Wescast Industries Inc.

Wescast Industries Inc.

July 29, 2009 10:48 ET

Wescast Reports Second Quarter Results

BRANTFORD, ONTARIO--(Marketwire - July 29, 2009) - Wescast Industries Inc. (TSX:WCS.A) today reported 2009 second quarter sales of $49.5 million and a net loss of $8.1 million.

(In thousands of Canadian dollars,
except per share amounts) Three Months Ended Six Months Ended

June 28, June 29, June 28, June 28,
2009 2008 2009 2008
-------- -------- -------- --------

Sales 49,500 87,890 92,156 169,838

Gross profit (loss) 1,925 6,247 (3,030) 11,009

Net loss (8,150) (2,669) (17,951) (5,191)

Diluted net loss per share (0.62) (0.20) (1.36) (0.40)

Cash derived from (applied to)
operations 3,556 (1,124) 3,678 (7,969)


- The Company reported consolidated sales of $49.5 million, a decline of 43.7% compared to the $87.9 million reported in the second quarter of 2008, reflecting significantly lower sales generated by the Company's North American and European operations. The level of sales generated in North America and Europe was severely impacted by the global economic crisis. The Company's primary North American customer base, the Detroit 3 automakers, experienced a 56.3% decline in light vehicle production in the second quarter of 2009 compared to the second quarter of 2008. During the quarter, both General Motors and Chrysler incurred extended plant closures as they reorganized through bankruptcy procedures resulting in very little demand for parts during these shutdown periods. These major customers continue to pay the Company's accounts receivable on a timely basis and the Company did not incur any accounts receivable write-offs as a result of the bankruptcies.

- The Company reported a net loss of $8.1 million for the quarter compared with a net loss of $2.7 million reported in the second quarter of 2008. Lower sales volumes in North America were a key factor in the deterioration in profitability. Also, the Company recorded net foreign exchange losses of $3.3 million and additional restructuring charges of $1.4 million to further adjust the Company's cost structure.

- The second quarter net loss per share on a diluted basis was $0.62, compared with a net loss per share of $0.20 reported in the second quarter of 2008.

- Under very challenging automotive market conditions, the Company generated cash from operations of $3.6 million during the second quarter and ended the quarter with cash on hand of $9.1 million and net cash of $2.7 million (cash on hand less interest-bearing debt).

The Company's entire quarterly financial statements and Management's Discussion and Analysis will be available at www.sedar.com by the start of business on July 30, 2009.

About Wescast

Wescast Industries Inc. is the world's leading supplier of cast iron exhaust manifolds for passenger cars and light trucks. The Company designs, casts, machines and assembles iron exhaust system components for automotive original equipment manufacturers ("OEMs") and Tier 1 customers for the car and light truck markets in North America, Europe and Asia. The Company employs approximately 1,350 people in 7 production facilities and 5 sales and design centres in Canada, Hungary, the United States, Germany, Japan and China. The Company also has sales and technical design representation in the United Kingdom and France. The Company is recognized worldwide for its quality products, innovative design solutions and highly committed workforce.

Learn more at www.wescast.com.

Forward Looking Statements

The contents of this news release contain statements which, to the extent that they are not recitations of historical fact, may constitute forward-looking statements based on certain assumptions. Forward-looking statements are provided for the purpose of providing information about management's current expectations and plans relating to the future. Persons reading this news release are cautioned that such information may not be appropriate for other purposes. Such forward-looking statements may include financial and other projections as well as statements regarding Wescast's future plans, objectives or performance for the current period and subsequent periods and regarding the markets for our products. The words "may", "would", "could", "will", "likely", "expect", "anticipate", "estimate", "intend", "plan", "forecast", "project" and "believe" or other similar words and phrases are intended to identify forward-looking statements. Persons reading this news release are cautioned that such statements are only predictions, and that Wescast's actual future results or performance may be materially different.

This information is based upon certain material factors or assumptions that were applied in drawing a conclusion or making a forecast or projection as reflected in the forward-looking statements, including our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances.

Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties principally relate to the risks associated with the automotive industry and include, but are not limited to: our operating and/or financial performance, including the effect of new accounting standards on our reported financial results, fluctuations in interest rates, changes in consumer and business confidence levels, consumers' personal debt levels, vehicle prices, the extent and nature of purchasing or leasing incentive campaigns offered by automotive manufacturers, environmental emission regulations, fuel prices and availability, the continuation and extent of outsourcing by automotive manufacturers, changes in raw material and other input costs, our ability to continue to meet customer specifications relating to product performance, cost, quality, delivery and service, industry cyclicality or seasonality, trade and/or labour issues or disruptions, customer pricing pressures, pricing concessions and cost absorptions, actual levels of program production volumes by our customers compared to original expectations, including program cancellations or delays, price reduction pressures, dependence on certain engine programs and the market success and consumer acceptance of the vehicles into which such powertrain products are installed, our relationship with and dependence on certain customers, currency exposure, failures in implementing Wescast's strategy, technological developments by Wescast's competitors, government and regulatory policies and changes in the competitive environment in which Wescast operates.

Wescast does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by law.

Contact Information

  • Wescast Industries Inc.
    Mr. E. Kent Harris
    Chief Financial Officer
    (519) 750-0000