ADF Group announces the results for the first quarter ended April 30, 2019

HIGHLIGHTS

• Revenues and net income are up compared with the same period a year ago.
• $73.0 million worth of new contracts signed in the first quarter.
• Order backlog reached $255.4 million as at April 30, 2019, up compared with January 31, 2019.

TERREBONNE, QC, June 12, 2019 /CNW Telbec/ - ADF GROUP INC. ("ADF" or the "Corporation") (TSX: DRX), recorded revenues of $37.1 million during the first quarter ended April 30, 2019, compared with $28.5 million for the same quarter a year ago.

The gross margin, as a percentage of revenues, went from 2.8% during the quarter ended April 30, 2018, to 15.5% during the three-month period ended April 30, 2019. This increase, as a percentage of revenues, is attributable to a better absorption of fixed costs in line with the increase in fabrication volume. It should be noted that the results for the three-month period ended April 30, 2018 were impacted by the uncertainty surrounding the introduction of import taxes on steel and aluminum.

For the first quarter ended April 30, 2019, ADF recorded a net income of $1.6 million ($0.05 basic and diluted per share) compared with a net loss of $910,000 (($0.03) basic and diluted per share) a year ago.

The order backlog of the Corporation stood at $255.4 million as at April 30, 2019, compared with $219.5 million as at January 31, 2019. The current order backlog will extend until end of the fiscal year ending January 31, 2021.

On April 30, 2019, working capital stood at $32.7 million. Operational activities required $2.8 million in liquidities during the quarter ended April 30, 2019, in order to support the increase in activities. The Corporation remains in a sound position to support its ongoing operations and pursue its development projects.

New Orders

On February 12, 2019, the Corporation announced a series of new contracts worth a total of $73.0 million, in the recreational and commercial market sectors in Western USA. The contracts consist in the design and engineering of connections, fabrication, including the procurement of raw material (steel) and industrial coating, as well as the installation of complex steel structures and heavy steel components. These contracts will be carried out at ADF's fabrication plant, in Great Falls, Montana, U.S.A. Fabrication work is scheduled to start soon, and will extend until the end of the fiscal year 2020.

Outlook

"We are obviously pleased with the improvement of our first-quarter results. As we have mentioned repeatedly, the growth of our order backlog is paramount to the Corporation's success, and allows us to have a positive outlook for the future" indicated Mr. Jean Paschini, Co-Chairman of the Board of Directors and Chief Executive Officer. Mr. Paschini added "moreover, despite the increase in our order backlog, we still have excess fabrication capacity."

Conference Call with Investors

A conference call with investors is scheduled for today, June 12, 2019, at 10 a.m. (Eastern time) to discuss the results of Corporation first quarter results ended April 30, 2019.

To take part in the conference call, dial 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 June 12, 2019 at 1:00 p.m. until midnight, June 19, 2019, by dialing 1-888-390-0620, followed by the access code 592260 #.

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

Annual Meeting of Shareholders

ADF Group is holding its annual and special meeting of shareholders today, at 11:00 a.m., at the Imperia Hotel & Suites, located at 2935 de la Pinière Boulevard, Terrebonne, Quebec.

ADF Group Inc. is a North American leader in the design and engineering of connections, fabrication, including industrial coatings, 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 and two paint shops, in Canada and in the United States.

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.

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.

All amounts are in Canadian dollars, unless otherwise indicated.

SOURCE ADF Group Inc.

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