WGI Heavy Minerals Announces First Quarter 2008 Results
Thu May 15, 10:18 AMCOEUR D'ALENE, ID, May 15 /CNW/ - WGI Heavy Minerals, Incorporated (TSX: WG.TO) today announced results for the first quarter ended March 31, 2008. All dollar amounts are in United States dollars unless otherwise indicated. Results have been filed and may be viewed at www.sedar.com. A summary of key financial results for the three-month period is as follows:
Highlights
- Revenues increased 10% for the quarter to $6.9 million from $6.2
million in the same period a year ago.
- Gross margin decreased to 19.0% for the quarter from 27% in the same
period last year.
- The Company posted a net loss for the quarter of $0.68 million. This
has decreased from the year ago period's net income of $0.02 million.
- Utilized cash of $0.187 million, or $(0.008) per share, from
operating activities.
- At March 31, 2008 the Company had a cash position (including short
term investments) of $16.2 million.
"The Company continues to improve operations outside India and increase sales. We are making investments in our processes both in our Idaho mining operations and Washington manufacturing business. These investments currently place pressure on our gross margins in anticipation of improved operating results down the line. We are adding additional capacity at our recycling plant in Germany to further growth in the European abrasives markets. The Company is evaluating a number of opportunities and anticipates presenting some of those opportunities in the near future defining the potential to enhance the Company's value," said President and CEO, Greg Emerson.
Results of Operations
Revenues for the three-month period ended March 31, 2008 increased 10 percent to $6.9 million, compared with $6.2 million for the same period in 2007 due to higher prices in abrasive markets and strong growth in waterjet parts sales. Abrasives revenues were up 8% as growth in other abrasives (60%) offset a 4% decline in garnet revenue. Abrasives sales volumes dropped 17% but prices increased 33%, fueling the revenue growth. Waterjet parts revenue jumped 24%, primarily due to continued growth in sales volume. Markets remained buoyant throughout the quarter. The Company's revenues come from the following products: Garnet (58%), Waterjet Replacement Parts (19%), and Other Abrasives (23%).
Gross profit margins decreased to 19% in the first quarter compared with 27% in the first quarter of 2007. Contributing to the decrease was extreme cold temperatures and snow in Idaho and at the same time, unseasonal rainfall and flooding in India. The decreases were in garnet & other abrasives decreasing to 18% gross margin in the first quarter 2008 from 26% in the first quarter 2007 and waterjet replacement parts decreased to 21% gross margin in the first quarter 2008 from 26% in first quarter 2007.
The Company posted a net loss of $0.68 million, or $(0.03) per share, for the first quarter 2008, compared with a net profit of $0.02 million, or $0.00 per share, for the first quarter 2007.
Outlook
For 2008, the Company is targeting a modest sales increase. The Company continues to look for additional land and sources of supply to strengthen its resources and to continue to operations in Tamil Nadu. Only if this land and the necessary mining leases are obtained on a timely basis can improvements in profitable sales be expected.
It may take the Company several years to sort out the critical issues before the Company in Andhra Pradesh, India. If the Company were to obtain all of the licenses and permits immediately, the Company would not be in a position to operate commercially until sometime in 2010. However, earlier scenarios are also possible. The Company is not in a position to predict the timing of operations in Andhra Pradesh.
The Company is making strenuous efforts to return to profitability at its Emerald Creek Garnet facility through reinvestment in the facility and improved procedures. The Company is seeing continued improvement in volume from International Waterjet Parts and is investigating means to reduce manufacturing costs. Sales volumes in Europe and the Far East continue to grow in all product lines. The Company is improving capacity at its recycling operations and expects continued growth in other abrasives.
China is beginning to be a useful source of mineral supply as well as a growing market. Strong efforts are being made to source more material from this area.
Management's Discussion and Analysis
The Company's unaudited consolidated financial statements and the management's discussion and analysis for the three months ended March 31, 2008 are available on the Company's website at www.wgiheavyminerals.com. Additional information related to the Company is also available on the SEDAR website at www.sedar.com.
WGI Heavy Minerals, Inc. is a fully integrated miner, producer, and marketer of industrial-grade minerals and replacement parts for ultra-high waterjet cutting systems. The Company's operations include mining and processing facilities in Idaho, U.S. (Emerald Creek Garnet), Tamil Nadu, India (Bengal Bay Garnet) and Ermsleben, Germany (Kominex) and a manufacturing facility in Washington, U.S. (International Waterjet Parts).
This press release contains forward-looking statements concerning the business, operations, and financial performance and condition of WGI Heavy Minerals, Incorporated. A number of the matters discussed and statements made in the press release contain forward-looking statements reflecting current expectations regarding future assets. When used in this press release, the words "believe", "anticipate", "intend", "estimate", "expect", "project", and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such words. These forward-looking statements are based on current expectations and are naturally subject to risks, uncertainties, and changes in circumstances beyond management's control that may cause actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that may cause such differences include but are not limited to: exploration and development risks; risks related to permits and title to property; risks related to foreign countries and regulatory requirements; operating hazards; foreign currency fluctuations; competition; fluctuations in the market price of mineral commodities and transportation costs; uncertainty as to calculations of mineral deposit estimates; uninsured risks; and dependence upon key management personnel and executives. Actual results may differ materially from those expressed here. You should not place undue reliance on such forward-looking statements. The Company is under no obligation to update or alter such forward-looking statements, whether as a result of new information, future events, or otherwise.
WGI Heavy Minerals, Incorporated
Financial Information
(in thousands, except for per share amounts)
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As at
Consolidated Balance Sheet As at March 31, 2008 December 31, 2007
Assets
Cash and Short term deposits $16,204 $17,250
Other Current Assets 8,703 8,263
-----------------------------------------
Total Current Assets 24,907 25,513
Property, plant and equipment 8,085 8,024
Goodwill and Intangible Assets 1,946 1,971
-----------------------------------------
Total Assets $34,938 $35,508
-----------------------------------------
Liabilities & Equity
Current Liabilities $4,798 $4,622
Long-term debt 490 594
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Total Liabilities 5,288 5,216
Capital stock 53,388 53,388
Stock-based compensation 2,594 2,497
Deficit (26,652) (25,969)
Foreign currency translation
account 320 376
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Total Equity 29,650 30,292
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Total Liabilities & Equity $34,938 $35,508
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3 months ended 3 months ended
Consolidated Statements of March 31, 2008 March 31, 2007
Operations and Deficit
Sales $6,864 $6,219
Operating Costs 5,299 4,264
Depreciation, depletion and
amortization 282 275
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Gross Margin 1,283 1,680
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Expenses
G&A 1,771 1,296
Interest Income (145) (224)
Interest Expense 25 43
Stock based compensation 97 101
Development costs 7 292
Other Expenses/(income) 155 63
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Total 1,910 1,571
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Income/(Loss) before taxation (627) 109
Taxes 56 92
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Net Income/(Loss) for the period $(683) $17
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Basic and diluted loss per
common share ($0.03) $0.00
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3 months ended 3 months ended
Consolidated Statements of March 31, 2008 March 31, 2007
Cash Flows
Cash flows from operating activities $(187) $535
Cash flows from investing activities (292) (276)
Cash flows from financing activities (467) 145
Effect of exchange rate on cash
and cash equivalents (100) 63
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Net increase (decrease) in
cash & ST Investments $(1,046) $467
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Cash $ ST Investments -
beginning of period 17,250 18,320
Cash & ST Investments -
end of period $16,204 $18,787
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All figures stated in U.S. dollars unless noted otherwise.
ContactsGloria Marks
CFO
810 Sherman Ave.
Coeur d'Alene
ID
83814
U.S.A.
(208) 770-2204
Fax (208) 667-7380
www.wgiheavyminerals.com
E-Mail gloria@wgiheavyminerals.com Greg Emerson
President and CEO
(208) 770-2202
E-mail greg@wgiheavyminerals.com Ed Kok
Investor Relations
(208) 770-2208
E-Mail ed@wgiheavyminerals.com
55.71 (0.41%)
