This call is being recorded on Thursday, September 12th, 2024 . I would now like to turn the conference over to Jean-François Boursier, ADF Chief Financial Officer. Please go ahead.
Thank you. Good morning, and welcome to ADF's conference call, covering the second quarter and six months ended July 31st, 2024. I am with Jean Paschini, Chairman of the Board and CEO of ADF, who will be available to answer your question at the end of the call. I will first update you on our quarterly and year-to-date results, which were disclosed earlier this morning by press release, and then proceed with a quick update about our operations. 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 months ended July 31st, 2024, which were filed with SEDAR this morning. Revenues for the quarter ended July 31st, 2024, at CAD 74.9 million, were CAD 5.3 million lower than last year.
This decrease is mainly attributable to one client delays in construction site preparation. We estimate that were it not for these site delays, revenues for the quarter and year to date would have been approximately CAD 35 million higher. These additional dollars coming from additional steel installation work. In fact, more than 300 loads of fabricated prefabricated products are waiting to be delivered to the construction site. These revenues are, of course, not lost, but rather postponed to the next quarters. That said, and given that installation schedules are difficult to compress over time, these missing revenues risk being moved forward to our next fiscal year. Year to date, revenues stood at CAD 182.3 million, compared to CAD 160.5 million for the six-month period ended July 31st, 2023, a 13.6% year-over-year increase.
The positive gross margin level observed in the first quarter continued. We closed the second quarter on July 31st, 2024, with gross margins of 36.9% as a percentage of revenues, up from the 22.2% for the quarter ended July 31st, 2023, while adjusted EBITDA at CAD 24.9 million compared to 12.6 million dollars for the same quarter ended a year ago. Year to date, gross margins as a percentage of revenues at 32.3% is up from the 19.5% margin for the six-month period ended July 31st, 2023, while adjusted EBITDA stood at CAD 48 million, more than doubling last year's figure.
The improvement in margins is in line with the increase observed in recent quarters and is largely attributable to a better absorption of fixed costs, the continued favorable impact of investments in automation at ADF's plant in Terrebonne, Quebec, and a favorable mix of projects. For the second consecutive quarter, the mix of products in fabrication was particularly favorable. With the anticipated catch-up in installation volume, as previously explained, margins should stabilize in the coming quarters.
Again, this quarter, the mark-to-market valuation of our DSUs and PSUs impacted our SG&A expenses. For the quarter, considering the decline in ADF's share price, the mark-to-market valuation decreased SG&A expenses by CAD 2.4 million when compared to last year, while the year-to-date increase in stock price increased the year-to-date SG&A expenses by CAD 3 million when compared to the six-month SG&A expenses last year.
We therefore closed our second quarter with net income of CAD 16 million, or CAD 0.51 per share, compared to CAD 10.5 million, or CAD 0.32 per share, for the corresponding quarter a year ago. Year to date, net income stood at CAD 31.3 million, or CAD 0.98 per share, compared to CAD 15.9 million, or CAD 0.49 per share, for the same period ended July 31st, 2023.
Even considering the 2.8 million share repurchase finalized this past June, which required CAD 48.3 million, we closed our second quarter with CAD 76 million in cash and cash equivalents, 27.7 million more than the April 30, 2024, levels, and CAD 3.7 million higher when compared to the January 31st, 2024, closing balances, while working capital as of July 31st, 2024, reached CAD 90.1 million. Operating cash flow reached CAD 82.4 million for the quarter ended July 31st, 2024, driven by favorable working capital variation and improved operating results. Year to date, operating cash flow stood at CAD 60.1 million, CAD 9.7 million higher than for the first six months of last year.
Yesterday, our board of directors approved the payment of the second semiannual dividend, which now stands at CAD 0.02 per share, as announced this last June. This dividend will be paid on October 17 to shareholders of record as at September 27th, 2024. Even with the decrease in revenues during the three-month period closed on July 31st, 2024, compared with last fiscal year, as previously explained, we were able to close the period ended July 31st, 2024, with higher net income while increasing our liquidities. Although the pipeline of projects under negotiation is still very active, we are seeing a certain slowdown in the finalization of contractual agreement with mainly for projects affecting the green energy sector.
This is most likely linked to the American presidential election, to be held in early November, where opposite energy investment strategies are presented by the two U.S. political parties. In light of this, the next few months may see some hesitation in the market served by ADF. However, given the size of our order backlog as at quarter end, which stood at CAD 402.3 million, and the requirements in public infrastructure, mainly for the U.S. market, we remain optimistic about our growth prospects. Independent of this, we will continue our efforts to pursue our growth and achieve improved results, and we remain focused on continuing building ADF on the know-how of our personnel, our long-standing industry expertise, and our state-of-the-art facilities. Thank you for your interest and confidence in ADF. Jean and I will now answer your questions.
Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Nicholas Cortellucci with Atrium Research. Your line is now open.
Good morning, JF and Jean. Hope you guys are doing well.
Good morning, Nick.
A couple questions here. Firstly, I know we had the CAD 35 million delay, but inventory was actually down quarter-over-quarter. So maybe explain that to us and add some commentary there.
The fabricated material doesn't impact the inventory. The inventory would be included in our contract assets or contract liabilities, depending on where we stand from a billing standpoint. So there's no link. The inventory is really for general inventory, not project inventory.
Okay, understood. And I know we saw a great improvement with the margins this quarter, so I wanted to ask you guys how sustainable that is. I know last quarter you were talking about that being in a steady state, but you came out again with vastly improved margins. So just curious on the sustainability of that and how you see that coming in the next couple quarters.
Fabrication-wise, okay, it's sustainable. But when you do the fabrication, then the installation, there's less margin. So if you make the two together, the margins are lower. So that CAD 35 million shift, it wasn't at the same margin. It, the margins were would have been they would have been lower on that CAD 35 million . So, you know, in the next quarters, we will do fabrication, but we will do installation, too. So, right now, what we're seeing, margins very high. I think they're gonna go down, okay, but they're gonna be maybe like, the first quarter.
Okay, perfect. So you ended the quarter in a very large net cash position here, and we expect you guys to keep generating cash over the next couple quarters. So it seems like ADF is gonna be in another position to allocate capital, whether it's increasing the dividend or buying back stock. So am I right, am I right in assuming that we should see some more capital allocation over the next couple quarters, or at least in the next year?
Well, for the time being, as we mentioned in the SG&A, at least the CapEx portion, with some small purchase of equipment for our Terrebonne shop, we see the total CapEx for this year at CAD 8 million. The cash generation, you'll remember that we ended the first quarter with CAD 90 million of revenues, and that are not revenues, CAD 90 million of receivables. And most of these, obviously, these receivables were collected in the second quarter, which drives the operating inflows that we see in the second quarter. Our ending receivables for the second quarter are lower, so we will generate cash flow in the second half of the year, but not necessarily to the same tune we've seen in the first half.
The last part of it is that in light of that, in light of the delays in the installation, we're happy, obviously, with the cash position. It's probably more cash than we need just to support the working capital, so I think we'll let the year run its course, see how we stand, see how the U.S. election impact our markets or not. As I mentioned on the call, the infrastructure requirements are still really high, so we still see lots of opportunity from a bidding standpoint, so things, independent of what happens in November, things should remain the same for that portion.
But we will close the year, see where we stand from a cash flow and overall cash position, and then reassess our position and our strategy going forward with the excess cash. But at the time being, there's no major CapEx plan, there's no M&A plan, and no other share purchase plan for the time being. So we'll just stay the course and reassess the situation once we're done with the fiscal year.
Okay, great. And then just the last one from me. Do you have any updates or color on new contracts for the Los Angeles Olympics in 2028, or any other secular trends that are worth mentioning that should drive new contracts over the next coming quarters?
There is quite a few contracts right now that we are in the final negotiation, but, you know, they have been delayed. Everybody's waiting for the election in November. So are we gonna sign something in October? I don't know yet, okay? But we're. We are in a very good position to sign new projects, but maybe it's gonna be only after the American election.
Okay, understood. All right. That's all for me. Thanks for the time, guys.
Thanks.
Ladies and gentlemen, as a reminder, should you have a question, please press star one. There are no further questions at this time. I will now turn the call over for closing remarks.
Again, we wish to thank you for your interest in and support of ADF Group. Have a nice day.
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.