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ADF GROUP INC. ANNOUNCES THE RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2024
ADF GROUP INC. ANNOUNCES THE RESULTS FOR THE FISCAL YEAR ENDED JANUARY 31, 2024 Canada ...
About this update from Adf Group Inc.
ADF GROUP INC. 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MARGIN-RIGHT:0em; MARGIN-BOTTOM:0em; MARGIN-LEFT:0.83em !IMPORTANT } .prntal{ TEXT-ALIGN: LEFT } .prnvab{ VERTICAL-ALIGN: BOTTOM } .prnsbbb1{ BORDER-BOTTOM:black 1pt } .prnsbtb0{ BORDER-TOP:black 0pt } Canada NewsWire HIGHLIGHTS Revenues of $331.0 million , up by $80.1 million or 32% from the previous fiscal year. Net income of $37.6 million , up by 152% from the fiscal year ended January 31, 2023 . Cash flow from operations of $77.9 million for the fiscal year ended January 31, 2024 . The Corporation's order backlog (1 ) reached $510.9 million as at January 31, 2024 . TERREBONNE, QC , April 11, 2024 /CNW/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX) recorded revenues of $331.0 million during the fiscal year ended January 31, 2024, compared with $250.9 million the previous fiscal year. Gross margin, as a percentage of revenues (1) , went from 14.2% for the fiscal year ended January 31, 2023 , to 22.0% for the fiscal year ended January 31, 2024 . This increase as a percentage of revenues is explained by a higher fabrication volume, generating better absorption of fixed costs, and by the improvement in internal efficiency generated by investments made in recent years in robotization and increased automation of fabrication processes at ADF's plant located in Terrebonne, Quebec . Earning before interest, taxes, depreciation, and amortization (adjusted EBITDA) (2) for the fiscal year ended January 31, 2024, totalled $55.9 million , which is $29.8 million or 114% higher than at the same date a year earlier. For the fiscal year ended January 31, 2024 , ADF posted net income of $37.6 million ( $1.15 per share basic and diluted) compared with net income of $14.9 million ( $0.46 per share, basic and diluted) a year earlier. As at January 31, 2024 , the Corporation had a working capital (1) of $110.1 million , 68% more than at the same date a year ago. In addition, the Corporation generated cash flow from operating activities totalling $77.9 million during the fiscal year ended January 31, 2024 . As at January 31, 2024 , the Corporation's order backlog (1) stood at $510.9 million , compared with $376.5 million as at January 31, 2023. The majority of projects in hand will be completed progressively by the second semester of the fiscal year ending January 31, 2026. Financial Highlights Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars, and dollars per share) $ $ Revenues 331,023 250,890 Adjusted EBITDA (2) 55,939 26,119 Income before income tax expense 46,406 16,854 Net income for the year 37,622 14,935 — Basic and diluted per share 1.15 0.46 Cash flows from (used in) operating activities 77,860 (2,612) (In thousands) Number Number Average number of outstanding shares (basic and diluted) 32,640 32,640 Outlook "These results reflect ADF's efforts and strategies over the past few years, from the construction of our state-of-the-art fabrication plant in Great Falls, Montana nearly 10 years ago, to our investment in robotization and increased automation of our fabrication process at our Terrebonne plant, in Québec," said Jean Paschini , Chairman of the Board of Directors and Chief Executive Officer. Mr. Paschini concluded, "during this period, ADF has invested over $110 million to strengthen its position as one of North America's leading fabricators of all types of steel structures and heavy steel components. Today, we are reaping the fruits of this work and the sustained efforts of all ADF employees." ________________________________ 1. The order backlog, gross margin as a percentage of revenues and working capital are additional financial measures. Refer to the "Non-GAAP and Other Financial Measures" section herein for the definition of these indicators. 2. Adjusted EBITDA is a non-GAAP financial measure.  Refer to the "Non-GAAP Financial Measures and Other Financial Measures" section of this press release for the definition of this indicator. Dividend On April 10, 2024 , 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 May 15, 2024 , to Shareholders of Record as at April 26, 2024 . Conference Call with Investors A conference call with investors is scheduled for Thursday, April 11, 2024 , at 10 a.m. ( Montreal time) to discuss the results of fiscal year ended January 31, 2024 . To join the conference call without operator assistance, you can register with your phone number on https://emportal.ink/4bZ6lFj to receive an instant automatic reminder. You can also join the conference call with operator assistance by dialing 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 1:00 p.m. on April 11, 2024 , to April 18, 2024 , by dialing 1-888-259-6562 , followed by access code 855225 # . The conference call (audio) will also be available at the www.adfgroup.com . Members of the media are invited to join in listening mode. ____________________________________________________________________________________________ ANNUAL GENERAL MEETING OF SHAREHOLDERS FOR THE FISCAL YEAR ENDED JANUARY 31, 2024 ADF Group Inc.'s Annual Meeting of Shareholders will be held on: Date: Tuesday, June 11, 2024 Time: 11 a.m. Location: Sheraton Laval Hotel 2440, Autoroute des Laurentides, Laval, Quebec, Canada Results for the first quarter ended April 30, 2024, will also be released at the Annual Meeting of Shareholders. ___________________________________________________________________________________________ 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-GAAP Financial Measures and Other Financial Measures | Are measures derived primarily from the consolidated financial statements but are not a standardized financial measure under the financial reporting framework used to prepare the Corporation's financial statements. Therefore, readers should be careful not to confuse or substitute them with performance measures prepared in accordance with GAAP. In addition, readers should avoid comparing these non-GAAP financial measures to similarly titled measures provided or used by other issuers. The definition of these indicators and their reconciliation with comparable International Financial Reporting Standards measures issued by the International Accounting Standards Board ("IFRS Accounting Standards") is as follows: Adjusted EBITDA Adjusted EBITDA shows the extent to which the Corporation generates profits from operations, without considering the following items: Net financial expenses; Income tax expense ; Foreign exchange losses, and Depreciation and amortization of property, plant and equipment, intangible assets, and right-of-use assets. Net income is reconciled with adjusted EBITDA in the table below: Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars) $ $ Net income 37,622 14,935 Income tax expense 8,784 1,919 Net financial expenses 2,573 1,999 Amortization 5,800 5,323 Foreign exchange loss 1,160 1,943 Adjusted EBITDA 55,939 26,119 Gross Margin as a Percentage of Revenues Gross margin as a percentage of revenue indicator is used by the Corporation to assess the level of profitability for a given period based on the project mix for that same period. This indicator is subject to fluctuations in project prices and also in the operational efficiency of the Corporation. The indicator of gross margin as a percentage of revenues results from dividing gross margin by revenues. Order Backlog The order backlog is a measure used by the Corporation to assess future revenue levels. The order backlog includes firm orders obtained by the Corporation, either through a firm contract or a formal notice to proceed confirmed by the client. The order backlog disclosed by the Corporation therefore includes the portion of confirmed contracts that have not been put into production. Working Capital The working capital indicator is used by the Corporation to assess whether current assets are sufficient to meet current liabilities. It is therefore equal to current assets, less current liabilities. All amounts are in Canadian dollars unless otherwise specified. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION As at January 31, 2024 2023 (In thousands of Canadian dollars) $ $ ASSETS Current assets Cash and cash equivalents 72,379 7,193 Accounts receivable 77,844 90,921 Current income tax assets 115 714 Contract assets 44,862 42,541 Inventories 13,534 10,679 Investment tax credit 3,112 ― Prepaid expenses and other current assets 3,730 2,332 Total current assets 215,576 154,380 Non-current assets Property, plant and equipment 86,615 90,378 Right-of-use assets 21,173 21,848 Intangible assets 3,925 3,640 Deferred income tax assets 266 ― Other non-current assets 1,050 1,371 Total assets 328,605 271,617 LIABILITIES Current liabilities Accounts payable and other current liabilities 55,441 39,985 Current income tax liabilities ― 235 Contract liabilities 46,168 44,533 Other current liabilities ― 964 Current portion of lease liabilities 827 806 Current portion of long-term debt 3,040 2,258 Total current liabilities 105,476 88,781 Non-current liabilities Long-term debt 42,138 44,927 Lease liabilities 2,839 3,528 Deferred income tax liabilities 15,876 9,240 Other non-current liabilities 146 156 Total liabilities 166,475 146,632 SHAREHOLDERS' EQUITY Capital stock 68,127 68,127 Contributed surplus 6,435 6,435 Accumulated other comprehensive income 8,283 8,107 Retained income 79,285 42,316 Total shareholders' equity 162,130 124,985 Total liabilities and shareholders' equity 328,605 271,617 CONSOLIDATED STATEMENTS OF INCOME Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars, except the number of shares and the amounts per share) $ $ Revenues 331,023 250,890 Cost of goods sold 258,102 215,321 Gross Margin 72,921 35,569 Selling and administrative expenses 22,782 14,773 Net financial expenses 2,573 1,999 Foreign exchange loss 1,160 1,943 26,515 18,715 Income before income tax expense 46,406 16,854 Income tax expense 8,784 1,919 Net income for the fiscal year 37,622 14,935 Earnings per share — Basic and diluted per share 1.15 0.46 Average number of outstanding basic and diluted shares (in thousands) 32,640 32,640 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars) $ $ Net income for the fiscal year 37,622 14,935 Other comprehensive income : Exchange differences on translation of foreign operations (a) 176 2,246 Comprehensive income for the fiscal year 37,798 17,181 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, 2022 68,120 6,435 5,861 28,034 108,450 Net income for the fiscal year ― ― ― 14,935 14,935 Other comprehensive income ― ― 2,246 ― 2,246 Comprehensive income for the fiscal year ― ― 2,246 14,935 17,181 Dividends ― ― ― (653) (653) Shares issuance upon exercise of options 7 ― ― ― 7 Balance, January 31, 2023 68,127 6,435 8,107 42,316 124,985 Capital Stock Contributed Surplus Accumulated Other Comprehensive Income Retained Income Total (In thousands of Canadian dollars) $ $ $ $ $ Balance, February 1, 2023 68,127 6,435 8,107 42,316 124,985 Net income for the fiscal year ― ― ― 37,622 37,622 Other comprehensive income ― ― 176 ― 176 Comprehensive income for the fiscal year ― ― 176 37,622 37,798 Dividends ― ― ― (653) (653) Balance, January 31, 2024 68,127 6,435 8,283 79,285 162,130 CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars) $ $ OPERATING ACTIVITIES Net income for the fiscal year 37,622 14,935 Non-cash items: Amortization of property, plant and equipment 4,612 4,118 Amortization of right-of-use assets 753 835 Amortization of intangible assets 435 370 Gain on disposal of property, plant and equipment (31) (802) Unrealized (gain) loss on derivative financial instruments (1,168) 968 Unrealized foreign exchange gain (176) (1,158) Share-based compensation 4,576 724 Income tax expense 8,784 1,919 Government grants ― (1,280) Net financial expenses 2,573 1,999 Others 811 (250) Net income adjusted for non-cash items 58,791 22,378 Change in non-cash working capital items (1) 19,162 (25,850) Income tax recovery (paid) (93) 860 Cash flows from (used in) operating activities 77,860 (2,612) INVESTING ACTIVITIES Acquisition of property, plant and equipment (5,768) (11,463) Acquisition of intangible assets (720) (698) Others 222 80 Cash flows used in investing activities (6,266) (12,081) FINANCING ACTIVITIES Issuance of long-term debts ― 20,000 Repayment of the long-term debt (2,296) (2,216) Payment of lease liabilities (686) (804) Dividends paid (653) (653) Interest paid (3,053) (2,177) Others ― 7 Cash flows (used in) from financing activities (6,688) 14,157 Impact of fluctuations in foreign exchange rate on cash and cash equivalents 280 599 Net change in cash and cash equivalents during the fiscal year 65,186 63 Cash and cash equivalents, beginning of fiscal year 7,193 7,130 Cash and cash equivalents, end of fiscal year 72,379 7,193 (1) The following table sets out in detail the components of the "Change in non-cash working capital items": Fiscal Years Ended January 31, 2024 2023 (In thousands of Canadian dollars) $ $ Accounts receivable 13,589 (48,647) Contract assets (2,217) (12,011) Inventories (2,849) (550) Prepaid expenses and other current assets (1,213) 103 Accounts payable and other current liabilities 10,749 5,478 Contract liabilities 1,113 29,787 Others (10) (10) Change in non-cash working capital items 19,162 (25,850) 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, 2024 2023 (In thousands of Canadian dollars) $ $ Revenues Canada 36,060 36,913 United States 294,963 213,977 331,023 250,890 As at January 31, 2024 2023 (In thousands of Canadian dollars) $ $ Non-current assets (1) Canada 69,359 74,424 United States 43,404 42,813 112,763 117,237 (1) The non-current assets mainly include property, plant and equipment, intangible assets, right-of-use 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, 2024, 69% of the Corporation's revenues was realized with four (4) clients, each representing 10% and more of its revenues (62% with three (3) clients during the fiscal year ended January 31, 2023 ). The following table presents the breakdown of revenues for each of these clients: Fiscal Years Ended January 31, 2024 (1) 2023 (1) (In thousands of Canadian dollars) $ $ Client A 45,739 ― Client B ― 57,386 Client C 42,086 ― Client D ― 46,069 Client E 92,240 52,886 Client F 48,723 ― 228,788 156,341 (1) From the United States SOURCE ADF Group Inc. View original content: http://www.newswire.ca/en/releases/archive/April2024/11/c7690.html