News
Héroux-Devtek reports solid first quarter results

These results are the first presented by the Corporation following its
adoption for reporting purposes, on April 1, 2011, of International
Financial Reporting Standards ("IFRS"). Results for the prior year have
been restated. Results include the contribution of Eagle Tool &
Machine Co. and of its subsidiary All Tools Inc. ("Landing Gear USA")
for the entire period, versus only two months in the prior year. Unless
otherwise indicated, all amounts are in Canadian dollars.

Consolidated sales were $91.9 million, up 11.3% from $82.5 million for
the same period last year. This increase reflects higher sales for the
Aerostructure and Industrial product lines as well as an additional
sales contribution of $5.3 million from Landing Gear USA. Earnings
before interest, taxes, depreciation and amortization ("EBITDA") were
$14.9 million, or 16.3% of sales, compared with $12.0 million, or 14.5%
of sales. This improvement mainly results from a better absorption of
manufacturing overhead costs due to higher Aerostructure and Industrial
volumes. Operating income stood at $9.1 million, or 9.9% of sales, up
from $5.9 million, or 7.1% of sales last year. Net income amounted to
$5.8 million, or $0.19 per share, fully diluted, compared with $3.3
million, or $0.11 per share, fully diluted, a year ago. Results for the
first quarter of 2012 include expenses of $180,000 net of income tax, or
$0.01 per share, related to the start-up of the new facility in Mexico,
while the first quarter of fiscal 2011 contained restructuring charges
of $258,000 net of income tax, or $0.01 per share, related to the
closure of the Rivière-des-Prairies facility. Finally, cash flow from
operations reached $12.8 million this year, up from $10.6 million last
year.

Fluctuations in the value of the Canadian dollar versus the US currency
decreased first quarter sales by $3.4 million, or 4.2%, compared with
last year, and reduced gross profit by $0.7 million, or 0.2% of sales.
The impact of currency movements on the Corporation's gross profit is
mitigated by the use of forward foreign exchange sales contracts and the
natural hedging from the purchase of materials made in U.S. dollars.

                
FINANCIAL HIGHLIGHTS    Quarters ended June 30,
(in thousands of dollars, except per share data)    2011         2010
Sales                                                               91,873         82,541
EBITDA                                                            14,948         11,966
Operating income                                             9,083         5,872
Net income                                                      5,797         3,318
     Per share – basic and diluted ($)                   0.19         0.11
Cash flows from operations                              12,811         10,592
Weighted-average shares outstanding              30,215         30,237

"Héroux-Devtek's first quarter results clearly highlight the positive
momentum that is driving most of its strategic markets," said President
and CEO Gilles Labbé. "The Landing Gear product line is increasingly
benefitting from higher production rates for certain major large
commercial aircraft programs, the ramp-up of several strategic programs
is contributing to the growth of our Aerostructure product line, while
demand for our main Industrial products remains solid. More importantly,
this greater volume and further efficiency gains have resulted in a
significant increase in profitability and cash flow."

As at June 30, 2011, Héroux-Devtek's balance sheet remained healthy with
cash and cash equivalents of $40.1 million and long-term debt,
including the current portion, of $105.3 million. As a result, the net
debt-to-equity ratio stood at 0.28:1 at the end of the first quarter,
compared with 0.32:1 three months earlier. The net-debt-to-equity ratio
is defined as the total long-term debt, including the current portion,
less cash and cash equivalents over shareholders' equity.

SEGMENT RESULTS
Aerospace sales were $84.6 million in the first quarter of fiscal 2012
compared with $76.0 million last year. Landing Gear product sales
increased 9.5% to $59.4 million reflecting the additional one-month
contribution from Landing Gear USA. Excluding this factor, sales were
essentially stable as increased activity for certain large commercial
aircraft, mainly the B-777, and business jet programs were offset by
currency fluctuations and reduced customer requirements for certain
helicopter and regional jet programs. Aerostructure product sales grew
15.0% to $24.9 million due to higher sales for business jet programs,
the ramp-up of the Bell 429 helicopter program and increased JSF sales,
which more than offset currency fluctuations.

Industrial sales totalled $7.2 million in the first three months of
fiscal 2012, up from $6.5 million a year earlier. This increase reflects
higher demand for heavy equipment in the mining industry and, to a
lesser extent, higher sales to the power generation sector.

RECENT EVENT
On June 21, 2011, Héroux-Devtek announced that it has been awarded a
seven-year contract by Lockheed Martin Aeronautics Company to
manufacture the landing gear for the C-130J Super Hercules aircraft.
Under the terms of the agreement, Héroux-Devtek will manufacture and
assemble the landing gear for Lockheed Martin's global production of
C-130J aircraft and provide spare parts over a seven-year period
beginning in January 2012. Based on current program expectations, the
contract has a potential total value of approximately $70 million.

OUTLOOK
Conditions remain favourable in the commercial aerospace market. Large
commercial aircraft manufacturers have announced several production rate
increases on leading programs up to calendar 2014, new orders have
significantly increased in the first half of 2011 and both Boeing and
Airbus are forecasting higher deliveries for calendar 2011. The business
jet market continues to see positive signs, such as greater aircraft
utilization and fewer used aircraft for sale, but a significant recovery
in deliveries is only expected in calendar 2012. The military aerospace
market has stabilized as governments address their deficits. As to the
JSF program, despite the two-year probation on the short take-off and
vertical landing (STOVL) variant, the Corporation anticipates to produce
a higher number of shipsets in fiscal 2012, compared to fiscal 2011.
This results from the ramp-up of the other two variants, combined with a
higher share of the total production. Finally, the Corporation's main
industrial markets are showing further momentum, as new orders and
backlogs for its main customers continue to increase.

As at June 30, 2011, Héroux-Devtek's funded (firm orders) backlog stood
at $509 million, up from $502 million three months earlier, and remains
well diversified.

"As the economy continues to progress, Héroux-Devtek is well positioned
to leverage the strengths of its world-class organization by further
broadening its product and service offering. Encouraging advances in our
markets support an optimistic outlook despite the strong Canadian
dollar. We are also looking forward to the start-up of our facility in
Mexico, which should produce its first components early in calendar
2012, while a sound balance sheet enables us to consider other strategic
acquisitions that would enhance our product portfolio and our
technologies. In the mean time, we continue to anticipate an internal
sales growth of approximately 5% for the current fiscal year, assuming
the Canadian dollar remains at parity versus the U.S. currency. It is
also important to remember that the second quarter has traditionally
been a somewhat slower period owing to seasonal factors, such as plant
shutdowns and summer vacations. However, as many important programs will
ramp-up beyond this fiscal year, we are confident to achieve our
long-term goal to grow internally and through strategic alliances at 10%
per year, on average," concluded Mr. Labbé.