AMR Technologies returns to profitability in 2003
Thursday February 26, 11:31 am ET
Encouraging sales growth recorded in zirconium and magnetics
TORONTO, Feb. 26 /CNW/ - AMR Technologies Inc. (TSX:AMR - News) today reported its results for the year ending December 31, 2003. Unless otherwise specified, all currency amounts are expressed as U.S. dollars.
For the twelve-month period ending December 31, 2003, the Company reported sales of $46.9 million versus sales of $47.3 million for the same period last year. Operating income for the 2003 period significantly improved to $1.7 million, compared to an operating loss of $6 million in 2002. Net income for the year was $302,000 or $0.018 per share versus a net loss of $7.3 million or ($0.44) per share. Operating income in 2003 increased by approximately $1.1 million over 2002 after adjusting for the impact of the write-down of certain magnetic assets in 2002 and the re-imbursement of VAT in both years.
AMR reinvested approximately $1.2 million, or 2.6 percent of its 2003 revenue, in research and development activities, up from $714,000 or 1.5 percent of revenue in 2002. The increase in this R&D investment is partly attributable to costs related to the development of a new line of products for the display industry as well as the recently announced consumer product application for nanosized cerium oxide.
The Company's rare earth business unit experienced a year-over-year decline in revenues from $42.4 million in 2002 to $38.1 million in 2003. This was due primarily to a decline in the selling prices and volumes of certain low margin products manufactured by the Company as well as a change in the geographic mix of its revenue with a higher proportion of shipments into the Chinese market in 2003 where selling processes are generally lower.
Sales from the zirconium business unit more than doubled to $4.2 million in 2003 from $1.7 million in 2002. This increase is attributable to AMR's investment in additional sales and marketing resources during the latter half of 2002, which led to further market penetration for the Company's products in U.S. and European markets in 2003.
Sales from the magnetics business unit grew by 45% to $4.6 million in 2003 from $3.2 million in 2002. The increase primarily relates to a 41 percent increase in quantities shipped, reflecting AMR's increased share of the growing magnetic powder market where the Company is one of only two suppliers in the world able to produce commercial quantities at a quality level required by the industry.
"While we saw improved overall financial results in 2003 compared to the prior year, stronger results can be achieved in future periods through increased sales volumes in our zirconium and magnetics businesses and from firmer pricing in our rare earths business," noted Peter Gundy, AMR's Chairman and CEO. "These results also demonstrate the diversity of our revenue and the importance of the R&D work that we have been doing with our customers to develop and commercialize the next generation of performance materials. Financial results in 2004 will continue to be impacted by the reduction in the VAT rebate to only 5% as of January 1, 2004 compared to the full 17% at January 1, 2003. Reduced costs and some rare earth price increases are beginning to offset some of the VAT rebate changes with the expectation that margins will return to more normal levels in the second half of 2004."
Subsequent to the end of the fiscal year, the Company reported that Lynas Corporation Limited of Sydney, Australia has acquired a 19.9% interest in the common shares of the Company, constituting almost all of the shareholding formerly held by Whiterock Investments of Singapore. The Company also reported that it had engaged a financial advisor to consider the Company's strategic alternatives to enhance shareholder value and to provide financial advice.
§ Segmented Results
§ Rare Earths ------------------
§ US$000's Year ended
§ December 31
§ --------------------------------------------------
§ Q4 Q1 Q2 Q3 Q4 2003 2002
§ 2002 2003 2003 2003 2003
§ --------------------------------------------------
§ Sales 11,924 9,641 9,839 8,560 10,072 38,112 42,387
§ --------------------------------------------------
§ Operating
§ Income 941 780 518 (67) 490 1,721 3,364
§ --------------------------------------------------
§ Zirconium ------------------
§ US$000's Year ended
§ December 31
§ --------------------------------------------------
§ Q4 Q1 Q2 Q3 Q4 2003 2002
§ 2002 2003 2003 2003 2003
§ --------------------------------------------------
§ Sales 533 1,007 1,098 923 1,155 4,183 1,718
§ --------------------------------------------------
§ Operating
§ Income (163) 5 (40) (76) (65) (176) (110)
§ --------------------------------------------------
§ Magnetics ------------------
§ US$000's Year ended
§ December 31
§ --------------------------------------------------
§ Q4 Q1 Q2 Q3 Q4 2003 2002
§ 2002 2003 2003 2003 2003
§ --------------------------------------------------
§ Sales 975 800 1,258 1,222 1,320 4,600 3,169
§ --------------------------------------------------
§ Operating
§ Income (565)(1) (280) 80 153 179 132 (2,200)(1)
§ --------------------------------------------------
§ Note: (1) excluding $7.1 million asset write-down in 2002
§ Selected Financial Information
§ US$000's - except -----------------------------------------
§ per share amounts Three months ended 12 months ended
§ December 31 December 31
§ -----------------------------------------
§ 2003 2002 2003 2002
§ --------------------------------------------------
§ Sales 12,547 13,432 46,895 47,274
§ --------------------------------------------------
§ Operating Income (loss) 604 213 (1) 1,677 (6,012)
§ --------------------------------------------------
§ Net Income (loss) 194 (7,049) 302 (7,325)
§ --------------------------------------------------
§ Cash provided By Operating
§ Activities (454) 1,853 2,311 3,388
§ --------------------------------------------------
§ Net Income (loss) per Common
§ Share (US$) 0.011 (0.423) 0.018 (0.440)
§ --------------------------------------------------
§ Net Income (loss) per Common
§ Share (Cdn.$) 0.016 (0.663) 0.025 (0.689)
§ --------------------------------------------------
§ Note: (1) excluding $7.1 million asset write-down
§ Teleconference Call
§ Management will host a teleconference call on Thursday, February 26, 2004
at 4:00 pm (Eastern Time) to discuss these results. Interested parties may
access the teleconference by calling (416) 640-4127 (local) or (800) 814-3911
(toll free long distance) or by visiting http://www.newswire.ca/webcast. A
recording of the teleconference may be accessed by calling (416) 640-1917
(local) or (877) 289-8525 (toll free long distance), and entering pass code
21037050 followed by the number sign until March 26, 2004 or by visiting
http://www.newswire.ca/webcast.
§ AMR Technologies Inc.
§ CONSOLIDATED BALANCE SHEETS
§ (All figures in thousands of United States dollars)
§ As at December 31 2003 2002
§ $ $
§ --------------------------------------------------
§ ASSETS
§ Current
§ Cash and cash equivalents 3,962 4,381
§ Restricted cash 1,233 -
§ Accounts receivable 11,656 10,802
§ Inventories 14,312 11,063
§ Prepaid expenses 1,245 518
§ --------------------------------------------------
§ Total current assets 32,408 26,764
§ --------------------------------------------------
§ Capital assets, net 16,485 17,524
§ Other assets, net 696 441
§ --------------------------------------------------
§ 49,589 44,729
§ --------------------------------------------------
§ --------------------------------------------------
§ LIABILITIES AND SHAREHOLDERS' EQUITY
§ Current
§ Bank advances 10,707 9,201
§ Accounts payable and accrued liabilities 10,019 6,110
§ Current portion of long-term debt 821 876
§ --------------------------------------------------
§ Total current liabilities 21,547 16,187
§ --------------------------------------------------
§ Long-term debt 1,022 1,652
§ --------------------------------------------------
§ Minority interest 2,578 2,750
§ --------------------------------------------------
§ Commitments and contingencies
§ Shareholders' equity
§ Share capital 26,530 26,530
§ Deficit (2,088) (2,390)
§ --------------------------------------------------
§ Total shareholders' equity 24,442 24,140
§ --------------------------------------------------
§ 49,589 44,729
§ --------------------------------------------------
§ --------------------------------------------------
§ AMR Technologies Inc.
§ CONSOLIDATED STATEMENTS OF OPERATIONS
§ AND RETAINED EARNINGS (DEFICIT)
§ (All figures in thousands of United States dollars
§ except per share information)
§ Years ended December 31 2003 2002
§ $ $
§ --------------------------------------------------
§ REVENUE
§ Sales 46,895 47,274
§ --------------------------------------------------
§ COSTS AND EXPENSES
§ Cost of goods sold and selling,
§ general and administration expenses 41,413 42,380
§ Depreciation and amortization 2,608 3,126
§ Write-down of the Magnetics business - 7,066
§ Research and development expenses 1,197 714
§ --------------------------------------------------
§ Operating income (loss) 1,677 (6,012)
§ Other income 72 119
§ Interest expense, short-term debt (479) (465)
§ Interest expense, long-term debt (144) (225)
§ Foreign exchange gain (loss) 75 (34)
§ --------------------------------------------------
§ Income (loss) before income taxes and
§ minority interest 1,201 (6,617)
§ Income taxes (577) (463)
§ Minority interest (322) (245)
§ --------------------------------------------------
§ Net income (loss) for the year 302 (7,325)
§ Retained earnings (deficit) beginning of year (2,390) 4,935
§ --------------------------------------------------
§ Deficit, end of year (2,088) (2,390)
§ --------------------------------------------------
§ --------------------------------------------------
§ Net income (loss) per share,
§ basic and diluted (U.S.$) 0.018 (0.440)
§ --------------------------------------------------
§ --------------------------------------------------
§ AMR Technologies Inc.
§ CONSOLIDATED STATEMENTS OF CASH FLOWS
§ (All figures in thousands of United States dollars)
§ Years ended December 31 2003 2002
§ $ $
§ --------------------------------------------------
§ OPERATING ACTIVITIES
§ Net income (loss) for the year 302 (7,325)
§ Add items not affecting cash
§ Minority interest 322 245
§ Depreciation and amortization 2,608 3,126
§ Write-down of the Magnetics business - 7,066
§ Net change in non-cash working capital balances (921) 276
§ --------------------------------------------------
§ Cash provided by operating activities 2,311 3,388
§ --------------------------------------------------
§ INVESTING ACTIVITIES
§ Purchase of capital assets (1,542) (2,366)
§ Business acquisition - (496)
§ Increase in restricted cash (1,233) -
§ Increase in other assets (282) (55)
§ --------------------------------------------------
§ Cash used in investing activities (3,057) (2,917)
§ --------------------------------------------------
§ FINANCING ACTIVITIES
§ Increase in bank advances 1,506 2,074
§ Repayment of long-term debt (685) (1,126)
§ Minority interest share of
§ subsidiary's cash distribution (494) (323)
§ --------------------------------------------------
§ Cash provided by financing activities 327 625
§ --------------------------------------------------
§ Net increase (decrease) in cash and cash equivalents (419) 1,096
§ CASH AND CASH EQUIVALENTS
§ Beginning of year 4,381 3,285
§ --------------------------------------------------
§ End of year 3,962 4,381
§ --------------------------------------------------
§ --------------------------------------------------
§ About AMR
§ AMR produces, processes and develops rare earth and zirconium based
engineered materials and applications that are essential in many of today's
high technology products. These include computers, TVs, VCRs, cell phones and
CD players. AMR separates and purifies rare earth materials at two plants in
China and sells to multinationals in Europe, North America, Korea and Japan.
AMR manufactures at its plant in Thailand, rare earth bonded magnetic powder
and magnets for the electronics and automotive markets. Headquartered in
Toronto, AMR has approximately 1,000 employees throughout its international
operations.
§ Online Access
§ A complete set of financial statements, the Management's Discussion and
Analysis and Chairman's Report will be available online at www.amr-ltd.com on
Monday, March 1, 2004.
§ Forward Looking Statements
§ From time to time, the Company may publish forward-looking statements
relating to such matters as expected financial performance, business
prospects, technological developments, and development activities and like
matters. These statements involve risk and uncertainties, including but not
limited to the risk factors previously described. Actual results could differ
materially from those projected as a result of these risks and should not be
relied upon as a prediction of future events. AMR Technologies Inc. undertakes
no obligation to update any forward-looking statement to reflect events or
circumstances after the date on which such statement is made, or to reflect
the occurrence of unanticipated events.
§
http://www.newswire.ca/en/releases/orgDisplay.cgi?okey=42461
For further information
Contact: Geoff Bedford, Chief Financial Officer, (416) 367-8588, ext. 338, website: www.amr-ltd.com, e-mail: amrinfo@amr-ltd.com
Ali Mahdavi, Genoa Management, (416) 962-3300, ext.225, e-mail: amahdavi@genoa.ca
To request a free copy of this organization's annual report, please go to http://www.newswire.ca and click on reports@cnw.
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