VIENNA, Va., Nov. 16 /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 and services for use by the U.S. and
foreign governments, today announced results for the quarter ended
September 30, 2009. Financial Results: -- Revenue of $36.2 million
compared to $49.3 million in the third quarter of 2008 -- Net loss
of $3.3 million compared to net loss of $6.2 million during the
third quarter of 2008 -- EBITDA* from continuing operations of $4.3
million for the nine months ended September 30, 2009 -- Funded,
committed backlog of $89.6 million as of September 30, 2009 "During
the third quarter we continued to advance our engagements
throughout the world," said Major General (Ret) John J. Marcello,
President and Chief Executive Officer of The Allied Defense Group.
"While we are not pleased that the timing of certain contracts and
shipments were delayed beyond the end of the quarter, these
opportunities either remain active in our pipeline or have already
closed. These ebbs and flows should be expected from
quarter-to-quarter given the nature of the global ammunition
business. More importantly, however, we continue to be very
encouraged by the growing number of opportunities available to us
in the marketplace. Our unique positioning, combined with our
extensive international relationships, will serve us well as we
bring these opportunities to fruition." Business Segment Details:
Mecar SA -- Revenue of $19.1 million compared to $32.2 million in
the third quarter of 2008 -- Backlog of $83.9 million as of
September 30, 2009 Mecar USA -- Revenue of $17.1 million compared
to $17.0 million in the third quarter of 2008 -- Backlog of $5.7
million as of September 30, 2009 Third Quarter Summary Revenue was
$36.2 million in the third quarter of 2009, down 27% from the same
period of 2008. Lower revenue was due to lower manufacturing
activity and a mix of lower value sales contracts at Mecar SA.
Gross margin was 10% in the third quarter of 2009, compared to 13%
for the same period in 2008. The decline in gross margin was the
result of a lower volume of revenue and hours worked at Mecar SA.
Lower revenue and gross margins in the current quarter were
partially offset by better margin contracts at Mecar USA. Net loss
from continuing operations was $3.2 million in the third quarter of
2009, compared to a net loss of $3.3 million during the same period
of 2008. Diluted loss per share from continuing operations was
$0.39 in the third quarter of 2009, compared to a loss of $0.41
during the same period of 2008. EBITDA* from continuing operations
was a loss of $0.7 million in the third quarter of 2009, compared
to income of $2.7 million during the same period of 2008. Results
from continuing operations in the current period were positively
impacted by a $0.3 million gain associated with Mecar SA's forward
exchange contracts. Selling and administrative expenses were $4.9
million, roughly in-line with the same period last year. Interest
expense was $1.3 million, down from $1.4 million in the same period
in 2008. Nine-Month Summary Revenue was $115.1 million for the nine
months ended September 30, 2009, compared to $116.4 million during
the same period of 2008. Gross margin was 13% for the nine months
ended September 30, 2009, compared to 16% for the same period in
2008. Net loss from continuing operations was $2.6 million for the
nine months ended September 30, 2009, compared to a net loss of
$6.7 million during the same period of 2008. Diluted loss per share
from continuing operations was $0.32 for the nine months ended
September 30, 2009, compared to a loss of $0.83 during the same
period of 2008. EBITDA* from continuing operations was $4.3 million
for the nine months ended September 30, 2009, compared to $7.6
million during the same period of 2008. As of September 30, 2009,
the Company's firm committed backlog was $89.6 million, compared to
$168.4 million as of September 30, 2008. Cash Flow At September 30,
2009, the Company had $4.1 million of cash on hand. This is up from
$1.7 million at June 30, 2009. The Company used $9.6 million of
cash in operating activities during the nine months ended September
30, 2009 as compared to $17.6 million of cash used during the same
period of 2008. Cash provided by investing activities was $0.9
million during the nine months ended September 30, 2009 as compared
to $0.8 million generated during the same period of 2008. Cash
provided by financing activities was $3.9 million during the nine
months ended September 30, 2009 as compared to utilized cash of
$0.4 million during the same period of 2008. The increase in cash
provided by financing activities stemmed from short term financing
made available by the Mecar SA bank group. "Our cash position has
improved during the third quarter," said Debbie Ricci, Chief
Financial Officer of The Allied Defense Group. "We are working hard
to secure a longer-term lending facility to bolster our working
capital needs. In the meantime, we will continue to carefully
manage our cash until we secure appropriate working capital
solutions." Conference Call The Company will host a conference call
to discuss these results today, November 16, 2009, at 5:00 p.m.
(ET). To access the conference call, interested parties may call
(888) 286-2314 within the United States or (719) 325-2479 outside
the United States. A replay of the call will be available from
approximately 8:00 p.m. (ET) today, November 16, 2009, through
11:59 p.m. (ET) on November 23, 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: 2628448. The
Allied Defense Group, Inc. CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (Unaudited) (Thousands of Dollars, except per share and
share data) Three Months Ended Nine Months Ended September 30,
September 30, ------------- ------------- 2009 2008 2009 2008 ----
---- ---- ---- Revenue $36,185 $49,247 $115,113 $116,364 Cost and
expenses Cost of sales 32,738 42,851 99,614 97,323 Selling and
administrative 4,902 4,877 13,653 15,125 Research and development
443 535 1,515 1,667 Impairment of long-lived assets - 462 - 462
------- ------- ------- ------- Operating income (loss) (1,898) 522
331 1,787 ------- ------- ------- ------- Other income (expenses)
Interest income 20 102 83 511 Interest expense (1,282) (1,429)
(3,186) (5,470) Net gain (loss) on fair value of senior convertible
notes and warrants 10 (155) 257 (682) Gain (loss) from foreign
exchange contracts 343 (1,329) 912 (1,473) Other-net (402) (846)
(1,205) (837) ------- ------- ------- ------- (1,311) (3,657)
(3,139) (7,951) ------- ------- ------- ------- Loss from
continuing operations before income taxes (3,209) (3,135) (2,808)
(6,164) Income tax (benefit) expense (4) 173 (199) 495 -------
------- ------- ------- Loss from continuing operations (3,205)
(3,308) (2,609) (6,659) ------- ------- ------- ------- Income
(loss) from discontinued operations, net of tax Gain on sale of
subsidiaries 45 - 1,856 113 Loss from discontinued operations (114)
(2,912) (1,679) (2,063) ------- ------- ------- ------- Net income
(loss) from discontinued operations (69) (2,912) 177 (1,950)
------- ------- ------- ------- NET LOSS $(3,274) $(6,220) $(2,432)
$(8,609) ======= ======= ======= ======= Earnings (Loss) per share
- basic and diluted: Net loss from continuing operations $(0.39)
$(0.41) $(0.32) $(0.83) Net earnings (loss) from discontinued
operations (0.01) (0.36) 0.02 (0.24) ------- ------- -------
------- Total loss per share - basic and diluted $(0.40) $(0.77)
$(0.30) $(1.07) ====== ====== ====== ====== Weighted average number
of common shares: Basic 8,143,661 8,067,089 8,102,913 8,034,164
Diluted 8,143,661 8,067,089 8,102,913 8,034,164 The Allied Defense
Group, Inc. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(Thousands of Dollars, except per share and share data) September
30, December 31, ASSETS 2009 2008 (a) -------- -------- Current
Assets Cash and cash equivalents $4,083 $8,816 Restricted cash
8,039 9,666 Accounts receivable, net 20,610 12,646 Costs and
accrued earnings on uncompleted contracts 35,360 21,999
Inventories, net 20,798 21,508 Contracts in progress 2,413 1,469
Prepaid and other current assets 4,145 3,137 Assets held for sale -
4,474 -------- -------- Total current assets 95,448 83,715 --------
-------- Property, Plant Equipment, net 17,789 19,525 --------
-------- Other Assets 1,852 459 -------- -------- TOTAL ASSETS
$115,089 $103,699 ======== ======== CURRENT LIABILITIES Current
maturities of senior secured convertible notes $- $933 Bank
overdraft facility 4,657 381 Current maturities of long-term debt
5,294 2,659 Current maturities of foreign exchange contracts 261
405 Accounts payable 15,983 14,536 Accrued liabilities 18,100
16,099 Customer deposits 23,748 16,731 Belgium social security
2,876 3,522 Income taxes 3,842 3,913 Liabilities held for sale -
1,316 -------- -------- Total current liabilities 74,761 60,495
-------- -------- LONG TERM OBLIGATIONS Long-term debt, less
current maturities 5,210 6,681 Long-term foreign exchange
contracts, less current maturities 295 1,072 Derivative instrument
65 318 Other long-term liabilities 1,353 682 -------- --------
Total long-term obligations 6,923 8,753 -------- -------- TOTAL
LIABILITIES 81,684 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, 8,172,368 at September 30, 2009 and 8,079,509 at
December 31, 2008 817 808 Capital in excess of par value 56,361
55,912 Accumulated deficit (40,783) (38,351) Accumulated other
comprehensive income 17,010 16,082 -------- -------- Total
stockholders' equity 33,405 34,451 -------- -------- TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $115,089 $103,699 ========
======== (a) Condensed consolidated balance sheet as of December
31, 2008, has been derived from audited consolidated financial
statements. The Allied Defense Group, Inc. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited) (Thousands of Dollars) Nine
Months Ended September 30, 2009 2008 ---- ---- Cash flows from
operating activities Net Loss $(2,432) $(8,609) Less: Gain on sale
of subsidiaries (1,856) (113) Discontinued operations, net of tax
1,679 2,063 ----- ----- Loss from continuing operations (2,609)
(6,659) in operating activities, net of divestitures: Depreciation
and amortization 3,201 4,568 Unrealized (gain) loss on forward
contracts (912) 1,473 Loss on sale of fixed assets 90 - Net (gain)
loss related to fair value of notes and warrants (257) 682
Provision (reduction) for estimated losses on contracts (52) 906
Provision (reduction) for warranty reserves, uncollectible accounts
and inventory obsolescence (55) 495 Common stock and stock option
awards 322 292 Deferred director stock awards 82 54 (Increase)
decrease in operating assets and increase (decrease) in
liabilities, net of effects from discontinued businesses Restricted
cash 1,833 5,076 Accounts receivable (7,475) (13,374) Costs and
accrued earnings on uncompleted contracts (11,779) (19,580)
Inventories 1,462 (1,271) Contracts in progress (944) (3,265)
Prepaid and other current assets (1,263) 629 Accounts payable and
accrued liabilities 2,274 4,419 Customer deposits 6,130 4,139
Deferred compensation 614 40 Income taxes (284) 390 ---- --- Net
cash used in operating activities - continuing operations (9,622)
(20,986) Net cash provided by operating activities - discontinued
operations - 3,436 -- ------- Net cash used in operating activities
(9,622) (17,550) ------ ------- Cash flows from investing
activities Capital expenditures (1,220) (1,493) Proceeds from sale
of fixed assets 137 - Net proceeds from sale of subsidiaries 2,023
2,433 ----- ----- Net cash provided by investing activities -
continuing operations 940 940 Net cash used in investing activities
- discontinued operations - (114) -- --- Net cash provided by
investing activities 940 826 --- --- Cash flows from financing
activities Increase in short-term borrowings $977 $2,587 Principal
payments on senior convertible notes (928) (481) Bank overdraft
3,993 (1,822) Net borrowings (repayments) of long-term debt and
capital lease obligations (213) (702) Net cash transferred to
discontinued operations - 3,090 Proceeds from employee stock
purchases 54 80 Retirement of stock - (9) ----- ----- Net cash
provided by financing activities - continuing operations 3,883
2,743 Net cash used in financing activities - discontinued
operations - (3,136) -- ---- Net cash provided by (used in)
financing activities 3,883 (393) ----- ---- Net change in cash of
discontinued operations - (185) Effects of exchange rate on cash 66
460 -- --- NET DECREASE IN CASH AND CASH EQUIVALENTS (4,733)
(16,842) Cash and cash equivalents at beginning of period 8,816
21,651 ----- ------ Cash and cash equivalents at end of period
$4,083 $4,809 ====== ====== Supplemental Disclosures of Cash Flow
information Cash paid during the period for Interest $3,609 $5,518
Taxes $28 $99 Supplemental Disclosures of Non-Cash Investing and
Financing Activities Capital leases $22 $26 The Allied Defense
Group, Inc Calculation of EBITDA from continuing operations
(Unaudited) (All amounts are in thousands of U.S. Dollars) Three
months ended Nine months ended September 30, September 30, 2009
2008 2009 2008 ---- ---- ---- ---- Consolidated Loss from
continuing operations $(3,205) $(3,308) $(2,609) $(6,659) Any
extraordinary or non recurring gains or losses (Gain) loss from
fair value of notes and warrants (10) 155 (257) 682 (Gain) Loss
from Sale of Fixed Assets (90) - (90) 231 Non-cash expenses
associated with stock compensation expense 118 132 404 436
Impairment of long-lived assets - 462 - 462 ------- ------- -------
------- Adjusted Net Loss from continuing operations $(3,187)
$(2,559) $(2,552) $(4,848) Interest Income (20) (102) (83) (511)
Interest Expense 1,282 1,429 3,186 5,470 Income tax expense (4) 173
(199) 495 Depreciation and Amortization Expense 1,132 1,338 3,201
4,040 Any non-cash transactions: Foreign currency (gain) loss (28)
2,280 499 2,477 Adjustments related to Inventory (80) 114 (177) 285
Other non-cash charges 232 (1) 439 152 ----- ------ ------ ------
Consolidated EBITDA $(673) $2,672 $4,314 $7,560 ----- ------ ------
----- *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
Income (Loss) from continuing operations to EBITDA from continuing
operations for the reported periods. 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 and services 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: The 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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