Results for the fiscal year ended January 31, 2015

HIGHLIGHTS

New contracts totalling $62 million signed in Fiscal 2015
Commissioning of the new fabrication plant in Montana, USA
Construction of a new paint shop in Montana, USA
Available liquidities of $9 million
Order backlog of $48 million as at January 31, 2015

TERREBONNE, QC, April 9, 2015 /CNW Telbec/ - ADF Group Inc. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $76.1 million for the 2015 fiscal year compared with $93.0 million the previous fiscal year, and recorded a negative net income of $1.6 million compared with a net income of $7.7 million a year earlier. It is important to point out that the Syncrude project, in Alberta, significantly contributed to the 2014 fiscal year results, and that the fabrication of the steel structures for the Quebec City's new amphitheater project was then in full swing. Therefore, for the 2015 fiscal year, the progressive decrease in the fabrication hours required to complete these two projects was partially offset by the gradual implementation of our new fabrication plant in Great Falls, Montana, which generated new revenues, as well as by the new projects signed during the 2015 fiscal year.

The gross margin as a percentage of revenues went from 21.7% during the fiscal year ended January 31, 2014 to 9.6% during the fiscal year ended January 31, 2015. In addition to the impact of the Syncrude project mentioned above, this decrease is also explained by the fact that, even with a successful start-up, the first year of operations of our new Great Falls' fabrication plant was characterized by the usual learning curve.

On January 31, 2015, cash, cash equivalents and short-term investments totalled $8.7 million, down by $10.7 million compared with January 31, 2014. This decrease in available cash is explained by the fact that the Corporation invested more than $13.0 million during fiscal 2015 mainly to build a new paint shop, previously mentioned. Since the beginning of fiscal 2014, the Corporation invested close to $40.0 million in its new facilities in Montana from its own funds and through new U.S. denominated debts totalling CA$10.3 million.

Financial Highlights


Fiscal Years Ended January 31,		2015	2014
(In thousands of dollars, and dollars per share)		$	$
Revenues		76,058	92,997
EBITDA		1,594	14,234
Net income for the year		(1,570)	7,682
—	Basic per share	(0.05)	0.24
—	Diluted per share	(0.05)	0.23
Average number of outstanding shares (basic, in thousands)		32,499	32,463
Average number of outstanding shares (diluted, in thousands)		32,499	33,060

Outlook

During the fiscal year ended January 31, 2015, ADF Group announced the award of new contracts totalling $62.0 million. The largest of these contracts is part of a major real estate project in New York City. The other contracts involve the fabrication of steel structures for various industrial buildings for different projects, from Eastern Canada to Western USA.

ADF Group's order backlog totalled $48 million, on January 31, 2015, with a schedule extending to the third quarter of the 2016 fiscal year.

The Corporation started the 2016 fiscal year with 260,000 fabrication hours in hand, across its operational units in Terrebonne and Great Falls, which is twice as much fabrication hours than at the same date a year ago. This represents a very good level of activity and attests to the contribution of our new fabrication plant during its first year of operations.

"Today, we look forward to the future with solid financial and operational bases. Indeed, our financial situation, our three state-of-the-art plants equipped with cutting-edge machinery and our experienced staff, allows us to see the coming years with a renewed optimism. Our main markets are growing and several major projects are in our line of sight. Despite a constant downward pressure on prices, we are confident that the 2016 fiscal year will allow ADF to be profitable again and to achieve a sustainable growth" said Mr. Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer.

Dividend

ADF Group announces the payment of a semi-annual dividend of $0.01 per subordinate voting share and multiple voting share to be paid on May 15, 2015 to shareholders of record as at April 30, 2015.

Annual Meeting of Shareholders

ADF Group Inc. Annual Meeting of Shareholders will be held on:

Date:	Wednesday, June 10, 2015
Time:	10:30 a.m.
Place:	ADF Group Inc., Headquarters, Terrebonne, Quebec

Financial results for the first quarter ending April 30, 2015, 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 and engineering of connections, fabrication, including industrial coating, 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 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, one in Canada and one in the United States, as well as a paint shop in the United States.

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

Earnings before interest, taxes, depreciation and amortization ("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. Refer to Section 10 "Non-GAAP Measures" of the Corporation's Management's Discussion and Analysis for Fiscal Year Ended January 31, 2015, for the definition of this metric and reconciliation to the most comparable IRFS measures.

All amounts are in Canadian dollars, unless otherwise indicated.

CONFERENCE CALL WITH INVESTORS

To discuss ADF Group's results for Fiscal Year Ended January 31, 2015,
Thursday, April 9, 2015 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 Thursday, April 9, 2015 at 1:00 p.m. until midnight Thursday, April 16, 2015, by dialing 1-855-859-2056; access code 9274143.

The conference call (audio) will also be available at www.adfgroup.com

Members of the media are invited to listen in.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION


As at January 31,		2015	2014
(In thousands of Canadian dollars)		$	$

ASSETS
Current assets
	Cash and cash equivalents	7,946	18,675
	Short-term investments	789	798
	Accounts receivable	14,143	12,935
	Holdbacks on contracts	4,309	3,572
	Income tax assets	29	32
	Work in progress	6,834	6,139
	Inventories	5,769	5,609
	Prepaid expenses and other current assets	1,679	1,195
	Total current assets	41,498	48,955

Non-current assets
	Property, plant and equipment	83,000	68,476
	Intangible assets	2,781	2,713
	Other non-current assets	3,969	3,255
	Deferred income tax assets	6,567	4,585
Total assets		137,815	127,984

LIABILITIES
Current liabilities
	Accounts payable and other current liabilities	15,971	13,510
	Deferred revenues	4,173	4,121
	Derivative financial instruments	1,115	3
	Current portion of long-term debt	763	1,706
	Total current liabilities	22,022	19,340

Non-current liabilities
	Long-term debt	9,374	4,315
	Deferred income tax liabilities	2,461	2,496
Total liabilities		33,857	26,151
SHAREHOLDERS' EQUITY
	Capital stock	69,185	69,139
	Contributed surplus	6,433	6,407
	Accumulated other comprehensive income	5,835	1,562
	Retained income	22,505	24,725
Total shareholders' equity		103,958	101,833
Total liabilities and shareholders' equity		137,815	127,984

CONSOLIDATED STATEMENTS OF INCOME


Fiscal Years Ended January 31,		2015	2014
(In thousands of Canadian dollars and in dollars per share)		$	$

Revenues		76,058	92,997
Cost of goods sold		68,791	72,778
Gross Margin		7,267	20,219
Selling and administrative expenses		9,854	9,431
Financial revenues		(151)	(155)
Financial expenses		399	189
Foreign exchange loss (gain)		(58)	144
		10,044	9,609
Income before income tax expense (recovery)		(2,777)	10,610
Income tax expense (recovery)		(1,207)	2,928
Net income for the year		(1,570)	7,682
Earnings per share
	Basic per share	(0.05)	0.24
	Diluted per share	(0.05)	0.23
Average number of outstanding shares (in thousands)		32,499	32,463
Average number of outstanding diluted shares (in thousands)		32,499	33,060

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


Fiscal Years Ended January 31,		2015	2014
(In thousands of Canadian dollars)		$	$
Net income for the year		(1,570)	7,682
Other comprehensive income ^(a) :
	Exchange differences on translation of foreign operations ^(b)	4,273	3,244
	Change in value of available-for-sale financial assets ^(c)	―	51
		4,273	3,295
Comprehensive income for the year		2,703	10,977

(a)	Will subsequently be reclassified to net income.
(b)	Net of hedging activities and an immaterial related income tax expense for the fiscal year ended January 31, 2015 (net of $30,000 in related income tax recovery for the fiscal year ended January 31, 2014).
(c)	Net of an immaterial amount 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, 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


		Capital Stock	Contributed Surplus	Accumulated Other Comprehensive Income	Retained Income	Total
(In thousands of Canadian dollars)		$	$	$	$	$
Balance, February 1, 2014		69,139	6,407	1,562	24,725	101,833
	Net income for the year	―	―	―	(1,570)	(1,570)
	Other comprehensive income	―	―	4,273	―	4,273
	Comprehensive income for the year	―	―	4,273	(1,570)	2,703
	Share-based compensation	―	41	―	―	41
	Options exercised	46	(15)	―	―	31
	Dividends	―	―	―	(650)	(650)
Balance, January 31, 2015		69,185	6,433	5,835	22,505	103,958

CONSOLIDATED STATEMENTS OF CASH FLOWS


Fiscal Years Ended January 31,			2015	2014
(In thousands of Canadian dollars)			$	$

OPERATING ACTIVITIES
	Net income for the year		(1,570)	7,682
	Non-cash items:
		Amortization of property, plant and equipment	3,874	3,084
		Amortization of intangible assets	307	362
		Gain on disposal of property, plant and equipment	—	(2)
		Unrealized loss (gain) on derivative financial instruments	1,115	(12)
		Non-cash exchange loss (gain)	(119)	707
		Share-based compensation	41	23
		Income tax expense (recovery)	(1,207)	2,928
		Financial revenues	(151)	(155)
		Financial expenses	399	189
	Net income adjusted for non-cash items		2,689	14,806
	Changes in non-cash working capital items		(1,273)	(1,032)
	Income tax expense recovery (paid)		4	(30)
Cash flows from (used in) operating activities			1,420	13,744

INVESTING ACTIVITIES
	Net disposal of short-term investments		―	2,482
	Net acquisition of property, plant and equipment		(13,860)	(22,683)
	Acquisition of intangible assets		(373)	(488)
	Increase in other non-current assets		(608)	(204)
	Interest received		160	156
Cash flows from (used in) investing activities			(14,681)	(20,737)

FINANCING ACTIVITIES
	Issuance of long-term debt		5,516	4,819
	Repayment of long-term debt		(1,857)	(2,619)
	Issuance of subordinate voting shares		31	56
	Dividends paid		(650)	(649)
	Interest paid on the interest rate swap		(2)	(13)
	Interest paid	(371)	(174)
Cash flows from (used in) financing activities			2,667	1,420
Impact of fluctuations in foreign exchange rate on cash flow			(135)	334
Net change in cash and cash equivalents during the fiscal year			(10,729)	(5,239)
Cash and cash equivalents, beginning of year			18,675	23,914
Cash and cash equivalents, end of year			7,946	18,675

The following table sets out in detail the components of the "Changes in non-cash working capital items":


Fiscal Years Ended January 31,		2015	2014
(In thousands of CA$)		$	$
	Accounts receivable	(881)	2,842
	Holdbacks on contracts	(682)	(2,523)
	Work in progress	(683)	(5,863)
	Inventories	(44)	(825)
	Prepaid expenses and other current assets	(475)	(567)
	Accounts payable and other current liabilities	1,508	7,983
	Deferred revenues	(16)	(2,079)
Changes in non-cash working capital items		(1,273)	(1,032)

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, including industrial coating, and installation of complex steel structures, heavy steel built-ups, as well as miscellaneous and architectural metalwork.


Fiscal Years Ended January 31,		2015	2014
(In thousands of CA$)		$	$
Revenues
	Canada	59,879	91,532
	United States	16,179	1,465
		76,058	92,997


As at January 31,		2015	2014
(In thousands of CA$)		$	$
Non-current assets ⁽¹⁾
	Canada	45,218	45,255
	United States	44,532	29,189
		89,750	74,444

(1)	The non-current assets mainly include property, plant and equipment, intangible assets, investment tax credits and others non-current assets.

During the fiscal year ended January 31, 2015, 47% of the Corporation's revenues were realized with two (2) clients, for respective amounts of $27,526,000 and $8,313,000 (both from Canada), one (1) of which was part of the revenues' concentration during the fiscal year ended January 31, 2014 (86% of the revenues were realized with two (2) clients during the fiscal year ended January 31, 2014, for amounts of $55,240,000 and $24,558,000 respectively, all coming from Canada), and therefore each client accounted for more than 10% of the Corporation's revenues.

SOURCE ADF Group Inc

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