Automodular Corporation
TSX : AM

Automodular Corporation

May 12, 2009 11:49 ET

CORRECTION FROM SOURCE-Automodular Corporation: First Quarter 2009 Earnings

TORONTO, ONTARIO--(Marketwire - May 12, 2009) - The following corrects and replaces the release sent 9:08 am ET on May 8, 2009. In the second paragraph, second sentence, the word "weeks" was omitted after the number 23. The complete and corrected release follows.

Automodular Corporation ("Automodular")(TSX:AM) reports a net loss of $1.0 million or $0.04 per share for the three months ended March 31, 2009 compared to a net loss of $0.2 million or $0.01 per share in the same period in 2008. The current quarter includes a $1.4 million pre-tax charge relating to severance costs that will be incurred upon the closure of Automodular's Oshawa truck operations in the second quarter. 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.

As a result of the current economic climate and the resulting low demand for vehicles, Automodular's operations were shut down for a substantial portion of the first quarter. Automodular currently supports five different vehicle platforms and cumulatively they experienced 23 weeks during which production was shut down at our customers' plants ("downweeks") in the first quarter. Excluding the impact of the current quarter severance charge, results are marginally better in the first quarter of 2009 when compared to the first quarter of 2008. This is a result of fixed/variable pricing on certain new and renewed contracts, that were not in place in 2008, and which provides Automodular with some revenues to offset fixed costs during production downweeks. In the first quarter of 2008, the Company also incurred substantially more pre-production costs relating to vehicle launches than in 2009 as the Ford Flex program was ramping up and launched in the second quarter of 2008.

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



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2009 2008
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Sales $13,242 $20,810
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Net loss $(972) $(177)
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Loss per share $(0.04) $(0.01)
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Shares outstanding 25,949 25,949
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Automodular continues to actively follow the North American OEMs funding requests to the US and Canadian governments. General Motors Corporation has indicated that they may enter into some form of financial restructuring and it is not clear whether such a filing under Chapter 11 in the US would result in a CCAA filing in Canada also. Automodular would be impacted if GM files for creditor protection in both Canada and the US. Automodular has purchased approximately $3.5 million in insurance to mitigate the exposure and is investigating other avenues to further reduce its exposure.

Automodular continues its focus on reducing costs, conserving cash and managing its balance sheet. At this time, we are declining customer quotes where there are large capital requirements or significant volume risk and are looking for customers to fund substantial scope changes by providing up front financing or facilitating direct payment of capital costs.

Automodular is a supplier of sub-assembly, sequencing, transportation and logistics 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 the outcome of North American OEMs funding requests and GM's potential financial restructuring. 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 www.sedar.com. 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 fourth quarter of 2008, Automodular will no longer provide a financial outlook.

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