ADF GROUP INC. ('ADF' or the 'Corporation') (TSX: DRX), recorded revenues of $80.2 million during the second quarter ended July 31, 2023, compared to $66.4 million for the same period a year earlier.
After the first six (6) months of the fiscal year, revenues totalled $160.5 million, $26.1 million or 19.4% more than for the same period a year earlier.
Gross margin, as a percentage of revenues (1), decreased from 12.9% for the three (3) months ended July 31, 2022 to 22.2% for the same period ended July 31, 2023. Gross margin, as a percentage of revenues (1), increased from 12.5% in the first six months ended July 31, 2022, to 19.5% in the same period ended July 31, 2023. These variations are mainly explained by the start of manufacturing projects mainly from the US market. It is also important to note that gross margins for the three- and six-month periods ended a year ago on July 31, 2022 were favorably affected by the forgiveness of a $1.3 million (US$1.0 million) loan issued to a U.S. subsidiary under a U.S. pandemic relief program.
Earnings before interest, taxes, depreciation and amortization adjusted (adjusted EBITDA) (2) for the six (6) month period ended July 31, 2023, at $22.7 million, is $10.0 million higher than at the same date a year earlier. Adjusted EBITDA for the six (6) month period ended July 31, 2022 also benefited from a gain on disposal of assets of $0.8 million.
For the three months ended July 31, 2023, ADF recorded net income of $10.5 million ($0.32 per basic and diluted share) compared to net income of $5.4 million ($0.17 per share, basic and diluted) a year earlier. After six (6) months, net income as at July 31, 2023 totalled $15.9 million ($0.49 per share, basic and diluted) compared to net income of $9.7 million ($0.30 per share, basic and diluted) for the same period a year earlier.
The order book (1) of the Corporation was $373.7 million as at July 31, 2023, compared to $376.5 million as at January 31, 2023. Projects currently in the backlog will be phased in by the end of the fiscal year ending January 31, 2025.
As at July 31, 2023, the Company had working capital (1) of $83.0 million. The Company's operating activities generated $50.4 million in cash during the first six months ended July 31, 2023. The Company remains well positioned to continue its day-to-day operations and complete its development projects.
Prospects
'The improvement in internal efficiency continued, generating higher gross margins,' said Jean Paschini, Chairman of the Board and Chief Executive Officer. 'The contracts signed at the beginning of the quarter, on May 30, allow us to maintain a very attractive backlog and the opportunities in our markets remain more than attractive,' concluded Mr. Paschini.
Dividend
On September 6, 2023, ADF Group announced the payment of a semi-annual dividend of $0.01 per subordinate voting share and per multiple voting share, to be paid on October 17, 2023 to shareholders of record as of September 29, 2023.
About ADF Group Inc.
ADF Group Inc. is a North American leader in the design and engineering of connections, manufacturing, including the application of industrial coatings, the assembly of complex metal structures, heavy steel components, as well as fabricated and architectural metals, for the non-residential infrastructure sector. ADF Group Inc. is one of the few industry players able to carry out commercial, institutional, industrial and public megaprojects characterized by a very high level of technological complexity and accelerated timelines. 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 steel structures 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 that' as well as by 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-GAAP and Other Financial Measures Are measures derived primarily from the consolidated financial statements, but are not financial measures standardized under the financial reporting framework applied in preparing the Corporation's financial statements. Therefore, readers should be careful not to confuse or substitute for performance measures established in accordance with GAAP. In addition, the Bank should avoid comparing these non-GAAP financial 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 is as follows:
Contact:
Tel: (450) 965-1911
Web: www.adfgroup.com
ADF GROUP INC. 
