Automodular Corporation

Automodular Corporation

March 26, 2009 09:11 ET

Automodular Corporation: 2008 Results

TORONTO, ONTARIO--(Marketwire - March 26, 2009) - Automodular Corporation ("Automodular")(TSX:AM) reports a 2008 net loss of $(6.9) million or $(0.27) per share on sales of $82.9 million compared to net earnings of $6.9 million or $0.30 per share on sales of $99.6 million in 2007. The current year includes 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. The decision to write-off goodwill was made following a review of its carrying value in comparison to both Automodular's market capitalization and the outlook on existing contracts. In light of the decreased automotive demand and financial difficulties being experienced by North American OEMs, management felt it was appropriate to write-off the goodwill. The 2007 figures were restated as a result of a change in accounting policies relating to pre-production expenditures.

Automodular's consolidated financial statements, management discussion and analysis and annual information form for the year ended December 31, 2008 will be filed on SEDAR on or before March 31, 2009 and the complete annual report together with the management information circular and proxy will be mailed to shareholders on or about April 9, 2009.

In Oshawa, Automodular's truck plant contracts with GM will end in the second quarter 2009 when GM closes its truck facility. The current contract with GM provides funds to address severance, closure and residual facility costs relating to this closure. The remaining Oshawa contracts are those relating to the new Camaro program which entered commercial production in the first quarter of 2009.

In Oakville, a substantial number of downweeks are expected in 2009. Concurrently, our launch teams are preparing for the launch of the new Lincoln MKT vehicle which is scheduled for the second half of 2009.

Excluding the impact of the goodwill write-off and reversal of US future tax assets noted above, Automodular generated positive operating earnings in a very difficult environment. Operating performance weakened in the fourth quarter of 2008 and continues to be impacted by lower production volumes. The environment continues to be very difficult with consumer confidence levels low, limited availability of credit and two of the North American OEMs dependent on government support to remain solvent. Automodular is focused on conserving cash and managing its costs. Automodular enters the 2009 year with a strong balance sheet, cash on hand of $6.1 million and an undrawn $10 million line of credit.

In light of the current automotive environment, the Board of Directors determined that it was not appropriate to pay a dividend at this time.

Automodular Corporation is a supplier of sub-assembly, sequencing, and transportation services to five OEM plants in Ontario and Ohio. The Company has five 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 operating pattern expectations in Oshawa and Oakville-area operations including production volumes. 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 has from time to time provided a financial outlook in its filings. In its MD&A for the quarter ended September 30, 2008 it indicated that as a result of the worsening economic climate it could not reasonably predict sales or profits for its operations. Going forward, Automodular will no longer provide a financial outlook.

Contact Information

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