Allied Defense Group Inc.

8000 Towers Crescent Dr.

Year founded: 1961

Industry: Aerospace/defense

Post 200 Category: Top 125 Companies

Revenue: $146.90 Million

Net Income/Loss: $2.52 Million

Earnings per share: $0.42

Dividend: n/a

Stockholder equity: $130.08 Million

Auditor: Grant Thornton LLP

Stock: ADG

Assets: $197.36 Million

Market capitalization: $126.58 Million

52-week high: 24.85 3/28/2005

52-week low: 16.5 5/21/2004

Chairman: J.H. Binford Peay III

President and CEO: John G. Meyer Jr.

Employees: 664

Local employees: 8

Description: Allied specializes in making ammunition for the Pentagon and international customers. The company also produces electronic and microwave security systems, as well as pyrotechnics used for training that mimic the sounds and sights of combat.

Developments: Allied's chief executive, retired Maj. Gen. John G. Meyer Jr., described 2004 as a more "normal" year for the company after two previous years in which earnings soared. Last year began on a sour note for Allied, with analyst Patrick McCarthy of Friedman, Billings Ramsey lowering his rating on the company because of concerns about possible cuts in the defense budget. The bad news continued later in the first quarter, as a major contract that had fueled growth at Allied's Belgian subsidiary, MECAR, ran out, and earnings fell. The company's outlook brightened, however, as orders kept coming in, fed in part by the continuing warfare in Iraq. After winning an Army contract for 105mm "bunker busters" in 2003, Allied began selling the ammunition on the international market in 2004. The ammunition is designed to blast through a double-reinforced concrete wall, creating a hole big enough for soldiers to pass through. Allied also won a $12 million contract from a European client for a new 35mm rifle grenade, one of 22 new MECAR products introduced in 2004. The company has just eight employees at its corporate headquarters in Vienna, with the bulk of its business occurring at MECAR in Belgium. The company made efforts in 2004 to expand U.S. operations. In August, its electronic-security subsidiary, VSK Group, bought Control Monitor Systems, a small California company that makes card-swiping access-control devices. In December, the company rolled out a new line of antennas through its California subsidiary, SeaSpace Corp. The antennas were designed for use on high performance environmental satellites. The company also broke ground on a headquarters for its new subsidiary, MECAR USA, in Marshall, Tex. MECAR USA will use the new 100,000-square-foot facility to develop ammunition and pyrotechnics. The company issued its fourth-quarter and full-year earnings for 2004 belatedly and restated results for 2002, 2003 and the first three quarters of 2004 after its auditor questioned the company's accounting for foreign currency exchange contracts.