Husky Injection Molding Systems Ltd.

Husky Injection Molding Systems Ltd.

March 10, 2005 16:47 ET

Husky Injection Molding Systems Ltd. Issues Fiscal 2005 Second Quarter Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: HUSKY INJECTION MOLDING SYSTEMS LTD

TSX SYMBOL: HKY

MARCH 10, 2005 - 16:47 ET

Husky Injection Molding Systems Ltd. Issues Fiscal
2005 Second Quarter Results

TORONTO, ONTARIO--(CCNMatthews - March 10, 2005) - Husky Injection
Molding Systems Ltd. (TSX:HKY) today announced its results for the
second quarter ended January 31, 2005. All figures in this press release
are in US dollars unless otherwise stated.

Management's Discussion and Analysis

The following is a discussion of the second quarter fiscal 2005
consolidated financial condition and results of operations of Husky
Injection Molding Systems Ltd. (the "Company"). This analysis is current
as of March 3, 2005, and should be read in conjunction with the
Company's unaudited interim consolidated financial statements for the
three and six month periods ended January 31, 2005, and the Company's
Annual Report 2004 - Financial Supplement for the year ended July 31,
2004. Additional information regarding the Company, including its Annual
Information Form, can be found on SEDAR at www.sedar.com.

The Company assesses its performance by reviewing the geographic mix of
sales from its territories, and gross profit and profitability on a
consolidated basis.



Summarized Financial Results

(in millions of US dollars, except per share data, unaudited)

Three Months Ended Six Months Ended
January January January January
31, 2005 31, 2004 31, 2005 31, 2004
---------------------------------------------------------------------
Orders 230.0 237.8 454.7 444.9
---------------------------------------------------------------------
Sales 204.0 177.9 366.3 311.4
---------------------------------------------------------------------
Net Income (Loss) (2.8) 3.7 (16.1) (6.1)
---------------------------------------------------------------------
Earnings (Loss) Per Share (0.02) 0.03 (0.14) (0.05)
---------------------------------------------------------------------


Results of Operations

For the three and six month periods ended January 31, 2005 compared to
the same periods in the previous year.

Sales

Sales for the second quarter increased 15% to $204.0 million, due to a
higher opening backlog level. In North America, sales increased 21% due
to higher shipments in packaging and automotive markets. In Europe,
sales decreased 20%, principally due to lower shipments in packaging and
PET applications. These decreases were partly offset by growth in the
automotive market and from favourable foreign exchange rates on the
translation of Euro-denominated shipments. On a comparative basis,
foreign exchange on Euro-denominated shipments increased sales by
approximately $4.0 million. Sales in Latin America increased 51%,
reflecting strong shipments in packaging, automotive and PET markets.
Sales in Asia Pacific grew 64%, principally due to increased PET
shipments in all regions.

Sales for the first six months increased 18% to $366.3 million, as a
result of higher opening backlog at the start of the year and strong
order intake. The increase reflects higher shipments in all territories,
except Europe which was consistent with the prior year.

In North America, sales increased 20% due to higher shipments in all
application markets, except technical and general which were marginally
below last year. Sales in Europe were consistent with last year as
increased shipments in automotive and technical markets were offset by
lower shipments in packaging and PET applications. On a comparative
basis sales increased by approximately $7.0 million over last year as a
result of favourable foreign exchange on Euro-denominated shipments. In
Latin America, sales increased 54% as a result of higher shipments in
all regions and all markets, with particular strength in PET
applications. In Asia, sales grew 28% principally due to increased PET
shipments in all regions.

Net Income (Loss)

The net loss for the quarter was $2.8 million ($0.02 loss per share),
compared to a net income of $3.7 million ($0.03 earnings per share) last
year. For the year-to-date period the net loss of $16.1 million ($0.14
loss per share) compares to a net loss of $6.1 million ($0.05 loss per
share) last year.

President's Message

Robert Schad, Husky's President and Chief Executive Officer commented,
"Orders in the second quarter were marginally below record levels
achieved in the same period last year. Sales increased 15% to $204
million due to higher opening backlog. Despite strong sales in the
quarter, results reflect a small loss due to higher costs associated
with people-related expenses, new product ramp-up, and the impact of a
stronger Canadian dollar.

PET orders in the quarter slowed due to soft market conditions in
Eastern Europe and China. We are encouraged, however, by our success in
penetrating smaller volume applications with our new HyPET systems. This
will allow us to increase our share of the market. We also continue to
invest in development to improve system productivity and in programs to
improve the shelf life of bottles. The high output of our new HyPET
machines is also opening new opportunities in the replacement machine
business with customers looking to modernize their facilities.

Combined orders in other markets increased in the quarter. Our Hylectric
machines accounted for much of this growth, where orders were up more
than 65% compared to last year. This confirms the growing acceptance of
this product line. For example, we booked our first orders in the DVD
case market, which benefits significantly from the Hylectric platform.

On a year-to-date basis, the marginal decline in PET orders was more
than offset by growth in combined orders in other markets. Much of the
pick-up was attributable to the widespread success of our Quadloc,
Tandem, and Hylectric machines, particularly in the automotive and
packaging markets. Automotive orders are up significantly in all
territories compared to last year.

With the increase in backlog levels, we are in a position to grow sales
in fiscal 2005. However, the benefit of aggressive cost reduction
programs started in fiscal 2004 has been slower than expected. Many of
these programs include engineering solutions which are taking longer to
complete. Through these initiatives we expect to offset some of the
unfavourable conditions due to currency, new product ramp-up costs, and
steel price fluctuations.

Since founding Husky, I have built the Company on innovation, customer
intimacy, and entrepreneurial drive. While these elements will remain
critical, it is also clear that additional competencies to succeed will
be required to achieve our goal of profitable growth. In January 2005,
we announced that John Galt, currently the Company's Vice President,
Operations and Chief Operating Officer, will take over as my successor.
Through John's 20 year career at the Company, he has shown a tremendous
track record of leadership, professionalism, passion for operational
excellence, and strong profit orientation:

- As General Manager of the Company's North American machine business,
he led the rollout of a new product line resulting in record sales and
profit;

- While based at the Company's European campus in Luxembourg, he led a
major initiative to restructure the operations, put in place a new
leadership team, and improved performance in the hot runner and machine
businesses;

- As Vice President and COO, he has led the Company's global
manufacturing operations with a major program to implement company-wide
quality systems and best practices as well as developing a global team
of strong business leaders.

John will be able to do an excellent job driving improvements throughout
the organization and improve profits. He is a firm believer in our
culture and values, and I am confident that he is the right person to
lead the change that is necessary to take the Company to the next level."

2005 Outlook

Global market conditions remain difficult to predict, and the Company
expects that this uncertainty will persist through calendar 2005. Third
quarter sales for the current fiscal year are expected to be in line
with levels reached last year, and earnings will be lower than the $15.2
million achieved for the comparative period. Last year's third quarter
results included favourable tax rates due to the recognition of tax loss
carryforwards, which will not recur this year.

For the full fiscal year, the Company expects that sales will increase
compared to 2004. Despite the projected increase in sales, the Company
continues to face adverse conditions as a result of the strong Canadian
dollar, lower margin product mix, and rising steel prices. The Company
is aggressively pursuing initiatives which will offset some of the
unfavourable impact of these factors. Initiatives include off-shore
manufacturing, investments in automation, global sourcing, engineering
programs, and pricing strategies.

Gross Profit

Despite increased sales, gross profit for the second quarter of $43.1
million was consistent with last year. As a result, margins were 21.1%
of sales compared to 24.2%. Lower margin product mix and increased
expenses, most of which was due to salary and people-related costs,
reduced gross profit by approximately $6.0 million. Other contributing
factors included unfavourable foreign exchange rates on expenses
denominated in Canadian dollars and competitive pricing pressures. These
factors offset the favourable impact of higher sales volume.

For the first six months, gross profit increased to $66.1 million from
$62.9 million, with margins of 18.1% of sales compared to 20.2% last
year. The increase in gross profit was primarily due to higher sales
volume, which was partly offset by lower margin product mix,
unfavourable foreign exchange rates on Canadian dollar-denominated
expenses, and competitive pricing pressures. These offsetting factors
reduced gross profit by approximately $15.0 million. Other contributing
factors included higher salary and people-related expenses.

Other Income and Expenses

Selling and administration expenses were $40.8 million, up from $37.9
million last year. For the first six months, selling and administration
expenses increased to $81.1 million from $70.3 million last year. For
the quarter and year-to-date periods, the increases reflected higher
salary and people-related expenses, and unfavourable foreign exchange
rates on Canadian dollar and Euro-denominated expenses. For the
year-to-date period, the increase also reflects the Company's
participation in a large triennial trade show in Germany.

Interest expense for the second quarter, net of interest income,
increased to $2.7 million from $2.4 million, due to higher average
borrowing levels combined with higher average borrowing rates. For the
first six months, interest expense, net of interest income, increased to
$5.2 million from $4.8 million, due to reduced interest income and
higher average borrowing levels.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)1

EBITDA in the quarter was $14.5 million compared to $16.6 million last
year; the decrease was due to higher selling and administration expenses.

For the first six months, EBITDA was $9.7 million compared to $15.4
million; the decrease was due to higher selling and administration
expenses, partly offset by increased gross profit.

Income Taxes

In the quarter, the net loss included an income tax provision of $2.5
million. The quarterly income tax provision resulted from an increase in
the Company's future income tax asset valuation allowance. The Company
records its future income tax assets (net of its valuation reserve) only
to the extent that it is more likely than not it will realize the assets
in the foreseeable future. In fiscal 2004, the net profit for the
quarter included an income tax recovery of $1.0 million. The 2004
quarterly income tax recovery was the result of income earned in a
jurisdiction where the Company had unrecognized loss carryforwards.

The quarterly tax provision was recorded in accordance with the
Company's practice of evaluating its future tax assets, which is
discussed in more detail on page 8 under the "Critical Accounting
Estimates" section in the Company's Annual Report 2004 - Financial
Supplement.

Orders and Backlog

Orders in the second quarter decreased 3% to $230.0 million. Stronger
performance in North America and Latin America was more than offset by
lower orders in other territories. PET orders were down in all
territories except Latin America, which was consistent with last year.
This was partly offset by an increase in non-PET orders, particularly in
Hylectric machines.

Orders in North America increased primarily as a result of strong growth
in packaging applications. In Europe, orders decreased from the high
level achieved last year. The decrease was principally due to reduced
PET demand in Eastern Europe, and lower orders in technical and general
markets. On a comparative basis, orders in Europe increased by
approximately $8.0 million as a result of favourable foreign exchange
rates on Euro-denominated orders. In Latin America orders increased over
last year with strong growth in all regions except Mexico. Orders were
higher in all applications, with particular strength in the packaging
market. Asia Pacific orders decreased primarily due to weak PET demand
in North Asia.

For the first six months, orders increased to $454.7 million from $444.9
million last year. Higher orders in the Americas were partly offset by
decreases in other territories. PET orders were down marginally as
softness in Europe and Asia Pacific was partly offset by increases in
the Americas, with particular strength in North America. Combined orders
in other markets increased as a result of higher demand in automotive
and packaging applications.

Backlog at January 31, 2005 increased 8% to $359.7 million from $332.6
million last year.

Segmented Information

Sales and Orders

Please refer to the discussion of sales and orders above.

Gross Profit

The Company evaluates gross profit on a consolidated basis. The change
in gross profit margin of the Company's manufacturing operations during
the quarter is attributable to the factors discussed previously under
"Gross Profit". In general, gross profit earned by the Company's Service
and Sales territories fluctuates primarily as a result of changes to
internal pricing between business units, foreign exchange fluctuations,
and competitive pricing pressures. In Asia Pacific and Latin America,
for both the quarter and year-to-date periods, gross profit margins
decreased as a result of competitive pricing pressures. The reader is
reminded that internal changes in pricing between business units and
foreign exchange fluctuations may affect comparative Service and Sales
and manufacturing profit margins, and that such changes may give rise to
segmented results which are not necessarily indicative of external
business or market conditions.

Liquidity and Capital Resources

Cash Position

Cash provided by operating activities for the second quarter decreased
to $4.7 million from $22.3 million last year. The reduction was due to
increased non-cash working capital levels and lower profitability.
Non-cash working capital increased in the quarter as a result of higher
inventory and accounts receivable. The increase in inventory was
consistent with higher backlog levels. These increases were partly
offset by higher accounts payables and accruals, which increased
principally due to higher trade payables, and customer deposits.

For the first six months, cash provided by operating activities totalled
$0.6 million, compared to cash used in operating activities of $32.7
million last year. The improvement was primarily attributable to a
comparative decline in the use of non-cash working capital. From the
beginning of the fiscal year, non-cash working capital increased due to
higher inventory levels, partly offset by increased customer deposits
and decreased accounts receivable.

Capital Additions

Capital additions for the quarter totalled $13.1 million compared to
$16.8 million. Additions related principally to equipment purchases.

Capital Resources

Debt at January 31, 2005 totalled $179.0 million, compared to $172.3
million at July 31, 2004. The increase was principally due to temporary
borrowing on the Company's revolving credit facility. Net debt2
increased to $159.7 million from $132.4 million at July 31, 2004,
primarily as a result of reduced cash and cash equivalents. Debt as a
percentage of capital was 33% at January 31, 2005, compared to 31% at
July 31, 2004. Net debt as a percentage of capital increased to 31% from
26% at July 31, 2004.

At January 31, 2005 the Company had committed but unutilized credit
facilities totalling $74.2 million.

The Company expects to meet its operating cash requirements through
fiscal 2005, including required working capital investments, capital
expenditures, and currently scheduled repayments of debt, from cash on
hand, cash flow from operations, and its committed borrowing capacity.

Changes in Accounting Policies Including Initial Adoption

Effective August 1, 2004, the Company adopted the Canadian Institute of
Chartered Accountants Handbook Section 3110 "Asset Retirement
Obligations". The Company estimated and accrued the present value of its
obligations to restore certain leased premises at the end of the lease
term. At lease inception, the present value of this obligation is
recognized in other long-term liabilities with a corresponding amount
recognized in capital assets. The capital asset amount is amortized over
the period from lease inception to the time the Company expects to
vacate the premises, resulting in depreciation expense in the
consolidated statement of operations. Subsequently, the obligation is
adjusted for the accretion of discount and any changes in the amount or
timing of the underlying liability.

The Company adopted the new recommendations retroactively and
comparative figures have been restated. Adopting the new standard for
the reported figures as of July 31, 2004 resulted in an increase in
capital assets, future income tax assets and other long-term liabilities
of $203,000, $85,000 and $453,000 respectively, and a decrease in
retained earnings of $165,000. The impact of this accounting policy
change on reported net income for the three and six month periods ended
January 31, 2005 was a decrease of $74,000 and $106,000 respectively.
The impact on reported net income for the three and six month periods
ended January 31, 2004 was a decrease of $17,000 and $34,000
respectively.


1 EBITDA: Is a non-GAAP measure, which means earnings before interest,
taxes, depreciation and amortization. EBITDA does not have a
standardized meaning prescribed by GAAP, and which may not be directly
comparable to similar measures presented by other companies due to the
nature of its calculation. The Company believes this measure may be
relevant to stakeholders.

2 Net debt: Is a non-GAAP measure, which means total debt, less cash and
cash equivalents. Net debt does not have a standardized meaning
prescribed by GAAP, and may not be directly comparable to similar
measures presented by other companies due to the nature of its
calculation. The Company believes this measure may be relevant to
stakeholders.



HUSKY INJECTION MOLDING SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS OF US DOLLARS, UNAUDITED)

January 31, 2005 July 31, 2004
(restated)
---------------------------------------------------------------------

ASSETS
Current
Cash and cash equivalents 19,295 39,901
Accounts receivable 120,909 129,957
Income taxes receivable 5,953 6,541
Inventories 219,384 186,261
Prepaid expenses and other assets 11,699 11,147
Future income tax assets 27,365 22,724
---------------------------------------------------------------------
Total current assets 404,605 396,531
Cross currency swap receivable 36,270 34,091
Future income tax assets 11,804 9,856
Capital assets, net 375,230 379,614
---------------------------------------------------------------------
Total assets 827,909 820,092
---------------------------------------------------------------------
---------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued charges 168,415 174,373
Customers' deposits 76,684 54,668
Current portion of long-term debt 9,252 3,910
---------------------------------------------------------------------
Total current liabilities 254,351 232,951
Cross currency swap payable 29,032 29,032
Long-term debt 169,771 168,378
Employee future benefits 13,513 12,410
Future income tax liabilities 691 888
Other long-term liabilities 547 453
---------------------------------------------------------------------
Total liabilities 467,905 444,112
---------------------------------------------------------------------

Shareholders' equity
Share capital 133,651 133,510
Retained earnings 226,353 242,470
---------------------------------------------------------------------
Total shareholders' equity 360,004 375,980
---------------------------------------------------------------------
Total liabilities and shareholders'
equity 827,909 820,092
---------------------------------------------------------------------
---------------------------------------------------------------------


HUSKY INJECTION MOLDING SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS

(IN THOUSANDS OF US DOLLARS, EXCEPT PER SHARE DATA, UNAUDITED)

Three Months Ended Six Months Ended
January January January January
31, 31, 31, 31,
2005 2004 2005 2004
(restated) (restated)

---------------------------------------------------------------------

Sales 204,043 177,880 366,292 311,438
Cost of sales 160,894 134,835 300,153 248,567
---------------------------------------------------------------------
Gross profit 43,149 43,045 66,139 62,871
---------------------------------------------------------------------

Other expenses
Sales and administration 40,757 37,923 81,122 70,312
Interest - current, net (92) (159) (205) (463)
- long-term 2,752 2,608 5,361 5,221
---------------------------------------------------------------------
Total expenses 43,417 40,372 86,278 75,070
---------------------------------------------------------------------

Income (loss) before
income taxes (268) 2,673 (20,139) (12,199)
Provision for (recovery of)
income taxes
Current 647 530 1,298 1,312
Future 1,887 (1,565) (5,320) (7,403)
---------------------------------------------------------------------
2,534 (1,035) (4,022) (6,091)
---------------------------------------------------------------------
Net income (loss) for
the period (2,802) 3,708 (16,117) (6,108)

Retained earnings,
beginning
of period 229,155 214,022 242,635 223,821
Adjustment due to
change in accounting
policy - (106) (165) (89)
---------------------------------------------------------------------
Retained earnings,
end of period 226,353 217,624 226,353 217,624
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic and diluted
earnings (loss)
per share (0.02) 0.03 (0.14) (0.05)
---------------------------------------------------------------------
Weighted average
number of common
shares outstanding 116,951,382 116,866,602 116,943,194 116,837,545
---------------------------------------------------------------------
---------------------------------------------------------------------


HUSKY INJECTION MOLDING SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS OF US DOLLARS, UNAUDITED)

Three Months Ended Six Months Ended
January January January January
31, 31, 31, 31,
2005 2004 2005 2004
(restated) (restated)
---------------------------------------------------------------------

OPERATING ACTIVITIES
Net income (loss) for the
period (2,802) 3,708 (16,117) (6,108)
Add (deduct) items not
affecting cash
Depreciation 12,099 11,368 24,482 22,621
Amortization 29 64 190 225
Loss (gain) on disposal
of capital assets 609 121 1,004 (661)
Employee future benefits (77) 353 1,103 1,437
Future income taxes 1,715 (2,919) (6,786) (9,219)
---------------------------------------------------------------------
11,573 12,695 3,876 8,295
Net decrease (increase)
in non-cash working
capital balances related
to operations (6,850) 9,596 (3,299) (40,995)
---------------------------------------------------------------------
Cash provided by (used in)
operating activities 4,723 22,291 577 (32,700)
---------------------------------------------------------------------

INVESTING ACTIVITIES
Additions to capital
assets (13,125) (16,802) (21,174) (28,885)
Net increase (decrease)
in accounts payable and
accrued charges related
to capital asset additions (825) (335) (3,298) 940
---------------------------------------------------------------------
Cash used for capital
asset additions (13,950) (17,137) (24,472) (27,945)
Proceeds from sale of
capital assets 63 302 148 2,567
---------------------------------------------------------------------
Cash used in investing
activities (13,887) (16,835) (24,324) (25,378)
---------------------------------------------------------------------

FINANCING ACTIVITIES
Additional long-term debt 5,000 - 5,000 -
Repayment of long-term
debt (1,130) (923) (2,000) (1,743)
Maturity of marketable
securities - - - 49,966
Issue of common shares 78 82 141 322
---------------------------------------------------------------------
Cash provided by (used in)
financing activities 3,948 (841) 3,141 48,545
---------------------------------------------------------------------

Net increase (decrease)
in cash and cash
equivalents during the
period (5,216) 4,615 (20,606) (9,533)
Cash and cash equivalents,
beginning of period 24,511 58,582 39,901 72,730
---------------------------------------------------------------------
Cash and cash equivalents,
end of period 19,295 63,197 19,295 63,197
---------------------------------------------------------------------
---------------------------------------------------------------------

Supplementary cash flow
information
Cash income taxes paid, net 97 2,255 461 6,021
---------------------------------------------------------------------
Cash interest paid, net 223 29 5,004 4,599
---------------------------------------------------------------------
---------------------------------------------------------------------


HUSKY INJECTION MOLDING SYSTEMS LTD.
SEGMENTED INFORMATION

(IN THOUSANDS OF US DOLLARS)

Three Months Ended January 31, 2005 (unaudited)
---------------------------------------------------------------------
Service and Sales territories
---------------------------------------------------------------------
Manufact- Elimina-
North Latin Asia uring tions
America America Europe Pacific operations &other(i) Total
---------------------------------------------------------------------
External
sales 77,815 22,846 55,015 48,367 - - 204,043

Intersegment
sales - - - - 173,686 (173,686) -
---------------------------------------------------------------------
Total
sales 77,815 22,846 55,015 48,367 173,686 (173,686) 204,043
---------------------------------------------------------------------
---------------------------------------------------------------------
Gross
profit 12,414 3,137 7,039 7,793 5,319 7,447 43,149
---------------------------------------------------------------------
---------------------------------------------------------------------
Depreciation
and
amorti-
zation 855 199 623 434 8,907 1,110 12,128
---------------------------------------------------------------------
---------------------------------------------------------------------
Capital
asset
additions 2,375 76 329 142 9,684 519 13,125
---------------------------------------------------------------------
---------------------------------------------------------------------
Total
assets 104,970 38,973 100,748 73,869 382,509 126,840 827,909
---------------------------------------------------------------------
---------------------------------------------------------------------


---------------------------------------------------------------------
Three Months Ended January 31, 2004 (unaudited, restated)
---------------------------------------------------------------------
Service and Sales territories
---------------------------------------------------------------------

Manufact- Elimina-
North Latin Asia uring tions
America America Europe Pacific operations &other(i) Total
---------------------------------------------------------------------

External
sales 64,241 15,123 68,951 29,565 - - 177,880

Intersegment
sales - - - - 158,155 (158,155) -
---------------------------------------------------------------------
Total
sales 64,241 15,123 68,951 29,565 158,155 (158,155) 177,880
---------------------------------------------------------------------
---------------------------------------------------------------------
Gross
profit 11,587 2,628 7,140 5,555 20,231 (4,096) 43,045
---------------------------------------------------------------------
---------------------------------------------------------------------
Depreciation
and
amorti-
zation 909 217 616 260 8,174 1,256 11,432
---------------------------------------------------------------------
---------------------------------------------------------------------
Capital
asset
additions 81 181 264 4,778 11,238 260 16,802
---------------------------------------------------------------------
---------------------------------------------------------------------
Total
assets 101,430 30,647 133,697 65,641 358,643 115,092 805,150
---------------------------------------------------------------------
---------------------------------------------------------------------


Six Months Ended January 31, 2005 (unaudited)
---------------------------------------------------------------------
Service and Sales territories
---------------------------------------------------------------------
Manufact- Elimina-
North Latin Asia uring tions
America America Europe Pacific operations &other(i) Total
---------------------------------------------------------------------

External
sales 149,944 43,201 103,599 69,548 - - 366,292
Intersegment
sales - - - - 316,527 (316,527) -
---------------------------------------------------------------------
Total
sales 149,944 43,201 103,599 69,548 316,527 (316,527) 366,292
---------------------------------------------------------------------
---------------------------------------------------------------------
Gross
profit 25,821 6,247 13,064 10,980 553 9,474 66,139
---------------------------------------------------------------------
---------------------------------------------------------------------
Depreciation
and
amorti-
zation 1,713 402 1,247 835 18,048 2,427 24,672
---------------------------------------------------------------------
---------------------------------------------------------------------
Capital
asset
additions 2,640 101 733 357 16,068 1,275 21,174
---------------------------------------------------------------------
---------------------------------------------------------------------
Total
assets 104,970 38,973 100,748 73,869 382,509 126,840 827,909
---------------------------------------------------------------------
---------------------------------------------------------------------


Six Months Ended January 31, 2004 (unaudited, restated)
---------------------------------------------------------------------
Service and Sales territories
---------------------------------------------------------------------
Manufact- Elimina-
North Latin Asia uring tions
America America Europe Pacific operations &other(i) Total
---------------------------------------------------------------------

External
sales 125,050 28,075 104,113 54,200 - - 311,438

Intersegment
sales - - - - 270,521 (270,521) -
---------------------------------------------------------------------
Total
sales 125,050 28,075 104,113 54,200 270,521 (270,521) 311,438
---------------------------------------------------------------------
---------------------------------------------------------------------
Gross
profit 23,428 5,155 12,364 10,336 16,828 (5,240) 62,871
---------------------------------------------------------------------
---------------------------------------------------------------------
Depreciation
and
amorti-
zation 1,802 318 1,218 505 16,381 2,622 22,846
---------------------------------------------------------------------
---------------------------------------------------------------------
Capital
asset
additions 296 189 405 7,131 19,255 1,609 28,885
---------------------------------------------------------------------
---------------------------------------------------------------------
Total
assets 101,430 30,647 133,697 65,641 358,643 115,092 805,150
---------------------------------------------------------------------
---------------------------------------------------------------------
(i) Eliminations and other includes Corporate activities and assets
not attributable to the operating segments.


External sales to customers in Canada and the United States for the
three months ended January 31, 2005 were $4,467 (2004 - $4,556) and $
73,348 (2004- $59,685), respectively. External sales to customers in
Canada and the United States for the six months ended January 31, 2004
were $14,051 (2004 - $7,129) and $135,893 (2004 - $117,921),
respectively.

Capital assets in Canada, the United States and Luxembourg as at January
31, 2005 were $134,226 (2004 - $134,372), $101,737 (2004 - $107,547) and
$95,205 (2004 - $100,975), respectively.

This press release contains certain forward-looking statements which
reflect the Company's current view of future events, business outlook
and anticipated financial performance. Such statements are subject to
assumptions which may be incorrect, and to risks and uncertainties which
are difficult to predict. Future events, outcomes and financial
performance may differ materially from those predicted in these
statements as a result of factors which may include, but are not limited
to, those described on pages 10 and 11 under the "Risks and
Uncertainties" section in the Company's Annual Report 2004 - Financial
Supplement for the year ended July 31, 2004.

Husky Injection Molding Systems Ltd. (www.husky.ca) is a leading
supplier of injection molding equipment and services to the plastics
industry. The Company designs and manufactures the industry's most
comprehensive range of injection molding equipment, including machines,
molds, hot runners and robots. In addition, Husky's value-added services
include factory planning, customer training and systems integration. In
fiscal 2004, sales were $774 million, with approximately 3,000 people
employed worldwide.

Customers use Husky's equipment and services to produce a wide range of
plastic parts, including bottles and caps for water and soft drinks;
containers, from yogurt cups to recycling bins; medical applications,
such as syringes and vials; automotive components, from headlight
housings to bumpers; and parts for electronic equipment, including
personal digital assistants and mobile audio devices.

Husky has more than 40 Service and Sales offices - including 19
Technical Centers - supporting customers in over 100 countries.
Manufacturing facilities are located on campuses in Canada, the United
States, Luxembourg, and China. Our core values - a passion for
excellence, bold goals, proactive environmental responsibility, making a
contribution and uncompromising honesty - are the foundation of our
business practices worldwide. They are integral to everything we do and
define who we are as a company.

The Company's common shares are listed on the Toronto Stock Exchange
(HKY) and are included in the S&P/TSX Composite Index.

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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Husky Injection Molding Systems Ltd.
    Daniel Gagnon
    Vice President, Finance & CFO
    (905) 951-5191