Exhibit 99.1
The Allied Defense Group Announces Third Quarter and Nine Months
Financial Results and Full-Year 2004 Estimates
Company Records Twentieth Consecutive Profitable Quarter
VIENNA, Va., Nov. 4 /PRNewswire-FirstCall/ -- The Allied Defense Group,
Inc. (Amex: ADG) announces third quarter and nine months financial results for
the period ending September 30, 2004. The Company said that while its third
quarter and nine months results were behind 2003 results, it anticipates an
excellent fourth quarter and a good full-year 2004 with estimated 2004
earnings in the range of $1.35 - $1.42 per share.
Third Quarter Results -- For the three months ended September 30, 2004,
Allied earned $0.18 million, or $0.03 a share fully diluted, on revenues of
$37.1 million, compared to earnings of $0.86 million, or $0.16 a share fully
diluted, on revenues of $34.9 million, for the same period in 2003.
Nine Months Results -- For the nine months ended September 30, 2004,
Allied earned $5.2 million, or $0.89 a share fully diluted, on revenues of
$116.8 million. This compares to earnings of $7.1 million, or $1.23 a share
fully diluted, on revenues of $120.3 million for the same period in 2003.
Revenue -- Revenue for the three months ended September 30, 2004 increased
roughly 7% over the revenue for the same period in 2003. The change was
primarily due to sales growth at NS Microwave and an increase in the value of
the Euro. Sales at NS Microwave surpassed 2003 results by $4.6 million, or
374%, due to improved order flow from its core business base within the
Department of Homeland Security. Revenue for the quarter was positively
impacted by a 7.9% increase in the value of the Euro over the same period in
2003.
Earnings Per Share -- Diluted earnings per share for the three months
ended September 30, 2004 were lower by $0.13. The change was due to increased
R&D/G&A charges, as well as delays in the delivery of a significant raw
material order (primarily steel) that negatively impacted revenue and earnings
for the quarter. These materials will be delivered in the fourth quarter.
Backlog -- Backlog as of September 30, 2004 was approximately $83.8
million, compared to $115.4 million as of December 31, 2003. The September 30,
2004 and December 31, 2003 amounts include an unfunded portion of
approximately $9.4 million and $12.0 million, respectively, from a U.S.
government agency that awarded NS Microwave a multi-year Indefinite Delivery,
Indefinite Quantity (IDIQ) contract in 2003. In the third quarter, Allied
booked new orders of approximately $40.4 million.
SG&A/R&D -- SG&A/R&D expenses for the three months ended September 30,
2004 rose by 18% over 2003 levels, largely due to activities at NS Microwave
and SeaSpace that account for approximately 65% of the growth for the quarter.
The Allied Defense Group, Inc.
(All amounts in thousands of U.S. Dollars except share data)
Income Statement Three Months Nine Months
Ended September 30, Ended September 30,
2004 2003 2004 2003
Revenue $ 37,142 $ 34,871 $ 116,837 $ 120,251
Cost of Sales (28,062) (26,972) (82,909) (86,578)
Gross Margin $ 9,080 $ 7,899 $ 33,928 $ 33,673
24.4% 22.7% 29.0% 28.0%
SG&A/R&D 8,041 6,804 23,766 20,855
Operating Income $ 1,039 $ 1,095 $ 10,162 $ 12,818
2.8% 3.1% 8.7% 10.7%
Other Income/(Expense) (1,051) (470) (2,289) (1,521)
Taxes (194) (238) 2,721 4,198
Net Income 182 863 5,151 7,099
0.5% 2.5% 4.4% 5.9%
Weighted Shares
Basic 5,565,871 5,504,106 5,557,623 5,490,475
Fully Diluted 5,966,973 6,001,239 6,009,857 5,984,933
Earnings Per Share
Basic $ 0.03 $ 0.16 $ 0.93 $ 1.29
Fully Diluted $ 0.03 $ 0.16 $ 0.89 $ 1.23
Balance Sheet -- Certain balance sheet data is listed below:
Balance Sheet As of September As of December
Data 30, 2004 31, 2003
Current Assets $ 169,764 $ 184,391
Total Assets $ 214,220 $ 227,237
Current Liabilities $ 91,683 $ 107,511
Working Capital $ 78,081 $ 76,880
Long Term Liabilities $ 7,663 $ 9,731
Stockholders' Equity $ 114,874 $ 109,995
2004 Full Year Estimates -- The Company anticipates an excellent fourth
quarter and a profitable full year 2004.
2004 Full Year Estimates
(in millions of US Dollars
except per share amounts) 2003 Actual 2004 Range
Revenues $ 171.4 $ 153.0 - 160.0
Net Earnings $ 8.8 $ 7.8 - 8.1
Earnings Per Share (diluted) $ 1.54 $ 1.35 - 1.42
Major General (Ret.) John G. Meyer, Jr., Chief Executive Officer and
President of The Allied Defense Group, said, "As we have stated previously,
2004 will be less profitable than the preceding two years due to the absence
of a large order in our backlog, such as the approximately $130 million
Foreign Military Sales (FMS) contract awarded in 2002."
"Even so, consolidated third quarter results were lower than we had
expected. The third quarter is usually impacted by reduced production
activity at our two European subsidiaries, which have mandated vacation
schedules within Belgium. However, the delivery delay of significant raw
materials at MECAR provided an additional challenge in this third quarter.
Despite lower profitability in the third quarter than anticipated, the
financial results for the fourth quarter are expected to be significantly
better."
"I am proud to note that shareholder equity has increased over the first
nine months of 2004 by approximately $4.9 million. We have worked with
determination to ensure the profitability of our subsidiaries this year and,
although we still have much higher expectations for the future, we are making
immense strides now. We will continue to serve our shareholders by increasing
the value of their investment in our Company," concluded General Meyer.
About The Allied Defense Group, Inc. (formerly Allied Research
Corporation)
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 electronic and microwave security systems principally
for European and North American markets; manufactures battlefield effects
simulators and other training devices for the military; and designs and
produces state-of-the-art weather and navigation software, data, and systems
for commercial and military customers.
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.
CONTACT: Crystal B. Leiderman (Bedwell), Manager, Investor Relations,
+1-800-847-5322, or Jim Drewitz, Investor Relations, +1-972-355-6070, both of
the Allied Defense Group, Inc.
SOURCE Allied Defense Group, Inc.
-0- 11/04/2004
/CONTACT: Crystal B. Leiderman (Bedwell), Manager, Investor Relations,
+1-800-847-5322, or Jim Drewitz, Investor Relations, +1-972-355-6070, both of
the Allied Defense Group, Inc./
/Web site: http://www.allieddefensegroup.com /
(ADG)
CO: Allied Defense Group, Inc.; NS Microwave
ST: Virginia
IN: ARO
SU: ERN ERP