 86% of the Corporation's revenues (three (3) clients
accounted for 70% of the revenues during the fiscal year ended
January 31, 2013), and
therefore each client accounted for more than 10% of revenues.
SOURCE ADF Group Inc.