Automodular Corporation

Automodular Corporation

November 10, 2009 15:10 ET

Automodular Corporation: Third Quarter 2009 Results

TORONTO, ONTARIO--(Marketwire - Nov. 10, 2009) - Automodular Corporation ("Automodular" or "the Company") (TSX:AM) reports net earnings of $0.5 million or $0.02 per share for the nine months ended September 30, 2009 compared to $3.5 million or $0.14 per share in the same period in 2008. Net loss for the quarter ended September 30, 2009 was $(1.1) million or $(0.04) per share compared to net earnings of $2.0 million or $0.08 per share for the three-month period ending September 30, 2008. The prior year figures were re-stated as a result of the change in accounting policy relating to pre-production costs, adopted on October 1, 2008.

The third quarter financial results reflect the impact of a settlement of several commercial issues relating to Automodular's Oshawa and Ohio operations, subsequent to quarter end. These include: a reduction in revenues of $2.1 million relating primarily to a reduction in the previously recorded early termination fee; an increase in revenues of $0.3 million relating to capital assets, which as a result of the negotiations, will remain the property of Automodular; and a reduction in future obligations and corresponding exit costs of $0.4 million. The negotiations will also result in an increase to pricing as a result of changes in scope in our Oshawa business, going forward. As part of these negotiations, Automodular also agreed to extend its existing Ohio contracts to September 30, 2010 (they were previously set to expire December 31, 2009).

Current quarter and year-to-date earnings are impacted by the accounting for the aforementioned settlement, as well as lower production levels in the first two quarters of 2009 when assembly operations were idled for several weeks.

The results for the nine months of the year are summarized below (all figures in '000s except per share):

Three months ended Sept 30 Nine months ended Sept 30
-------------------------- -------------------------
2009 2008 2009 2008
-------- -------- -------- --------
Sales $ 15,112 $ 20,691 $ 52,457 $ 66,514
Net earnings (loss) $ (1,069) $ 2,022 $ 535 $ 3,483
Earnings (loss) per
share(i) $ (0.04) $ 0.08 $ 0.02 $ 0.14
Shares outstanding(i) 25,412 25,751 25,412 25,751
(i)(basic and fully diluted)

Automodular was not impacted by the Chapter 11 filing by General Motors Corporation in the United States. The automotive industry has changed substantially over this past year and it is still not clear at this point in time the impact that these and upcoming changes will have on Automodular.

In our Oshawa-area operations, demand has remained strong for the Chevrolet Camaro and overtime shifts continue to be scheduled.

In our Oakville operations, the Lincoln MKT launched at the beginning of the third quarter. We have seen the elimination of previously scheduled downweeks but are seeing intermittent production shutdowns as a result of supplier issues so the expected benefit to revenues and earnings are not being realized.

Automodular continues to see some improvement in production volumes. Our focus is unchanged - we are continuing to reduce costs, conserve cash and manage our balance sheet.

Automodular Corporation is a supplier of sub-assembly, sequencing, transportation and logistics services to three Original Equipment Manufacturer plants in Ontario and Ohio. The Company has four operating facilities and employs approximately 600 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 impact of the financial restructuring of North American OEMs and resultant changes to the automotive industry on Automodular, expected volumes and demand for vehicles that we provide services for in Oakville and Oshawa. 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 otherwise. Effective the fourth quarter of 2008, Automodular will no longer provide a financial outlook.

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