Business
WGI Heavy Minerals announces first quarter 2005 results
WGI Heavy Minerals announces first quarter 2005 results.
About this update from Nickel Creek Platinum Corp.
[{"type":"text","content":"\n\n\n\n\nwww.wgiheavyminerals.com \n\nCOEUR D'ALENE, ID, May 11 /CNW/ - WGI Heavy Minerals, Inc. (TSX: WG)\ntoday announced results for the first quarter ended March 31, 2005.\nRevenues for the first quarter of 2005 decreased 5.5 percent to\n$4.24 million, compared with $4.49 million for the year ago period in 2004.\nDespite strengthening global economic activity and firming demand, garnet\nshipments, in tons, were down, due to production constraints in India.\nHowever, WGI realized higher garnet prices, due to industry-wide price\nincreases, a greater percentage of sales into the higher-priced waterjet\nmarket, and more sales with \"delivered\" pricing, rather than \"FOB India\".\nGross profit margins declined to 11.8 percent in the quarter ended\nMarch 31, 2005, compared with 19.4 percent in the year ago period. Increased\nproduction costs, a provision for ilmenite inventory and lower production\nlevels resulting in lower absorption of fixed overhead have contributed to the\ndecline.\nGeneral and administrative expenses increased to 27.6 percent of net\nsales in 2005, compared to 21.3 percent in 2004, largely due to expenses\nassociated with the pending commercial startup in Andhra Pradesh, increased\nprofessional fees related to the review of the Indian operations, including\nlease applications, manufacturing process and legal structure and a provision\nof possible bad debts. Additionally, the Company wrote off $686,000 in\nadvances to an Indian firm, posted a $20,000 foreign exchange loss in 2005,\ncompared to a $385,000 foreign exchange loss in 2004. The Company also booked\na charge of $175,000 for stock based compensation in the first quarter of 2005\ncompared to nil in the first quarter of 2004.\nAs a result, the Company posted a net loss of $1.54 million, or $0.06 per\nshare, for the first quarter of 2005, compared with a net loss of\n$0.45 million, or $0.02 per share, for the first quarter of 2004.\n\nStrong Financial Condition\n\nThe balance sheet remains strong. The Company ended the first quarter of\n2005 with a debt-to-capital ratio of 10.4 percent and a net cash position of\n$24.9 million. Cash flows from operations after changes in working capital on\nother assets improved to $592,000 for the quarter compared to an operating\ncash outflow of $901,000 for the first quarter of 2004.\n\nOutlook\n\nThe Company expec...