ADF Group Announces the Results for the Three-Month and Six-Month Periods Ended July 31, 2021

HIGHLIGHTS
(All amounts are in Canadian dollars, unless otherwise indicated.)

• Revenues of $73.2 million and $123.6 million recorded during the 3-month and 6-month periods ended July 31, 2021, respectively, up compared with the same periods a year ago.
• Order backlog totalling $374.0 million as at July 31, 2021, excluding new contracts totalling $50.0 million signed since July 31, 2021.
• Limited impact of COVID-19 on ADF's operations during the first semester ended July 31, 2021.

TERREBONNE, QC, Sept. 9, 2021 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), recorded revenues of $73.2 million during the second quarter ended July 31, 2021, compared with $42.5 million for the same period a year earlier. After the first six months of the fiscal year, revenues totaled $123.6 million, which is $35.3 million more than the same period a year earlier, in line with the growth of the order backlog in recent quarters.

Gross margin, as a percentage of revenues, went from 17.4% for the 3-month period ended July 31, 2020, to 7.7% for the same period ended July 31, 2021. Gross margin, as a percentage of revenues, went from 13.9%, during the first semester ended July 31, 2020, to 10.9% for the same period ended July 31, 2021. These decreases are mainly due to the pressure exerted on margins given the fabrication start of some projects that were signed with lower prices.

For the quarter ended July 31, 2021, ADF recorded a net income of $1.5 million ($0.05 per share, basic and diluted) compared with a net income of $2.1 million ($0.06 per share, basic and diluted) a year earlier. At the close of the first semester, being July 31, 2021, net income totaled $5.9 million ($ 0.18 per share, basic and diluted) compared to net income of $ 2.2 million (0.07 $ per share, basic and diluted) for the same period one year earlier.

The Corporation's backlog stood at $374.0 million as at July 31, 2021, compared with $436.2 million as at January 31, 2021. The current order backlog will extend until end of the fiscal year ending January 31, 2023.

As of July 31, 2021, the Corporation's working capital stood at $33.6 million. Operating activities generated $10.4 million in cash during the first six months ended July 31, 2021. The Corporation remains in a good position to continue its current operations and carry out its development projects.

Financial Highlights

	3 Months		6 Months
Periods ended July 31,	2021	2020	2021	2020
(In thousands of dollars, and dollars per share)	$	$	$	$
Revenues	73,171	42,496	123,558	88,293
Earnings before interest, taxes, depreciation and amortization (EBITDA)	3,074	4,577	9,186	7,544
Net income	1,498	2,112	5,893	2,180
— Per share (basic and diluted)	0.05	0.06	0.18	0.07
Cash flows(used in) from operating activities	(1,854)	9,575	10,376	21,622
(In thousands)	Number	Number	Number	Number
Average number of outstanding shares (basic and diluted)	32,635	32,635	32,635	32,635

New Contracts

The Corporation announces today the signing of new contracts totalling nearly $50.0 million, in Canada and the United States. The largest of these new contracts was won in the transportation infrastructure sector in the Western USA. Fabrication work is scheduled to begin in early 2022 at both ADF's plants located in Terrebonne, Quebec and in Great Falls, Montana, and run until the fall of 2022, followed by the steel erection work of this new structure at the job site, which is scheduled to extend approximately over a 10-month period.

Outlook

"The three-month and six-month periods ending this July 31^st, reflect the efforts made toward growing the order backlog, with a marked increase in revenues. The revenue mix for the quarter ended July 31, 2021, however put some pressure on the quarterly margins," said Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer.

"That said, the level of activity in markets served by ADF remains high, and although the announcement of new contracts takes a little longer than anticipated, we are still confident that we can continue to grow the Corporation's order backlog," concluded Mr. Paschini.

Dividend

On September 8, 2021, ADF Group announced the payment of a semi-annual dividend of $0.01 per subordinate voting share and per multiple voting shares, which will be paid on October 15, 2021 to shareholders of record as of September 30, 2021.

COVID-19

The Corporation has taken all necessary steps to protect its employees and business partners, and will continue to follow the advice and recommendations of local authorities wherever the Corporation conducts business. These measures have resulted in operational costs and inefficiencies that have been offset by the government incentives previously mentioned. This situation is changing rapidly and the Corporation will continue to monitor and mitigate development affecting its personnel, suppliers, customers and the general public to the extent it can.

Conference Call with Investors

A conference call with investors is scheduled for this morning, September 9, 2021 at 10 a.m. (Montreal time) to discuss the results of Corporation second quarter and first semester ended July 31, 2021.

To take part in the conference call, dial 1 [phone], a few minutes prior to the conference call scheduled start time. Members of the media are invited to listen in.

A replay of this conference call will be available from 1:00 p.m. today, until Thursday, September 16, 2021, by dialing 1 [phone], followed by the access code 632398#. The conference call (audio) will also be available at www.adfgroup.com.

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.

SOURCE ADF Group Inc.

ADF GROUP INC., Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer; Jean-François Boursier, CPA, CA, Chief Financial Officer, Tel.: [phone] (#2283) / Website: www.adfgroup.com

Related Links

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