HUSKY
Schad considers selling all his shares / Sale or merger being examined / Job cuts in Canada
Husky Injection Molding Systems (Bolton, Ontario / Canada; www.husky.ca) is examining the possibility of selling its entire shareholding or parts of it, or a strategic combination with other businesses. The review follows the decision by founder Robert Schad to consider the sale of his shares. Citigroup Global Markets has been engaged as financial adviser to look at the options.
Schad considers Husky to be significantly undervalued in view of the status it has attained, and wants to change this by selling it to reflect its strong position in the market. CEO John Galt is convinced that Husky has reached a point where a new direction would be useful for future development. Both the management and the board are unanimous in supporting the project.
The considerations regarding the possible sale were announced with the half-yearly figures for the 2006/2007 financial year. Husky´s sales rose 11% in the first six months compared with the same period of the previous year to reach USD 452m (EUR 342m), with orders up 9 % to USD 600m. Net earnings stagnated at USD 2.8m, compared with USD 2.7m in the same period last year. This was within expectations, said Galt, but the company was working hard on improving the results.
Husky is experiencing increasing growth in eastern Europe and Turkey and in Asia, especially China. For example, hot runner capacities in Shenzen had just been doubled, reported Galt. The North American market, on the other hand, had been showing increasing signs of weakness in the last few months with orders declining. The recent cutting of 85 jobs at the Bolton headquarters could be seen as a reaction to this, he said.
The review will be far-reaching and Galt was clear about the fact that production in Canada could be halted. It was becoming "increasingly inefficient and costly" to manufacture products in Canada and then to transport them around the world, Galt said. The high Canadian exchange rate and a tax policy that was inhospitable to research and development was making the situation even worse, he added.
e-Service:
Detailed Husky report on half year 2006/2007 as PDF document (60 KB)
Schad considers Husky to be significantly undervalued in view of the status it has attained, and wants to change this by selling it to reflect its strong position in the market. CEO John Galt is convinced that Husky has reached a point where a new direction would be useful for future development. Both the management and the board are unanimous in supporting the project.
The considerations regarding the possible sale were announced with the half-yearly figures for the 2006/2007 financial year. Husky´s sales rose 11% in the first six months compared with the same period of the previous year to reach USD 452m (EUR 342m), with orders up 9 % to USD 600m. Net earnings stagnated at USD 2.8m, compared with USD 2.7m in the same period last year. This was within expectations, said Galt, but the company was working hard on improving the results.
Husky is experiencing increasing growth in eastern Europe and Turkey and in Asia, especially China. For example, hot runner capacities in Shenzen had just been doubled, reported Galt. The North American market, on the other hand, had been showing increasing signs of weakness in the last few months with orders declining. The recent cutting of 85 jobs at the Bolton headquarters could be seen as a reaction to this, he said.
The review will be far-reaching and Galt was clear about the fact that production in Canada could be halted. It was becoming "increasingly inefficient and costly" to manufacture products in Canada and then to transport them around the world, Galt said. The high Canadian exchange rate and a tax policy that was inhospitable to research and development was making the situation even worse, he added.
e-Service:
Detailed Husky report on half year 2006/2007 as PDF document (60 KB)
16.03.2007 Plasteurope.com [207660]
Published on 16.03.2007
German version of this article...