ADF GROUP INC. ANNOUNCES RESULTS FOR THE YEAR ENDED JANUARY 31, 2025

Published: 2025-04-11 09:26:33 ET DRX.TO

TERREBONNE - ADF GROUP INC. ('ADF' or the 'Corporation') (TSX: DRX) ended fiscal 2025 with revenues of $339.6 million compared to $331.0 million last year.

Gross margin, as a percentage of revenue (1), increased from 22.0% in the year ended January 31, 2024 to 31.6% in the year ended January 31, 2025. This variation is explained by the level of manufacturing activity compared to the previous year, resulting in better absorption of fixed costs, and also by the improvement in internal efficiencies generated by the automation investments made in recent years at ADF's plant in Terrebonne, Quebec.

Adjusted earnings before interest, taxes, depreciation and amortization (2) (Adjusted EBITDA) for the year ended January 31, 2025, at $91.3 million, is $35.4 million, or 63.2%, higher than at the same date a year ago.

For the year ended January 31, 2025, ADF posted net income of $56.8 million ($1.84 per basic and diluted share) compared to net income of $37.6 million ($1.15 per basic and diluted share) a year earlier.

As at January 31, 2025, the Company had working capital (1) $109.2 million, virtually unchanged from the same date a year earlier. In addition, the Company generated cash flows from operating activities totalling $55.1 million during the year ended January 31, 2025. The Company ended the year ended January 31, 2025 with cash of $60.0 million compared to $72.4 million for the previous fiscal year, including the total repurchase for cancellation of 3,487,589 shares, for a total disbursement of $54.6 million during the fiscal year ended January 31, 2025.

The order book (1) of the Company was $293.1 million as at January 31, 2025, excluding new orders totalling $120.0 million announced on February 26, 2025, compared to $510.9 million as at January 31, 2024. The majority of projects in hand will be completed in phases by the middle of the fiscal year, which will end on January 31, 2027.

Work-Sharing Program

Given the backlog of projects and the manufacturing schedule, the Corporation has applied and will soon receive approval from Service Canada to implement a Work-Sharing program for some of its employees at its manufacturing facility in Terrebonne, Quebec. The program would come into effect on April 14, 2025, and would allow certain employees to benefit from the Employment Insurance program to compensate for reduced hours of work. This program, as already discussed with the union executive, will be put to a vote by its unionized employees on April 12, 2025. This program would allow ADF to closely manage its costs until the manufacturing phase of the recently announced projects begins. Thus, approximately 200 employees would see their working hours reduced by 50% to 60%; hours that would be compensated by the government program.

Prospects

'Although we announced $120.0 million in new contracts at the very beginning of the current fiscal year, the uncertainty caused by the imposition of U.S. tariffs is delaying the conclusion of new trade agreements, and in this context, we are forced to analyze certain contingency measures, including the implementation of the Work-Sharing program at our plant located in Terrebonne. In this sense, we can already confirm that revenues for the year ending January 31, 2026 will be down, mainly in the first quarters, and that our margins will also be affected by the direct and indirect impacts of U.S. tariffs,' said Jean Paschini, Chairman of the Board of Directors and Chief Executive Officer.

'Rest assured, as ADF has always done for nearly 70 years now, that our decisions will be made based on the continued healthy and prudent growth of our Company,' concluded Mr. Paschini.

Dividend

On April 9, 2025, the Board of Directors of ADF Group approved the payment of a semi-annual dividend of $0.02 per share, to be paid on May 15, 2025 to shareholders of record as of April 24, 2025.

Conference call with investors

A conference call with investors will be held on Thursday, April 10, 2025 at 10 a.m. (Montreal time) to discuss the results for the year ended January 31, 2025.

To join the conference call without operator assistance, you can sign up with your phone number on https://emportal.ink/42IwHZF to receive an instant automatic callback.

You can also reach the call by an operator by dialing 1-800-990-4777 a few minutes before the call starts.

A replay of the replay of this call will be available from 1 p.m. on April 10, 2025, until April 17, 2025, by dialing 1-888-660-6345, followed by access code 49276 #. The conference call (audio) will also be available at www.adfgroup.com. Members of the media are invited to join in listening mode.

ANNUAL GENERAL MEETING OF SHAREHOLDERS FOR THE YEAR ENDED JANUARY 31, 2025

The Annual Meeting of Shareholders of ADF Group Inc. will be held on: Date: June 10, 2025

Time: 11 a.m.

Location: Imperia Hotel and Suites

2935 de la Piniere Boulevard, Terrebonne (QC) J6X 0A3

Results for the first quarter ended April 30, 2025 will also be announced at this Annual Meeting.

About ADF Group Inc. | ADF Group Inc. is a North American leader in connection design and engineering, manufacturing, including the application of industrial coatings, the erection of complex steel structures, heavy steel components, as well as wrought and architectural metals, for the non-residential infrastructure sector. ADF Group Inc. is one of the few players in the industry capable of carrying out commercial, institutional, industrial and public megaprojects characterized by a very high level of technological complexity and accelerated schedules. The Company now operates two manufacturing plants and two paint shops; in Canada and the United States, as well as a Construction division in the United States, which specializes in the assembly of structural steel and other related products.

Forward-Looking Statements | This press release contains forward-looking statements that reflect ADF's objectives and expectations. These statements are identified by verbs such as 'expects' as well as the use of future and conditional verb tenses. By their nature, these statements involve risks and uncertainties. As a result, actual facts may differ from ADF's expectations.

Non-IFRS and Other Financial Measures | Are measures derived primarily from the consolidated financial statements but are not standardized financial measures under the financial reporting framework used to prepare the Company's financial statements. Accordingly, readers should caution not confusing or substituting for IFRS performance measures. In addition, the insurer should avoid comparing these non-IFRS measures to similarly named measures provided or used by other issuers. The definition of these indicators and their reconciliation to comparable measures in International Financial Reporting Standards issued by the International Accounting Standards Board ('IFRS Accounting Standards') is as follows: