Armtec Infrastructure Inc. Reports Third Quarter Results

Company Announces Comprehensive Turnaround Plan to Deliver Business Improvements

GUELPH, ON, Nov. 14, 2011 /CNW/ - Armtec Infrastructure Inc. ("Armtec" or "the Company") (TSX: ARF) and (TSX: ARF.DB) today reported financial results for the third quarter and nine months ended September 30, 2011 and its Turnaround Plan.

Third Quarter Highlights:

  • Revenue was $143.4 million during the third quarter of 2011, consistent with the comparable three-month period in 2010.  Year to date, revenues were $341.6 million, a decrease of $1.5 million over 2010. Improved installation conditions in the third quarter supported year over year Construction and Infrastructure Applications ("CIA") product growth offsetting softness in Engineered Solutions ("ES") project volumes.
  • Gross margin for the quarter was $22.3 million, a decrease of $6.7 million from the same period in 2010. As a percentage of revenue, gross margin was 15.6%, which compared favourably to 9.3% in the second quarter of 2011 but lower than the 20.3% achieved in the same period in 2010.  Year to date, gross margin was $38.6 million, a decrease of $25.9 million from the same period in 2010.  As a percentage of revenue, gross margin for the nine-month period in 2011 declined to 11.3% as compared to 18.8% in 2010.
  • EBITDA1 was $12.1 million, compared to $22.5 million in the same period in 2010.  Year to date, EBITDA was $11.1 million, compared to $41.7 million in the prior year.  These results continue to reflect the lower ES project margins.
  • As a result of the decline in the Company's share price in the third quarter, as required under International Financial Reporting Standards ("IFRS"), Armtec recorded a further non-cash impairment charge of $50.2 million against goodwill, other intangible assets, and certain property, plant and equipment in the quarter.

Turnaround Plan:
Armtec announces the details of its comprehensive Turnaround Plan focused on cost reductions and efficiencies to improve near- and long-term earnings and cash flow. Management has set a target EBITDA improvement of $20.0 million with the benefit of these initiatives to occur over the next 12 to 24 months.  One-time cash costs are estimated to be $5.0 million and are primarily related to severance costs associated with an approximate headcount reduction of 270 or approximately 14% of its workforce by the end of 2011.  The Turnaround Plan is expected to require minimal further capital cost.

The Turnaround Plan addresses three key areas of improvement in the business:

Efficiency Improvements
Efficiency improvements are expected to be the largest contributor to the EBITDA improvement target.  These improvements will be achieved through improved visibility into the business and standardized, rigorous operating processes.  Identified initiatives include:

  • Reorganizing plant staffing levels and shifts
  • Scheduling seasonal plant shut downs, without impacting customer service expectations
  • Reducing headcount by approximately 190
  • Improving quality control to reduce waste and rework

Structural Cost Reductions
The focus will be to remove costs in the business considered to be redundant.  Identified items include:

  • Capacity rationalization involving two operations and the relocation of equipment to other plants
  • Outsourcing production to lower cost sources of supply
  • Headcount reductions of approximately 80
  • Improvement in procurement and logistics

Revenue Improvement
A return to more focused sales efforts in key product areas and price optimization strategies, most significantly in the CIA products.  Identified items include:

  • Refocusing the business on product ranges that are underperforming
  • Improved margins leveraging Armtec's current leadership in established market segments

Approximately 90% of the $20.0 million EBITDA target relates to efficiency improvements and structural cost reductions. Initial steps in the Turnaround Plan commenced during the third quarter of 2011 along with a strengthening of the management team.  Mr. Anderson and his new management team remain focused on delivering the results under the Turnaround Plan.

"This comprehensive Turnaround Plan is designed to improve near- and long-term earnings and cash flow position with a primary focus of lowering costs and improving efficiencies. To date, we have already achieved enhanced visibility in the business that has resulted in performance improvements in the quarter over the first half of the year," said Mark Anderson, President and Chief Executive Officer. "At the same time, however, our results to date continue to reflect margin compression on ES projects due to a higher proportion of lower margin projects, as well as continued low volumes of commercial and industrial construction activity.  Looking ahead, stronger bookings are expected in the fourth quarter at improved margins, particularly in the ES business, though this backlog will not have a meaningful impact on financial performance until 2012."

Summary of Results:

(in thousands of Canadian dollars except per share or unit amounts)
(unaudited)
  Three Months Ended     Nine Months Ended
  September 30,
2011
    September 30,
20101
    September 30,
2011
    September 30,
20101
                       
Revenue $ 143,373   $ 143,292   $ 341,643   $ 343,142
                       
Gross margin2 $ 22,332   $ 29,046   $ 38,611   $ 64,548
As a % of revenue                      
  Selling, general and administrative2   17,542     15,669     50,957     50,028
Earnings (loss) from operations before the undernoted   4,790     13,377     (12,346)     14,520
  Impairment   50,197     -     190,219     -
  Other (gains) losses - net   1,657     1,508     1,367     (1,400)
(Loss) earnings from operations $ (47,064)   $ 11,869   $ (203,932)   $ 15,920
                       
Net (loss) earnings attributable to owners of the Company $ (52,334)   $ 8,804   $ (201,274)   $  5,660
Depreciation and amortization $ 6,567   $ 7,381   $ 21,195     $  22,241
Finance cost - net $ 8,767   $ 7,826   $ 21,780    $  16,086
EBITDA3 $ 12,118   $ 22,506   $ 11,099      $  41,722
As a % of revenue                      
Dividends or distributions declared $ -   $ 10,987   $ 8,139      $  32,916
Basic and diluted (loss) earnings per share or unit $ (2.18)   $ 0.43   $ (8.90)      $ 0.28
  1. In November of 2010, Armtec disposed of certain non-core assets related to a cement packaging business.  As a result, the 2010 comparative numbers have been restated to reflect this disposal transaction. The 2010 comparative numbers have also been restated to reflect IFRS.
  2. Gross margin for the nine months ended September 30, 2011 and 2010 includes reorganization expenses of $Nil and $0.5 million, respectively.  Selling, general and administrative for the nine months ended September 30, 2011 and 2010 includes reorganization expenses of $2.3 million and $2.6 million, respectively.
  3. Please refer to the non-GAAP measures section of the separately issued MD&A for the reconciliation of EBITDA.

OVERVIEW

Revenue for the three months ending September 30, 2011 was $143.4 million, slightly ahead of the $143.3 million in the same period of 2010.  For the nine months ended September 30, 2011, revenue was $341.6 million; slightly below 2010 levels of $343.1 million.

CIA product revenue for the first nine months of 2011 was $197.4 million, representing growth of 7.3% over 2010 at $183.9 million.  CIA volumes, in the majority of the Company's facilities, were well below average levels in the first half of 2011 due to poor weather conditions; however these volumes recovered during the third quarter installation season. Third quarter revenue in 2011 was $96.7 million, or 20.6% ahead of 2010 levels. CIA gross margins remained compressed as a result of (i) under-utilized capacity in the first half of the year, (ii) raw material and freight increases that were not entirely passed through in end use pricing and (iii) an increased competitive pricing environment.  In contrast, the 2010 results benefited from the early spring which moved drainage purchases ahead in the procurement cycle and as a result, the facilities were fully utilized during that period.

Revenue of $144.3 million from ES projects in the nine-month period ended September 30, 2011 was 9.4% lower than the comparative period in 2010. In the third quarter of 2011, ES revenue was $46.7 million as compared to $63.1 million in the same quarter of 2010.  ES project activity remained below 2010 levels and was impacted by a slowdown in overall construction activity resulting in new project delays, certain customer schedule postponements and lower than anticipated production volumes. The Company continues to work through certain large projects that were awarded at recessionary level pricing margins.   The impact of these contracts will diminish as projects are completed and the backlog is rebuilt with more traditional work. Current ES bid margins have improved slightly and projects are more consistent with Armtec's core production competencies, however these contracts, if awarded, will start production primarily in 2012.

On August 19, 2011, Armtec entered into a loan agreement and warrant agreement with a Brookfield Asset Management company which provided the Company with the $125.0 million credit facility.   Armtec drew the full amount available and repaid in full the lenders under its previous senior term and revolving facilities ("Previous Credit Facilities") with the remaining cash balance available for general corporate purposes.

In addition to the two potential class action proceedings in Ontario, the Company and certain of its officers, a former director, and its current directors (along with certain third party underwriters) have been named as defendants in a potential class action proceeding commenced in the Superior Court of Quebec on October 12, 2011. The plaintiff in the Quebec proceeding seeks to represent all persons or entities, other than certain excluded persons, who acquired securities of the Company from March 30, 2011 to June 8, 2011.  The plaintiffs seek damages of $70.0 million and other monetary and non-monetary relief for alleged violations of securities legislation, negligent misrepresentations and other causes of action in connection with alleged misrepresentations and omissions in the Company's preliminary short form prospectus dated March 30, 2011, in its short form prospectus dated April 6, 2011, and in its public disclosure. The Company intends to defend these actions vigorously and is monitoring the risk of these proceedings and the potential exposure to the Company of a potential loss. At this time, the quantum of a potential loss, if any, cannot be readily determined and no loss provision has been made.

On October 23, 2011, Mark Anderson assumed the position of President and Chief Executive Officer of the Company. Prior to his appointment as President and Chief Executive Officer, Mr. Anderson held the position of Chief Operating Officer of the Company with responsibility for driving operational improvements and advancing business excellence while supporting Armtec's growth strategy. Concurrent with this change, Charles Phillips resigned as President, Chief Executive Officer and Director of the Company in order to pursue other interests.

As a result of the continued decline in the Company's share price during the third quarter of 2011, Armtec reviewed the carrying value of its assets relative to the estimated recoverable amounts as required under IFRS and as a result recorded an additional non-cash impairment charge of approximately $50.2 million against goodwill, other intangible assets and certain property, plant and equipment in its financial results.  Armtec has recognized a total non-cash impairment charge of $190.2 million during the nine months ended September 30, 2011.  IFRS, which applies impairments differently than the former Canadian GAAP, initially allocates an impairment charge to goodwill, with the balance allocated on a pro rata basis to intangible assets as well as property, plant and equipment.  Under this allocation, the Company recorded a non-cash impairment charge against property, plant and equipment of $20.3 million.

THIRD QUARTER RESULTS

Revenue
Armtec recorded revenue of $143.4 million for the third quarter of 2011, consistent with the three months ended September 30, 2010.  Revenue from CIA products was $96.7 million for the three months ended September 30, 2011, a significant increase of 20.6% or $16.5 million over the same period in 2010.   Many of the CIA product deliveries and installations were delayed from earlier in the year as a result of the unseasonably wet spring weather.  With the improved installation conditions during the third quarter, product demand improved, particularly in the infrastructure market.  The end of the third quarter saw a strong start to the fall agricultural drainage installation season after a very late spring season. Activity levels in the Company's natural resource end use market continued to be strong in the Pacific region during the quarter especially in the energy and forestry sectors.  Residential end use market activity remained below prior year levels, particularly in the Prairie and Central regions where single family housing starts have slowed considerably as compared to 2010 levels.

ES revenue was $46.7 million in the third quarter of 2011, representing a slight decrease of 5.7% over the second quarter of 2011 but was down $16.4 million or 26.0% from the comparative 2010 quarter. Production volumes during the third quarter of 2011, principally in the Central and Prairie regions, were lower due to (i)  an overall softness in construction activity which led to delays in new project awards, (ii) sound wall volumes significantly lower on weak demand in the US and increased competitive pressures in the Ontario market and (iii) continuing construction delays in the Prairie region which affected several plants. The third quarter of 2010 was characterized by relatively high production volumes; notably the large Calgary West Light Rail Transit Guideway ("WLRTG") and parkade. In the Central region, the third quarter of 2011 saw production continue on the Toronto Transit Commission ("TTC") tunnel liners and several new parkade structures.

Loss from Operations
The loss from operations for the third quarter ended September 30, 2011 was $47.1 million, inclusive of a non-cash impairment charge of $50.2 million, as compared to earnings of $11.9 million in the same period of the prior year.  Armtec recorded a  further non-cash impairment charge during the third quarter of 2011.  Armtec tests the carrying value of goodwill on an annual basis.  In addition, the carrying value of assets is tested when there is an indication that the assets may be impaired.  During the third quarter, the Company's share price declined from the level at the end of the second quarter of 2011, which was considered by management to be indicative of possible further asset impairment. Accordingly, management tested the carrying value of the assets related to the operating segments of the business.  While Armtec has one reporting segment, the operating segments are determined on a regional level.

The test was carried out by comparing the carrying amount of each operating segment to their recoverable amount.  This test resulted in a non-cash impairment charge of $29.9 million against the goodwill allocated to three of the operating segments.  A further charge of $18.3 million was allocated against certain property, plant and equipment and other intangible assets of two regions.

The gross margin for the three months ended September 30, 2011 was $22.3 million, a decrease of $6.7 million from $29.0 million in the same period of 2010.  As a percentage of revenue, the third quarter gross margin was 15.6% which showed improvement over the 9.3% in second quarter of 2011 but was still lower than the 20.3% achieved in the same period of 2010.

Gross margin performance in the CIA products business improved in the third quarter from earlier in the year with the increased production volumes in the quarter.  The higher utilization of the facilities in the quarter resulted in a increased absorption of manufacturing overheads, as compared to the unusually low volumes experienced during the first half of 2011.  However, gross margin still remained lower than historical averages as a result of competitive pricing pressures and input cost increases, particularly with regard to freight.  While Armtec historically passes input cost increases on to the market, the implementation of SAP impaired the visibility of management into this area of the business and created delays in implementing pricing adjustments.  Significant improvements were made during the quarter on gaining better visibility into the business through the focused efforts of the management team on the continuing optimization of SAP.

The ES projects continued to be impacted in the third quarter of 2011 by (i) customer construction delays and associated inefficiencies, (ii) unabsorbed production overheads caused by lower volumes which were impacted by delays in new project awards, (iii) the remaining projects that were booked during the recession and were more complex in nature with lower pricing and (iv) unfavourable product mix with lower volumes of sound wall and insulated wall panels which are provided to the industrial building segment.  Offsetting the lower volumes and delays were the initial benefits from the progress made in correcting certain production inefficiencies which became evident in the third quarter of 2011.  Visibility into the business was initially impacted by the changes associated with the SAP implementation; however, progress was made in resolving identified issues leading to the execution of Turnaround Plan cost saving actions in the quarter.  Included in these actions were improvements to the TTC tunnel liner manufacturing processes.  The result was an improvement gain in productivity while ensuring the Company achieves higher standards of both safety and quality.  Management estimates that this contract will perform at a breakeven level for the balance of the contract although additional losses were incurred in the third quarter.  Overall ES project performance has improved in the quarter as a result of these cost reduction actions and other improvement measures put in place.

Depreciation and amortization levels in the quarter were slightly lower than 2010 levels at approximately $6.6 million in 2011 as compared to $7.4 million in 2010.  The carrying value of certain intangible and property, plant and equipment were reduced by $29.1 million as a result of the impairment charge recognized in the second quarter.   A further charge of $18.3 million was recognized in the third quarter but did not impact the depreciation during the quarter.

Selling, general and administrative expenses for the third quarter of 2011 were $17.5 million, or $1.9 million higher than 2010 levels.  The increase was related to a United States ("US") dollar exchange loss in the third quarter for 2011 as opposed to a gain recorded in 2010 and the timing of certain other expenses.

YEAR TO DATE RESULTS

Revenue
Armtec recorded revenue of $341.6 million for the first nine months of 2011, a decrease of $1.5 million as compared to the same period in 2010.  The improved installation conditions during the third quarter supported year over year growth in CIA products offsetting softness in ES project volumes.

Revenue from CIA products was $197.4 million for the nine months ended September 30, 2011, an increase of 7.3% over the same period in 2010.  The 2011 drainage installation season was initially negatively affected by the late arrival of spring, followed by unprecedented wet weather conditions.  The conditions improved in the third quarter with favourable installation conditions supporting improved volumes in this area of the business.   Activity levels, primarily in the Pacific region, supported growth in certain natural resource end use markets, specifically the forestry and energy sectors.  The agricultural drainage market gained momentum in September; the beginning of the fall installation season. Volume improvements were also seen in infrastructure applications for transportation projects. Partially offsetting these revenue gains were declines in residential end use markets, particularly in the Prairie and Central regions where weather impacted the spring renovation market in addition to a considerable slowing of housing starts as compared to 2010 levels.

ES revenue was $144.3 million in the nine months ended September 30, 2011, or a decrease of 9.4% over the same period of 2010.  During 2011, the final stage of the Calgary WLRTG project was completed in the first quarter, while projects such as the South East Stony Trail in the Prairie region continued to experience customer delays.  Armtec's sound wall business experienced declines due to (i) an overall softness in markets in Canada and the US, (ii) the negative impact of competing products, compounded by (iii) the decline in the US dollar.  Volumes on the TTC tunnel liner project reached expected production levels. In addition the Central region commenced parkades for various commercial projects during 2011.

Loss from Operations
The loss from operations for the nine months ended September 30, 2011 was $203.9 million, including a non-cash impairment charge of $190.2 million, as compared to earnings of $15.9 million in the same period of the prior year. The decline in results was largely due to the non-cash impairment charge recognized against certain property, plant and equipment, goodwill and other intangible assets during the nine months ended September 30, 2011 including $3.0 million of intangible assets specifically related to the refinancing of the revolving component of the Previous Credit Facility in August 2011 before its planned maturity.

The gross margin for the nine months ended in 2011 was $38.6 million, a decrease of $25.9 million from the $64.5 million in the same period of 2010.  As a percentage of revenue, the gross margin in the first nine months of 2011 declined to 11.3% as compared to 18.8% in 2010.  While gross margin remains below 2010 levels, progress was made during the third quarter toward narrowing the difference.  The year to date decline in the gross margin percentage reflected (i) the weather related impact of lower manufacturing volumes in Armtec's CIA production facilities in the first half of 2011 as compared to 2010, (ii) input cost increases which were not entirely passed through to the market, (iii) the continued effects on current projects from the competitive recessionary pricing environment and (iv) delays of project awards reducing the absorption of overhead costs.

The projects that Armtec secured during 2010 and carried over into 2011 tended to be more complex to manufacture with lower margin expectations, making it more difficult to meet or exceed original estimates. The Calgary WLRTG, a complex project that experienced breakeven performance, was completed in the first quarter of 2011.  The additional production resources required to meet TTC production milestones also negatively impacted overall margin performance in 2011. As a result of construction delays, many of the larger lower margin projects have carried over into 2011.  These projects were further impacted by the inefficiencies associated with the cold and wet conditions experienced in the first half of 2011 and the disruptions caused by the SAP implementation process.  Announced in the second quarter, the Company has formed cross functional teams which are focused on improving visibility into the performance of the business through better use of SAP.  Progress was made during the third quarter on many fronts and as a result, management has already been able to implement certain Turnaround Plan actions such as production labour rationalization on large ES projects.  Management remains focused on the continuous improvement of the use and functionality of the SAP system.

New project wins, anticipated to commence at the end of 2011, are more in line with Armtec's core manufacturing competencies with improved bidding margins.  Project volumes will continue to remain a challenge.  The beneficial impacts of these projects combined with the improved operational initiatives are not expected to be realized until 2012.

Depreciation and amortization levels in the nine months ended September 30, 2011 were slightly below 2010 levels at approximately $21.2 million.

Selling, general and administrative expenses, including reorganization expenses, for the nine months ended September 30, 2011 were $51.0 million or an increase of $0.9 million over 2010 levels.  As a percentage of revenue, these costs were consistent with 2010 levels.

OUTLOOK

Certain aspects of the Turnaround Plan were implemented in the third quarter, supporting the improvement in the 2011 third quarter performance relative to the second quarter of 2011. Management is focused on delivering the key accountabilities under the Turnaround Plan through the implementation of cost reductions, returning discipline to operating processes, tapping into the full benefits available through SAP and ensuring Armtec's response to changing market conditions is appropriate.  The Turnaround Plan was developed with very clear, attainable actions, with delivery accountabilities throughout every level of the organization.  In parallel with operational actions, continuous improvement activities continue around the utilization of the SAP system.  The accomplishments to date have improved visibility into key areas of the business, providing the operations team with the information required to make the right decisions.  Gains have already been made on the management of input costs, both labour and materials, that will benefit the operations on a go forward basis into 2012.  The Turnaround Plan has a target of $20.0 million in EBITDA improvements over the next 24 months of execution.

Management anticipates stronger bookings in the fourth quarter at improved gross margins, particularly in the ES business.  This backlog will not have a meaningful impact on financial performance until 2012.  Armtec is currently negotiating in excess of $50.0 million of new ES projects across the country for which either verbal approval or letters of intent have been received.  As a result of numerous delays in the awards of new projects, the September 30, 2011 ES project backlog is approximately $90.0 million.  The decline of $50.0 million from December 2010 reflected the progression of large projects, such as the TTC tunnel liners, which have not been replenished to date.   Management anticipates that this backlog level will improve by the end of 2011.

CIA gross margins were compressed as a result of (i) under-utilized capacity and lower manufacturing overhead absorption, (ii) increased input costs not being reflected in end use pricing and (iii) increased competitive pricing due to the low level of work available due to the poor installation conditions experienced during the first half of the year.  While product volumes in the third quarter rebounded, the overall gross margin on CIA products is not expected to recover to prior year levels in 2011.

Construction activity in the Company's end use markets tapers off with the onset of winter conditions and remains at low levels through the first quarter, particularly in the CIA business.  Overall, management expects revenue in the fourth quarter to be slightly below 2010 levels based on the current outlook.  While initial steps under the Turnaround Plan are showing improvements, the gross margins achieved in this historically low volume fourth quarter period will not show a marked improvement over the results achieved to date in 2011.  The initial impact of the Turnaround Plan is expected in the 2012 results, with the full impact realized over a 12 to 24 month period.

The long term outlook for the Company's largest end use market, infrastructure, remains strong despite headwinds in the short term. Governments have continued to reiterate their commitment to infrastructure renewal which has been augmented through the use of public-private partnerships.  What cannot be determined is the timing of these projects.  Armtec has yet to see a full recovery in its private markets.  Residential market activity in 2011 was below 2010 levels and while some recovery is expected in 2011, single family housing start forecasts remain below pre-recession levels.  The commercial and industrial building construction market has stabilized but remains off historical levels and a return to pre-recession levels is not anticipated in the near future given current vacancy rates for commercial and industrial properties.

CONFERENCE CALL & WEBCAST

Management will host a conference call at 10:00 a.m. (ET) on Tuesday, November 15, 2011 to discuss the results.  Investors who wish to participate can access the call using the following numbers: 416-644-3414 or 1-800-814-4859. The call will be webcast live and archived on Armtec's website at www.armtec.com.

A taped rebroadcast will be available to listeners following the call until midnight on Tuesday, November 22, 2011.  To access the rebroadcast, please dial 416-640-1917 or 1-877-289-8525 and quote the passcode 4477692#.

Armtec's full consolidated financial statements, notes to financial statements and management's discussion and analysis are available at www.sedar.com or at www.armtec.com.

ABOUT ARMTEC INFRASTRUCTURE INC.

Armtec is a leading manufacturer and marketer of a comprehensive range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets globally.  These markets include Canada's national and regional public infrastructure markets and private sector markets in agricultural drainage, commercial building, residential construction and natural resources.  Operating through its network of regional offices and production facilities across the country, Armtec's broad range of engineered solutions include products for drainage, bridge applications, soil retention, rehabilitation and water management systems including corrugated high-density polyethylene, corrugated steel and concrete pipe; an array of architectural and structural precast and pre-stressed concrete products from steps, paving stones, slabs and wall panels to highly engineered structural components designed and installed for projects such as bridges, sports venues and parking garages; and a full suite of noise barriers, acoustic enclosure and wall systems along with associated retaining wall and traffic barrier systems.

NON-GAAP MEASURE

Earnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")
References to EBITDA are to earnings before finance cost, taxes (other than capital taxes), depreciation and amortization, certain non-recurring expenses and certain non-cash amounts resulting from purchase accounting.  Management believes that in addition to net earnings, EBITDA is a useful supplemental measure of cash available for dividends prior to debt service, changes in working capital, capital expenditures and income taxes.  However, EBITDA is not a recognized measure under GAAP.  Investors are cautioned that EBITDA should not be construed as an alternative to net and comprehensive earnings determined in accordance with GAAP as an indicator of Armtec's performance or as an alternative to cash flows from operating, investing and financing activities as a measure of Armtec's liquidity and cash flows.  Armtec's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, Armtec's EBITDA may not be comparable to similarly named measures used by other issuers.

RISKS AND UNCERTAINTIES

Armtec is subject to certain risks and uncertainties that could have a material adverse effect on Armtec's results of operations, business prospects, financial condition, dividends to shareholders and the trading price of Armtec's shares.  These uncertainties and risks include, but are not limited to:  industry cyclicality; competition; acquisition and expansion risk; capital and liquidity risk; current economic conditions; reduction in demand for products; information management; credit risk; relationships with suppliers; lack of long-term agreements; expiration of rights under license and distribution arrangements; availability and price volatility of raw materials; product liability; intellectual property; reliance on key personnel; labour markets; environmental; collective bargaining; pension plans; currency fluctuations; interest rates; uninsured and underinsured losses; operating hazards; risk of future legal proceedings; securities laws compliance and corporate governance standards; income tax and other taxes; geographical risk; seasonality and adverse weather; and geopolitical.  Dividends are not guaranteed.  Further information about these and other risks and uncertainties can be found in the disclosure documents filed by Armtec Infrastructure Inc. with the securities regulatory authorities, available at www.sedar.com.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking" statements (including those set out under the heading "Overview" and "Outlook" and those relating to target EBITDA improvement, one-time cash costs, capital costs associated with the Turnaround Plan, and bookings and margins in the fourth quarter and their impact on financial performance) within the meaning of applicable securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, events, performance or achievements of Armtec or industry results, to be materially different from any future results, events, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements typically contain such words or phrases as "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. Forward-looking statements reflect current expectations regarding future results, events, performance and achievements and are based on information currently available to Armtec's management, anticipated operating and financial results of Armtec, and current and anticipated market conditions.

Forward-looking statements involve numerous assumptions and should not be read as guarantees of future results, events, performance or achievements. Such statements will not necessarily be accurate indications of whether or not such future results, events, performance or achievements will be achieved.  You should not unduly rely on forward-looking statements as a number of factors, many of which are beyond the control of Armtec, could cause actual results, events, performance or achievements to differ materially from the results, events, performance or achievements discussed in the forward-looking statements, including, but not limited to the factors discussed in Armtec's materials filed with the Canadian securities regulatory authorities from time to time. Although the forward-looking statements contained in this news release are based upon what management of Armtec believes are reasonable assumptions, Armtec cannot assure investors that actual results, events, performance or achievements will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of the date of this news release and, except as required by applicable law, Armtec assumes no obligation to update or revise them to reflect new events or circumstances.

DEFINED TERMS

Capitalized terms that are not otherwise defined in this news release shall have the meanings given to them in Armtec's management's discussion and analysis for the three and nine months ended September 30, 2011.

 

 

SOURCE Armtec Infrastructure Inc.

For further information:

Mark D. Anderson   James R. Newell   Carrie Boutcher
President & Chief Executive Officer   Chief Financial Officer   Vice President, Investor Relations & Treasurer
         
Tel:  (519) 822-0210   Tel:  (519) 822-0210   Tel:  (519) 822-0210
Fax: (519) 822-8894   Fax: (519) 822-8894   Fax: (519) 822-8894

 

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