Market Overview

ADF Group Inc. annonces the results for the fiscal year ended January 31, 2018


ADF Group Inc. annonces the results for the fiscal year ended January 31, 2018

Canada NewsWire


  • Revenues up by 75% compared with the previous year, reaching $180.5 million.
  • Revenues before income tax expense of $2.2 million, down by $0.3 million compared with a year ago.
  • Negative net result of $7.2 million, including a non-recurring non cash income tax expense totalling $9.2 million.
  • The Corporation's backlog stood at $85.5 million on January 31, 2018.

TERREBONNE, QC, April 12, 2018 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX:DRX) recorded revenues of $180.5 million during the fiscal year ended January 31, 2018, compared with $102.8 million the previous fiscal year. This increase in revenues results from the rise in fabrication activities across both of the Corporation's plants.

The gross margin as a percentage of revenues went from 16.7% during the fiscal year ended January 31, 2017, to 8.9% during the fiscal year ended January 31, 2018. This drop in gross margin was mainly lead by the current pressure on price in the markets served by ADF.

The Corporation recorded a $9.2 million non-recurrent non-cash income tax expense, resulting almost entirely from the decrease of deferred U.S. subsidiaries income tax assets. This decrease had to be taken because of the change to the U.S. federal tax rates for the Corporation's U.S. subsidiaries which had an impact of $1.7 million, and the non-recognition of deferred U.S. subsidiaries income tax assets following a tax settlement, resulting in an additional impact of $7.5 million. However, it is important to point out that once the Corporation has a better outlook on its U.S. subsidiaries' future profitability, the written off assets may be recognized when it becomes more likely than not that these assets will be realized.

In light of this one-time charge, ADF recorded a negative net income of $7.2 million (-$0.22 basic and diluted per share) during the fiscal year ended January 31, 2018, compared with a net income of $1.5 million ($0.05 basic and diluted per share) a year ago. It is also important to underline that had it not been for the change to the U.S. federal tax rates and the write-off of deferred income tax assets, the Corporation's net income for the fiscal year ended January 31, 2018, would have amounted to $2.0 million or $0.06 basic and diluted per share.

On January 31, 2018, the Corporation had $34.8 million in working capital, up from January 31, 2017. On January 31, 2018, cash and cash equivalents totalled $4.9 million, up by $4.6 million compared with January 31, 2017.

The Corporation remains in a solid position to support its ongoing operations and pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy.

As at January 31, 2018, the Corporation order backlog totalled $85.5 million, compared with $194.5 million as at January 31, 2017. These contracts will be progressively completed by the end of the fiscal year ending January 31, 2020.


Financial Highlights

Fiscal Years Ended January 31,



(In thousands of CA$, and dollars per share)









Income before income tax expense



Net income for the year



—      Basic per share



—      Diluted per share



Average number of outstanding shares (basic, in thousands)



Average number of outstanding shares (diluted, in thousands)





"Despite the negative net income which was driven by this one-time non-cash tax adjustment and the uncertainties in our markets, our revenues for fiscal 2018 increased by about $80 million compared with fiscal 2017, and when we exclude this tax adjustment, the net income also improved " indicated Mr. Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer.

"Despite this uncertain environment, we continue focusing on our growth objectives" concluded Mr. Paschini.


On April 11, 2018, 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 16, 2018 to shareholders of record as at April 30, 2018.

Conference Call with Investors

A conference call with investors is scheduled for April 12, 2018 at 10 a.m. (Eastern time) to discuss the results of Corporation fiscal year ended January 31, 2018.

To take part in the conference call, dial 1 (866) 865-3087, a few minutes prior to the conference call scheduled start time. A replay of this conference call will be available from Thursday, April 12, 2018 at 1:00 p.m. until 11:59 p.m., Thursday, April 19, 2018, by dialing 1 (855) 859-2056, followed by the access code 5199297.

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

Annual Meeting of Shareholders

ADF Group Inc. Annual Meeting of Shareholders will be held on:



Wednesday, June 13, 2018


11:00 a.m.


Imperia Hotel & Suites

2935 de la Pinière Boulevard, Terrebonne, Québec, Canada


Financial results for the first quarter ending April 30, 2018, will also be disclosed at the Corporation's shareholders meeting.

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 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 IRFS measures.

All amounts are in Canadian dollars, unless otherwise indicated.



As at January 31,



(In thousands of Canadian dollars)




Current assets

Cash and cash equivalents



Accounts receivable



Holdbacks on contracts



Income tax assets



Work in progress






Derivative financial instruments


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