Thyssenkrupp Budd Canada Inc.

Thyssenkrupp Budd Canada Inc.

May 13, 2005 08:56 ET

ThyssenKrupp Budd Canada Announces Second Quarter Results

KITCHENER, ONTARIO--(CCNMatthews - May 13, 2005) - ThyssenKrupp Budd Canada Inc. today announced a net loss of $20.5 million or $5.44 a share on sales of $89.9 million for the quarter ended March 31, 2005. This compares to net earnings of $.8 million or $.20 a share on sales of $131.4 million for the same quarter in 2004.

Total sales for the six months ended March 31, 2005 were $196.7 million, a decrease of $80.4 million over the same period in 2004. The net loss for the six months ended March 31, 2005 was $28.0 million or $7.44 a share compared to net earnings in the same period in 2004 of $4.0 million or $1.06 a share.

Consumer demand for the GM Envoy and Trailblazer is declining, in favour of crossover vehicles and passenger cars, which generally utilize unibody construction and do not require the frames produced by the Corporation. During the quarter and the six-month period ended March 31, 2005, the major portion of the $41.6 million decrease in product sales was attributable to Envoy/Trailblazer sales reductions. The sale of Mercedes frames ended in December 2004 and impacted sales negatively for the quarter by $11.8 million compared to the same period the previous year.

Liquidity and Capital Resources

Cash flow used in operating activities for the current quarter ended March 31, 2005 was $20.0 million. Operations did not generate any cash due to the loss in the quarter. During the six-month period ended March 31, 2005, cash used in operations was $.8 million compared to $35.1 million in the first six months in the previous fiscal year, during which extra cash was required to cover the change in payment terms by the Corporation's major customer in the first quarter of 2004. As at March 31, 2005, total debt stood at $322.3 million compared to $310.2 million as at September 30, 2004 for an increase of $12.1 million.

The Corporation is not in arrears in respect of any financial obligations. The Corporation's on-going viability is still dependent on financing provided by its affiliate, ThyssenKrupp Finance Canada, Inc. and the Corporation does not have immediate access to other sources of liquidity.

Outlook

The Corporation's major customer has scheduled further temporary shutdowns of the two plants supplied by the Corporation on a rotating basis over the next quarter to balance inventories. The decline in the full-framed mid-sized SUV sales has been abrupt across all customers but has hit the Corporation particularly hard. This is expected to negatively impact sales for the remainder of fiscal 2005. The Corporation's production of Mercedes frames, which amounted to $47.1 million in sales in fiscal 2004, has ceased. The Corporation's production of Jeep frames is expected to cease around May 2006. Sales of the Jeep frames in fiscal 2004 were $40.0 million. In April 2005, the Corporation was awarded the replacement business for the GM Envoy and Trailblazer business. Although the Corporation continues its efforts to improve its cost structure, it is anticipated that the losses will continue throughout fiscal 2005.

The Corporation's Interim Financial Statements for the Six Months ended March 31, 2005 are available on SEDAR at http://www.sedar.com.

Budcan Holdings Take-over Bid

Budcan Holdings Inc. acquired 785,182 common shares of the Corporation that were deposited to its take-over bid dated March 4, 2005. Budcan Holdings now holds 3,695,182 common shares of the Corporation, representing approximately 98.1% of the outstanding common shares. Budcan Holdings has exercised its right of compulsory acquisition under the Business Corporations Act (Ontario) to acquire all of the remaining common shares of the Corporation and expects to complete the acquisition of such shares by the end of May 2005. The Corporation's common shares were de-listed from the Toronto Stock Exchange on May 2, 2005.

ThyssenKrupp Budd Canada Inc. is an automotive manufacturer specializing in the production of light truck and sport utility vehicle frames and chassis components.

This press release contains certain "forward looking statements" that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Contact Information

  • ThyssenKrupp Budd Canada Inc.
    Winston P. Wong
    (519) 895-3010