Results for the fiscal year ended January 31, 2016

HIGHLIGHTS

29% increase in revenues compared with the previous fiscal year
Gross margin, as a percentage of revenues, stood at 14.3%, which is a 4.7% increase compared with a year ago
Return to profitability with the recording of a net income of $1.7 million
New contract awards worth a total of $100 million during the 2016 fiscal year
Construction of a new paint shop at ADF's own Terrebonne facilities

TERREBONNE, QC, April 14, 2016 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $98.1 million during the fiscal year ended January 31, 2016, up by $22.0 million compared with the previous fiscal year. The change in revenues results from the increase in the production level at all of the Corporation's facilities.

The gross margin as a percentage of revenues went from 9.6% during the fiscal year ended January 31, 2015 to 14.3% during the fiscal year ended January 31, 2016. This increase is mainly explained by a better product mix and a better absorption of the fabrication fixed costs, in line with the volume at both of our fabrication plants, as well as by the favorable foreign exchange rate impact.

ADF Group recorded a net income of $1.7 million ($0.05 basic and diluted per share) during the fiscal year ended January 31, 2016 compared with a negative net income of $1.6 million (-$0.05 basic and diluted per share) a year ago.

On January 31, 2016, the Corporation had $21.0 million in working capital including short-term available liquidities (comprised of cash, cash equivalents and short-term investments) of $2.4 million. On February 22, 2016, a few days after the close of its 2016 fiscal year, the Corporation drew the second tranche of $5.0 million from a bank loan contracted during the third quarter of the fiscal year ended January 31, 2016. The Corporation remains in a solid position to support its ongoing operations, pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy.

As at January 31, 2016, the Corporation order book totalled $70.6 million, compared with $48.0 million as at January 31, 2015. These contracts will be progressively completed by the end of the second quarter of fiscal 2018.

Financial Highlights

Fiscal Years Ended January 31,		2016	2015
(In thousands of CA$, and dollars per share)		$	$

Revenues		98,089	76,058
EBITDA		7,244	1,594
Net income for the year		1,699	(1,570)
-	Basic per share	0.05	(0.05)
-	Diluted per share	0.05	(0.05)
Average number of outstanding shares (basic, in thousands)		32,597	32,499
Average number of outstanding shares (diluted, in thousands)		32,807	32,499

New Orders

On March 30, 2016, the Corporation announced the award of new contracts worth over $43.0 million, in Quebec and in U.S. East Coast. In addition to fabricating various steel structures and unique heavy steel built-ups, and performing the installation work thereof, ADF's contracts also include the supply of the shop drawings, the purchase of the steel required in the scope of these different projects, and in some cases, the application of special industrial coatings. These projects will be primarily carried out at ADF's Terrebonne fabrication plant and they are scheduled to extend until July 2017.

Outlook

"Including our recently commissioned new paint shop in Terrebonne, we now have five centers of excellence in North America, which will enable us to efficiently reach clients across this market" indicated Mr. Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer.

"For fiscal 2017, our goal is to integrate all of our recent investments and making sure we maintain a solid backlog to support all of our activities, and continue improving our operational processes" concluded Mr. Paschini.

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 16, 2016 to shareholders of record as at April 29, 2016.

Annual Meeting of Shareholders

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

Date:	Wednesday, June 15, 2016
Time:	11:00 a.m.
Place:	Hotel Sheraton Laval, 2440 Des Laurentides, Laval, Quebec

Financial results for the first quarter ending April 30, 2016, 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 the application of industrial coatings, and installation of complex steel structures, heavy steel built-ups, as well as in miscellaneous and architectural metals for the non residential infrastructure sector. 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 and two paint shops, in Canada and in the United States, and a Construction Division in the United States, which specializes in the installation of steel structures and other related products.

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, 2016, 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 INVESTOR, APRIL 14, 2016 AT 10:00 A.M. (Montreal time)

RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2016

TO PARTICIPATE, 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 14, 2016

at 1:00 p.m. until midnight Thursday, April 21, 2016, by dialing 1-855-859-2056; access code 77353950.

The conference call (audio) will also be available on ADF's Website at www.adfgroup.com.

Members of the media are invited to listen in.

CONSOLIDATED OF FINANCIAL POSITION

As at January 31,		2016	2015
(In thousands of Canadian dollars)		$	$

ASSETS
Current assets
	Cash and cash equivalents	2,377	7,946
	Short-term investments	―	789
	Accounts receivable	23,146	14,143
	Holdbacks on contracts	1,693	4,309
	Income tax assets	―	29
	Work in progress	7,521	6,834
	Inventories	6,180	5,769
	Prepaid expenses and other current assets	1,889	1,679
	Total current assets	42,806	41,498

Non-current assets
	Property, plant and equipment	91,067	83,000
	Intangible assets	2,871	2,781
	Other non-current assets	3,337	3,969
	Deferred income tax assets	6,390	6,567
Total assets		146,471	137,815

LIABILITIES
Current liabilities
	Accounts payable and other current liabilities	17,772	15,971
	Income tax liability	49	―
	Deferred revenues	2,753	4,173
	Derivative financial instruments	403	1,115
	Current portion of long-term debt	868	763
	Total current liabilities	21,845	22,022

Non-current liabilities
	Long-term debt	14,351	9,374
	Deferred income tax liabilities	2,742	2,461
Total liabilities		38,938	33,857

SHAREHOLDERS' EQUITY
	Capital stock	68,077	69,185
	Contributed surplus	6,397	6,433
	Accumulated other comprehensive income	9,507	5,835
	Retained income	23,552	22,505
Total shareholders' equity		107,533	103,958
Total liabilities and shareholders' equity		146,471	137,815

CONSOLIDATED STATEMENTS OF INCOME

Fiscal Years Ended January 31,		2016	2015
(In thousands of Canadian dollars and in dollars per share)		$	$

Revenues		98,089	76,058
Cost of goods sold		84,069	68,791
Gross Margin		14,020	7,267
Selling and administrative expenses		11,391	9,854
Financial revenues		(79)	(151)
Financial expenses		574	399
Other gains		(653)	(58)
		11,233	10,044
Income before income tax expense (recovery)		2,787	(2,777)
Income tax expense (recovery)		1,088	(1,207)
Net income for the year		1,699	(1,570)
Earnings per share
	Basic per share	0,05	(0,05)
	Diluted per share	0,05	(0,05)
Average number of outstanding shares (in thousands)		32,597	32,499
Average number of outstanding diluted shares (in thousands)		32,807	32,499

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Fiscal Years Ended January 31,		2016	2015
(In thousands of Canadian dollars)		$	$
Net income for the year		1,699	(1,570)
Other comprehensive income ^(a) :
	Exchange differences on translation of foreign operations	3,672	4,273
Comprehensive income for the year		5,371	2,703

(a) Will subsequently be reclassified to net income.

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, 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


	Capital Stock	Contributed Surplus	Accumulated Other Comprehensive Income	Retained Income	Total
(In thousands of Canadian dollars)	$	$	$	$	$

Balance, February 1, 2015	69,185	6,433	5,835	22,505	103,958
Net income for the year	―	―	―	1,699	1,699
Other comprehensive income	―	―	3,672	―	3,672
Comprehensive income for the year	―	―	3,672	1,699	5,371
Share-based compensation	―	44	―	―	44
Redemption of subordinate voting shares	(2,282)	364	―	―	(1,918)
Options exercised	1,174	(444)	―	―	730
Dividends	―	―	―	(652)	(652)
Balance, January 31, 2016	68,077	6,397	9,507	23,552	107,533

CONSOLIDATED STATEMENTS OF CASH FLOWS

Fiscal Years Ended January 31,			2016	2015
(In thousands of Canadian dollars)			$	$

OPERATING ACTIVITIES
	Net income for the year		1,699	(1,570)
	Non-cash items:
		Amortization of property, plant and equipment	4,294	3,874
		Amortization of intangible assets	321	307
		Gain on disposal of property, plant and equipment	(618)	―
		Unrealized loss (gain) on derivative financial instruments	(712)	1,115
		Non-cash exchange gain	(709)	(119)
		Share-based compensation	44	41
		Income tax expense (recovery)	1,088	(1,207)
		Financial revenues	(79)	(151)
		Financial expenses	574	399
	Net income adjusted for non-cash items		5,902	2,689
	Changes in non-cash working capital items ⁽¹⁾		(7,059)	(1,273)
	Income tax expense recovery		―	4
Cash flows from (used in) operating activities			(1,157)	1,420

INVESTING ACTIVITIES
	Disposal of short-term investments		778	―
	Net acquisition of property, plant and equipment		(8,591)	(13,860)
	Revenues from disposals of property, plant and equipment		1,457	―
	Acquisition of intangible assets		(411)	(373)
	Decrease (increase) in other non-current assets		641	(608)
	Interest received		96	160
Cash flows from (used in) investing activities			(6,030)	(14,681)

FINANCING ACTIVITIES
	Issuance of long-term debt		5,000	5,516
	Financing costs relating to the debt		(107)	―
	Repayment of long-term debt		(772)	(1,857)
	Redemption of subordinate voting shares		(1,918)	―
	Issuance of subordinate voting shares		730	31
	Dividends paid		(652)	(650)
	Interest paid on the interest rate swap		―	(2)
	Interest paid		(552)	(371)
Cash flows from (used in) financing activities			1,729	2,667
Impact of fluctuations in foreign exchange rate on cash flow			(111)	(135)
Net change in cash and cash equivalents during the fiscal year			(5,569)	(10,729)
Cash and cash equivalents, beginning of year			7,946	18,675
Cash and cash equivalents, end of year			2,377	7,946

(1)

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



Fiscal Years Ended January 31,		2016	2015
(In thousands of Canadian dollars)		$	$

	Accounts receivable	(8,008)	(881)
	Holdbacks on contracts	2,636	(682)
	Work in progress	(399)	(683)
	Inventories	(309)	(44)
	Prepaid expenses and other current assets	(139)	(475)
	Accounts payable and other current liabilities	651	1,508
	Deferred revenues	(1,491)	(16)
Changes in non-cash working capital items		(7,059)	(1,273)

SEGMENTED INFORMATION

The Corporation operates in the non-residential construction industry, 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,		2016	2015
(In thousands of Canadian dollars)		$	$

Revenues
	Canada	22,368	59,879
	United States	75,721	16,179
		98,089	76,058




As at January 31,		2016	2015
(In thousands of Canadian dollars)		$	$

Non-current assets ⁽¹⁾
	Canada	47,480	45,218
	United States	49,795	44,532
		97,275	89,750


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

Revenues from external clients were allocated to each country on the basis of the project's location.

During the fiscal year ended January 31, 2016, 70% of the Corporation's revenues were realized with three (3) clients, for respective amounts of $30,489,000 from the United States, $24,480,000 from the United States and Canada, and $13,269,000 from Canada, one (1) of whom was part of the Corporation's revenues concentration during the fiscal year ended January 31, 2015.

During the fiscal year ended January 31, 2015, 47% of the revenues were realized with two (2) clients for amounts of $27,526,000 and $8,313,000 respectively, all generated in Canada, and therefore each client accounted for more than 10% of the Corporation's revenues, one (1) of whom was part of the Corporation's revenues concentration during the fiscal year ended January 31, 2014.

SOURCE ADF Group Inc.

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