VIENNA, Va., March 20 /PRNewswire-FirstCall/ -- The Allied Defense Group,
Inc. (Amex: ADG) announces fourth quarter and year end financial results for
the period ended December 31, 2007.
The Allied Defense Group, Inc.
(All amounts in thousands of U.S. Dollars except share data)
Income Statement Three Months Ended Year Ended December 31,
December 31,
2007 2006 2007 2006
Revenue $27,580 $21,140 $55,618 $87,015
Cost of Sales 18,404 24,115 49,949 81,097
Operating Expenses 7,230 8,427 31,493 31,633
Operating Income/(Loss) 1,946 (11,402) (25,824) (25,715)
Other Expense (1,663) (5,838) (18,073) (4,324)
Tax Expense (Benefit) (16) 15,611 4 11,340
Earnings/(Loss) from Continuing
Operations, net of tax 283 (32,851) (43,901) (41,379)
Earnings/(Loss) from Discontinued
Operations, net of tax (1,835) 6 22,623 282
Net Loss $(1,552) $(32,845) $(21,278) $(41,097)
Weighted Shares
Basic and diluted 8,014,514 6,139,252 7,244,983 6,065,732
Earnings/(Loss) per Share,
fully diluted
from Continuing Operations,
net of tax $ 0.04 $(5.35) $(6.06) $(6.83)
from Discontinued Operations,
net of tax (0.23) 0.00 3.12 0.05
Net Loss per Share $(0.19) $(5.35) $(2.94) $(6.78)
Fourth Quarter Results - For the three months ended December 31, 2007,
Allied reported net earnings of $0.3 million, or $0.04 per fully diluted
share, on revenues of $27.6 million from continuing operations. This
represents a $6.4 million/ 31% increase in revenues and a $33.1 million
improvement in net income as compared to the three months ended December 31,
2006. The results for the quarter ended December 31, 2007 represent a 192%,
479% and 99% improvement in revenue when compared to the first, second and
third quarters of 2007, respectively. Similarly, the Company reported 102%,
101% and 105% improvement for earnings/(loss) from continuing operations in
the fourth quarter, when compared to the first, second and third quarters of
2007, respectively.
Full Year 2007 Results - For the year ended December 31, 2007, Allied
reported a net loss from continuing operations of $43.9 million, or ($6.06)
per fully diluted share, on revenues of $55.6 million, compared to a net loss
from continuing operations of $41.4 million, or ($6.83) per fully diluted
share, on revenues of $87.0 million, for the same period in 2006.
Discontinued Operations - During 2007, the Company completed the sale of
two of its operating units -- SeaSpace Corporation and The VSK Group -- which
closed in July and September of 2007, respectively. The results of Titan
Dynamics Systems were also included in discontinued operations. Titan Dynamics
was sold effective February 29, 2008.
Major General (Ret.) John Marcello, President and Chief Executive Officer
of The Allied Defense Group said, "This has been a rebuilding year for ADG.
It is interesting to note that nearly half of our 2007 revenues occurred in
Q4. With this report, we mark our return to profitability from continuing
operations and with backlog approaching historic proportions, we believe we
have many excellent opportunities over the next few years.
"It's not business as usual at ADG. We restructured and recapitalized the
Company, including substantial operating improvements and efficiencies. We
built a more robust financial system with stronger internal controls. We
divested three non-strategic operating units and focused on our core
competencies. We implemented new business development initiatives, including
strategic partnerships and teaming relationships, penetrated important new
markets and expanded our traditional business to accumulate years of backlog.
More than $60M of our backlog is from first time customers. Most importantly,
all of these efforts resulted in the improved quarterly performance we
reported today. We are not the Company we were a year ago," concluded Major
General Marcello.
The Allied Defense Group, Inc.
(All amounts in millions of U.S. Dollars)
Revenue by Segment: Three Months Ended, Year Ended December 31
December 31,
2007 2006 2007 2006
Amount % Amount % Amount % Amount %
Ammunition &
Weapons Effects $21.9 79% $13.9 66% $38.6 69% $67.3 77%
Electronic
Security 5.7 21% 7.2 34% 7.0 31% 19.8 23%
Total $27.6 100.0% $21.1 100.0% $55.6 100.0% $87.0 100.0%
Revenue - Consolidated revenue for the three months ended December 31,
2007 was $27.6 million, compared to $21.1 million in the prior year,
representing 31% growth. Consolidated revenue for the year ended December
31, 2007, was $55.6 million, compared to $87.0 million in the prior year,
representing a 36% reduction.
Revenues in 2007 for the Company's Ammunition & Weapons Effects segment
(MECAR S.A. and MECAR USA) increased 58% and decreased 43% from the prior year
three month and full-year periods ended December 31, 2006, respectively. The
increase resulted from performance at MECAR on a significant contract in the
current quarter. The decrease resulted primarily from a lower volume of MECAR
contracts in process during the first half of 2007 due to an extended delay in
the receipt of new orders from its largest customer. MECAR received a
contract exceeding $90 million in value from this customer in July 2007, but
was limited in its ability to produce under this new contract prior to the
fourth quarter of 2007 as a result of the four to six month lead time required
for the associated inventory purchases. Revenue for MECAR USA for the year
ended 2007 was also down slightly from 2006 as a result of the completion of a
major contract in early 2007.
Revenues for the Company's Electronic Security segment (NS Microwave and
Global Microwave Systems) decreased 21% and 14% from the prior year three
month and full-year periods ended December 31, 2006, respectively. Order
volume at NS Microwave (NSM) was lower as a result of a lag in follow-on
contracts from NSM's largest customer during the year. This offset higher
order volume at Global Microwave Systems (GMS) and accounts for the revenue
differential for both the three month and full-year year-over-year periods.
Net Earnings (Loss) - The Company had net earnings from continuing
operations of $0.3 million and net loss from continuing operations of $43.9
million for the three month and full-year periods ended December 31, 2007,
respectively, as compared to net loss from continuing operations of $32.9
million and $41.4 million for the three month and full-year periods ended
December 31, 2006, respectively.
Much of the loss for the full-year period was driven by the significant
reduction in revenues at MECAR. In 2007, MECAR's cost of sales exceeded
revenues as a result of low level of revenues on MECAR's fixed cost structure.
The Company restructured and reduced MECAR's breakeven point, which, today, is
estimated at approximately $80 million per year. Given the improvements at
MECAR, the steep increase in backlog, and normal delivery times, MECAR expects
to return to sustained profitability in 2008. MECAR continues to target new
business and diversify its customer base, as evidenced by recent contract
award announcements.
Earnings Per Share - Diluted earnings per share from continuing operations
were $0.04 for the three months ended December 31, 2007 and diluted loss per
share from continuing operations for the year ended December 31, 2007 was
$6.06. This compares to diluted losses per share from continuing operations
of $5.35 and $6.83 for the same periods in 2006, respectively.
Backlog - The Company reported a contractual backlog of $110.8 million as
of December 31, 2007, representing a 160% increase over the December 31, 2006
backlog of $42.6 million. Additionally, the Company had unfunded backlog,
which is subject to an appropriation of government funds, of approximately
$102.4 million as of December 31, 2007, representing a 1,363% increase over
the December 31, 2006 unfunded backlog of $7.0 million.
Balance Sheet - Certain balance sheet data is listed below:
Balance Sheet Data As of December 31, 2007 As of December 31, 2006
Current Assets $116,953 $119,906
Total Assets $160,251 $168,029
Current Liabilities $98,532 $106,463
Working Capital $18,421 $13,443
Long Term Liabilities $16,064 $6,219
Stockholders' Equity $45,655 $55,347
The Company previously reported that it was in the process of refinancing
MECAR S.A.'s banking pool in Belgium. The Company is in discussions with
MECAR S.A.'s existing banking pool to extend and expand the facility until
November 30, 2008 contingent upon local government support.
Conference Call - The Company will be hosting a conference call on
Wednesday, March 26, 2008 at 10:00 a.m. EDT. To access the call, please dial
(888) 459-5609 within the United States and (973) 321-1024 outside the United
States. A replay of the call will be available from Wednesday, March 26,
2008 at 12:00 p.m., EDT, through Wednesday, April 2, 2008. To access the
replay, please call (800) 642-1687 in the United States or (706) 645-9291
outside the United States. To access the replay, users will need to enter the
following code: 39990998.
About The Allied Defense Group, Inc.
The Allied Defense Group, Inc. is a diversified international defense and
security firm which: develops and produces conventional medium caliber
ammunition marketed to defense departments worldwide; designs, produces and
markets sophisticated microwave security systems; and manufactures battlefield
effects simulators and other training devices for the military. For more
Information, please visit the Company 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.
For more information, contact:
Jim Drewitz, Investor Relations
830-669-2466
SOURCE The Allied Defense Group, Inc.