Automodular Corporation

Automodular Corporation

March 09, 2010 15:38 ET

Automodular Corporation: 2009 Results

AJAX, ONTARIO--(Marketwire - March 9, 2010) - Automodular Corporation ("Automodular") (TSX:AM) reports 2009 net earnings of $2.7 million or $0.11 per share on sales of $75.3 million compared to a net loss of $(6.9) million or $(0.27) per share on sales of $82.9 million in 2008. Prior year results included a $9.4 million write-off of goodwill and a $0.8 million charge relating to the reversal of US-based future tax assets where realization of those assets was uncertain. 

Fourth quarter 2009 net earnings of $2.1 million or $0.08 per share on sales of $22.8 million compare to a net loss of $(10.3) million or $(0.40) per share on sales of $16.4 million. Fourth quarter 2008 results included the write-off of goodwill and US-based future tax assets described above. In the fourth quarter of 2008, Automodular's operations also experienced substantial production downtime as our customers attempted to rebalance inventory levels and reduce costs in light of a substantial reduction in consumer demand for automobiles. In comparison, the fourth quarter of 2009 contained no production downtime and daily volumes in our Oakville operations were at the highest levels we have experienced during our contract to date.

Automodular's consolidated financial statements, management discussion and analysis and annual information form for the year ended December 31, 2009 will be filed on SEDAR on or before March 31, 2010 and the complete annual report together with the management information circular and proxy will be mailed to shareholders on or about April 9, 2010.

In Oshawa, Automodular has received written notice from General Motors demanding an approximately 50% reduction in the price of its services to General Motors Oshawa Car Assembly Plant or risk losing the business as early as August, 2010. Loss of the business would expose Automodular to an after tax loss of approximately $7 million in the current year. Automodular is evaluating its options.

In Oakville, production volumes increased substantially during the fourth quarter of 2009 and carried over into 2010. Our launch teams are focused on the 2011 model year change which calls for some substantial modifications to the Ford Edge. These enhancements are expected to result in increased demand. 

Automodular generated positive operating earnings and cash flows in a difficult environment. The closure of our Oshawa-area truck operations in the second quarter of 2009 resulted in the layoff of approximately 110 employees. The first half of 2009 was characterized by a substantial number of production downweeks as Ford and GM sought to rebalance inventory levels. The Chevrolet Camaro program launched in the first quarter of 2009 and demand for the vehicle has been strong. Automodular's results benefited from improved vehicle demand especially in our Oakville operations over the second half of 2009. Automodular continues to focus on cash management and cost containment and enters the 2010 year with a strong balance sheet, cash on hand of $5.1 million and an undrawn $10 million line of credit. 

Automodular Corporation is a supplier of sub-assembly, sequencing, and transportation services to three OEM plants in Ontario and Ohio. The Company has four operating facilities and employs approximately 650 people.

This press release contains forward-looking statements that involve a number of risks and uncertainties. Specific forward-looking statements in the document include those relating to GM's demand for a price reduction and the potential impact of the loss of the business, operating patterns in Oshawa and Oakville-area operations including production volumes and the potential impact of the updated Ford Edge vehicle in Oakville. Among the important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are market and general economic conditions and the risk factors detailed from time to time in the Company's periodic reports filed with the Canadian securities regulatory authorities and on SEDAR at Readers are cautioned not to rely on forward-looking statements. Except as required under continuous disclosure obligations, the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Automodular does not provide financial outlooks.

Contact Information

  • Automodular Corporation
    Christopher S. Nutt
    Vice President, Finance and CFO
    (905) 619-4202