A five-year transformation of Husky Injection Molding Systems Ltd. from a PET preform machine specialist into a broad-line supplier is starting to pay off, Husky leader Robert Schad told shareholders Dec. 5.
Husky turned a profit of US$1.1 million in its first quarter of fiscal 2003, ended Oct. 31 - marking the first time in four years the Canadian maker of injection presses, molds and robots has been profitable at the start of the fiscal year. In the first quarter of fiscal 2002, it lost $17.8 million.
``The first quarter's always our most difficult quarter,'' said Schad, president and chief executive officer, during Husky's annual shareholders meeting in Toronto.
First-quarter sales were $149.2 million, a 39 percent gain from $107.4 million in the year-ago quarter.
Bolton, Ontario-based Husky launched its restructuring in 1997. The company came out with several new machines, such as its Hylectric press, which combines hydraulic and electric power and is aimed at a general-purpose market. The company also spent millions of dollars to bring component manufacturing in-house, instead of outsourcing the metalworking.
Schad said PET continues to be a good business, which Husky leads with a 55 percent market share. Husky has a 76 percent market share for high-volume machines to make preforms for soft drinks, water and other mass-market beverages.
But competitors have been nipping at Husky in preform machines for several years. By diversifying, Schad said, Husky is ensuring its long-term health.
Like other machinery makers, Husky has endured what Schad called a ``meltdown'' in the North American machinery market. Husky posted a fiscal 2002 loss of $12.5 million, a figure Schad said included special charges of $8 million. In the fiscal year ended July 31, 2001, Husky lost $7.8 million.
Schad said Husky can return to a decent level of profitability and continued improvement ``provided the industry conditions are reasonable.''
The restructuring has helped Husky reduce its manufacturing costs and pick up market share, Schad said. ``We're emerging from a tough period as a much stronger company,'' he said.
Orders have increased steadily in each of the past four quarters, growing 24 percent during the past 12 months through October.
Husky's backlog at the end of the first quarter is up more than 40 percent compared with the same time a year ago.
``Based on the present order momentum, we have the opportunity to increase sales volume, and as a much leaner and more efficient company, we now have the ability to grow profits,'' Schad said.
Even so, Husky officials are not giving specific projections until clearer business trends develop. But Schad spoke enthusiastically about Husky's new product line, coupled with its ability to design entire molding plants for customers.
``We see some daylight now,'' he said.