Husky Injection Molding Systems Ltd. probably will not match its ``windfall'' 2003 sales of $815.7 million in fiscal 2004, but executives told analysts and shareholders the company will continue to pick up market share, thanks to its new, broader machinery portfolio.
Robert Schad, Husky's president and chief executive officer, said the injection press and hot-runner manufacturer will continue to push lean manufacturing and automate its factories, even as Husky continues to add people and new technical centers around the world. By keeping up with investments all through the three-year collapse of the depressed North American market, Husky is well-positioned, he said.
``We have more opportunities right now to do business with people that wouldn't even talk to us five years ago,'' Schad said Dec. 4 at Husky's annual shareholders meeting in Toronto.
He tossed out a few examples, including an order for 30 Hylectric injection presses and ``substantial hot runners to go along with it'' from the Tetra-Pak business in France. Tetra-Pak is going to add injection molded closures to its carton packaging, he said.
Schad also announced that Saint-Gobain Calmar Inc. is buying 13 presses as it moves injection molding of its sprayer pumps from California to Mexico. ``We've been trying to get into Calmar for 20 years or 30 years,'' he told shareholders. ``So these things are starting to happen now.''
Schad said some competing machinery makers have cut back on investment and customer service. ``So we have a strong position as a reliable supplier, anywhere in the world, with customers,'' he said.
He said Husky's new technical center in Shanghai, China, will open in about three months to produce hot runners. Officials already are discussing how to double the facility's size. ``We expect to manufacture machines there by next year,'' he said.
Husky's fiscal 2003 ended July 31. After losing money in 2001 and 2002, the Bolton, Ontario-based company turned a $47.3 million profit in 2003, on sales of $815.7 million. Sales for 2002 were $580.9 million.
But Schad called that whopping 2003 sales number ``a bit of a windfall,'' and said Husky is not likely to match it this year. ``This was mainly due to a high opening backlog [in 2003] and high first-half orders, so it was not quite normal,'' he said. Schad added, however, that 2003 shows that Husky can make a solid profit when it is running at a higher capacity level.
Husky announced its first-quarter 2004 results Dec. 3, the day before the shareholders meeting. In the first quarter, ended Oct. 31, Husky lost $9.8 million, after earning $1.1 million in the first quarter a year ago. Sales declined 10 percent to $133.6 million, from $149.2 million.
In North America, sales increased 11 percent, reflecting higher shipments to PET preform makers and automotive molders. Sales declined 3 percent in Europe and sank more than 30 percent in Latin America and the Asia-Pacific region.
Husky's gross profit margin also declined in the first quarter, to 14.8 percent of sales, down from 22.3 percent in the year-earlier quarter. Husky cited the stronger Canadian dollar, increased hiring and pay hikes.
``Global markets for injection equipment remain weak,'' said Steve Wilson, Husky's chief financial officer. He said there are no signs of a big turnaround. Even so, Husky's orders increased 17 percent in the first quarter from the same period a year ago - all of that from non-PET markets. Husky reported its Hylectric machinery business in the quarter was almost double the level booked a year earlier.
Schad said Husky leaders are working on a new five-year plan. He did not have many details, but said Husky wants to dominate in niches it has targeted, such as automotive - customers in cost-sensitive industries that need total solutions to improve their operations.
Husky plans to develop new technologies, boost customer support and add employees, Schad said. ``We want to be the leader in our industry, two or three times [the size of] our nearest competitor,'' he said.