HIGHLIGHTS
- Revenues of $179.7 million, up
33% from the previous year.
- The outcome of an out of court settlement in commercial
litigation in the USA resulted in
the recording of a net loss of $2.1
million, compared with a net loss of $0.4 million a year earlier.
- The Corporation closed the 2020 fiscal year with an order
backlog of $328.7 million, nearly
$110.0 million more than as at
January 31, 2019.
- $65.0 million worth in new
contracts added to the Corporation's backlog since the end of the
2020 fiscal year.
- At the date hereof, there is no significant impact from
COVID-19 on the Corporation's operations.
TERREBONNE, QC, April 9, 2020 /CNW Telbec/ - ADF GROUP
INC. ("ADF" or the "Corporation") (TSX: DRX) recorded
revenues of $179.7 million during the
fiscal year ended January 31, 2020, compared with $135.1 million the previous fiscal year. This
increase in revenues is attributable to the start of recently
awarded projects, in line with the growth of the order backlog.
However, had it not been for the $7.7
million write-off recorded in the third quarter of the 2020
fiscal year resulting from a out of court settlement in a
commercial dispute in Florida, the
2020 fiscal year revenues would have been $187.4 million, an increase of 38.7% from the
previous year.
Gross margin, as a percentage of revenues, increased from 7.1%
for the fiscal year ended January 31,
2019, to 9.2% for the fiscal year ended January 31, 2020. This increase, as the
percentage of revenues, is mainly due to improved margins on
projects in the backlog, and an improvement in internal efficiency,
in line with the increase in fabrication hours.
For the fiscal year ended January 31,
2020, ADF posted a net loss of $2.1
million (-$0.07 basic and
diluted per share) resulting from the out of court settlement
previously mentioned, compared with a net loss of $0.4 million (-$0.01 basic and diluted per share) a year ago.
Had it not been for the out of court settlement previously
mentioned, net income for fiscal 2020 would have been $5.5 million or $0.17 basic and diluted per share.
On January 31, 2020, the Corporation had $29.3 million in working capital. The Corporation
remains in a sound position to support its ongoing operations and
pursue its development projects.
During the fiscal year ended January 31,
2020, the Corporation was able to secure new contracts
valued at approximately $300 million,
bringing its order backlog to $328.7
million on that date, compared with a backlog of
$219.5 million as at January
31, 2019, and that is excluding the new contracts worth
$65.0 million announced on
March 23, 2020. Most contracts will
be progressively completed by the end of the fiscal year ending
January 31, 2022.
Financial
Highlights
|
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
(In thousands of CA$,
and dollars per share)
|
$
|
$
|
|
|
|
Revenues
|
179,710
|
135,073
|
EBITDA
|
5,225
|
1,945
|
Loss before income
tax expense
|
(1,986)
|
(2,393)
|
Net loss for the
year
|
(2,132)
|
(374)
|
— Basic and
diluted per share
|
(0.07)
|
(0.01)
|
Average number of
outstanding shares (basic and diluted, in thousands)
|
32,635
|
32,635
|
COVID-19
At the date hereof, the impact of COVID-19 on ADF's operations
is limited. We have taken all necessary steps to protect our
employees and business partners, and we will continue to follow the
advice and recommendations of local authorities wherever we conduct
business. This situation is changing rapidly and we will continue
to monitor and mitigate development affecting our staff, suppliers,
customers and the general public to the extent we can.
Outlook
"Although we were able to collect more than $13 million from the out-of-court settlement
mentioned above, which allowed us to have the liquidities needed to
continue the growth of our order backlog, our 2020 fiscal year
results were adversely affected by a write-off of $7.7 million, as part of this settlement"
added Mr. Jean Paschini,
Co-Chair of the Board of Directors and Chief Executive
Officer.
"Renewing our backlog remains one of our top priorities, and our
sustained efforts continue to pay off. We have signed $300 million worth in new contracts during the
2020 fiscal year, and more recently we have secured additional
contracts for an estimated total value of $65 million, including, among others, a major
industrial building in Montreal.
Alongside this objective, we remain determined and work tirelessly
and collaboratively to achieve another common goal, which is to
continue to find ways to improve and enhance operational efficiency
and excellence" added Mr. Jean
Paschini.
Dividend
On April 8, 2020, ADF Group's
Board of Directors approved the payment of a semi-annual dividend
of $0.01 per share, which will be
paid on May 15, 2020 to shareholders
of record as at April 30, 2020.
Conference Call with Investors
A conference call with investors is scheduled for Thursday, April 9, 2020 at 10 a.m. (Montreal time) to discuss the results of
Corporation fiscal year ended January 31,
2020.
To take part in the conference call, dial 1-888-390-0620, a few
minutes prior to the conference call scheduled start time. A replay
of this conference call will be available from Thursday, April 9, 2020 at 1:00 p.m. until 11:59 p.m., Thursday, April 16, 2020, by dialing
1-888-390-0541, followed by the access code 113212 #.
The conference call (audio) will also be available at
www.adfgroup.com. Members of the media are invited to listen
in.
ANNUAL GENERAL MEETING OF SHAREHOLDERS
In these exceptional circumstances, and amongst the several
preventative health measures adopted by the Provincial and Federal
Governments and by the Corporation to slow the spread of COVID-19,
ADF Group Inc. will hold its Annual Meeting of Shareholders via
webcasting, on Wednesday, June 10,
2020 at 11 :00 a.m.
Financial results for the first quarter ending April 30, 2020, will also be disclosed during
this Shareholders' Meeting.
Shareholders' meeting details and webcasting connection
instructions will be made available in the coming weeks.
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's 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 the section "Non-GAAP Measures" of the
Corporation's Management's Discussion and Analysis for the
definition of this metric and reconciliation to the most comparable
IFRS measures.
All amounts are in Canadian dollars, unless otherwise
indicated.
CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION
|
|
|
|
As at January
31,
|
2020
|
2019
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
ASSETS
|
|
|
Current
assets
|
|
|
Cash and cash
equivalents
|
3,983
|
4,164
|
Accounts
receivable
|
39,555
|
29,919
|
Holdbacks on
contracts
|
11,628
|
6,227
|
Current income tax
assets
|
882
|
859
|
Contract
assets
|
14,435
|
17,952
|
Inventories
|
7,898
|
8,349
|
Prepaid expenses and
other current assets
|
1,581
|
1,638
|
Total current
assets
|
79,962
|
69,108
|
Non-current
assets
|
|
|
Property, plant and
equipment
|
64,967
|
89,375
|
Right-of-use
assets
|
23,818
|
―
|
Intangible
assets
|
3,354
|
3,312
|
Other non-current
assets
|
1,443
|
1,417
|
Total assets
|
173,544
|
163,212
|
LIABILITIES
|
|
|
Current
liabilities
|
|
|
Credit
facilities
|
13,105
|
6,605
|
Accounts payable and
other current liabilities
|
30,788
|
16,857
|
Current income tax
liabilities
|
216
|
422
|
Contract
liabilities
|
3,444
|
10,920
|
Derivative financial
instruments
|
123
|
184
|
Current portion of
lease liabilities
|
1,070
|
―
|
Current portion of
long-term debt
|
1,903
|
2,272
|
Total current
liabilities
|
50,649
|
37,260
|
Non-current
liabilities
|
|
|
Long-term
debt
|
19,156
|
24,939
|
Lease
liabilities
|
4,930
|
―
|
Deferred income tax
liabilities
|
4,215
|
3,921
|
Other non-current
liabilities
|
187
|
197
|
Total
liabilities
|
79,137
|
66,317
|
SHAREHOLDERS'
EQUITY
|
|
|
Capital
stock
|
68,120
|
68,120
|
Contributed
surplus
|
6,435
|
6,432
|
Accumulated other
comprehensive income (loss)
|
6,942
|
6,648
|
Retained
income
|
12,910
|
15,695
|
Total shareholders'
equity
|
94,407
|
96,895
|
Total
liabilities and shareholders' equity
|
173,544
|
163,212
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME (LOSS)
|
|
|
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
(In thousands of
Canadian dollars, except the number of shares and the amounts per
share)
|
$
|
$
|
|
|
|
Revenues
|
179,710
|
135,073
|
Cost of goods
sold
|
163,203
|
125,520
|
Gross
Margin
|
16,507
|
9,553
|
Selling and
administrative expenses
|
16,005
|
12,181
|
Net financial
expenses
|
2,082
|
1,784
|
Foreign exchange loss
(gain)
|
406
|
(2,019)
|
|
18,493
|
11,946
|
Loss before income
tax expense (recovery)
|
(1,986)
|
(2,393)
|
Income tax expense
(recovery)
|
146
|
(2,019)
|
Net loss for the
year
|
(2,132)
|
(374)
|
Earnings per
share
|
|
|
— Basic and diluted
per share
|
(0.07)
|
(0.01)
|
Average number of
outstanding basic and diluted shares (in thousands)
|
32,635
|
32,635
|
|
|
|
|
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|
|
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
Net loss for the
year
|
(2,132)
|
(374)
|
Other comprehensive
income (loss) (a) :
|
|
|
Exchange differences on
translation of foreign operations
|
294
|
2,131
|
Comprehensive income
(loss) for the year
|
(1,838)
|
1,757
|
|
a)
Will subsequently be reclassified to net income (loss).
|
CONSOLIDATED
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Capital
Stock
|
Contributed
Surplus
|
Accumulated
Other
Comprehensive Income
(Loss)
|
Retained
Income
|
Total
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
Balance, February 1,
2018
|
68,120
|
6,423
|
4,706
|
16,533
|
95,782
|
Net loss for the
year
|
―
|
―
|
―
|
(374)
|
(374)
|
Other comprehensive
income (loss)
|
―
|
―
|
2,131
|
―
|
2,131
|
Comprehensive income
(loss) for the year
|
―
|
―
|
2,131
|
(374)
|
1,757
|
New IFRS 9 adoption
(1)
|
―
|
―
|
(189)
|
189
|
―
|
Share-based
compensation
|
―
|
9
|
―
|
―
|
9
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2019
|
68,120
|
6,432
|
6,648
|
15,695
|
96,895
|
|
|
|
|
|
|
(1)
Impact of the adoption of IFRS 9 on February 1, 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Stock
|
Contributed
Surplus
|
Accumulated
Other
Comprehensive Income
(Loss)
|
Retained
Income
|
Total
|
(In thousands of
Canadian dollars)
|
$
|
$
|
$
|
$
|
$
|
|
|
|
|
|
|
Balance, February 1,
2019
|
68,120
|
6,432
|
6,648
|
15,695
|
96,895
|
Net loss for the
year
|
―
|
―
|
―
|
(2,132)
|
(2,132)
|
Other comprehensive
income (loss)
|
―
|
―
|
294
|
―
|
294
|
Comprehensive income
(loss) for the year
|
―
|
―
|
294
|
(2,132)
|
(1,838)
|
Share-based
compensation
|
―
|
3
|
―
|
―
|
3
|
Dividends
|
―
|
―
|
―
|
(653)
|
(653)
|
Balance,
January 31, 2020
|
68,120
|
6,435
|
6,942
|
12,910
|
94,407
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
(In thousands of
Canadian dollars)
|
$
|
$
|
|
|
|
OPERATING
ACTIVITIES
|
|
|
Net loss for the
year
|
(2,132)
|
(374)
|
Non-cash
items:
|
|
|
Amortization of
property, plant and equipment
|
3,387
|
4,206
|
Amortization of
right-of-use assets
|
926
|
―
|
Amortization of
intangible assets
|
410
|
367
|
Unrealized (gain) loss
on derivative financial instruments
|
(61)
|
484
|
Unrealized foreign
exchange gain
|
(134)
|
(2,781)
|
Share-based
compensation
|
491
|
(533)
|
Income tax expense
(recovery)
|
146
|
(2,019)
|
Inventories
depreciation allowance
|
(78)
|
352
|
Net financial
expenses
|
2,082
|
1,784
|
Others
|
(276)
|
7
|
Net income adjusted
for non-cash items
|
4,761
|
1,493
|
Change in non-cash
working capital items (1)
|
(5,655)
|
10,182
|
Cash flows (used in)
from operating activities
|
(894)
|
11,675
|
|
|
|
INVESTING
ACTIVITIES
|
|
|
Acquisition of
property, plant and equipment
|
(1,186)
|
(3,273)
|
Acquisition of
intangible assets
|
(452)
|
(482)
|
Revenues from
disposals of property, plant and equipment
|
168
|
35
|
Disposal of equity
investments
|
―
|
217
|
Government
grants
|
826
|
210
|
Others
|
(26)
|
13
|
Cash flows used in
investing activities
|
(670)
|
(3,280)
|
|
|
|
FINANCING
ACTIVITIES
|
|
|
Variation in credit
facilities
|
6,500
|
(3,545)
|
Repayment of long-term
debt
|
(1,884)
|
(1,544)
|
Repayment of lease
liabilities
|
(771)
|
―
|
Dividends
paid
|
(653)
|
(653)
|
Interest
paid
|
(1,827)
|
(1,774)
|
Cash flows from (used
in) financing activities
|
1,365
|
(7,516)
|
Impact of
fluctuations in foreign exchange rate on cash flow
|
18
|
287
|
Net change in cash
and cash equivalents during the year
|
(181)
|
1,166
|
Cash, and cash
equivalents, beginning of year
|
4,164
|
2,998
|
Cash and cash
equivalents, end of year
|
3,983
|
4,164
|
|
(1)
The following table sets out in detail the components of the
"Change in non-cash working capital items":
|
|
|
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
(In thousands of CA$)
|
$
|
$
|
|
|
|
Accounts
receivable
|
(10,360)
|
5,601
|
Holdbacks on
contracts
|
(5,491)
|
(936)
|
Contract
assets
|
3,660
|
13,477
|
Inventories
|
554
|
(3,413)
|
Prepaid expenses and
other current assets
|
74
|
851
|
Accounts payable and
other current liabilities
|
13,597
|
(12,553)
|
Contract
liabilities
|
(7,679)
|
6,955
|
Other non-current
liabilities
|
(10)
|
200
|
Change in non-cash
working capital items
|
(5,655)
|
10,182
|
SEGMENTED INFORMATION
The Corporation operates one operational sector, being, the
non-residential construction industry, primarily in the United States and Canada. This sector includes the following
areas of expertise: 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,
|
2020
|
2019
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Revenues
|
|
|
Canada
|
13,906
|
3,518
|
United
States
|
165,804
|
131,555
|
|
179,710
|
135,073
|
|
|
|
|
|
|
As at January
31,
|
2020
|
2019
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Non-current assets
(1)
|
|
|
Canada
|
48,281
|
48,750
|
United
States
|
45,301
|
45,355
|
|
93,582
|
94,105
|
|
|
(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, 2020, 72% of
the Corporation's revenues were realized with four (4) clients,
each representing 10% and more of its revenues (79% with three (3)
clients during the fiscal year ended January
31, 2019).
The following table presents the breakdown of revenues for each
of these clients:
|
Fiscal Years Ended
January 31,
|
2020
|
2019
|
|
United
States
|
United
States
|
(In thousands of
CA$)
|
$
|
$
|
|
|
|
Client A
|
20,518
|
60,503
|
Client B
|
32,812
|
―
|
Client C
|
43,415
|
32,480
|
Client D
|
31,894
|
―
|
Client E
|
―
|
13,168
|
|
128,639
|
106,151
|
SOURCE ADF Group Inc.