Wescast Reports Second Quarter Results

BRANTFORD, ONTARIO -- (Marketwire) -- 08/11/11 -- Wescast Industries Inc. (TSX: WCS.A) today reported 2011 second quarter sales of $71.4 million and a net loss of $1.1 million.

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

                       July 3, 2011 June 27, 2010 July 3, 2011 June 27, 2010

Sales                        71,411        71,069      143,017       134,026
Gross profit                  5,345         8,840       15,037        23,522
Net (loss) earnings         (1,126)       (1,376)          280         6,935
Diluted net (loss)
 earnings per share          (0.09)        (0.10)         0.02          0.52
Cash derived from
 (applied to)
 operations                   2,883         5,339      (4,143)         5,825

The information presented in this news release is in accordance with International Financial Reporting Standards ("IFRS"). Accordingly, the comparative information provided for the three months and six months ended June 27, 2010 has been restated from Canadian GAAP to IFRS.


--  The Company has booked $61.5 million of average annualized new and
    replacement business globally in the first six months of 2011 which the
    Company expects will positively impact our results in the future. In
    North America, 13 programs were launched in the first six months of the
    year, with another 8 programs in Europe and 12 in Asia, for a total of
    33 programs. A further 28 programs are in pre-launch phase with
    production starts scheduled for 2011 through to 2013.

--  The Company reported consolidated sales of $71.4 million, consistent
    with the $71.1 million reported in the second quarter of 2010,
    reflecting higher sales generated by the Company's European and Asian
    business units and lower sales in North America. The Company's European
    and Asian business units continue to launch many new programs and ship a
    higher number of both cast and machined parts resulting in a positive
    impact on each of those business units compared to the second quarter of

--  The Company reported gross profit of $5.3 million for the second quarter
    compared to gross profit of $8.8 million for the same period last year.
    The decline was partially due to lower casting and machining volumes in
    North America compared to the second quarter of 2010 with the balance
    related to operational performance with the significant number of new
    programs launched. The new launch activity in North America which has
    lead to the expansion of our machining capabilities in our Michigan
    operations, resulted in labour inefficiencies and incremental costs
    associated with training. Our European and Asian business units also
    experienced higher labour and production costs associated with the
    continuation of the new programs they are launching. While these have
    had a negative impact on the quarter, the longer term effect of the
    continued growth should be positive.

--  Included in gross profit in the six months ended June 27, 2010 was a
    $7.7 million curtailment gain related to an amendment made to one of the
    Company's unfunded retiring allowance plans. This gain was recorded in
    cost of sales. There was no such gain reported in the first six months
    of 2011. The Company reported a second quarter net loss of $1.1 million
    compared with a net loss of $1.4 million reported in 2010. The net loss
    per share on a diluted basis was $0.09, compared with a net loss of
    $0.10 reported in the second quarter of 2010.

--  Included in the net loss for the quarter was share-based payments
    expense of $1.2 million (2010 - $3.0 million) and expenses of $0.6
    million (2010 - $nil) related to a review of strategic alternatives with
    the objective of enhancing shareholder value. The share-based payments
    expense for the quarter was due mainly to the significant increase in
    the Company's share price during the quarter. The combined negative
    impact on the diluted net loss per share for the quarter was $0.14.

--  Over the course of the past eight months, the Company has been investing
    in the expansion of its material capabilities in Europe and China to
    include NiResist and stainless steel, and has begun the expansion of its
    stainless steel facility in Stratford Ontario to more than double its
    previous capacity. All projects are on track and on budget and will
    position the Company to continue its diversification into higher
    temperature alloys and new higher growth products.

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 August 12, 2011.

About Wescast

Wescast Industries Inc. is a global automotive parts supplier that designs, engineers, casts, machines and assembles high quality engineered exhaust system components, including exhaust manifolds, turbocharger housings and integrated turbomanifolds, as well as various other components for the car and light truck markets. The Company supplies to a diversified group of global original equipment manufacturers ("OEMs") and Tier 1 customers in North America, Europe, Asia, Africa, South America and Australia. The Company employs approximately 2,000 people in its regionally-based operations and sales and design centres in Canada, the United States, Hungary, China, Germany, Japan, the United Kingdom and France.

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, 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 and customers, 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.

Wescast Industries Inc.
Teresa Fortney
Chief Financial Officer
(519) 750-0000

Related Stocks:
Stock Market XML and JSON Data API provided by FinancialContent Services, Inc.
Nasdaq quotes delayed at least 15 minutes, all others at least 20 minutes.
Markets are closed on certain holidays. Stock Market Holiday List
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
Press Release Service provided by PRConnect.
Stock quotes supplied by Six Financial
Postage Rates Bots go here