Research from Atrium Research, Atrium Research Corporation

Atrium Research

Research from Atrium Research

Atrium Research Corporation

Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. 

Our research product includes in-depth initiation reports, research notes, thematic research pieces, and company fact sheets.

Equity Bottom-Up

<ul>
<li>ADF reported Q3 financials that beat our expectations, driven by stronger project execution, margin recovery, and early contributions from LAR.</li>
<li>Revenue came in at $71.4M vs. our estimate of $68.4M while EBITDA of $18.4M meaningfully outperformed our $10.2M estimate.</li>
<li>Backlog increased to $497.1M (+6% QoQ), supported by a stronger mix of Canadian projects (now 57% of the backlog), while integration progress at LAR is setting up ADF for a strong Q4 and FY27.</li>
</ul>


ADF reported Q3 financials that beat our expectations, driven by stronger project execution, margin recovery, and early contributions from LAR.
Revenue came in at $71.4M vs. our estimate of $68.4M while EBITDA of $18.4M meaningfully outperformed our $10.2M estimate.
Backlog increased to $497.1M (+6% QoQ), supported by a stronger mix of Canadian projects (now 57% of the backlog), while integration progress at LAR is setting up ADF for a strong Q4 and FY27.


DRX: Q3 Financials Beat Expectations; Diversified Away from Tariffs

<ul>
<li>ADF provided an update and hosted a conference call to discuss the acquisition of Groupe LAR.</li>
<li>ADF plans to double LAR’s backlog by January 2027, benefitting from hydroelectric dam renovation and construction projects across Canada.</li>
<li>Management will invest $35M over the next 24 months to increase LAR’s capacity and modernize its equipment.</li>
</ul>


ADF provided an update and hosted a conference call to discuss the acquisition of Groupe LAR.
ADF plans to double LAR’s backlog by January 2027, benefitting from hydroelectric dam renovation and construction projects across Canada.
Management will invest $35M over the next 24 months to increase LAR’s capacity and modernize its equipment.


DRX: Increasing Estimates on Groupe LAR Acquisition

<ul>
<li>ADF reported Q2 financials that missed our expectations on the back of uncertainty from U.S. tariffs, similar to Q1.</li>
<li>Revenue came in at $53.0M (-29% YoY) vs. our estimate of $58.2M and EBITDA came in at $3.7M vs. our estimate of $10.0M.</li>
<li>ADF remains well-positioned for H2 given that its backlog was $468.0M, (+60% since Q4), all of its employees have returned on a full-time basis, and its acquisition of LAR Group will provide further growth.</li>
</ul>


ADF reported Q2 financials that missed our expectations on the back of uncertainty from U.S. tariffs, similar to Q1.
Revenue came in at $53.0M (-29% YoY) vs. our estimate of $58.2M and EBITDA came in at $3.7M vs. our estimate of $10.0M.
ADF remains well-positioned for H2 given that its backlog was $468.0M, (+60% since Q4), all of its employees have returned on a full-time basis, and its acquisition of LAR Group will provide further growth.


DRX: Soft Q2 Financials; Excellent Backlog Growth

<ul><li>What you need to know: • ADF entered into an agreement to acquire Groupe LAR Inc. for $19M.</li><li>LAR operates in the machining, welding, and industrial mechanics sectors, primarily focusing on the large-scale hydroelectricity market.</li><li>• LAR posted $80.9M in revenue in 2024 (ending December 31st) and had a backlog of $104.5M as of July 31st.</li></ul>

What you need to know: • ADF entered into an agreement to acquire Groupe LAR Inc. for $19M.LAR operates in the machining, welding, and industrial mechanics sectors, primarily focusing on the large-scale hydroelectricity market.• LAR posted $80.9M in revenue in 2024 (ending December 31st) and had a backlog of $104.5M as of July 31st.

DRX: Deploying Cash on Acquisition of Groupe LAR

<ul>
<li>DF secured a five-year Québec energy contract for $35M-$40M annually, with a five-year extension option, totalling nearly $400M.</li>
<li>The deal diversifies revenue outside the U.S. and adds long-term, recurring income, reducing exposure to market cyclicality.</li>
<li>Q2 financials will be released in September, we are expecting revenue of $58.2M, 22% gross margin, and EBITDA of $10.0M.</li>
</ul>


DF secured a five-year Québec energy contract for $35M-$40M annually, with a five-year extension option, totalling nearly $400M.
The deal diversifies revenue outside the U.S. and adds long-term, recurring income, reducing exposure to market cyclicality.
Q2 financials will be released in September, we are expecting revenue of $58.2M, 22% gross margin, and EBITDA of $10.0M.


DRX: Signs Five-Year Contract for $35-40M Annually

Canada

ADF Group Inc. manufactures and erects structural steel for complex structures and miscellaneous metal work. The Company offers Standard Structural Steel, Complex Steel Structures, and Trial Assemblies. ADF Group serves clients throughout North America and Canada.

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ADF Group (DRX CN)

DRX: Q3 Financials Beat Expectations; Diversified Away from Tariffs

ADF reported Q3 financials that beat our expectations, driven by stronger project execution, margin recovery, and early contributions from LAR.

Atrium Research

DRX: Increasing Estimates on Groupe LAR Acquisition

ADF plans to double LAR’s backlog by January 2027, benefitting from hydroelectric dam renovation and construction projects across Canada.

Atrium Research

DRX: Soft Q2 Financials; Excellent Backlog Growth

Revenue came in at $53.0M (-29% YoY) vs. our estimate of $58.2M and EBITDA came in at $3.7M vs. our estimate of $10.0M.

Atrium Research

DRX: Deploying Cash on Acquisition of Groupe LAR

What you need to know: • ADF entered into an agreement to acquire Groupe LAR Inc. for $19M. LAR operates in the machining, welding, and industrial...

Atrium Research

DRX: Signs Five-Year Contract for $35-40M Annually

What you need to know: • ADF secured a five-year Québec energy contract for $35M-$40M annually, with a five-year extension option, totalling...

Atrium Research

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