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Allied Defense Group Inc Reports Operating Results (10-Q)

August 13, 2012 | About:

Allied Defense Group Inc (ADG) filed Quarterly Report for the period ended 2012-06-30.

Arcus Development Group Inc. has a market cap of $50.16 million; its shares were traded at around $0 with a P/E ratio of 0.6.

Highlight of Business Operations:

Net assets in liquidation at June 30, 2012 are $43.818 million compared to $44.333 million at December 31, 2011. The change in net assets in liquidation is due to: (i) adjustments of assets to fair value, (ii) adjustment to estimated income to be earned on investments, and (iii) adjustments to estimated costs to be incurred during liquidation. The net assets in liquidation per share as of June 30, 2012 has been adjusted to $5.32 as compared to $5.35 as of March 31, 2012, $5.38 as of December 31, 2011, $5.37 as of September 30, 2011, $5.40 as of June 30, 2011 and $5.54 as of March 31, 2011 and December 31, 2010.

During the three months ended June 30, 2012, $0.427 million of costs were incurred. The estimate of costs to be incurred during liquidation was increased by $0.203 million. This is the net effect of a $0.074 million increase in compensation for remaining employees and directors principally due to a potential final pay-out to Mecar employees; $0.009 million decrease in compliance and other office costs; $0.120 million increase in insurance fees due to the increase in the estimate for D&O insurance; and $0.018 million increase in professional fees due to amounts accrued not previously included in the estimated net costs to liquidate. As of June 30, 2012, the estimate of remaining costs to be incurred through 2013 is $2.380 million. Future investment income is estimated to be $0.135 million resulting in estimated total net costs to be incurred during liquidation of $2.245 million as of June 30, 2012.

As of December 31, 2011, the estimated total net costs to be incurred during liquidation was $2.688 million, consisting of $2.888 million estimated costs offset by $0.200 million of investment income. During the six months ended June 30, 2012, $0.999 million of costs were incurred. The estimate of costs to be incurred during liquidation was increased by $0.491 million.

This is the net effect of a $0.101 million increase in compensation for remaining employees and directors principally due to a final 401k plan contribution and a potential final pay-out to Mecar employees; $0.006 million increase in compliance and other office costs; $0.344 million increase in insurance fees, primarily due to the amortization of prepaid insurance and write-off of the prepaid balance and an increase in the estimate for D&O insurance; and $0.040 million increase in professional fees due to amounts accrued not previously included in the estimated net costs to liquidate. As of June 30, 2012, the estimate of remaining costs to be incurred through 2013 is $2.380 million. Future investment income is estimated to be $0.135 million resulting in estimated total net costs to be incurred during liquidation of $2.245 million as of June 30, 2012.

subsequent to closing for losses arising from breaches of representations, warranties and covenants. Indemnification periods varied based on the particular representation, warranty or covenant covered, the vast majority of which have all expired. As of September 30, 2011, the only remaining indemnification obligations relate to representations and warranties concerning taxes, environmental matters, breaches of title, breaches of authorization and fraud. For SeaSpace, Titan, the VSK Group, GMS and NSM, these indemnification provisions have been capped at $1.0 million, $0.950 million, $6.288 million (5.0 million), $5.2 million and $0.863 million, respectively. At June 30, 2012, no amount has been accrued related to these indemnifications as a liability is not deemed probable.

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About the author:

10qk
Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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