WGI Heavy Minerals Announces First Quarter 2009 Results

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[{"type":"text","content":"\n\n\n\nCOEUR D'ALENE, ID, May 13 /CNW/ - WGI Heavy Minerals, Incorporated\n("WGI") (TSX: WG) today announced results for the quarter ended March 31,\n2009. All dollar amounts are in U.S. dollars unless otherwise indicated.\nResults have been filed and may be viewed at www.sedar.com.\n\n\nResults of Operations\n\n\nSales for the quarter declined by a less than expected 11% despite some\nmarkets having declined by more than 20%. WGI improved gross margins by 5%\nthrough cost reductions, led by WGI - Idaho, the international sales and\nmarketing arm, International Waterjet Parts ("IWP") and Kominex. As part of\nthe Company's efforts to be fiscally responsible, total expenses in 2009 were\nreduced 22% over the same three-month period in 2008. Careful cash flow\nmanagement has ensured that cash from operations remains positive at $0.40\nmillion, while the change in cash before the payment of the special\ndistribution (paid in January) remained positive at $0.06 million for the\nquarter. We are not out of the woods yet as the world economy remains\nuncertain. We continue to evaluate other business opportunities and look for\nways to expand on those segments of our business that are profitable.\n\n\nSummary of Quarterly Results\n\n\nFinancially, the Company's balance sheet remains strong after completion\nof the $19.22 million special distribution in the first quarter of 2009. The\nnet cash inflow for the first quarter 2009, before accounting for the special\ndistribution, was $0.06 million, the result of a reduction in accounts\nreceivables and increased accounts payable mainly due to the extension of\ncredit to the Company in the first quarter of 2009 by VVM under the supply\nagreement signed in 2008.\n\n\nRevenues for the three-month period ended March 31, 2009 declined 11%\nfrom $6.8 million in 2008 to $6.1 million for the same period in 2009.\nApproximately 60% of the decline was the result of a 13% devaluation of the\nEuro against the U.S. dollar resulting in an unfavourable currency exchange.\nThe remainder of the decline was due to lower sales volumes, some of which\nwere planned due to the shutdown of Emerald Creek Garnet ("ECG").\n\n\nProduct sales from ECG were at very low levels due to lack of supply when\nthe mine shut down operations during the first quarter to avoid a repeat of\nthe high co...

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