Results for the second quarter ended July 31, 2012

TERREBONNE, QC, Sept. 6, 2012 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) closed the second quarter of the 2013 fiscal year with revenues of $10.6 million, lower than those for the same quarter of the 2012 fiscal year. For the six-month period ended July 31, 2012, ADF Group recorded year-to-date revenues of $23.0 million, compared with $26.3 million the previous year.

The second-quarter gross margin, as a percentage of revenues, stood at 16% compared with 24% for the corresponding quarter the previous year, whereas the gross margin for the six-month period ended July 31, 2012 stood at 15% compared with 24% a year earlier. The decrease in revenues and gross margin, which started in the third quarter of the 2012 fiscal year, is for the most part explained by the completion of work related to the World Trade Center projects in New York and by the different mix of projects currently underway.

ADF posted second-quarter net earnings of $29,000 ($0.00 per share, basic and diluted), compared with $0.8 million ($0.02 per share, basic and diluted) a year ago. For the first six months, net earnings totalled $0.1 million ($0.00 per share, basic and diluted), compared with $1.9 million ($0.06 per share, basic and diluted) for the first half of the previous year. Besides the negative impact stemming from the different revenue mix, this decline is attributable to the realization of lower exchange gains than the previous year.

The Corporation's operating activities used cash flows of $1.8 million in the second quarter and $1.7 million during the six-month period ended July 31, 2012. As at July 31, 2012, the Corporation had working capital of $41 million, including short-term available liquidities (cash, cash equivalents and short-term investments) of $19.3 million. Therefore, available liquidities exceeded ADF Group's total debt by $14.4 million, placing the Corporation in a solid position to support its ongoing operations, pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy implemented at the beginning of fiscal 2012.

Financial Highlights

Periods ended July 31	Three Months				Six Months
	2012		2011		2012		2011
(In thousands of dollars, and dollars per share)	$		$		$		$
Revenues	10,557		13,118		23,021		26,347
EBITDA	663		2,527		1,600		4,622
Net income	29		774		120		1,855
- Per share (basic and diluted)	0.00		0.02		0.00		0.06
Cash flows from (used in) operating activities	(1,777)		4,202		(1,662)		9,289
Average number of outstanding shares (basic, in thousands)	32,464		32,787		32,464		32,781
Average number of outstanding shares (diluted, in thousands)	32,869		33,376		32,900		33,365

New orders

On July 26, 2012, the Corporation announced the award of three new contracts in Canada worth a total of $18.7 million. The largest of these contracts concerns the fabrication of the steel structure of a plant in Northern Alberta for a company specializing in the petroleum industry. The two other contracts are for the fabrication and delivery of steel components for two bridges, one in Calgary, Alberta and one in Montreal, Quebec. These three contracts will be completed by the end of the second quarter of the 2014 fiscal year.

Dividend

The Corporation announces today the payment of a second semi-annual dividend of $0.01 per subordinate voting share and multiple voting share, which will be paid on October 15, 2012 to shareholders of record as at September 21, 2012.

Outlook

As at July 31, 2012, ADF Group's order backlog stood at $41 million, the execution schedule of which should extend until the end of the second quarter of the Corporation's 2014 fiscal year.

"Although prices in ADF's traditional markets remain low and the U.S. East Coast market shows little signs of improvement in the short-term, the announcement of new contracts in Canada, and more particularly the award of a first contract in the petroleum market segment in Western Canada, allows the Corporation to foresee the future with prudent optimism" confirmed Mr. Jean Paschini, Chairman of the Board and Chief Executive Officer.

In the short term, the Corporation is pursuing its analysis and efforts with regard to the possibility of setting up a fabrication plant in the United States, as well as the opportunity to make targeted acquisitions, which would allow the Corporation to improve its overall offer and extend the scope of its activities. In addition, in order to increase its order backlog, the Corporation is pursuing its efforts to develop the public infrastructure market segment in Canada, which is currently more dynamic.

About ADF Group Inc.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication 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.

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.

All amounts are in Canadian dollars, unless otherwise indicated.

CONFERENCE CALL WITH INVESTORS

To discuss ADF Group's results for the 3-month and 6-month periods ended July 31, 2012,
September 6, 2012 at 10:00 a.m. (Montreal time)

To participate in the conference call, please dial 1-888-231-8191 a few minutes before the start of the call.

For those unable to participate, a taped rebroadcast will be available from
Thursday, September 6, 2012 at 1:00 p.m. until midnight Thursday September 13, 2012,
by dialing 1-855-859-2056; access code 25481106.

The conference call (audio) will also be available at www.adfgroup.com
Members of the media are invited to listen in.

 

 

 

SOURCE: ADF GROUP INC.

Source:
ADF Group Inc.

Contact:
Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer
Jean-François Boursier, CPA, CA, Chief Financial Officer

Telephone:  [phone]
Web Site:  www.adfgroup.com