ADS posts revenues of $17.7 million for its second quarter ended July 27, 2008


    - Revenues of $17.7 million over second quarter, for an increase of 16%;
    - The majority of platforms contributed to sales growth;
    - Commercialization of the Hydrabath(TM) scheduled for this fall;
    - The Company has a solid order book and anticipates significant growth
      during the current fiscal year.

    SAINT-ELZEAR-DE-BEAUCE, QC, Sept. 3 /CNW Telbec/ - The Board of Directors
of ADS Inc. "ADS" (TSX: AAL.A) today announced the Company's financial results
for the second quarter ended July 27, 2008.
    The Company's sales volume for the three-month period ended July 27, 2008
was $17.7 million, compared to $15.3 million for the same quarter last year,
for an increase of 16.0%. After six months, the Company's sales volume was
$30.7 million, an increase of $4.5 million compared to the first half of the
preceding fiscal year. The sales volume increase for the first six months is
attributable to sales from the Beckwith Bemis division, acquired in June 2007,
and the Texel division's sales growth of $1.7 million, an increase of more
than 7%.
    During the second quarter, the Company recorded net earnings of $576,000
or $0.03 per share on a consolidated basis, compared to net earnings of
$418,000, or $0.02 per share on a consolidated basis for the same three-month
period of the preceding fiscal year. The second quarter results include a
$147,000 after-tax gain on the sale of tangible assets. For the first half,
the Company recorded net earnings of $157,000, or $0.01 per share, compared to
net earnings of $369,000 or $0.02 per share for the same period of the
preceding fiscal year.
    During the first six months of the current fiscal year, the Texel
division significantly contributed to the increase in the Company's revenues.
"The development efforts carried out in recent years are paying off with the
majority of the division's platforms growing compared to the first half last
year. The Company experienced a delay in its sales launch in the geosynthetics
sector due to unfavourable weather conditions in the markets it serves.
Presently, however, we are seeing our sales recover in this sector. This is a
trend that we expect will intensify throughout the third quarter," said
Mr. Guy Drouin, President and Chief Executive Officer of ADS.

    Short-term revenue growth outlook

    Furthermore, as planned, ADS is preparing to launch its Hydrabath(TM)
wipe this fall. In addition, the first sales were recorded of the draintube
product line offered by the joint venture company Afitex Texel Geosynthetics
Inc., which was created at the beginning of this year. Sales of these
draintube products are expected to be significant in the third quarter.
    "We are continually working to improve the profitability of our recent
acquisition, the Beckwith Bemis division. This division is greatly affected by
the strength of the Canadian dollar and recent increases in raw material
costs. This situation is hitting the medical sector particularly hard," said
Mr. Drouin. The Company's main objectives for this division are the
development of new applications, market share growth in existing sectors, and
operational control improvement.
    "Generally, the level of business in each of the group's divisions is
currently very high. We are working on several promising projects. These
initiatives will strengthen the reputation of our experts and know-how in our
target markets," said 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.

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

                                     Three-Month Periods   Six-Month Periods
                                       July 27,  July 29,  July 27,  July 29,
                                          2008      2007      2008      2007
                                             $         $         $         $

    Revenues                            17,724    15,281    30,689    26,215

    Cost of sales and operating
     expenses before the
     following items                    15,731    13,543    28,064    23,602

    Net research and development
     costs                                 134        74       302       232
    Depreciation of property, plant
     and equipment                         778       849     1,574     1,581
    Amortization of intangible assets      150       150       298       248

                                        16,793    14,616    30,238    25,663

    Operating income                       931       665       451       552

    Financial expenses (revenues)
    Interest on long-term debt              28        62        93        62
    Interest and bank charges              151        30       227        48
    Interest income                        (86)      (42)     (115)     (101)

                                            93        50       205         9

    Earnings before income taxes           838       615       246       543

    Income taxes                           262       197        89       174

    Net earnings and comprehensive
     income for the period                 576       418       157       369

    Basic and diluted net earnings
     per Class A share                   $0.03     $0.02     $0.01     $0.02

    Interim Consolidated Statement of Contributed Surplus and Retained
    (in thousands of dollars)
                                                           Six-Month Periods
                                                        July 27,     July 29,
                                                           2008         2007
                                                              $            $

    Contributed surplus

    Balance - Beginning of period                           542          478

    Stock-based compensation                                 14           29
    Average paid-up capital in excess of redemption
     price of 15,000 Class A shares cancelled                 6            -

    Balance - End of period                                 562          507

    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                                              -           25
    Net earnings for the period                             157          369

                                                         11,012       11,256

    Dividends on Class A shares                            (952)        (954)

    Balance - End of period                              10,060       10,302

    Interim Consolidated Balance Sheet
    (in thousands of dollars)

                                                          As at        As at
                                                        July 27,  January 27,
                                                           2008         2008
                                                              $            $

    Current assets
    Accounts receivable                                  11,472        7,724
    Inventory                                            10,137        7,888
    Income taxes recoverable and research and
     development tax credits recoverable                    387          544
    Prepaid expenses                                        594          516
    Unrealized foreign exchange gain on forward
     exchange contracts                                      31          135
    Current portion of balances of sales price
     receivable                                             627        1,156

                                                         23,248       17,963

    Research and development tax credits recoverable        618          473
    Balances of sales price receivable                      794        1,366
    Property, plant and equipment                        25,601       26,342
    Intangible assets                                     2,807        2,934
    Future income tax assets                                170          158
    Goodwill                                                 75           75

                                                         53,313       49,311


    Current liabilities
    Excess of outstanding cheques over bank balances      2,117          410
    Bank loans                                            3,405        3,535
    Accounts payable and accrued liabilities              6,715        5,579
    Future income tax liabilities                            24           24
    Current portion of long-term debt                       292          175

                                                         12,553        9,723

    Long-term debt                                        5,226        3,353
    Future income tax liabilities                         2,229        2,137

                                                         20,008       15,213

    Capital stock                                        22,683       22,701
    Contributed surplus                                     562          542
    Retained earnings                                    10,060       10,855

                                                          33,305      34,098

                                                          53,313      49,311

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

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