Mr. Jean Paschini reports

ADF GROUP INC. ANNOUNCES THE RESULTS FOR THE FIRST QUARTER ENDED APRIL 30, 2023

ADF Group Inc. recorded revenues of $80.3-million in the first quarter ended April 30, 2023, compared with $68-million for the same period a year earlier.

Gross margin, as a percentage of revenue, went from 12.1 per cent during the three-month period ended April 30, 2022, to 16.8 per cent for the same period ended April 30, 2023. Gross margin for the quarter ended April 30, 2023, benefited from improvements stemming from operational efficiencies driven by the commissioning of the all-new robotic production line and new programmable and automated equipment at ADF's fabrication facility in Terrebonne, Que.

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) at $10-million is $4.4-million or 79 per cent higher than as at April 30, 2022.

For the first quarter ended April 30, 2023, ADF recorded a net income of $5.4-million (16 cents per share, basic and diluted) compared with a net income of $4.3-million (13 cents per share, basic and diluted) for the same period last year.

As at April 30, 2023, the corporation's order backlog reached $312.4-million, excluding the new contracts worth a total of $142-million announced on May 30, 2023.

As at April 30, 2023, the corporation had working capital of $73.7-million while cash flows from operating activities generated liquidities of $41.2-million for the quarter ended April 30, 2023.

The corporation remains in sound position to continue its day-to-day operations and pursue its development projects.

New financing

On April 28, 2023, the corporation entered into a new agreement with its Canadian financial institution for its Canadian operating credit facility which increased from $30-million to $40-million. This amount remains subject to a margination calculation, but only when the corporation needs to draw over $20-million. All other terms and conditions remain similar to the previous terms.

Outlook

"Building on our backlog, in addition to the new contracts worth a total of $142-million announced on May 30, 2023, we are starting the 2024 fiscal year on the right foot," indicated Jean Paschini, chairman of the board of administration and chief executive officer.

"The addition of robotization and new programmable automated equipment to our fabrication plant in Terrebonne, Que., continues to bring increased efficiency, thereby improving our profitability," concluded Mr. Paschini.

Conference call with investors

An investor conference call will be held this morning, June 7, 2023, at 10 a.m. (EST) to discuss results for the first quarter ended April 30, 2023.

To join the conference call without operator assistance, you can register with your phone number to receive an instant automated call back. You can also join the conference call with operator assistance by dialling 1-888-390-0620 a few minutes prior to the conference call scheduled start time.

A replay of the conference call will be available from 1 p.m., Wednesday, June 7, 2023, until midnight, Wednesday, June 14, 2023, by dialling 1-888-259-6562, followed by the access code 020433 followed by the pound key.

The conference call (audio) will also be available on ADF Group's website. Members of the media are invited to join in listening mode.

Annual general meeting of shareholders for the fiscal year ended Jan. 31, 2023

ADF Group will hold its annual general meeting of shareholders by way of a webcast today, June 7, 2023, at 11 a.m. (EST) which will also be available by way of webcast.

Shareholders are encouraged to vote on the matters before the meeting by proxy and to view the meeting on-line by way of a live webcast. Shareholders will be able to submit questions to management of the corporation through the webcast at any time and at the conclusion of the meeting. To this end, a dialogue box will be available at the bottom of the screen allowing registered shareholders to write their questions.

About ADF Group Inc.

ADF Group 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 is one of the few players in the industry capable of handling highly technically complex megaprojects 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.

We seek Safe Harbor.