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The company noted highlights from the report include:
- MTI Global is optimizing Aerospace operations following the completed offload of manufacturing to Mexico and has largely completed the consolidation of operations in its N.A. Silicone division
- Sales for the three months ended September 30, were $17.6 million, an increase of 12.9 percent from last year's sales of $15.5 million
- Aerospace sales were $7.3 million for the quarter, an increase of 52.1 percent over last year's sales of $4.8 million resulting from an increase in sales volume
- Gross margin for the quarter was $3.1 million, an increase of $0.7 million or 26.9 percent over last year while the gross margin percentage increased to 17.9 percent from 15.9 percent
- The net loss for the quarter was $6.8 million or twenty four cents per share
- The Company breached the following financial covenants with its principal Canadian lenders and is in continuing discussions seeking to obtain a waiver of these breaches:
- Earnings before interest, taxes and depreciation
- Fixed charge coverage
Bill Neill, MTI Global's President and CEO said, "We remain optimistic that we will report further improvements in sales and operating performance through the fourth quarter of 2008, despite sales slippage at MTI Milton caused by the downturn in the automotive industry. MTI Global's primary goal continues to be focused on improving margins with reduced operating costs in the fourth quarter and beyond."
On a percentage basis, Aerospace accounted for 42 percent of total sales, compared to 31 percent for the same period last year. Silicone sales represented 54 percent of total sales, compared to 63 percent for the comparable period last year. Fabricated Products accounted for 4 percent of total sales, compared to 6 percent for last year.
The gross margin for the three months ended September 30, was $3.1 million, an increase of $666,000 or approximately 26.9 percent over the prior year. The gross margin percentage increased to 17.9 percent from 15.9 percent. The increase was primarily due to improved margins at Leewood with the operation of the continuous oven line and the elimination of redundant costs in Polyfab that were present in 2007 as a result of outsourcing the majority of Aerospace manufacturing to Mexico.
Total operating expenses for the three months ended September 30, of $5.4 million were $1.6 million higher than in the same period in 2007 and include $1.3 million of restructuring costs largely attributable to changes in the business operations.
Plant and laboratory expenses of $671,000 were $178,000 higher than in the same period last year due to Polyfab costs associated with the Mexican contract manufacturing operation and additional staff at Leewood. Sales and marketing expenses of $1.5 million increased $203,000 from the prior year due to increased headcount at Leewood and Sterne. Administrative expenses of $1.8 million increased $186,000 from the same period last year. The increase is primarily due to an increase in professional fees.
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