ADF Group Inc. (TSE: DRX) Q2 2020 earnings call dated Sep. 10, 2020
Corporate Participants:
Jean-Francois Boursier — Chief Financial Officer
Presentation:
Operator
Good morning, ladies and gentlemen, and welcome to the ADF Group Second Quarter and First Semester Results Conference Call. [Operator Instructions] Also note that this call is being recorded on Wednesday — Thursday, September 10th, 2020.
And I would like to turn the conference over to Jean Boursier, Chief Financial Officer. Please go ahead.
Jean-Francois Boursier — Chief Financial Officer
Thank you, and good morning. Welcome to ADF’s conference call covering the second quarter and six months ended July 31st, 2020. I will update you on our results, which were disclosed earlier this morning by press release and then update you on our operations.
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 and ended July 31st, 2020, which were filed with SEDAR this morning.
Please also consider that, although for the moment the impact of COVID-19 on ADF’s operations is limited, the extent to which the virus can have an impact on our results will depend on future developments, which are very uncertain and cannot be predicted at this time. Including, new information that may emerge regarding the COVID-19 and the measures taken to contain it or address its impact among others.
Revenues for the second quarter stood at $42.5 million compared with $54.1 million last year. Year-to-date revenues at $88.3 million were $3 million lower than last year. Although our quarter-over-quarter fabrication hours have increased, the lower revenues can be explained by the lower installation hours based on project execution timing for both [Technical Issues] quarters ended July 31st, 2020 and 2019.
Gross margins for the second quarter at 17.4% was 6.8% higher than reported a year ago. Year-to-date, gross margin stood at 13.9% compared to 12.6% for the six months period ended July 31st, 2019. Better pricing, better absorption and the finalization of some contractual changes explain the quarter-over-quarter margin improvement.
At the close of the three months ended July 31st, 2020, EBITDA stood at $4.6 million, $1.6 million better than for the corresponding quarter a year ago. Year-to-date, EBITDA stood at $7.5 million compared to $6 million a year ago. The increase in gross margins and the lower selling and administrative expenses, the latter coming from the lower legal fees associated to last year third quarter out of court settlement explain these favorable variances.
For the quarter ended July 31st, 2020, net earnings stood at $2.1 million or $0.06 per share basic and diluted, compared with net earnings of $490 — $419,000 for the same period a year ago or $0.01 per share basic and diluted. For the six-month period ended July 31st, 2020, net earnings stood at $2.2 million or $0.07 per share basic and diluted, compared to $2 million for the six months ended July 31st, 2019; $0.06 per share basic and diluted. Beside the elements mentioned before, FX fluctuation add a $1.1 million favorable impact quarter-over-quarter, while the impact was $0.7 million unfavorable when comparing the six months periods ended July 31st, 2020 and 2019.
Along with our improved results and following our cash management responsible approach, our working capital, liquidity and balance sheet situation also improve. Working capital as of July 31st, 2020 at $35.4 million was $6.1 million better than it’s January 31st, 2020 level. Net liquidity at $14.7 million are $23.8 million higher than at January 31st, 2020. Year-to-date, cash flow from operation generated $21.6 million.
In light of the uncertainty surrounding the COVID-19, we are taking a cautious approach with our liquidities and accordingly are tailoring our capex program to the situation, with only $0.4 million spend during the six months ended last July 31.
These operating inflows enable us to reduce the drawn credit facility by $13.1 million and finished the quarter with no amount being drawn from our credit facilities. As mentioned in our first quarter reporting and our July 31st, 2020 MD&A, ADF like many others is currently navigating into unchartered waters. As mentioned before, and although the impact of the COVID-19 pandemic as of this date and the limited impact on ADF’s operation, we remain abreast of economic developments and trends.
Our order backlog stood at $314.5 million as of July 31st, 2020. Although the bidding pipeline is still very active, we are finding that finalizing new contracts is somewhat a bit more challenging, with all parties involved taking more time to better understanding — better understand the coming months. Even though we have said this before, we feel it is appropriate to reaffirm that risk management was, is and will always be a paramount and of course, offers us comfort and allows us to sail these challenging time.
Ladies and gentlemen, thank you for your interest and confidence in ADF. I will now answer your questions.
Questions and Answers:
Operator
Thank you, Mr. Boursier. [Operator Instructions] And at this time, Mr. Boursier, we have no questions registered sir. Please proceed.
Jean-Francois Boursier — Chief Financial Officer
Again, I wish to thank you for your interest in ADF Group. Have a nice day.
Operator
[Operator Closing Remarks]