ADS posts revenues of $10.9 million for its first quarter ended April 29, 2007



    
    Highlights
    ----------

    - Revenues of $10.9 million during the first quarter;
    - Obtained first order from a subcontractor in the automobile market;
    - Improvement in the Company's operational results;
    - ADS actively continues its evaluation program with a view to acquiring
      companies.
    

    SAINT-ELZEAR-DE-BEAUCE, QC, June 6 /CNW Telbec/ - The board of directors
of ADS Inc. "ADS" (TSX: AAL.A) today announced the Company's financial results
for its first quarter ended April 29, 2007.
    The sales volume for the Company's continuing activities for the
three-month period ended April 29, 2007 was $10.9 million, a reduction of
$635,000 compared to the $11.6 million recorded over the first quarter of the
preceding fiscal year. This sales volume decline is attributable to a
non-recurring project carried out during the first quarter last year. This
project involved sales of Compostex(TM), which generated almost $400,000 in
revenues. In addition, the Company's sales in the geotextile market have been
affected by the late spring experienced in Quebec.
    For all of its activities during the first quarter, the Company recorded
a net loss of $49,000 or $0.00 per share on a consolidated basis. This
compares to $116,000 or $0.01 per share, also on a consolidated basis, for the
same three-month period of the preceding fiscal year. As in past years, the
seasonal impact on the Company's revenues during this quarter makes it
difficult to achieve profitability compared to the other quarters of the
fiscal year.
    The operating loss during the first quarter was lower than that recorded
over the same period of the preceding fiscal year, despite the sales volume
decline. This improvement is due to better operational results and a reduction
in certain fixed costs, notably with respect to the level of administration
expenses.

    Short-term revenue growth outlook

    "The sales growth of some of our platforms during the first quarter,
combined with opportunities opening up to us in the disposable wipes and
automobile markets, allowing us to forecast sales volume growth in the coming
quarters. We are also pleased to confirm that we have obtained a first order
to supply material for the automobile market. We believe that this initial
order could lead to an agreement, which would likely generate more than
two million dollars in annual sales. In the future, we aim to increase our
growth in this sector, which offers the company strong commercial potential.
Furthermore, in order to support our business development, we are presently
looking to reinforce our sales team by adding new representatives whose
expertise will complement that of our current team members. These new team
members will help us to develop the American market in a more strategic way,"
said Mr. Guy Drouin, President and Chief Executive Officer of ADS.
    "In addition, we are actively continuing our enterprise evaluation
program aimed at identifying promising acquisition opportunities currently
available in the market. The objective of these efforts is to strengthen and
solidify our position in North America. In this regard, we intend to announce
positive results in the very short-term. The efforts made over the last year
are now leading to concrete projects, enabling us to envision the future with
renewed confidence," added Mr. Drouin.

    Forward-looking statement

    With the exception of historical information, this press release contains
forward-looking information and statements about the Company's
futureperformance. These statements are based on assumptions, uncertainties,
as well as on management's best evaluations possible in relation to future
events. These factors are subject to, but are not limited to, variations in
quarterly financial results, changes in demand for the Company's products and
services, the impact of the competition on pricing and on the market in
general, in addition to setbacks that could affect economic conditions.
Readers are therefore cautioned that actual results could differ from forecast
results.

    ADS Inc., whose head office is based in Beauce, near Quebec City, is a
corporation active primarily in the manufacturing sector through subsidiaries
operating in the technical textiles field.


    
    Interim Consolidated Statement of Earnings and comprehensive income
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (unaudited)
    (in thousands of dollars, except per share amounts)

                                                         Three-Month Periods
                                                        April 29,   April 30,
                                                            2007        2006
                                                               $           $

    Revenues                                              10,934      11,569
                                                    -------------------------

    Cost of sales and operating expenses before the
     following items                                       9,939      10,682

    Research and development costs                           268         229
    Depreciation of property, plant and equipment            732         725
    Amortization of intangible assets                         98         102
                                                    -------------------------

                                                          11,037      11,738
                                                    -------------------------

    Operating loss                                          (103)       (169)
                                                    -------------------------

    Financial expenses (revenues)
    Interest on long-term debt                                 -           4
    Interest and bank charges                                 18          26
    Interest income                                          (59)        (59)
                                                    -------------------------

                                                             (41)        (29)
                                                    -------------------------

    Loss before income taxes                                 (62)       (140)

    Income tax recovery                                      (21)        (45)
                                                    -------------------------

    Net loss from continuing operations                      (41)        (95)

    Net loss from discontinued operations                     (8)        (21)
                                                    -------------------------

    Net loss for the period                                  (49)       (116)
                                                    -------------------------
                                                    -------------------------

    Basic and diluted net loss per Class A share
     from continuing operations                                -           -
                                                    -------------------------
                                                    -------------------------

    Basic and diluted net loss per Class A share               -      $(0.01)
                                                    -------------------------
                                                    -------------------------

    Weighted average number of shares outstanding
     (in thousands)                                       19,076      19,076
                                                    -------------------------
                                                    -------------------------


    Interim Consolidated Statement of Retained Earnings
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (unaudited)
    (in thousands of dollars)

                                                         Three-Month Periods
                                                        April 29,   April 30,
                                                            2007        2006
                                                               $           $

    Balance - Beginning of period                         10,862      12,991
    Adjustment related to the implementation
     of the new standard on financial instruments             30           -
    Net loss for the period                                  (49)       (116)
                                                    -------------------------

                                                          10,843      12,875

    Dividends on Class A shares                             (954)       (954)
                                                    -------------------------

    Balance - End of period                                9,889      11,921
                                                    -------------------------
                                                    -------------------------


    Interim Consolidated Balance Sheet
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (unaudited)
    (in thousands of dollars)

                                                           As at       As at
                                                        April 29, January 28,
                                                            2007        2007
                                                               $           $

    ASSETS

    Current assets
    Cash                                                       -           2
    Short-term investment                                    256       1,506
    Accounts receivable                                    6,897       6,136
    Inventory                                              7,843       5,671
    Income taxes recoverable                                 309         175
    Prepaid expenses                                         425         431
    Future income tax assets                                  23          23
    Current portion of balances of
     sales price receivable                                  834         924
    Current assets of discontinued operations                315         278
                                                    -------------------------

                                                          16,902      15,146

    Research and development tax credit recoverable          248         182
    Long-term assets of discontinued operations                8           8
    Balances of sales price receivable                     1,850       2,399
    Property, plant and equipment                         21,901      22,148
    Intangible assets                                      1,888       1,975
    Future income tax assets                                  86          86
    Goodwill                                                  75          75
                                                    -------------------------

                                                          42,958      42,019
                                                    -------------------------
                                                    -------------------------

    LIABILITIES

    Current liabilities
    Excess of outstanding cheques over bank balance          933           -
    Bank loans                                                70          30
    Accounts payable and accrued liabilities               5,110       4,811
    Dividends payable                                        954           -
    Future income tax liabilities                              2          15
    Current portion of long-term debt                        150         159
    Current liabilities of discontinued operations           111         318
                                                    -------------------------

                                                           7,330       5,333

    Long-term debt                                           132         230
    Future income tax liabilities                          2,388       2,394
                                                    -------------------------

                                                           9,850       7,957
                                                    -------------------------

    SHAREHOLDERS' EQUITY

    Capital stock                                         22,722      22,722
    Contributed surplus                                      497         478
    Retained earnings                                      9,889      10,862
                                                    -------------------------

                                                          33,108      34,062
                                                    -------------------------

                                                          42,958      42,019
                                                    -------------------------
                                                    -------------------------
    




For further information:

For further information: Mr. Paul Drouin, Chairman of the board; Mr. Guy
Drouin, President and Chief Executive Officer, (418) 387-3383; Source: ADS
Inc.

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