Timminco Limited
TSX : TIM

Timminco Limited

March 17, 2008 18:43 ET

Timminco Reports Fourth Quarter and Year End Fiscal 2007 Results

TORONTO, ONTARIO--(Marketwire - March 17, 2008) - Timminco Limited ("Timminco") (TSX:TIM) today announced its preliminary financial results for the fourth quarter and fiscal year ended December 31, 2007.

Highlights for the Fourth Quarter

- Completed construction of solar grade silicon manufacturing facility with annual production capacity of 3,600 metric tons

- Commenced production on the first of three 1,200 metric ton lines

- Shipped 33 metric tons of solar grade silicon bringing cumulative year to date shipments to 89 metric tons

- Sales of $36.4 million compared with $47.6 million for fiscal 2006

- Net loss of $8.8 million or $0.08 per share, compared with net loss of $38.7 million or $0.53 per share in the fourth quarter 2006

Highlights for Fiscal 2007

- Secured sales contracts with four key customers for approximately 28,000 metric tons of solar grade silicon through 2012

- Completed two bought deal equity offerings and a private placement generating gross proceeds of $116.2 million, primarily to fund expansion of solar grade silicon production capacity

- Sales of $166.2 million compared with $181.8 million for fiscal 2006

- Net loss of $18.0 million, or $0.20 per share, compared with a net loss of $46.2 million, or $0.62 per share for fiscal 2006

Highlights Subsequent to Quarter End

- Commenced production on second and third of three 1,200 metric ton lines

- Announced further expansion of annual production capacity of solar grade silicon from 3,600 to 14,400 metric tons

- S&P/TSX Composite Index revised to include Timminco as of March 24, 2008

OVERVIEW

Timminco has two reporting segments: the Silicon Group, which includes the silicon metal and solar silicon businesses, and the Magnesium Group, which includes the magnesium extrusion and fabrication business. Timminco also has a minority investment in an aluminum wheels business.

"Fiscal 2007 was a year of transition for Timminco as we focused on establishing production and securing our first customer contracts in our solar grade silicon business, while at the same time positioning our silicon metal and magnesium businesses for improved performance going forward," said Heinz Schimmelbusch, Chairman of the Board and Chief Executive Officer of Timminco. "In December, less than six months after breaking ground on our 3,600 metric ton solar grade silicon facility, we commenced production and now have all three lines operating. Before year end, we had also secured four long-term contracts that commit us to supply up to 6,000 metric tons per year of solar grade silicon beginning in 2009. Based on our success to date, as well as a strong pipeline of prospective customers, we made the decision last month to expand our production capacity to 14,400 metric tons annually. Looking ahead, we are firmly focused on leveraging our position as a low-cost producer of solar grade silicon to capitalize on the tremendous opportunity in the high growth solar photovoltaic energy industry."

Dr. Schimmelbusch continued, "We are optimistic about the potential for both our historical silicon metal business and our magnesium business. The rise in silicon metal prices, which have more than doubled over the last 24 months, has created a favourable environment for our silicon metal business for the foreseeable future. Following the restructuring of our magnesium business in 2007, we are focused on bringing our cost structure in line with the goal of returning this business to profitability."

Results for the Fourth Quarter

Sales for the fourth quarter of 2007 were $36.4 million compared with sales of $47.6 million for the fourth quarter of 2006. The decrease is the result of lower sales in both the Silicon Group and the Magnesium Group. The appreciation of the Canadian dollar had an unfavourable impact of reducing reported sales by $4.6 million compared with the fourth quarter of fiscal 2006. During the fourth quarter of fiscal 2007, the average U.S.-Canadian dollar exchange rate was approximately $0.98 compared to approximately $1.13 for the fourth quarter of fiscal 2006.

Net loss for the fourth quarter of fiscal 2007 was $8.8 million, or $0.08 per share, compared with a net loss of $38.7 million, or $0.53 per share, for the fourth quarter of 2006. Included in the net loss for the fourth quarter of 2006 is an asset impairment charge of $31.2 million.

Cash and short-term investments at December 31, 2007 were $34.6 million compared to $0.8 million at December 31, 2006. The increase was the result of gross proceeds from two bought deal equity offerings and a private placement in fiscal 2007 that generated gross proceeds of $116.2 million. The majority of cash used during the period was related to building the solar grade silicon facility and the repayment of long-term debt. Bank indebtedness at December 31, 2007 was $21,000 compared with $26.2 million at December 31, 2006.

Fiscal 2007 Results

Sales for the fiscal 2007 were $166.2 million compared with $181.8 million for fiscal 2006. The appreciation of the Canadian dollar had the unfavourable impact of reducing reported sales by $6.7 million. During fiscal 2007, the average U.S.-Canadian dollar exchange rate was approximately $1.08 compared to approximately $1.13 for fiscal 2006.

Net loss for fiscal 2007 was $18.0 million, or $0.20 per share, compared with a net loss of $46.2 million, or $0.62 per share, for fiscal 2006. Included in the net loss for fiscal 2006 are restructuring and impairment charges of $33.2 million.

Financial Highlights


(000's except per share data)
---------------------------------------------------------------------------
Three Months Ended Year Ended
(unaudited) (unaudited)
---------------------------------------------------------------------------
December December December December
31, 2007 31, 2006 31, 2007 31, 2006
---------------------------------------------------------------------------
Sales $36,439 $47,581 $166,156 $181,814

Gross profit (2,588) 1,693 6,506 12,492

Gross profit percentage (7.1%) 3.7% 3.9% 7.1%

Net loss (8,836) (38,733) (18,036) (46,233)

Loss per common share, basic
and diluted (0.08) (0.53) (0.20) (0.62)
Working capital (excluding
available cash items) 26,466 21,734 26,466 21,734
Total assets 187,281 113,874 187,281 113,874
Cash and marketable securities 34,614 804 34,614 804
Bank debt 21 30,598 21 30,598
Total long term liabilities 26,196 24,255 26,196 24,255
Weighted average number of
common shares outstanding,
basic and diluted 103,978 75,133 103,992 75,133



Timminco will file its audited annual consolidated financial statements for the year ended December 31, 2007, and the related management's discussion and analysis ("MD&A"), with securities regulatory authorities within the applicable timelines. Such financial statements, MD&A and related documents will be available through the SEDAR website, at www.sedar.com , as well as through Timminco's website, at www.timminco.com.

About Timminco

Timminco is a leader in the production and marketing of lightweight metals, specializing in solar grade silicon for the rapidly growing solar photovoltaic energy industry. Using its proprietary technology, Timminco processes metallurgical grade silicon into low cost solar grade silicon for use in the manufacture of solar cells. Timminco also produces silicon metal, magnesium extrusions and other specialty metals for use in a broad range of industrial applications serving the aluminum, chemical, pharmaceutical, electronics and automotive industries.

CAUTIONARY NOTE ON FORWARD-LOOKING INFORMATION

This news release contains "forward-looking information", as such term is defined in applicable Canadian securities legislation, concerning Timminco's future financial or operating performance and other statements that express management's expectations or estimates of future developments, circumstances or results. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "expects", "believes", "anticipates", "budget", "scheduled", "estimates", "forecasts", "intends", "plans" and variations of such words and phrases, or by statements that certain actions, events or results "may", "will", "could", "would" or "might" "be taken", "occur" or "be achieved". In this news release, such information includes statements regarding the expansion of solar grade silicon production capacity and prospective customers, the potential growth of the silicon metal business and the profitability of the magnesium business. Forward-looking information is based on a number of assumptions and estimates that, while considered reasonable by management based on the business and markets in which Timminco operates, are inherently subject to significant operational, economic and competitive uncertainties and contingencies. Timminco cautions that forward-looking information involves known and unknown risks, uncertainties and other factors that may cause Timminco's actual results, performance or achievements to be materially different from those expressed or implied by such information, including, but not limited to, expansion of the solar grade silicon business generally, delays or cost overruns in the construction of new manufacturing facilities and installing and commissioning new equipment, commitments under existing and prospective long-term contracts for solar grade silicon, maintaining and further improving the purity of solar grade silicon, protection of intellectual property rights, silicon metal and magnesium metal prices, raw materials pricing and availability, and competition. These and other factors are discussed in greater detail in Timminco's most recent Management's Discussion and Analysis. Although Timminco has attempted to identify important factors that could cause actual results, performance or achievements to differ materially from those contained in forward-looking information, there can be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate or that management's expectations or estimates of future developments, circumstances or results will materialize. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this news release is made as of the date of this news release and Timminco disclaims any intention or obligation to update or revise such information, except as required by applicable law.

Sedar File Profile #00000838

Contact Information