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Press release from CNW Group

Armtec Reports Financial Results for the Fourth Quarter and Full Year 2011

Thursday, March 22, 2012

Armtec Reports Financial Results for the Fourth Quarter and Full Year 201119:08 EDT Thursday, March 22, 2012and Announces Mark Anderson's Appointment to the Board of Directors Toronto Stock Exchange: ARF.UN; ARF.DBGUELPH, ON, March 22, 2012 /CNW/ -Armtec Infrastructure Inc. ("Armtec" or the "Company") (TSX: ARF.UN; ARF.DB) today reported financial results for the year and the fourth quarter ended December 31, 2011.Results summary:Revenues of $453.6 million, a decrease of 1.9% over 2010.  Improved installation conditions in the second half of 2011 supported year-over-year growth in Construction Infrastructure Applications ("CIA") products which partially offset softness in Engineered Solutions ("ES") project volumes. For the fourth quarter, revenues were $112.0 million, a decrease of 6.0% compared to the prior year.Gross margin was $54.7 million, a decrease from $84.3 million earned in 2010.  As a percentage of revenue, gross margin declined to 12.1% compared to 18.2% in 2010.  In the fourth quarter, gross margin was $15.7 million, a decrease of $3.7 million from $19.4 million achieved in the same period in 2010.  As a percentage of revenue, gross margin declined to 14.0% from 16.3% in the same period in the prior year.  The narrowing of the gross margin gap reflects the positive impacts of the Turnaround Plan implemented during the fourth quarter.EBITDA3 decreased to $16.7 million compared to $51.5 million in 2010 and declined to $4.9 million for the fourth quarter, compared to $9.0 million for the same period in the prior year.As a result of the decline in the Company's market enterprise value during 2011, as required under International Financial Reporting Standards ("IFRS"), Armtec recorded a non-cash impairment charge of approximately $268.6 million, of which $78.4 million was recognized in the fourth quarter. The impairment was initially allocated to goodwill, with the balance allocated on a pro rata basis to property, plant and equipment and other intangible assets."In the fourth quarter and into 2012, Armtec has made significant progress in executing Turnaround Plan initiatives, particularly with regard to labour efficiencies in our large ES facilities. We are continuing to develop the capabilities of the enterprise resource planning system ("SAP") which enables our management team to better identify performance improvement  opportunities in the business," said Mark Anderson, President and Chief Executive Officer.  "At year-end, our ES backlog was approximately $140.0 million, up $50.0 million from third quarter levels, with projects that represent a return to more traditional projects with improved bid margins over 2011 levels. The Company has secured significant projects in natural resource markets as well as transportation infrastructure across Canada. Longer term, the outlook for infrastructure, our largest end-use market, remains strong as Governments continue to reiterate their commitments to infrastructure renewal."Armtec announced today that Mark Anderson has been appointed to the Company's Board of Directors. Mr. Anderson has been President and Chief Executive Officer of Armtec since October 2011. Prior to his appointment as President and Chief Executive Officer, Mr. Anderson held the position of Chief Operating Officer of Armtec with responsibility for driving operational improvements and advancing business excellence while supporting Armtec's growth strategy.Mr. Anderson is a highly experienced senior executive who brings a solid track record of delivering performance and value creation in the industry. Prior to joining Armtec in March 2011, Mr. Anderson worked for Lafarge for 16 years. Since 2009, he served as President of the Lakes and Seaway cement business with revenues approaching $1 billion and operations in Canada and United States ("US"). Prior to this appointment, he held a number of leadership positions in Lafarge's aggregate and concrete division, including Vice President and General Manager of the Western US aggregates business, and Vice President and General Manager of the Great Lakes aggregates business, following various assignments in sales and marketing."Mark's extensive operational experience will be of great benefit to the Board and we welcome him as a new director," said Robert Wright, Chairman.Armtec also announced that the annual meeting of its shareholders will be held at 10:30 a.m. (local time) on June 21, 2012 at the TMX Broadcast Centre, The Exchange Tower, Main Floor, the Gallery, 130 King Street West, Toronto, ON, M5X 1J2.Summary of ResultsFor the periods ended December 31Fourth QuarterYear Ended 2011 20101 2011 20101(in thousands of Canadian dollars except per share or unit amounts) (unaudited) (unaudited)             Revenue$ 111,962$ 119,063$ 453,605$ 462,205         Gross margin2$ 15,727$ 19,428$ 54,671$ 84,309As a % of revenue 14.0% 16.3% 12.1% 18.2%            Selling, general and administrative2 21,618 18,626 72,191 68,250         Earnings (loss) from operations before the undernoted (5,891) 802 (17,520) 16,059            Impairment 78,352 - 268,571 -   Other (gains) losses - net (409) (446) 958 (1,846)         (Loss) earnings from operations$ (83,834)$ 1,248$ (287,049)$ 17,905         Net (loss) earnings attributable to owners of the Company$ (68,519)$ 5,842$ (269,793)$ 11,502         Depreciation and amortization$ 6,129$ 7,240$ 27,324$ 29,481         Finance (income) expense - net$ 11,291$ 6,922$ 33,788$ 23,745         EBITDA3$ 4,912$ 9,020$ 16,728$ 51,479As a % of revenue 4.4% 7.6%  3.7% 11.1% Dividends or distributions declared$ -$ 10,988$ 8,139$ 43,904         Basic and diluted (loss) earnings per share or unit$ (2.85)$ 0.29$ (11.74)$ 0.57In November of 2010, Armtec disposed of certain non-core assets related to a cement packaging business.  As a result, the 2010 comparative numbers have been restated to reflect this disposal transaction.Gross margin for the year ended December 31, 2011 and 2010 includes reorganization expenses of $0.3 million and $0.7 million, respectively.  Selling, general and administrative for the year ended December 31, 2011 and 2010 includes reorganization expenses of $6.6 million and $3.7 million, respectively.Please refer to the non-GAAP measure section of the separately issued management's discussion and analysis ("MD&A") for the period ended December 31, 2011 for the reconciliation of EBITDA.OVERVIEWRevenue for the year ended December 31, 2011 was $453.6 million or 1.9% below 2010 levels of $462.2 million.  CIA product revenue for 2011 was $263.9 million, representing growth of 8.4% over 2010 at $243.5 million.  CIA volumes, in the majority of the Company's facilities, were well below average levels in the first half of 2011 due to poor weather conditions; however these volumes were recovered during the latter part of the year. CIA gross margin remained compressed as a result of the under-utilized capacity in the first half of the year, combined with raw material and freight increases that were not entirely passed through in product pricing.  In contrast, the 2010 results benefited from the early spring which moved drainage purchases ahead in the procurement cycle and as a result, the facilities were favourably utilized during that period.Revenue of $189.7 million from ES projects in 2011 was 13.3% lower than the comparative period in 2010.  ES production remained below 2010 levels, impacted by a slowdown in overall construction activity resulting from new project award delays and certain customer schedule postponements. The Company continued to work through certain large projects that were not priced or have not performed consistent with prior years.  The impact of these contracts will diminish as projects are completed in 2012 and the backlog is rebuilt with more traditional work. The ES backlog at December 31, 2011 was approximately $140.0 million, consistent with the prior year but an improvement of $50.0 million from September 30, 2011.  Current ES bid margins and recently awarded contract margins show improvement over 2011 levels.  In addition, these projects are more consistent with Armtec's core production competencies and are not as complex in nature as some of the projects experienced during 2011.On August 19, 2011, Armtec entered into a loan agreement ("Brookfield Facility") and warrant agreement with Brookfield Special Situations Partners Ltd., an affiliate of Brookfield Asset Management as collateral agent and lender which provided the Company with a $125.0 million term credit facility.  Armtec drew the full amount available and repaid the lenders under its previous senior term and revolving facilities as more particularly described in the MD&A under "Capital Resources - Credit Facilities" with the remaining cash balance available for general corporate purposes.  During the fourth quarter of 2011, the agreement was amended primarily to allow the Company to secure further surety facilities to support the replenishment of the backlog for ES projects.During 2011, the Company and certain of its directors and former officers (along with certain third party underwriters) have been named as defendants in two potential class action proceedings commenced before the Ontario Superior Court of Justice on June 16, 2011 and July 7, 2011 respectively and one potential class action proceeding commenced in the Superior Court of Quebec on October 12, 2011 (collectively, the "Existing Legal Proceedings").  On January 20, 2012, the Ontario Superior Court of Justice stayed one of the actions and prohibited any further actions being commenced against the Company in respect of securities purchased between March 30, 2011 and June 8, 2011. The plaintiffs in the remaining Ontario action seek damages of $100.0 million as well as other monetary and non-monetary relief on behalf of a specified class of investors in respect of alleged violations of securities legislation, negligent misrepresentation and other causes of action in connection with alleged misrepresentations and omissions in the Company's preliminary short form prospectus dated March 30, 2011, the Company's short form prospectus dated April 6, 2011, and in its public disclosure.  The plaintiffs in Quebec seek damages of $70.0 million as well as other monetary and non-monetary relief on behalf of a specified class of investors.  The Company intends to defend these actions vigorously and is monitoring the risk of these proceedings and the potential exposure to the Company of a potential loss.  At this time, the quantum of a potential loss, if any, cannot be readily determined and no loss provision has been made.  For further information regarding the risks to Armtec related to the Existing Legal Proceedings and other potential legal proceedings please see the MD&A under "Risk Factors - Existing Legal Proceedings" and "Risk Factors - Risk of Future Legal Proceedings".As a result of the decline in the Company's market enterprise value during 2011, Armtec reviewed the carrying value of its assets as required under IFRS and as a result recorded a non-cash impairment charge of approximately $268.6 million, of which $78.4 million was recognized during the fourth quarter.  The impairment was initially allocated to goodwill, with the balance allocated on a pro rata basis to property, plant and equipment and other intangible assets.TURNAROUND PLAN UPDATEIn the fourth quarter of 2011, the Company announced details of a comprehensive Turnaround Plan that is expected to improve the near and long-term earnings and cash flow with a primary focus on cost reduction.  Management has established an EBITDA improvement target of $20.0 million with the benefit of these initiatives to occur over the next 12 to 24 months.  Restructuring charges of $4.7 million, primarily related to severance costs associated with an approximate headcount reduction of 270 or approximately 14% of the total workforce, were recognized in the fourth quarter.  The Turnaround Plan is expected to require minimal further capital investment.The Turnaround Plan addresses three key areas of improvement in the business:Efficiency Improvements Efficiency improvements are expected to be the largest contributor to the EBITDA improvement target. These improvements will be achieved through improved visibility into the business and standardized, rigorous operating processes. Identified initiatives include:Reorganizing plant staffing levels and shifts;Scheduling seasonal plant shut downs, without impacting customer service expectations;Reducing headcount by approximately 190; andImproving quality control to reduce waste and rework.Structural Cost Reductions The focus will be to remove costs in the business considered to be redundant. Identified items include:Capacity rationalization involving two operations and the relocation of equipment to other plants;Outsourcing production to lower cost sources of supply;Headcount reductions of approximately 80; andImprovement in procurement and logistics.Revenue Improvement Revenue improvements are expected from a return to more focused sales efforts in key product areas and price optimization strategies, most significantly in the CIA products. Identified items include:Refocusing the business on product categories that are underperforming; andImproved margins leveraging Armtec's current leadership in established market segments.Approximately 90% of the $20.0 million EBITDA target relates to efficiency improvements and structural cost reductions. Initial steps in the Turnaround Plan included a strengthening of the management team. In addition to Mr. Anderson assuming the role of Chief Executive Officer and President, new Regional Vice Presidents have been appointed in the two largest regions, Prairie and Central, a new Operations Director has been added to the Prairie region, and a new Vice President has been assigned on a contract basis to lead and monitor the success of the Turnaround Plan. The financial team has been strengthened with the appointment of new regional finance directors in the Central and Eastern Regions and a new Interim Chief Financial Officer following the departure of Mr. Newell early in 2012. Health and safety is the top priority for all Armtec employees. While significant improvements have been made in 2011, a new Vice President, Health and Safety has been appointed to further these results. Management believes that health and safety performance is a leading indicator of the state of operational discipline.During 2011, the management team re-focused on four key priority areas for the business as the foundation of the Turnaround Plan: (i) health and safety, (ii) our people, (iii) securing profitable business, and (iv) critical information and key business processes.  These priorities form the basis of the 2012 Corporate Objectives as discussed in the "Outlook" section of the MD&A. The Company has also intensified its efforts to entrench a culture of empowerment, accountability and performance throughout Armtec.Detailed action plans have been developed and will be monitored at the various levels throughout the organization to ensure the savings and improvement targets are achieved.  Approximately 50% of the over 200 identified actions have been completed during the fourth quarter.  The most significant number of actions, being headcount reductions, were all completed during 2011.  Total headcount at December 31, 2011 was 1,519, a reduction of 377 positions or 20% over the 1,896 at the end of 2010.As announced under the Turnaround Plan, facilities have been closed in Langley B.C and Lethbridge, Alberta.   In both cases the leases expired in early 2012. The equipment has been relocated to support production in other facilities and addresses capacity constraints.  These closures have progressed as scheduled and within the original cost estimates.Significant progress has been made in other Turnaround Plan initiatives during the fourth quarter and into 2012, particularly with regard to reducing the cost of quality and improving production efficiencies in the large ES facilities.  The Company has completed the implementation of its SAP system and has made progress on initial visibility issues.  The Company continues to develop the capabilities of the system and associated processes. A small number of actions originally identified have been challenging, however, the management teams continue to identify new opportunities to realize cost reductions in the business and we remain on track with our Turnaround Plan expectations.In summary, the Turnaround Plan is focused on restoring the gross margin levels in the business by optimizing pricing, eliminating redundant costs and improving efficiencies.  These actions are expected to not only improve profitability in 2012 but also to prepare the organization to compete and succeed in the event of increased economic headwinds. Based on the results from activities to date and future expectations, management believes that the Turnaround Plan remains on target to deliver approximately $20.0 million in benefits from these initiatives over the next 12 to 24 months.FULL YEAR RESULTSRevenueArmtec recorded revenue of $453.6 million for the year ended December 31, 2011, a decrease of 1.9% as compared to 2010.  The improved installation conditions during the second half of 2011 supported year over year growth in CIA products partially offsetting softness in ES project volumes.Revenue from CIA products was $263.9 million for the year ended December 31, 2011, an increase of 8.4% or $20.4 million over 2010.  The 2011 drainage installation season began with the late arrival of spring followed by unprecedented wet weather conditions, but these installation conditions improved throughout the third and fourth quarters of 2011 supporting improved volumes in this area of the business.  In addition to better volumes, margins in the latter part of 2011 improved over the first half of 2011.  Activity levels, primarily in the Pacific and Prairie regions, supported growth in certain natural resource end use markets, specifically the forestry and energy sectors.  Improvements were also seen in infrastructure applications for transportation projects. Partially offsetting these revenue gains were declines in the residential development market.ES revenue was $189.7 million in 2011, or a decrease of $29.0 million or 13.3% relative to 2010.  During 2011, the final stage of the Calgary West Light Rail Transit ("WLRTG") project was completed early in the year, while various projects such as the South East Stony Trail in the Prairie region continued to experience customer delays.  Armtec's sound wall business experienced declines due to (i) an overall softness in markets in Canada and the US, (ii) the negative impact of competing products, compounded by (iii) the decline in the US dollar.  Offsetting the lower sound wall performance were improved volumes on the Toronto Transit Commission ("TTC") tunnel liner project, which was approaching targeted daily production levels, and parkades for various commercial and rail infrastructure projects commenced during 2011 in the Central region.Loss from OperationsThe loss from operations for 2011 was $287.0 million compared to earnings of $17.9 million in fiscal 2010. Before the impairment charge of $268.6 million the loss was $18.4 million reflecting a decline of $36.3 million. As a result of the decline in the Company's market enterprise value during 2011, Armtec reviewed the carrying value of its assets as required under IFRS and as a result recorded a non-cash impairment charge. The impairment was initially allocated to goodwill, with the balance allocated on a pro rata basis to property, plant and equipment and other intangible assets.Gross margin achieved in 2011 was $54.7 million, a decrease from $84.3 million earned in 2010.  As a percentage of revenue, the gross margin declined to 12.1% as compared to 18.2% in 2010.  While gross margin remains below 2010 levels, progress was made during the second half of the year toward narrowing the difference. The year to date decline in the gross margin percentage reflected (i) the weather related impact of lower manufacturing volumes in Armtec's CIA production facilities in the first half of 2011 as compared to 2010, (ii) input cost increases which were not entirely passed through to the market, (iii) the effects of a competitive pricing environment in certain end use markets and product groups and (iv) delays of ES project awards reducing the absorption of overhead costs.The ES projects that Armtec secured during 2010 and carried over into 2011 tended to be more complex to manufacture with lower than expected margin performance. The Calgary WLRTG, a complex project that experienced breakeven performance, was completed in the first quarter of 2011.  In addition, the production resources required to meet TTC production milestones particularly in the first half of 2011 negatively impacted overall margin performance in 2011. As previously discussed at the end of the second quarter, performance for the remainder of the TTC project is anticipated to breakeven. Construction delays associated with certain existing projects and delays with new project awards further impacted ES performance by the inefficiencies resulting from underutilized production capacity.  Progress was made during the third and fourth quarters related to the implementation of certain Turnaround Plan actions focused on improved production labour planning for large ES projects. These actions contributed to the improved margin performance in the fourth quarter.  The gap to 2010 performance narrowed with a gross margin of 14.0% achieved during the fourth quarter of 2011 compared to 16.3% achieved during the final quarter of 2010. The 2.3 percentage point gap is a significant improvement over the results in the second quarter where the gross margin was 11.7 percentage points lower than the prior year.Depreciation and amortization levels for 2011 of $27.3 million were below 2010 levels at approximately $29.5 million mainly as a result of the impairment charges against property, plant and equipment and intangible assets during the year.Selling, general and administrative expenses, including reorganization expenses, for 2011 were $72.2 million or an increase of $3.9 million over 2010 levels. As a percentage of revenue, these costs were 15.9% of revenue for 2011 compared to 14.8% in 2010.  The increase primarily relates to the restructuring charges in 2011 which exceeded the 2010 charges by approximately $3.0 million and exchange losses incurred in 2011 compared with exchange gains that were recognized in 2010.FOURTH QUARTER RESULTSRevenueArmtec recorded revenue of $112.0 million for the fourth quarter of 2011, $7.1 million or 6.0% below revenue of $119.1 million for the three months ended December 31, 2010.  Revenue from CIA products was $66.5 million for the three months ended December 31, 2011, an increase of 11.6% or $6.9 million over the same period in 2010.  Many of the CIA product deliveries and installations were delayed from earlier in the year as a result of the unseasonably wet spring weather.  With the improved installation conditions during the second half of 2011, product demand improved in various infrastructure applications.  The end of the year saw improved agricultural drainage installations. Activity levels in the Company's natural resource end use market continued with strong performance in the energy and mining sectors.  Residential end use market activity remained below prior year levels, particularly in the Prairie and Central regions where single family housing starts have slowed in 2011.ES revenue was $45.4 million in the fourth quarter of 2011, representing a decrease of 23.6% or $14.0 million from the comparative 2010 quarter. Production volumes during the fourth quarter of 2011, primarily in the Central and Prairie regions, were lower due to an overall softness in construction activity which led to delays in new project awards earlier in the year, lower sound wall volumes reflecting the weak demand in the US, and competitive pressures in the Ontario market, in addition to continuing construction schedule delays on current projects.  These delays offset the production volumes achieved on the TTC project which commenced near the end of 2010.  The fourth quarter of 2010 was characterized by relatively high production volumes notably the large Calgary WLRTG parkade in the Prairie region.Loss from OperationsThe loss from operations for the fourth quarter ended December 31, 2011 was $5.5 million, excluding a further non-cash impairment charge of $78.4 million allocated to certain intangible assets and property, plant and equipment, as compared to earnings of $1.2 million in the same period of the prior year.  The carrying value of assets is tested when there is an indication that the assets may be impaired.  During the quarter, the Company's market value, based on the fair value of common shares and debt, declined from its previous level and was considered by management to be indicative of possible further asset impairment.  Accordingly, management tested the carrying value of the assets related to the operating segments of the business, which while Armtec has one reporting segment, involves determination at a regional level. The resulting impairment charge of $78.4 million was recorded in the fourth quarter.The gross margin for the three months ended December 31, 2011 was $15.7 million, a decrease of $3.7 million from $19.4 million in the same period of 2010.  As a percentage of revenue, the fourth quarter gross margin of 14.0% was lower than the 16.3% achieved in the same period of 2010.  While the Company improved CIA gross margins throughout 2011, and reduced the gap between 2010 and 2011, Armtec was unable to deliver the levels of 2010 in the fourth quarter because of lower ES volumes and higher input costs.  For the nine months ended September 2011, the gross margin achieved was 7.5 percentage points lower than the same period in 2010.  With improved margins in the fourth quarter, the full year gross margin for 2011 improved to 6.1 percentage points below 2010.Gross margin performance in the CIA products business improved in the quarter from earlier in the year with the increased production volumes and improved efficiencies. The higher utilization of the facilities in the quarter resulted in an increased absorption of manufacturing overheads, as compared to the unusually low volumes experienced during the first half of 2011.  However, consistent with performance in the third quarter, gross margin for the fourth quarter still remained lower than historical averages as a result of competitive pricing pressures and input cost increases, particularly with regard to freight.  While Armtec historically passes input cost increases on to the market, the implementation of SAP impaired the visibility of management into this area of the business in the earlier months.  During the fourth quarter, price adjustments were introduced to the market place but did not have a significant impact during the quarter.The ES projects continued to be impacted in the fourth quarter of 2011 by customer schedule delays and associated inefficiencies, the continued manufacture of projects that were booked during the recession with lower gross margins and an unfavourable product mix with lower volumes of sound wall products.  Offsetting the lower volumes and delays were the initial benefits from the progress made under the Turnaround Plan actions aimed at correcting certain production inefficiencies. Included in these actions were improvements to the TTC tunnel liner manufacturing processes and labour efficiencies in the Prairie region.  Overall ES project execution has improved in the quarter as a result of the initial Turnaround Plan actions.Depreciation and amortization levels in the quarter were slightly lower than 2010 levels at approximately $6.1 million in 2011 as compared to $7.2 million in 2010.  The carrying value of certain intangible assets and property, plant and equipment was reduced as a result of the further impairment charge recognized in the fourth quarter of $78.4 million but this did not impact the depreciation during the quarter.Selling, general and administrative expenses for the fourth quarter of 2011 were $21.6 million, or $3.0 million higher than 2010 levels.  The increase was related to the restructuring charge in the fourth quarter of 2011 of approximately $4.4 million as opposed to $1.0 million recorded in 2010.  The increased restructuring charge was partially offset through the realization of cost reductions resulting from Turnaround Plan initiatives undertaken in November 2011.OUTLOOKArmtec secured approximately $95.0 million in new ES contract bookings in the fourth quarter of 2011.  ES backlog ended the year at approximately $140.0 million, consistent with December 2010 levels and an increase of $50.0 million over levels at September 2011.  The most significant new award is the smelter modernization project in Kitimat, B.C. secured during the fourth quarter.  The Pacific region is now beginning the changeover process to prepare for this project which will contribute approximately $32.0 million in revenue over 2012 and 2013. The current backlog, at improved bid margins, will be primarily realized in ES revenue throughout 2012 with some projects continuing into 2013.  These projects will replace the TTC and other complex projects that negatively impacted 2011 performance.  Management estimates the TTC contract will perform at a breakeven level for the balance of the contract.  The combination of underperforming projects reaching completion in the first half of 2012, projects currently in backlog and the bid pipeline represent more traditional structural projects with improved margins over 2011 levels.CIA revenue is highly influenced by weather conditions. Construction activity tapers off with the onset of winter weather conditions and remains at low levels through the first quarter. The 2011 season was negatively impacted by a cold Canadian winter and wet spring hampering installations of drainage products.  The installation outlook early in 2012 is favourable. These product groups are subject to competitive pricing pressures combined with the challenge of fluctuations in raw material costs.  With a return to historical seasonal patterns the first and fourth quarters are expected to be lower than the second and third quarters in the fiscal year, however, operational performance for CIA products is expected to improve over 2011 levels.The long term outlook for infrastructure, the Company's largest end use market, remains strong despite current headwinds. Governments continue to reiterate their commitment to infrastructure renewal which continues to be augmented through the use of public-private partnerships.  The Company has been successful in securing a meaningful number of recent wins in the natural resource applications as well as rail and highway transportation infrastructure across Canada.The outlook for Armtec's private markets is mixed.  Residential market activity is anticipated to remain at low levels with single family housing starts forecast to remain low in light of current household debt levels across Canada.  Multi-residential starts will continue to be impacted by high vacancy rates.  Industrial building construction is expected to remain below historical levels throughout 2012 while commercial facility construction will benefit, to a limited extent, from projects such as those related to the 2014 Pan American games.  Natural resource markets, while showing improvement in 2011, are heavily influenced by US residential starts impacting the demand for Canadian forestry products.  The oil and gas market activity will be influenced by commodity pricing.  Major natural gas initiatives with the US have ceased, however, alternate projects have been proposed to support the transport of natural gas from Canada to Asia.The Turnaround Plan was developed with very clear, attainable actions, with delivery accountabilities throughout every level of the organization.  In parallel with operational actions, continuous improvement activities continue around the utilization of the SAP system.  Gains have already been made on the management of input costs with over half of the more than 200 identified Turnaround Plan actions completed that will benefit the operations throughout 2012.  The Turnaround Plan has a target of $20.0 million in EBITDA improvements over the 24 months of execution.  Based on the current outlook and initiatives undertaken to date, the plan remains on target to achieve improved earnings in 2012.  In addition, as a result of this outlook management currently believes the Company will remain in compliance with the covenants as outlined in the Brookfield Facility.Management remains focused on delivering the key accountabilities under the Turnaround Plan through the implementation of cost reductions, returning discipline to operating processes, tapping into the full benefits available through SAP while ensuring Armtec's response to changing market conditions is appropriate.CONFERENCE CALL & WEBCASTManagement will host a conference call at 10:00 a.m. (ET) on Friday, March 23, 2012 to discuss the results.  Investors who wish to participate can access the call using the following numbers: 416-644-3415 or1-877-974-0445.  The call will be webcast live and archived on Armtec's website at www.armtec.com.A taped rebroadcast will be available to listeners following the call until 12:00 a.m. on Friday, March 30, 2012.  To access the rebroadcast, please dial 416-640-1917 or 1-877-289-8525 and quote the passcode 4526011#.Armtec's full consolidated financial statements, notes to financial statements and management's discussion and analysis are available at www.sedar.com or at www.armtec.com.ABOUT ARMTEC INFRASTRUCTURE INC.Armtec is a leading manufacturer and marketer of a comprehensive range of infrastructure products and engineered construction solutions for customers in a diverse cross-section of industries that are located in every region of Canada, as well as in selected markets globally.  These markets include Canada's national and regional public infrastructure markets and private sector markets in agricultural drainage, commercial building, residential construction and natural resources.  Operating through its network of regional offices and production facilities across the country, Armtec's broad range of engineered solutions include products for drainage, bridge applications, soil retention, rehabilitation and water management systems including corrugated high-density polyethylene, corrugated steel and concrete pipe; an array of architectural and structural precast and pre-stressed concrete products from steps, paving stones, slabs and wall panels to highly engineered structural components designed and installed for projects such as bridges, sports venues and parking garages; and a full suite of noise barriers, acoustic enclosure and wall systems along with associated retaining wall and traffic barrier systems.NON-GAAP MEASUREEarnings before Interest, Taxes, Depreciation and Amortization ("EBITDA")References to EBITDA are to earnings before finance cost, taxes (other than capital taxes), depreciation and amortization, certain non-recurring expenses and certain non-cash amounts resulting from purchase accounting.  Management believes that in addition to net earnings, EBITDA is a useful supplemental measure of cash available for dividends prior to debt service, changes in working capital, capital expenditures and income taxes.  However, EBITDA is not a recognized measure under GAAP.  Investors are cautioned that EBITDA should not be construed as an alternative to net and comprehensive earnings determined in accordance with GAAP as an indicator of Armtec's performance or as an alternative to cash flows from operating, investing and financing activities as a measure of Armtec's liquidity and cash flows.  Armtec's method of calculating EBITDA may differ from the methods used by other issuers and, accordingly, Armtec's EBITDA may not be comparable to similarly named measures used by other issuers.RISKS AND UNCERTAINTIESArmtec is subject to certain risks and uncertainties that could have a material adverse effect on Armtec's results of operations, business prospects, financial condition, dividends to shareholders and the trading price of Armtec's shares.  These uncertainties and risks include, but are not limited to:  capital and liquidity risk; access to bonding and letters of credit; credit risk; seasonality and adverse weather; existing legal proceedings; industry cyclicality; competition; acquisition and expansion risk; current economic conditions; reduction in demand for products; information management; change management; risk of future legal proceedings; relationships with suppliers; lack of long-term agreements; expiration of rights under license and distribution arrangements; availability and price volatility of raw materials; product liability; intellectual property; reliance on key personnel; labour markets; environmental; collective bargaining; pension plans; currency fluctuations; interest rates; uninsured and underinsured losses; operating hazards; securities laws compliance and corporate governance standards; income tax and other taxes; geographical risk; and geopolitical.  Dividends are not guaranteed.  Further information about these and other risks and uncertainties can be found in the disclosure documents filed by Armtec Infrastructure Inc. with the securities regulatory authorities, available at www.sedar.com.FORWARD-LOOKING STATEMENTSThis news release contains "forward-looking" statements (including those set out under the heading "Overview", "Turnaround Plan Update" and "Outlook" and those relating to near and long-term earnings and cash flow; EBITDA improvement target; capital investment; efficiency improvements; margins and profitability in 2012; ability to compete and succeed; profitability on the TTC tunnel liner project; timing of cash tax liability; backlog levels; margins in the current backlog; performance and margins; installation outlook; and the outlook for Armtec's markets) within the meaning of applicable securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, events, performance or achievements of Armtec or industry results, to be materially different from any future results, events, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements typically contain such words or phrases as "may", "outlook", "objective", "intend", "estimate", "anticipate", "should", "could", "would", "will", "expect", "believe", "plan" and other similar terminology suggesting future outcomes or events. Forward-looking statements reflect current expectations regarding future results, events, performance and achievements and are based on information currently available to Armtec's management, anticipated operating and financial results of Armtec, and current and anticipated market conditions.Forward-looking statements involve numerous assumptions and should not be read as guarantees of future results, events, performance or achievements. Such statements will not necessarily be accurate indications of whether or not such future results, events, performance or achievements will be achieved.  You should not unduly rely on forward-looking statements as a number of factors, many of which are beyond the control of Armtec, could cause actual results, events, performance or achievements to differ materially from the results, events, performance or achievements discussed in the forward-looking statements, including, but not limited to the factors discussed in Armtec's materials filed with the Canadian securities regulatory authorities from time to time. Although the forward-looking statements contained in this news release are based upon what management of Armtec believes are reasonable assumptions, Armtec cannot assure investors that actual results, events, performance or achievements will be consistent with these forward-looking statements. All forward-looking statements in this news release are qualified by these cautionary statements. These forward-looking statements are made as of the date of this news release and, except as required by applicable law, Armtec assumes no obligation to update or revise them to reflect new events or circumstances.DEFINED TERMSCapitalized terms that are not otherwise defined in this news release shall have the meanings given to them in Armtec's management's discussion and analysis for the three and 12-months ended December 31, 2011.For further information: Carrie Boutcher Vice President, Investor Relations & Treasurer Tel:  (519) 822-0210 Fax: (519) 822-8894