ADG AMG Critical Materials NV

VIENNA, Va., May 14 /PRNewswire-FirstCall/ -- The Allied Defense Group, Inc. (NYSE Amex: ADG), a multinational defense company focused on the manufacture, sale and distribution of ammunition and ammunition-related products for use by the U.S. and foreign governments, today announced results for the quarter ending March 31, 2009. Highlights: -- Revenue of $31.5 million, an increase of 18% over the first quarter of 2008 -- Net loss of $0.3 million, compared to a net loss of $3.3 million during the first quarter of 2008 -- EBITDA* from continuing operations of $1.6 million -- Funded, committed backlog of $158.5 million as of March 31, 2009 "We are continuing to execute on our priorities," said Major General (Ret) John J. Marcello, President and Chief Executive Officer of The Allied Defense Group. "We are focused on realizing the significant value our backlog represents, improving our operational efficiency, and securing the funding necessary to support our short-term working capital needs. We are pursuing a number of available options to ensure that we accomplish our objectives." "We are also continuing to grow our ammunition services business and we are advancing our various engagements around the world, reflecting the repositioning of the Company toward our core competency in ammunition," concluded Major General Marcello. Business Segment Details: Mecar SA -- Revenue of $26.7 million, an increase of 4% over the first quarter of 2008 -- Backlog of $109.5 million as of March 31, 2009 Mecar USA -- Revenue of $4.8 million, an increase of $3.7 million over the first quarter of 2008 -- Backlog of $49.0 million as of March 31, 2009 First Quarter Summary Revenue was $31.5 million in the first quarter of 2009, up 18% over the same period of 2008. Gross margin was 15% in the first quarter of 2009, compared to 22% for the same period in 2008. Lower gross margins in the current quarter resulted from lower margins at Mecar SA associated with mix. In addition, Mecar USA, a business with lower margins than Mecar SA, saw an increase in its revenue base and gross profit, but overall profit margins were compressed. Net loss from continuing operations was $1.4 million in the first quarter of 2009, compared to a net loss of $2.7 million during the same period of 2008. Diluted loss per share from continuing operations was $0.17 in the first quarter of 2009, compared to a loss of $0.33 during the same period of 2008. EBITDA from continuing operations was $1.6 million in the first quarter of 2009, compared to $2.1 million during the same period of 2008. As of March 31, 2009, the Company's firm committed backlog was $158.5 million, compared to $155.7 million as of March 31, 2008. At March 31, 2009, the Company had $1.9 million cash on hand. For the three months ended March 31, 2009, the Company used cash of $9.5 million from operating activities associated with the growth of working capital. This use of cash was funded with available cash balances and short term financing. Looking forward, as we have said previously, cash has historically been tight during the summer months. We have several short-term options available to us to manage through these working capital constraints, and we are continuing to work to put a longer-term working capital facility in place. The expectation is that the situation will improve in September with a significant increase in collection of cash receivables. Results from continuing operations in the current period were negatively impacted by $0.7 million of unrealized loss associated with a forward currency contract. This loss was partially offset by a net gain from the fair value of notes and warrants of $0.2 million. As compared to the prior period, selling and administrative expenses declined by 15%, or $0.8 million, and interest expense declined by 49%, or $0.8 million. The reduced operating expense reflects the transition of the Company to an ammunition-focused business. Conference Call The Company will host a conference call to discuss these results today, May 14, 2009, at 4:30 p.m. (ET). To access the conference call, interested parties may call (888) 262-8790 within the United States or (913) 312-1403 outside the United States. A replay of the call will be available from approximately 7:30 p.m. (ET) today, May 14, 2009, through 11:59 p.m. (ET) on May 21, 2009. To access the replay, please call (888) 203-1112 in the United States, or (719) 457-0820 outside the United States, and enter the following code: 1859041. The Allied Defense Group, Inc. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Thousands of Dollars, except per share and share data) Three Months Ended March 31, 2009 2008 ------- ------- Revenue $31,548 $26,795 ------- ------- Cost and expenses Cost of sales 26,718 20,988 Selling and administrative 4,212 4,973 Research and development 492 552 ------- ------- Operating income 126 282 ------- ------- Other income (expenses) Interest income 35 158 Interest expense (864) (1,690) Net gain (loss) on fair value of senior convertible notes and warrants 239 (1,233) Loss from foreign exchange contracts (662) - Other-net (247) (67) ------- ------- (1,499) (2,832) ------- ------- Loss from continuing operations before income taxes (1,373) (2,550) Income tax expense - 128 ------- ------- Loss from continuing operations (1,373) (2,678) ------- ------- Income (loss) from discontinued operations, net of tax Gain on sale of subsidiaries 946 113 Income (loss) from discontinued operations 110 (730) ------- ------- Net income (loss) from discontinued operations 1,056 (617) ------- ------- NET LOSS $(317) $(3,295) ======= ======= Earnings (Loss) per share - basic and diluted: Net loss from continuing operations $(0.17) $(0.33) Net income (loss) from discontinued operations, net of tax 0.13 (0.08) ------- ------- Total loss per share - basic and diluted $(0.04) $(0.41) ======= ======= Weighted average number of common shares: Basic and Diluted 8,079,972 8,013,156 The Allied Defense Group, Inc Calculation of EBITDA from continuing operations (Unaudited) (All amounts are in thousands of U.S. Dollars) Three months ended March 31, 2009 2008 ------- ------- Consolidated Net Loss from continuing operations $(1,373) $(2,678) Any extraordinary or non recurring gains or losses (Gain) loss from fair value of notes and warrants (239) 1,233 Loss from Sale of Fixed Assets - 231 Non-cash expenses associated with stock compensation expense 141 182 ------- ------- Adjusted Net Loss from continuing operations $(1,471) $(1,032) Interest Income (35) (158) Interest Expense 864 1,690 Income tax expense - 128 Depreciation and Amortization Expense 1,023 1,310 Any non-cash transactions: Foreign currency losses 963 70 Adjustments related to Inventory 193 114 Other non-cash charges 29 - ------- ------- Consolidated EBITDA $1,566 $2,122 ------- ------- *Earnings before interest, taxes, depreciation and amortization, non-cash stock compensation and payments, non-cash charges that do not result in future cash obligations, any extraordinary or non recurring gains (losses) and any non-cash transactions (EBITDA) is not intended to present a measure of performance in accordance with accounting principles generally accepted in the United States (GAAP). Nor should Consolidated EBITDA from continuing operations be considered as an alternative to statements of cash flows as a measure of liquidity. Consolidated EBITDA from continuing operations is included herein as means to measure operating performance that financial analysts, lenders, investors and other interested parties find to be a useful tool for analyzing companies. The measurement of EBITDA from continuing operations, as provided above, is defined in the terms of the Company's senior secured convertible notes that were repaid in January 2009 and may not reflect EBITDA from continuing operations as calculated by other parties. The above table reconciles GAAP Net Loss from continuing operations to EBITDA from continuing operations for the reported periods. The Allied Defense Group, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Thousands of Dollars, except per share and share data) March 31, December 31, ASSETS 2009 2008(a) -------- -------- Current Assets Cash and cash equivalents $1,888 $8,816 Restricted cash 17,540 9,666 Accounts receivable, net 23,261 12,646 Costs and accrued earnings on uncompleted contracts 29,046 21,999 Inventories, net 22,956 21,508 Contracts in progress 5,167 1,469 Prepaid and other current assets 3,915 3,137 Assets held for sale 4,555 4,474 -------- -------- Total current assets 108,328 83,715 -------- -------- Property, Plant and Equipment, net 17,714 19,525 -------- ------ Other Assets 424 459 -------- -------- TOTAL ASSETS $126,466 $103,699 ======== ======== CURRENT LIABILITIES Current maturities of senior secured convertible notes $ - $933 Bank overdraft facility 5,089 381 Current maturities of long-term debt 2,871 2,659 Current maturities of foreign Exchange contract 654 405 Accounts payable 16,440 14,536 Accrued liabilities 21,904 16,099 Customer deposits 32,021 16,731 Belgium social security 2,041 3,522 Income taxes 3,792 3,913 Liabilities held for sale 1,260 1,316 -------- -------- Total current liabilities 86,072 60,495 -------- -------- LONG TERM OBLIGATIONS Long-term debt, less current maturities 5,826 6,681 Long-term foreign exchange contract, less current maturities 1,399 1,072 Derivative instrument 84 318 Other long-term liabilities 655 682 -------- -------- Total long-term obligations 7,964 8,753 -------- -------- TOTAL LIABILITIES 94,036 69,248 -------- -------- CONTINGENCIES AND COMMITMENTS STOCKHOLDERS' EQUITY Preferred stock, no par value; authorized 1,000,000 shares; none issued - - Common stock, par value, $.10 per share; authorized 30,000,000 shares; issued and outstanding, 8,084,748 at March 31, 2009 and 8,079,509 at December 31, 2008 809 808 Capital in excess of par value 56,070 55,912 Accumulated deficit (38,668) (38,351) Accumulated other comprehensive income 14,219 16,082 -------- -------- Total stockholders' equity 32,430 34,451 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $126,466 $103,699 ======== ======== About The Allied Defense Group, Inc. The Allied Defense Group, Inc. is a multinational defense company focused on the manufacture, sale and distribution of ammunition and ammunition-related products for use by the U.S. and foreign governments. For more information, please visit our web site: http://www.allieddefensegroup.com/. Certain statements contained herein are "forward looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission. Contact: Geoff Grande, CFA FD P: 617-747-1721 F: 617-897-1511 DATASOURCE: Allied Defense Group, Inc. CONTACT: Geoff Grande, CFA, FD, +1-617-747-1721, fax, +1-617-897-1511, Web Site: http://www.allieddefensegroup.com/

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