Results for the second quarter ended July 31, 2014

TERREBONNE, QC, Sept. 11, 2014 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), closed the second quarter of the 2015 fiscal year with revenues of $20.4 million, up from those for the same quarter of the previous fiscal year. For the six-month period ended July 31, 2014, ADF Group recorded revenues of $44.8 million, compared with $29.9 million the previous year. The increase compared with the previous year is mainly due to the Quebec City's amphitheater project. Although revenues are up compared with last year's corresponding periods, the trend of the last quarters is down due to the completion of the projects of Syncrude, in Alberta, and the Quebec City and Trois-Rivières amphitheaters.

The second-quarter gross margin, as a percentage of revenues, stood at 10.8% compared with 23.9% for the corresponding quarter the previous year, whereas the gross margin for the six-month period ended July 31, 2014 stood at 11.2% compared with 18.7% a year earlier. These decreases are mainly explained by the completion of the previously mentioned projects and the start up of the new fabrication plant in Great Falls, Montana.

ADF posted second-quarter net loss of $0.3 million ($0.01 per share, basic and diluted), compared with net earnings of $1.2 million ($0.04 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 $1.0 million ($0.03 per share, basic and diluted) for the first half of the previous year.

The Corporation's operating activities used cash flows of $9.6 million in the second quarter and $11.2 million during the six-month period ended July 31, 2014. As at July 31, 2014, the Corporation had a working capital of $30.8 million, including short-term available liquidities (cash, cash equivalents and short-term investments) of $6.5 million. The Corporation remains in a solid position to support its ongoing operations, pursue its development projects and remunerate its shareholders in accordance with the dividend payment policy.

As at July 31, 2014, the Corporation backlog stood at $9 million. Since that date, the Corporation obtained new fabrication contracts in Canada and in the United States, totalling $5.3 million. These new projects will be completed in the coming months.

Financial Highlights

Outlook

"As announced this past February, the construction of our new industrial paint and coating shop is underway and is going as planned. The commissioning of the new paint shop is scheduled for the end of 2014. We expect that our recent development projects, together with a market that is still impacted by a strong pressure on prices, will continue to impact our results in the short-term.

ADF's markets continue to show positive signs of improvement and we are bidding actively. This being said, we remain committed to our prudent and selective approach adopted in the past years and continue to privilege profitable and long-term growth. Our strategy may, from time to time, postpone the conclusion of certain agreements, however it allows us to assure our shareholders of a long-term profitability" concluded Mr. Jean Paschini, Co-Chairman of the Board and Chief Executive Officer.

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, 2014 to shareholders of record as at September 30, 2014.

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. The Corporation operates two fabrication plants, one in Canada and one in the United States.

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.

SOURCE ADF Group Inc