Automodular Corporation

Automodular Corporation

May 05, 2010 12:30 ET

Automodular Corporation First Quarter 2010 Earnings

TORONTO, ONTARIO--(Marketwire - May 5, 2010) - Automodular Corporation ("Automodular") (TSX:AM) reports a net loss of $0.2 million or $0.01 per share for the three months ended March 31, 2010 compared to a net loss of $1.0 million or $0.04 per share in the same period in 2009. As a result of General Motors of Canada Limited's ("GM") announced termination of Automodular's Oshawa-area contracts, the current quarter includes a $1.5 million pre-tax charge for expected severance costs and a $3.3 million impairment of its capital assets. Costs relating to the facility closure will be recorded in the period in which the facility ceases operations. Automodular will continue to re-examine its cost estimates on a quarterly basis and revise those estimates as circumstances change or additional information becomes available.

Excluding the impact of GM's announced termination of our Oshawa-area contracts, operating results were significantly stronger than in 2009. In 2009, the Oakville operations experienced 7 weeks of production downtime in the first quarter. There were no production downweeks in the first quarter of 2010 and daily run rates were at higher than historical levels. 

The first quarter results are summarized below (all numbers in '000s except earnings per share):

    2010     2009  
Sales $ 24,801   $ 13,242  
Net loss $ (202 ) $ (972 )
Loss per share $ (0.01 ) $ (0.04 )
Shares outstanding   25,949     25,949  

In Oshawa and Ohio, Automodular's efforts are focused on managing the termination of GM contracts and the mitigation of costs for the closure of the respective facilities. In Oakville, resources are focused on the 2011 Ford Edge model year change which is expected to be well received and will help stimulate demand for the vehicle.

On March 31, 2010 Automodular utilized surplus cash and repaid both of its outstanding term credit facilities in order to reduce future interest charges. Automodular continues to focus on conserving cash and managing its balance sheet. 

Automodular 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 the termination of our GM contracts and expected closure of our Oshawa-area and Ohio facilities, as well as the expected impact of the 2011 Ford Edge model year change on vehicle demand. Among the important factors that could cause actual results to differ materially from those indicated above 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 otherwiseAs of the fourth quarter of 2008, Automodular no longer provides a financial outlook.

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