ADS posts revenues of $13.0 million for its first quarter ended April 27, 2008



    Highlights
    ----------

    
    - Revenues of $13.0 million during the first quarter, for an increase of
      18%;
    - Breakthrough into automobile market;
    - Commercialization of the HydrabathTM wipe scheduled for autumn;
    - Seasonality of revenues makes profitability goals difficult to attain
      in the first quarter;
    - The Company has a solid order book and anticipates significant sales
      growth during the current fiscal year.
    

    SAINT-ELZEAR-DE-BEAUCE, QC, June 5 /CNW Telbec/ - The Board of Directors
of ADS Inc. "ADS" (TSX: AAL.A) today announced the Company's financial results
for the first quarter ended April 27, 2008.
    The Company's sales volume for the three-month period ended April 27,
2008 was $13.0 million, for an increase of $2.1 million over the $10.9 million
recorded during the first quarter of the preceding fiscal year. The sales
volume growth is primarily attributable to sales from the Beckwith Bemis
division, acquired in June of last year.
    During the first quarter, the Company recorded a net loss of $419,000 or
$0.02 per share on a consolidated basis. This compares to a loss of $49,000 or
$0.00 per share, also on a consolidated basis, for the same three-month period
of the preceding fiscal year.
    Results for the first quarter were in line with the results anticipated
by management during budget preparation for the fiscal year. The seasonality
of the Company's revenues, as well as lower gross profit margins linked to the
increase in raw material costs, have made it difficult to reach an acceptable
level of profitability in the first quarter. The Company is also affected by
the appreciation of the Canadian dollar, which increases the competitiveness
of foreign products.

    Short-term revenue growth outlook

    "Each year, the sales take-off in the geosynthetics sector results in a
major increase in revenues during the second and third quarters. Presently,
our order book is strong, which allows us to be confident about the results
over the coming quarters. For the current fiscal year, we estimate that our
annual sales should show a significant increase over last year," said Mr. Guy
Drouin, President and Chief Executive Officer of ADS.
    Over the short-term, ADS plans to take advantage of several opportunities
in its various market segments, in particular the disposable wipes, automobile
and industrial applications sectors. "We are presently in the process of
finalizing the marketing plan for the HydrabathTM disposable wipe, which will
be launched by this fall in the retail market. In addition, the assembly
facilities for the draintube products from the joint venture company Afitex
Texel Geosynthetics Inc. were finalized during the first quarter. The market
launch for these products has begun and several projects will be carried out
in this sector over the summer. These innovative products offer an excellent
business development outlook in the United States, which is a market that we
intend to quickly develop," adds Mr. Drouin.
    Furthermore, ADS continues its work in order to increase its production
capacity and competitiveness in manufacturing geotextile products. "The
Company's objective is to strengthen its position as a leader in Quebec and
develop new markets. Many major infrastructure projects will be carried out in
the coming years and we have all the expertise and know-how required to
position us well in this promising market," concluded Mr. Drouin.

    Forward-looking statement

    With the exception of historical information, this press release contains
forward-looking information and statements about the Company's future
performance. 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. For more information about ADS,
please visit the Company's web site at: www.adsinc.ca

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

                                                      Three-Month Periods
                                                      April 27,     April 29,
                                                          2008          2007
                                                             $             $

    Revenues                                            12,965        10,934
                                                     ------------------------
    Cost of sales and operating expenses before
     the following items                                12,333        10,059

    Research and development costs                         168           158
    Depreciation of property, plant and equipment          796           732
    Amortization of intangible assets                      148            98
                                                     ------------------------

                                                        13,445        11,047
                                                     ------------------------

    Operating loss                                        (480)         (113)
                                                     ------------------------

    Financial expenses (revenues)
    Interest on long-term debt                              65             -
    Interest and bank charges                               76            18
    Interest income                                        (29)          (59)
                                                     ------------------------

                                                           112           (41)
                                                     ------------------------

    Loss before income taxes                              (592)          (72)

    Income taxes                                          (173)          (23)
                                                     ------------------------

    Net loss and comprehensive loss for the
     period                                               (419)          (49)
                                                     ------------------------
                                                     ------------------------

    Basic and diluted net loss per Class A share         (0.02)            -
                                                     ------------------------
                                                     ------------------------


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

                                                        Three-Month Periods
                                                      April 27,     April 29,
                                                          2008          2007
                                                             $             $

    Contributed surplus

    Balance - Beginning of period                          542           478

    Stock-based compensation                                 7            19
    Average paid-up capital in excess of
     redemption price of 15,000 Class A shares
     cancelled                                               6             -
                                                     ------------------------

    Balance - End of period                                555           497
                                                     ------------------------
                                                     ------------------------

    Retained earnings

    Balance - Beginning of period                       10,855        10,862
    After-tax adjustment related to the
     implementation of the new accounting
     standard on financial instruments                       -            30
    Net loss for the period                               (419)          (49)
                                                     ------------------------

                                                        10,436        10,843

    Dividends on Class A shares                           (952)         (954)
                                                     ------------------------

    Balance - End of period                              9,484         9,889
                                                     ------------------------
                                                     ------------------------


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

                                                         As at         As at
                                                      April 27,   January 27,
                                                          2008          2008
                                                             $             $

    ASSETS

    Current assets
    Accounts receivable                                  8,427         7,724
    Inventory                                           10,662         7,888
    Income taxes recoverable and research and
     development tax credits recoverable                   740           544
    Prepaid expenses                                       564           516
    Unrealized foreign exchange gain on forward
     exchange contracts                                     93           135
    Current portion of balances of sales price
     receivable                                            614         1,156
                                                     ------------------------

                                                        21,100        17,963

    Research and development tax credits
     recoverable                                           614           473
    Balances of sales price receivable                     833         1,366
    Property, plant and equipment                       25,975        26,342
    Intangible assets                                    2,830         2,934
    Future income tax assets                                75           158
    Goodwill                                                75            75
                                                     ------------------------

                                                        51,502        49,311
                                                     ------------------------
                                                     ------------------------

    LIABILITIES

    Current liabilities
    Excess of outstanding cheques over bank
     balances                                            1,610           410
    Bank loans                                           4,420         3,535
    Accounts payable and accrued liabilities             6,374         5,579
    Dividends payable                                      952             -
    Future income tax liabilities                           24            24
    Current portion of long-term debt                      168           175
                                                     ------------------------

                                                        13,548         9,723

    Long-term debt                                       3,283         3,353
    Future income tax liabilities                        1,949         2,137
                                                     ------------------------

                                                        18,780        15,213
                                                     ------------------------
    SHAREHOLDERS' EQUITY

    Capital stock                                       22,683        22,701
    Contributed surplus                                    555           542
    Retained earnings                                    9,484        10,855
                                                     ------------------------

                                                        32,722        34,098
                                                     ------------------------

                                                        51,502        49,311
                                                     ------------------------
                                                     ------------------------
    




For further information:

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

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