Davie Yards Inc.

Davie Yards Inc.

May 15, 2009 17:02 ET

Davie Yards Inc. Releases its First Quarter Results for 2009

LEVIS, QUEBEC--(Marketwire - May 15, 2009) - Davie Yards Inc. ("Davie" or the "Corporation") (TSX:DAV) today released its financial and operating results for the three month period ended March 31, 2009. The temporary shut-down period at Davie ended by a gradual resumption of operations beginning on February 22nd. this year. Davie's quarterly report includes operational activities from February 22nd. to March 31st. Closing of the US$20 million equity private placement and the disbursement of the first advance by Export Development Canada under its US$200 million loan to the Corporation's client, Cecon ASA, took place after March 31.

Financial Highlights:

Revenue for the first quarter ending March 31, 2009 was US$4.3 million and net loss was US$4.3 million compared to revenue of US$10.2 million and net loss of US$8.7 million in the corresponding period in 2008 and revenue of US$36.8 million and net profit of US$27.4 million in the fourth quarter of 2008. The decrease is related to the shut down of operations from December 2008 until February 22, 2009 when Davie began to gradually recall its work force and resume its operations.

Future Outlook:

"Following the shutdown of the shipyard in December 2008, we began to gradually resume our operations on February 22, 2009, and we have currently recalled 1027 employees. Planned full productivity is expected to be achieved in the 3rd Quarter and the Corporation's capacity will be fully utilized from then." Stated Mr. Steinar Kulen, Davie's Chief Executive Officer.

Going Concern:

The Corporation has incurred significant operating losses and cash outflows from operations and has negative working capital as at March 31, 2009 and 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. 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, obtained US$10 million of loans from Investissement Quebec and raised US$20 million of equity through loan conversions and new issuances of shares. Completion of the Corporation's financial restructuring plan requires also the funding of a $100 million loan facility to Ocean Hotels plc and the renegotiation of the Investissement Quebec loan facilities to pre-fund tax credits and employment obligations. The Corporation is pursuing such negotiations as well as negotiations for a debt facility which will finalize the financial restructuring and ensure sufficient sources of cash to finance its operations through the next 12 months although there can be no assurance that it will obtain such financing.

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 quarter ended March 31, 2009 and the year ended December 31, 2008 as well as the Financial Statements for the quarter ended March 31, 2009 and the year ended December 31, 2008, and the Corporation's Annual Information Form dated March 29, 2009.

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