Davie Yards Inc.

Davie Yards Inc.

March 30, 2009 15:19 ET

Davie Yards Inc. Releases Fourth Quarter and Year End 2008 Results

LEVIS, QUEBEC--(Marketwire - March 30, 2009) - Davie Yards Inc. ("Davie" or the "Corporation") (TSX:DAV) today released its financial and operating results for the twelve month period ended December 31, 2008.

Financial Highlights Fourth Quarter 2008:

Revenue for the fourth quarter ending December 31, 2008 was US$36.8 million and net profit was US$27.4 million. The results mainly comes from the reversal of the loss provision taken in 2007 and the residual provision taken in the second quarter of 2008 following contract price adjustments accepted by Davie's clients and a strengthening of the U.S. dollar during the quarter. Operations in the quarter were negatively influenced by a lack of materials and
a need to preserve the rest of the Corporation's cash, leading to a closing of the operations and lay-off of the employees on December 12.

Financial Highlights 2008:

In the year ended December 31, 2008, Davie recorded operating revenues of US$88.2 million. This revenues growth in the twelve months of 2008 is essentially due to an increased level of building activities on the three first ships on contract. TThe first one is 52 completed, the second is 21% completed and the third is 10% completed. The gross profit for the year was recorded at US$10.3 million with a net loss of US$24.1 million.

Future Outlook:

"We started resuming operations in the beginning of March, and we currently have 832 employees at work. All employees are expected to be called back to work by the beginning of April. Planned productivity is expected to be reached at the end of June. We have five vessels on order with a total contract price of US$740.6 million and our order book takes us to first quarter of 2011. In order to finalize these ships we need all of the close to 1,100 employees we had in December and another 500 more", stated Steinar Kulen, CEO of Davie Yards Inc.

Mr. Kulen continued: "Due to the financial turmoil, the market outlook is characterized as 'wait and watch'. However, the fundamentals within the offshore oil and gas industry are still positive, and offshore activity is going into deeper and deeper water. WWe also see that net fields will be developed in the near future for which several vessels are not yet built and there are also promising Canadian domestic requirements for new vessels".

Going concern

To date, the Corporation has financed its operations mainly through share issuances, borrowing, and revenues from contracts. The Corporation has incurred significant operating losses and cash outflows from operations as reported in the two last quarter. Due to this, the Corporation began working on its financial restructuring plan during second half of 2008. As part of this plan, the Corporation reached agreements with its clients for price increases of US$95 million on their existing contracts and obtained US$10 million of loans from Investissement Quebec. At present the Corporation is finalizing an increase of the equity through a US$20 million private placement share issuance.

If the Corporation fails to complete the US$20 million private placement, its available cash and cash equivalents and committed sources of cash are not presently sufficient to fund expected cash requirements through the next 12 months. As a result, there could then be uncertainty as to whether the Corporation will have the ability to continue as a going concern.

About Davie Yards Inc.

Davie Yards Inc. owns and operates the Davie yard in Quebec. With over 180 years of operating experience and approximately 1100 employees, the shipyard is the largest in Canada and among the largest and most sophisticated in North America. The Corporation has a focus on building large and complex offshore service vessels and rigs, and other sophisticated vessels for commercial and governmental use. Its shares are traded on the Toronto Stock Exchange (DAV). News and information are available at www.davie.ca.

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable Canadian securities legislation. These statements include those relating to statements that are not historical facts, and reflect the current intentions, plans, expectations and beliefs of Davie's management ("Management"). Such forward-looking statements reflect Management's current beliefs and are based on information currently available to Management. Forward-looking statements involve known and unknown risks, uncertainties and other factors outside Management's control. A number of factors could cause actual results of Davie to differ materially from the results predicted in the forward-looking statements, including, but not limited to, risks associated with the Corporation's fiscal results, conditions to the completion of the refinancing plan, working capital requirements, major disruptions of production, a downturn in economic conditions, competition and sensitivity to the oil and gas industry and other factors.

Although the forward-looking statements contained herein are based upon what Management believes to be reasonable assumptions, Management cannot assure investors that actual results will be consistent with these forward-looking statements. Certain assumptions underlying the forward-looking statements contained in this news release include Management's assumptions regarding market outlook for the construction of complex offshore vessels as well as the assumptions that new vessels will be delivered on schedule and that the Corporation will attract and retain key personnel in key positions. These forward-looking statements are made as of the date of this release, and Management assumes no obligation to update or revise them to reflect new events or circumstances, except as required pursuant to applicable securities laws. Readers are cautioned not to place undue reliance on these forward-looking statements. For additional information with respect to certain of these and other assumptions and risks, please refer to the Corporation's Management's Discussion and Analysis for the year ended December 31, 2008 as well as the Annual Financial Statements for the year ended December 31, 2008, and the Corporation's Annual Information Form dated March 29, 2009.

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