Good morning, ladies and gentlemen, and welcome to the ADF Group second quarter and six-month period ended July 31st, 2021 conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, September 9th, 2021. I would now like to turn the conference over to Mr. Jean-François Boursier, Chief Financial Officer. Please go ahead, sir. Thank you. Good morning, ladies and gentlemen. Welcome to ADF conference call covering the second quarter and six month ended July 31st, 2021. I will first update you on our year-to-date results, which were disclosed earlier this morning by press release, and then update you on our operations and new contract announcement. First, a word of caution. Please note that some of the issues discussed today may include forward-looking statements. These are documented in ADF Group's management report for the second quarter and six month ended July 31st, 2021, which were filed with SEDAR this morning. Please also consider that although for the moment the impact of COVID-19 on ADF's operation is limited, the extent to which the virus and its variants could have an impact on our results will depend on future developments, including new information that may emerge regarding the COVID-19 and the measures taken to contain it or address its impact among others. This said, revenues for the second quarter ended July 31st, 2021, stood at CAD 73.2 million, compared with CAD 42.5 million for the same period last year. Year- to- date, revenues at CAD 123.6 million were CAD 35.3 million higher than for the same period last year. These increases in revenues are in line with the increase of our backlog. Gross margins for the three months ended July 31st, 2021, at 7.7% was lower than the 17.4% reported for the same period a year ago. Year- to- date, gross margin went from 13.9% recorded last year to 10.9% for the six-month period ended July 31st, 2021. As mentioned in our January 31st, 2021, MD&A report, a certain pressure on margins was expected at the beginning of the fiscal year due to the start-up of certain projects signed with lower prices. Although this pressure was less felt in the quarter ended April 30th, 2021, because of timing, the product mix during the second quarter had the previously anticipated negative impact. In addition, during the second quarter ended July 31st, 2021, we adopted a cautious approach and adjusted downwards the anticipated profitability on one of our ongoing projects. This said, we anticipate that this adjustment will be more than sufficient to absorb the anticipated increase in cost. Lastly, and as a reminder, gross margin for the six months ended July 31st, 2021, includes a CAD 1.6 million subsidy from the Canada Emergency Wage Subsidy Program recorded during the first quarter ended April 30th, 2021. At the close of the three months ended July 31st, 2021, EBITDA stood at CAD 3.1 million, CAD 1.5 million lower than for the same period a year ago. This unfavorable variance coming from the lower gross margin, as just explained, partially offset by the lower SG&A expenses. Year- to -date, EBITDA stood at CAD 9.2 million, CAD 1.6 million higher than for the same period a year ago. Year -to -date, the improved gross margins and lower selling administrative expenses explain this favorable variance. Still year to date, selling administrative expenses benefited from the CAD 300,000 Canadian COVID subsidy booked in the 1st quarter, but also from lower travel expenses following COVID-related travel guidance. For the quarter ended last July 31st, net earnings stood at CAD 1.5 million, or CAD 0.05 per share, compared with net earnings of CAD 2.1 million, or CAD 0.06 per share a year ago. Year-to-date, net earnings for the six months ended July 31st, 2021, stood at CAD 5.9 million, or CAD 0.18 per share, compared to net earnings of CAD 2.2 million, or CAD 0.07 per share, for the same period a year ago. Besides the elements mentioned before, the net earnings for the six-month period ended July 31st, 2021, was favorably impacted by lower effective tax rates, considering that in light of our unrecorded U.S. tax loss, U.S. affiliates' pre-tax income is not tax effective. Considering our remaining unrecorded U.S. tax losses, we do expect to have similar low tax rates in the coming quarters. Working capital as of July 31st, 2021, at CAD 33.6 million, was somewhat lower than the levels recorded as at April 30th and as at January 31st, 2021. This situation is temporary and, as of today, has already improved with significant receivable collections since the quarter end. Considering the July 31st, 2021 receivable levels, cash flow from operations for the quarter ended at the same date required CAD 1.9 million in cash. Year- to -date, cash flow from operations generated in excess of CAD 10 million. In light of the market outlook, as previously mentioned during our June 2021 annual general meeting of shareholders, we are moving forward with a capital investment program to automate our Terrebonne fabrication operations. These acquisitions are currently funded from the corporation's cash flow. However, we are currently exploring various options to diversify financing sources. Including these investments, we are now expecting our full year CapEx to reach CAD 20 million. With this, and as at July 31st, 2021, we posted CAD 14.3 million in cash and cash equivalents, with no amount being drawn from our credit facilities, and thus, an excellent position to pursue our backlog growth and execute our existing backlog, which stood at CAD 374 million as at July 31st, 2021. Lastly, our board of directors approved yesterday the payment of a semi-annual dividend of CAD 0.01 per subordinate voting shares and per multiple voting shares, which will be paid on October 15, 2021, to shareholders of record as at September 30th, 2021. In addition to this backlog total, we announced this morning the signing of new contracts totaling CAD 50 million. The largest of these new contracts was one in the transportation infrastructure sector in the Western USA. Fabrication work is scheduled to begin in early 2022 at both our plants located in Terrebonne and in Great Falls and run until the fall of 2022, followed by the steel erection work. These new project announcements are taking a bit longer than anticipated, we are still optimistic that we will be able to continue to grow our order backlog. The recent COVID variant surge is obviously being monitored, and we are keeping all required measures to not only protect our employees, but to also maintain our operational requirements. Ladies and gentlemen, thank you for your interest and confidence in ADF. I will now answer your questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session for analysts. Should you have any questions, please press star followed by one on your touch-tone phone. You will hear a three-tone prompt acknowledging the request, and your question will be pulled in the order they are received. Should you wish to decline from the polling process, please press star followed by two. If you're using a speakerphone, please lift your handset before pressing any keys. One moment for your first question. Ladies and gentlemen, as a reminder, should you have any questions, please press star one. With that, there are no questions at this time. Mr. Boursier, you may proceed. Again, I wish to thank you for your interest in ADF Group. Have a nice day and be safe. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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