MISSISSAUGA, ON, Aug. 19 /CNW/ - CPI Plastics Group Ltd., ("CPI")
announced today its financial results for the three and six months ended
June 30, 2008. A summary of those results is as follow:
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Second Quarter Year to Date
(in thousands of dollars 3 months ended 6 months ended
except per share amounts) June 30 June 30
(unaudited) (unaudited)
2008 2007 2008 2007
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Net Sales 25,346 31,546 50,587 62,268
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Operating Margin 622 2,204 1,392 4,396
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Net loss (2,371) (962) (4,759) (1,495)
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Loss per share:
Basic (0.18) (0.07) (0.36) (0.11)
Diluted (0.18) (0.07) (0.36) (0.11)
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Consolidated net sales for the quarter ended June 30, 2008 were
$25,346,000 as compared to $31,546,000 in the second quarter of 2007,
representing a decrease of $6,200,000 or 20% over the same period in 2007.
Consolidated net sales for the six months ended June 30, 2008 were $50,587,000
which was down $11,681,000 or 19% from the first six months of 2007. The
ongoing general slow down in the U.S. economy led by the slump in the U.S.
housing market and weak consumer spending all contributed to lower sales
volumes across all sectors. In addition, the strength of the Canadian dollar
relative to the U.S. dollar continued to negatively impact the Company's
sales. Management estimates that after the mitigating effect of the Company's
foreign currency hedging strategy, as outlined below, the year over year
increase in the value of the Canadian dollar relative to the U.S. dollar
resulted in a decline in sales of approximately $1.5 million in the second
quarter and $4.2 million for the first six months of the year as illustrated
below under Foreign Currency Hedging. Excluding the impact of exchange rate
changes, sales would have decreased by approximately $4.7 million or 15%
during the second quarter and $7.5 million or 12% as compared to the same
periods in 2007.
Sales for each business segment for the second quarter and first six
months of 2007 were as follows:
Three months ended Six Months ended
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(in thousands of June 30, June 30, % June 30, June 30,
dollars) 2008 2007 Change 2008 2007 Change
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Outdoor Living
Products 11,895 14,435 (18%) 23,472 26,301 (11%)
Film Products 6,354 7,485 (15%) 12,848 15,768 (19%)
Custom Products 7,097 9,626 (26%) 14,267 20,199 (29%)
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Total 25,346 31,546 (20%) 50,587 62,268 (19%)
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Sales in the Outdoor Living Products segment were $11,895,000 in the
second quarter, which was down $2,540,000 or 18% from $14,435,000 in the
second quarter of 2007. For the six months ended June 30, 2008, sales in the
Outdoor Living Products segment were $23,472,000 which was down $2,829,000 or
11% from $26,301,000 in the first six months of 2007. The ongoing weakness in
the U.S. economy, recession in housing markets and soft consumer spending,
continued to adversely affect the entire building products sector and home
improvement segment in particular. This negatively impacted sales of the
Company's decking, fencing and hot tub products in 2008.
Sales of Film Products were $6,354,000 in the second quarter which was
down 15% from $7,485,000 in the second quarter of 2007. For the six months
ended June 30, 2008 sales of Film Products were $12,848,000 compared to
$15,768,000 in the first half of 2007. The majority of the decline was in
industrial film products due primarily to the rationalization of certain low
margin business and customers. Sales of retail film products were $4,896,000
and $9,716,000 in the second quarter and first six months of 2008, which was
down from $4,983,000 and $10,131,000 in the comparable periods a year ago.
Custom Products segment sales in the quarter were $7,097,000, which were
down $2,529,000 or 26% from $9,626,000 in second quarter of 2007. Year to date
sales of Custom products were $14,267,000 which were down 29% from $20,199,000
in the first six months of 2007. Sales of window fashion products in the
second quarter of 2008 were $3,589,000, down $2,078,000, or 37%, from the
second quarter of 2007 due to a rationalization of inventory at the key
customer for these products in response to the general economic slowdown and
weakness in new housing markets in the U.S. Sales of other custom products in
the quarter were $3,508,000, down $451,000 or 11% from the second quarter of
2007. Sales declines in other custom products were primarily the result of
certain customer programs ceasing production in 2007, as well as lower volumes
on ongoing programs due to the general economic slowdown in the U.S. This
decline was partially offset by incremental sales from new customers and
programs.
Operating margins in the second quarter were $622,000, or 2.5% of sales
which was down from $2,204,000 or 7.0% of sales in the second quarter of 2007.
For the six months ended June 30, 2008, operating margins were $1,392,000, or
2.8% of sales compared to $4,396,000 or 7.1% of sales in the first half of
2007.
