Wescast Expects 2001 Earnings To Exceed Projections And Announces Outlook For 2002
BRANTFORD, Ontario--Jan. 21, 2002--WescastWescast Industries Inc. Announces Its Most
Recent Forecast for the 2001 Fiscal Year and Its Outlook for 2002
2001 results are projected to be higher than discussed during the Q3 conference call held in October when the company gave guidance for earnings from continuing operations in the range of $4.50 to $4.60 (fully diluted).
While the year end audit of the 2001 financial statements is not yet complete, the company now expects fully diluted earnings per share from continuing operations to be in the range of $4.95 to $5.05.
This is above the earlier projection and above most published analyst forecasts. The primary reason is that volumes - driven by high incentives and near record sales, were higher during the last quarter than had been expected at the time of the last conference call. This incremental volume and continued strong operating performance due to the tremendous efforts of our employees resulted in profitability that exceeded expectations. Management also made the decision to reduce profit sharing and variable compensation to management, salaried and hourly employees, due to the substantial loss realized earlier this year when the Company chose to transfer the stainless steel business.
For 2002, however, the Company expects revenues to remain relatively stable compared to 2001, based on North American production volumes of 15.4 million vehicles (excluding medium and heavy trucks). Fully diluted earnings per share from continuing operations are expected to decline from 2001 levels to a range of $4.10 to $4.30. This decline reflects reduced industry volumes, the impact of items such as a reduction in flexible compensation and foreign exchange gains that positively affected 2001 earnings as well as a number of specific growth-oriented initiatives.
"2002 is a critical year for the company," says Ray Finnie, President and CEO. "We are committed to maximizing profitability of our core operations in a year that will see no industry growth, pricing pressures and cost increases. At the same time, we will continue to balance these short term priorities with initiatives that are important to the long-term growth and profitability of the company."
These investments will include an expanded global sales and design network, research and development initiatives, manufacturing capacity expansion in machining capabilities in North America and the start up of Weslin in Europe, to meet program commitments that will go into production in 2003 and beyond. In addition, the Company is committed to new product development in hot-end systems and turbocharger housings, people development and diversification.
Capital spending for 2002 will be approximately $100 million.
"Looking forward to 2003 and beyond, the results look positive," continues Finnie. "Revenues are expected in the range of 10% to 12%, or approximately $40 million over 2001, assuming stable North American vehicle production of 15.5 million units. This is primarily attributed to new program launches and increased machining penetration."
Wescast Industries Inc. is the world's largest supplier of cast exhaust manifolds for passenger cars and light trucks. The Company designs, develops, casts and machines high-quality iron exhaust manifolds for automotive OEM's. Wescast has three sales and design offices in North America and Europe. The Company operates seven production facilities in North America and has a 50% joint venture interest in Weslin Autoipari Rt., a Hungarian based supplier of cast iron exhaust manifolds and turbo charger housings for the European light vehicle market. The Company is recognized worldwide for its quality products, innovative design solutions and highly committed workforce. Wescast trades under the TSE symbol WCS.A as well as the NASDAQ symbol of WCST.
Forward Looking Statements
Wescast and its representatives may periodically make written or oral statements that are "forward-looking", including statements included in this news release and in our filings with applicable Securities commissions and in reports to our stockholders. These statements may be identified by words such as "believe, "anticipate," "project," "expect," "intend" or other similar expressions, and include all statements which address operating performance, events or developments that we expect or anticipate may occur in the future (including statements relating to future sales or earnings expectations, volume growth, awarded sales contracts and earnings per share expectations or statements expressing general optimism about future operating results). Such statements involve risks and uncertainties that may cause unanticipated events and actually evolve to be materially different from those either expressed or implied. These factors include, but are not limited to, risks associated with the automotive industry, production, marketing and transportation such as loss of market, volatility of prices, currency fluctuations, environmental risks, competition from other producers and ability to access sufficient capital from internal and external sources; as a consequence, actual results may differ materially from those anticipated in the forward-looking statements. For more detailed information regarding these risks you may refer to Wescast's publicly filed documents with applicable Canadian securities authorities and the U.S. Securities and Exchange Commission. Wescast undertakes no obligation to update any of these forward-looking statements.
A conference call has been arranged for: January 21, 2002 3:00 p.m. EST To participate, please dial (416) 641-6715. Post view (replay) of the conference call will be available by dialing 416-626-4100, passcode 20171742, from January 21 through January 28, 2002.