TERREBONNE, QC, Dec. 6, 2013 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), closed the third quarter of the 2014 fiscal year with revenues of $33.8 million, compared with $7.7 million during the same quarter of the previous fiscal year. For the nine-month period ended October 31, 2013, ADF Group recorded revenues of $63.7 million, up by $33.0 million compared with the same period last year. These significant increases are attributable to the recently awarded contracts, particularly the Trois-Rivières and Quebec City amphitheaters, which started to yield results, and by the acceleration of the contract in Western Canada.
The third-quarter gross margin, as a percentage of revenues, stood at 25.9% compared with 2.3% negative gross margin for the corresponding quarter the previous year, whereas the gross margin for the nine-month period ended October 31, 2013 stood at 22.5% compared with 10.8% a year earlier. These increases are mainly explained by productivity improvements attributable to the additional workload, by the completion of certain projects with less favorable margins which exerted downward pressure on last year's margin, and the acceleration of the project in Western Canada, mentioned previously.
ADF posted third-quarter net earnings of $4.4 million ($0.13 per share, basic and diluted), compared with a net loss of $1.2 million ($0.04 per share, basic and diluted) a year ago. For the first nine months, net earnings totalled $5.3 million ($0.16 per share, basic and diluted), compared with a net loss of $1.0 million for the same period in 2012 (0.03 per share, basic and diluted).
The Corporation's operating activities generated cash flows of $9.2 million in the third quarter and $7.7 million during the nine-month period ended October 31, 2013. As at October 31, 2013, the Corporation had working capital of $27.7 million, including short-term available liquidities (cash, cash equivalents and short-term investments) of $16.0 million. Therefore, available liquidities exceeded ADF Group's total debt by $13.1 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.
Financial Highlights
| 3 Months | 9 Months | |||
| Periods ended October 31 | 2013 | 2012 | 2013 | 2012 |
| (In thousands of dollars, and dollars per share) | $ | $ | $ | $ |
| Revenues | 33,781 | 7,723 | 63,706 | 30,744 |
| EBITDA | 6,789 | (795) | 9,826 | 805 |
| Net income | 4,380 | (1,160) | 5,330 | (1,040) |
| - Per share (basic and diluted) | 0.13 | (0.04) | 0.16 | (0,03) |
| Cash flows from (used in) operating activities | 9,223 | 749 | 7,741 | (913) |
| Average number of outstanding shares (basic, in thousands) | 32,463 | 32,455 | 32,456 | 32,461 |
| Average number of outstanding shares (diluted, in thousands) | 33,088 | 32,455 | 32,987 | 32,461 |
Outlook
During the quarter ended October 31, 2013, in accordance with the implementation of its business plan, ADF increased its revenues and almost completed the construction of its new fabrication plant located in Great Falls, Montana. ADF expects fabricating its very first steel pieces in early 2014. As at October 31, 2013, ADF Group's order backlog totalled $55.4 million, and will be progressively executed over the next twelve months.
In light of the results achieved to date, the Corporation now expects that total revenues for the 2014 fiscal year will exceed $90.0 million. However, ADF anticipates that the level of activity for its Terrebonne plant will be lower in fiscal 2015, than that achieved in the current fiscal year, and to which will be gradually added the sales generated by the new plant in Montana. However, the outlook is more promising in Western Canada, where important investments were recently announced in Northern Alberta.
"We have recorded our highest level of quarterly revenues in almost ten years. In addition, despite a still difficult market environment, our prudent and structured management approach has allowed us to carry out a major strategic investment program in Montana, all the while preserving a healthy financial position" added Mr. Jean Paschini, Co-Chairman of the Board and Chief Executive Officer.
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 9-month periods ended October 31, 2013,
December 6, 2013 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
Friday, December 6, 2013 at 1:00 p.m. until midnight Friday, December 13, 2013,
by dialing 1-855-859-2056; access code 15857609.
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.
Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer
Jean-François Boursier, CPA, CA, Chief Financial Officer
Telephone: (450) 965-1911 / 1 (800) 263-7560
Web Site: www.adfgroup.com
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