ADF Group (DRX) investor relations material

Executive summary

• Q3 2025 revenues were CAD 71.4 million, down from CAD 80 million year-over-year; nine-month revenues were CAD 179.9 million, down from CAD 262.2 million year-over-year.

• Net income for Q3 was CAD 10.3 million, and for the nine months was CAD 20 million, both down from CAD 16.4 million and CAD 47.7 million a year earlier.

• U.S. tariffs caused delays and margin pressure, especially at the Terrebonne plant.

• Groupe LAR was consolidated for the first time after its acquisition on September 18, 2025, contributing CAD 6.2 million in revenue and CAD 0.2 million in net income.

• Order backlog reached CAD 497.1 million as of October 31, 2025, up from CAD 330.3 million a year ago and including CAD 91.9 million from Groupe LAR.

Financial highlights

• Q3 gross margin was 27.6%, down from 30.4% a year ago; year-to-date gross margin was 23.8%, down from 31.7%.

• Adjusted EBITDA for Q3 was CAD 18.4 million, down from CAD 24 million year-over-year; year-to-date adjusted EBITDA was CAD 32.5 million, down from CAD 72 million, both net of CAD 1.4 million in business combination fees.

• Q3 EPS was CAD 0.36, and year-to-date EPS was CAD 0.70, compared to CAD 0.55 and CAD 1.53 in the prior year.

• Cash and equivalents at quarter-end were CAD 37.7 million, down CAD 27.3 million from January 31, 2025.

• Operating cash flow for the nine months was CAD 13.4 million.

Outlook and guidance

• Q4 is expected to be similar to Q3, with management anticipating another good quarter.

• Integration of Groupe LAR and investment in new equipment are expected to drive future synergies and margin improvements.

• Management remains focused on integrating Groupe LAR and maintaining operational risk controls.

• Growth strategy centers on expanding the order backlog and generating cash.