HUSKY INJECTION MOLDING SYSTEMS LTD. ISSUES FISCAL 2007 SECOND QUARTER RESULTS, ANNOUNCES WORKFORCE REDUCTION AND INITIATES OWNERSHIP REVIEW



    TORONTO, March 8 /CNW/ - Husky Injection Molding Systems Ltd. (TSX: HKY)
today announced its results for the second quarter ended January 31, 2007, a
workforce reduction, and an ownership review. All figures in this press
release are in US dollars unless otherwise stated.

    Management's Discussion and Analysis

    The following is a discussion of the second quarter fiscal 2007
consolidated financial condition and results of operations of Husky Injection
Molding Systems Ltd. (the "Company"). This analysis is current as of March 2,
2007, and should be read in conjunction with the Company's unaudited interim
consolidated financial statements for the three and six month periods ended
January 31, 2007, and the Company's Annual Report 2006 - Financial Supplement
for the year ended July 31, 2006. Additional information regarding the
Company, including its Annual Information Form, can be found on SEDAR at
www.sedar.com.
    The Company assesses its performance by reviewing the geographic mix of
sales from its territories, and gross profit and profitability on a
consolidated basis.

    

    Summarized Financial Results
    (in millions of US dollars, except per share data, unaudited)

                           Three Months Ended            Six Months Ended
                        January 31,   January 31,   January 31,   January 31,
                              2007          2006          2007          2006
                      -------------------------------------------------------
    Orders                   314.4         275.7         599.5         547.5
    -------------------------------------------------------------------------
    Sales                    260.1         231.6         451.5         407.5
    -------------------------------------------------------------------------
    Net Income                10.5          12.0           2.8           2.7
    -------------------------------------------------------------------------
    Earnings Per Share        0.09          0.10          0.02          0.02
    -------------------------------------------------------------------------


    Results of Operations
    For the three and six month periods ended January 31, 2007 compared to
    the same periods in the previous year

    Sales
    Sales for the second quarter increased 12% to $260.1 million from    
$231.6 million, as a result of higher opening backlog. Sales increased in all
territories.
    In North America, sales increased 6% as a result of higher shipments in
all markets except automotive. Sales in Europe grew 10% due to increased
shipments in all markets except beverage packaging (PET). The impact of year-
over-year currency rate changes on Euro-denominated shipments increased sales
by approximately $6.0 million. Sales in Asia Pacific increased 32% as a result
of strong beverage packaging (PET) shipments which more than offset declines
in other markets. In Latin America, sales increased 10% primarily due to
higher shipments in beverage packaging.
    For the first six months, sales increased 11% to $451.5 million from
$407.5 million in the prior year. The increase was due to strong order intake
in the first half of the year in addition to higher opening backlog levels.
Sales increased in all territories except Latin America.
    North American sales increased marginally due to higher shipments in
beverage packaging, technical and general applications, partly offset by
declines in packaging and automotive markets. Sales in Europe and Asia Pacific
were up 14% and 39%, respectively. These increases were due to higher opening
backlog levels and increased order intake in the first half of the fiscal
year. In addition, year-over-year currency rate changes on Euro- denominated
shipments increased sales in Europe by approximately $9.0 million. Sales in
Latin America declined 7% as a result of lower opening backlog levels. The
decrease was principally in automotive market applications.

    Net Income
    Net income for the second quarter totaled $10.5 million ($0.09 earnings
per share) compared to $12.0 million ($0.10 earnings per share) last year. On
a year-to-date basis, net income was $2.8 million ($0.02 earnings per share)
compared to $2.7 million ($0.02 earnings per share) last year.

    President's Message

    John Galt, the Company's President and Chief Executive Officer,
commented: "Today we are announcing three important pieces of news:
     1. Financial results for the second quarter.
     2. A reduction of our workforce on the Bolton campus.
     3. A review of Husky's long-term ownership based on Robert Schad's
decision to consider the sale of his shares.

    The review of  Husky's long-term ownership structure will be discussed in
a separate press release issued today.
    The Company's financial performance continues to be encouraging,
especially with regard to orders and sales. Orders in the quarter increased by
$38.8 million to $314.4 million, another new high. These results demonstrate
that, despite difficult market conditions and an aggressive competitive
environment, we are continuing to make progress with our strategy of growing
our business in key market areas - beverage and other packaging, automotive
and technical and general.
    Net income was $2.8 million for the first half of the fiscal year,
consistent with last year. While this profit was in line with our
expectations, we need to continue looking for ways to grow profitably.
    The performance of our European and Asia Pacific businesses continues to
be strong. In Eastern Europe, we developed new customer relationships and
opened a new sales office in Istanbul, Turkey. Similarly, our ongoing
investment in Asia Pacific is promising, particularly in our hot runners and
tooling business. We recently doubled the capacity of our Shenzhen, China hot
runner manufacturing operation. We also opened a new Technical Center in
Singapore, adding local customer support and hot runner manufacturing
capabilities to more effectively service our growing customer base in the
region.
    On the other hand, North American orders in the quarter were negatively
impacted by the unfavorable market conditions affecting the industry. With
almost half of our business continuing to come from the Americas, we are fully
committed to serving these customers from a strong local base. The United
States in particular remains our largest single market; the success of our
North and South American customers is one of our foremost priorities.
    Nevertheless, becoming a leaner organization is a critical part of our
goal of achieving profitable growth. While we have made progress, many areas
of inefficiency remain and we are competing with companies around the world
who are learning and getting better as well. As a result, we have reduced our
workforce, on the Bolton campus, by 85 people.
    In addition, it has become increasingly inefficient and costly to
manufacture products in Canada that are destined for, and shipped to, markets
on the other side of the globe. The high Canadian dollar and some ineffective
research and development tax structures add further difficulties to
successfully manufacture in Canada for overseas markets. We have outlined our
concerns and proposed solutions to various levels of government. While these
issues are now well understood, they have not yet been addressed with
meaningful action.
    While we remain committed to making our Canadian operations successful,
it is clear that we will require further improvement and greater efficiency
going forward. We will continue working to achieve profitable growth by
maintaining the momentum we see in our core markets, controlling costs,
continuing our progress towards becoming a leaner organization and making the
investments required to grow our customer relationships."

    Gross Profit
    For the quarter, gross profit increased to $56.4 million from        
$54.5 million last year. As a result, margins were 21.7% of sales compared to
23.5% last year. Increased sales, cost reduction initiatives and higher margin
product mix improved gross profit by approximately $20.0 million. A research
and development (R&D) investment tax recovery of $1.9 million was also
recognized in the quarter on income earned in a jurisdiction where the Company
has investment tax assets that were not previously recognized. These factors
were offset by competitive pricing pressures and higher expenses, most of
which were people-related. In addition, unfavorable exchange rates primarily
on the translation of Canadian dollar-denominated expenses reduced gross
profit by approximately $6.0 million, compared to last year.
    Gross profit for the first six months increased to $86.3 million    
(19.1% of sales) from $81.5 million last year (20.0% of sales). Higher sales,
cost reductions and R&D investment tax recovery increased gross profit by
approximately $32.0 million. These factors were partly offset by unfavorable
foreign exchange rates, which totaled approximately $9.0 million compared to
last year, principally relating to the translation of Canadian dollar-
denominated expenses. Other contributing factors that reduced gross profit
were competitive pricing pressures and higher expenses, most of which were
people- related.

    Other Income and Expenses
    In the second quarter, selling and administration expenses increased to
$41.2 million from $37.5 million last year. For the first six months, selling
and administration expenses were $79.4 million, up from $72.2 million last
year. The increase for both the quarter and year-to-date periods was
principally due to higher people-related expenses and unfavorable exchange
rates on the translation of Euro and Canadian dollar-denominated expenses.  
The impact of unfavorable exchange rates was $1.8 million and $2.8 million for
the quarter and year-to-date periods, respectively.
    Interest expense for the second quarter, net of interest income,
decreased to $1.7 million from $2.1 million. For the first six months,
interest expense, net of interest income, decreased to $3.3 million from    
$4.8 million last year. The decrease for both the quarter and year-to-date
periods was primarily due to higher interest income.

    Earnings Before Interest, Taxes, Depreciation and Amortization
    (EBITDA)(1)
    For the quarter, EBITDA decreased to $28.0 million from $29.9 million
last year. For the first six months, EBITDA was $32.4 million compared to
$35.1 million last year.

    Income Taxes
    In the quarter, the income tax provision was $2.9 million resulting in an
effective income tax rate of 22%, compared to $2.9 million last year with an
effective income tax rate of 19%.
    The income tax provision for the six month period was $0.7 million
resulting in an effective income tax rate of 20%, compared to $1.8 million
last year with an effective income tax rate of 40%. The income tax provision
was lower as a result of the distribution of income in jurisdictions with
lower tax rates and income earned in jurisdictions where the Company has
income tax assets that were not previously recognized.

    Orders and Backlog
    Orders for the quarter increased 14% to $314.4 million from           
$275.7 million, representing a record level for the Company. The increase was
due to higher demand in all markets and in all territories except North
America.
    In North America, orders decreased due to a decline in beverage packaging
(PET) and automotive application markets, partially offset by increases in
packaging, technical and general markets. Beverage packaging orders were
higher last year as a result of increased demand for isotonic and carbonated
soft drink (CSD) applications which did not recur.
    European orders increased in all markets as a result of strong growth in
all regions. The increase in beverage packaging orders was primarily due to
higher demand in CSD, water and other applications. The impact of year-over-
year currency rate changes increased Euro-denominated orders by approximately
$11.0 million.
    In Asia Pacific, orders increased in all regions, with particular
strength in North Asia. The increase was principally due to growth in beverage
packaging as a result of higher demand in CSD and other applications. In
addition, automotive orders grew as a result of increased demand in South
Asia.
    Orders in Latin America increased in all regions and all markets,
primarily as a result of improved demand in beverage packaging and other
packaging application markets. Beverage packaging orders were up due to higher
demand in a variety of applications.
    For the first six months, orders increased to $599.5 million from    
$547.5 million last year with growth in all markets. Orders increased across
all territories except North America. The impact of year-over-year currency
rate changes increased Euro-denominated orders by approximately $15.0 million,
compared to last year.
    Backlog at January 31, 2007 increased 12% to $422.6 million from     
$376.4 million last year, a record level for the Company.

    Segmented Information

    Sales and Orders
    Please refer to the discussion of sales and orders above.

    Gross Profit
    The Company evaluates gross profit on a consolidated basis. The change in
gross profit margin of the Company's manufacturing operations during the
quarter is attributable to the factors discussed previously under "Gross
Profit". In general, gross profit earned by the Company's Service and Sales
territories fluctuates primarily as a result of changes to internal pricing
between business units, foreign exchange fluctuations and competitive pricing
pressures. In Latin America, margins for the second quarter decreased as a
result of competitive pricing pressures. Asia Pacific margins for the second
quarter and year-to-date periods decreased as a result of competitive pricing
pressures. The reader is reminded that internal changes in pricing between
business units and foreign exchange fluctuations may affect comparative
Service and Sales and manufacturing profit margins, and that such changes may
give rise to segmented results which are not necessarily indicative of
external business or market conditions.

    Liquidity and Capital Resources

    Cash Position
    Cash provided by operating activities for the second quarter decreased to
$35.0 million from $50.0 million last year. The reduction was principally due
to higher non-cash working capital levels. For the quarter, non-cash working
capital decreased as a result of higher accounts payable and accruals, and
customer deposits. The increase in accounts payable and accruals was
principally due to higher trade payables. In addition, the accruals included
the deferral of a gain associated with the $11.0 million received from     
MHT Molds and Hot Runner Technology AG ("MHT") which was awarded by the German
appeal court. These decreases were partly offset by higher accounts
receivable, which was consistent with higher sales in the second quarter.
    For the first six months, cash provided by operating activities totaled
$25.6 million, compared to $74.2 million last year. The reduction was
primarily due to higher non-cash working capital levels. From the beginning of
the fiscal year, non-cash working capital increased due to higher inventory
and accounts receivable. The increase in inventory was consistent with higher
backlog levels. The higher accounts receivable was due to increased sales in
the quarter. These factors were partly offset by an increase in customer
deposits and accounts payable and accruals, which were in line with higher
backlog levels. In addition, the accruals included the deferral of the gain
associated with the $11.0 million received from MHT.

    Capital Additions
    Capital additions for the quarter totaled $8.0 million compared to     
$8.3 million last year. Additions related principally to equipment purchases.

    Dividend
    For the three and six month periods ended January 31, 2007, the Company
paid a dividend of $2.1 million and $4.1 million respectively.

    Capital Resources
    Debt at January 31, 2007 totaled $155.5 million, compared to        
$160.9 million at July 31, 2006. The reduction was principally due to the
translation of Canadian dollar-denominated debt of approximately $3.8 million.
Net debt(2) decreased to $51.5 million from $63.8 million at July 31, 2006,
primarily as a result of increased cash and cash equivalents balances. Debt as
a percentage of capital(3) was 28% at January 31, 2007 and July 31, 2006. Net
debt as a percentage of capital(3) decreased to 11% from 14% at July 31, 2006.
    At January 31, 2007, the Company had committed, unsecured, but unutilized
credit facilities totaling $95.0 million.
    The Company expects to meet its operating cash requirements through
fiscal 2007, including required working capital investments, capital
expenditures and currently scheduled repayments of debt, from cash on hand,
cash flow from operations and its committed borrowing capacity.

    2007 Outlook
    For the third quarter, despite the higher opening backlog levels, the
Company expects sales to be in line with the comparable period last year.   
Net income is expected to be lower principally due to higher compensation
incentives and a restructuring charge, as described below.

    Subsequent Events
    On March 8, 2007 the Company announced:

      1. That it has initiated a review which will include the possibility of
         a sale of part or all of the Company's shares or a strategic
         combination with another business. However, there is no assurance
         that it will result in any specific strategic or financial
         transaction. The Company has retained Citigroup Corporate and
         Investment Banking as its financial advisor to assist in the review.

      2. A workforce reduction of 85 people on the Bolton campus. The Company
         expects this restructuring will have an impact on cash and net
         income of approximately $5.0 million in the third quarter. For the
         current fiscal year, the Company expects the impact on cash and
         net income to be approximately $2.5 million.

      3. That a payment of a dividend of C$0.02 per common share was approved
         by the Company's Board of Directors, for the third quarter. The
         dividend will be paid on April 30, 2007 to shareholders of record as
         of April 16, 2007. The Company's intention is to continue with a
         regular quarterly dividend. The payment of dividends will result in
         a reduction of cash and cash equivalents and shareholders' equity
         of approximately $2.1 million.

    Forward Looking Statements and Risk Factors
    The information in this press release contains certain forward-looking
statements which reflect the Company's current view of future events, business
outlook and anticipated financial performance. The material assumptions
identified in the 2007 Outlook section above may be incorrect. The statements
are also subject to risks and uncertainties which are difficult to predict.
Future events, outcomes and financial performance may differ materially from
those predicted in these statements as a result of factors which may include,
but are not limited to: a reduction in sales of beverage packaging (PET)
equipment; failure of the Company's cost reduction programs to be successful;
changes in macro-economic factors that affect the Company's capital equipment
markets; continued strengthening of the Canadian dollar; being named as a
defendant in a legal action; competitive price pressures; customer driven
price concessions and cost absorption; the timing of orders booked and
shipped; changes in product mix; excess or shortage of manufacturing capacity;
pricing of key raw materials used by the Company's customers; supply chain
disruption, including a significant increase in the cost of a key production
input; changes in governmental, environmental or regulatory policies; failures
of, or deficiencies in, information systems or internal business processes.
These and additional factors are discussed in more detail on pages 10 and 11
under the "Forward-Looking Statements and Risks Factors" section in the
Company's Annual Report 2006 - Financial Supplement for the year ended July
31, 2006. The Company assumes no obligation to update or revise any forward-
looking statements, in order to reflect actual events, results or
circumstances.

    About Husky
    Husky Injection Molding Systems (www.husky.ca) is a global supplier of
injection molding equipment and services to the plastics industry. Customers
use Husky equipment to manufacture a wide range of products in the packaging,
technical and automotive industries. The Company has more than 40 service and
sales offices, supporting customers in more than 100 countries. Husky's
manufacturing facilities are located in Canada, the United States, Luxembourg
and China.

    The Company's common shares (HKY) are listed on the Toronto Stock
    Exchange.

    (1) EBITDA: Earnings before interest, taxes, depreciation and
        amortization is a non-GAAP measure. EBITDA does not have a
        standardized meaning prescribed by GAAP, and may not be directly
        comparable to similar measures presented by other companies due to
        the nature of its calculation. The Company believes this measure may
        be relevant to stakeholders.

    (2) Net debt is defined as total debt less cash and cash equivalents.
        Net debt is a non-GAAP measure, which does not have a standardized
        meaning prescribed by GAAP, and which may not be directly comparable
        to similar measures presented by other companies due to the nature
        of its calculation.

    (3) Debt as a percentage of capital is defined as total debt divided by
        the sum of total debt and shareholders' equity. Net debt as a
        percentage of capital is defined as net debt divided by the sum of
        net debt and shareholders' equity. Debt and net debt as a percentage
        of capital are non-GAAP measures, which do not have a standardized
        meaning prescribed by GAAP, and which may not be directly comparable
        to similar measures presented by other companies due to the nature
        of their calculation.



                    HUSKY INJECTION MOLDING SYSTEMS LTD.
                         CONSOLIDATED BALANCE SHEETS

    (IN THOUSANDS OF US DOLLARS, UNAUDITED)

                                                    January 31,      July 31,
                                                          2007          2006
    -------------------------------------------------------------------------
    ASSETS
    Current
    Cash and cash equivalents                          103,986        97,112
    Accounts receivable                                151,503       135,381
    Income taxes receivable                             11,374         2,339
    Inventories                                        208,679       190,128
    Prepaid expenses and other assets                   13,296         9,276
    Future income tax assets                            21,603        21,295
    -------------------------------------------------------------------------
    Total current assets                               510,441       455,531
    Cross currency swap receivable, net                  4,941         8,786
    Future income tax assets                             4,909         6,134
    Capital assets, net                                324,618       340,041
    -------------------------------------------------------------------------
    Total assets                                       844,909       810,492
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current
    Accounts payable and accrued charges               185,922       175,030
    Customers' deposits                                 84,557        53,440
    Current portion of long-term debt                    3,662         3,605
    -------------------------------------------------------------------------
    Total current liabilities                          274,141       232,075
    Long-term debt                                     151,793       157,302
    Employee future benefits                            14,223        15,037
    Future income tax liabilities                          682           909
    Other long-term liabilities                            607           551
    -------------------------------------------------------------------------
    Total liabilities                                  441,446       405,874
    -------------------------------------------------------------------------

    Shareholders' equity
    Share capital                                      134,544       134,403
    Retained earnings                                  268,919       270,215
    -------------------------------------------------------------------------
    Total shareholders' equity                         403,463       404,618
    -------------------------------------------------------------------------
    Total liabilities and shareholders' equity         844,909       810,492
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                    HUSKY INJECTION MOLDING SYSTEMS LTD.
                    CONSOLIDATED STATEMENTS OF OPERATIONS

    (IN THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA, UNAUDITED)

                           Three Months Ended            Six Months Ended
                        January 31,   January 31,   January 31,   January 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Sales                  260,055       231,619       451,532       407,506
    Cost of sales          203,660       177,146       365,275       325,982
    -------------------------------------------------------------------------
    Gross profit            56,395        54,473        86,257        81,524
    -------------------------------------------------------------------------

    Other expenses
    Selling and
     administration         41,214        37,504        79,401        72,244
    Interest
      - current, net          (816)         (347)       (1,685)         (495)
      - long-term            2,509         2,477         5,034         5,269
    -------------------------------------------------------------------------
    Total other expenses    42,907        39,634        82,750        77,018
    -------------------------------------------------------------------------

    Income before income
     taxes                  13,488        14,839         3,507         4,506
    Provision for
     (recovery of)
     income taxes
      Current               (2,622)          879        (2,145)        1,843
      Future                 5,571         1,990         2,837           (35)
    -------------------------------------------------------------------------
                             2,949         2,869           692         1,808
    -------------------------------------------------------------------------
    Net Income              10,539        11,970         2,815         2,698
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     earnings per share       0.09          0.10          0.02          0.02
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Weighted average number
     of common shares
     outstanding       117,204,160   117,121,649   117,195,902   117,099,897
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                CONSOLIDATED STATEMENTS OF RETAINED EARNINGS

    (IN THOUSANDS OF US DOLLARS, UNAUDITED)

                           Three Months Ended            Six Months Ended
                        January 31,   January 31,   January 31,   January 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    Retained earnings,
     beginning of period   260,454       235,273       270,215       244,545
    Net Income              10,539        11,970         2,815         2,698
    Dividends               (2,074)            -        (4,111)            -
    -------------------------------------------------------------------------
    Retained earnings,
     end of period         268,919       247,243       268,919       247,243
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                    HUSKY INJECTION MOLDING SYSTEMS LTD.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS

    (IN THOUSANDS OF US DOLLARS, UNAUDITED)

                           Three Months Ended            Six Months Ended
                        January 31,   January 31,   January 31,   January 31,
                              2007          2006          2007          2006
    -------------------------------------------------------------------------

    OPERATING ACTIVITIES
    Net Income              10,539        11,970         2,815         2,698
    Add (deduct) items
     not affecting cash
        Depreciation        12,687        12,881        25,393        25,649
        Amortization            93            92           181           174
        Loss (gain) on
         disposal of
         capital assets        (63)           67             4           447
        Employee future
         benefits             (831)          410          (814)        1,067
        Future income taxes  3,969         1,423           690          (880)
        Other                  748          (299)          555          (596)
    -------------------------------------------------------------------------
                            27,142        26,544        28,824        28,559
    Net decrease (increase)
     in non-cash working
     capital balances
     related to operations   7,808        23,461        (3,230)       45,690
    -------------------------------------------------------------------------
    Cash provided by
     operating activities   34,950        50,005        25,594        74,249
    -------------------------------------------------------------------------

    INVESTING ACTIVITIES
    Additions to capital
     assets                 (8,008)       (8,266)      (10,130)      (16,474)
    Net increase (decrease)
     in accounts payable
     and accrued charges
     related to capital
     asset additions           515         1,602        (2,671)       (1,074)
    -------------------------------------------------------------------------
    Cash used for capital
     asset additions        (7,493)       (6,664)      (12,801)      (17,548)
    Proceeds from sale of
     capital assets            108           102           178         7,556
    -------------------------------------------------------------------------
    Cash used in investing
     activities             (7,385)       (6,562)      (12,623)       (9,992)
    -------------------------------------------------------------------------

    FINANCING ACTIVITIES
    Dividends               (2,074)            -        (4,111)            -
    Repayment of long-term
     debt                     (930)         (836)       (1,825)       (9,087)
    Issuance of common
     shares                     89           205           141           293
    -------------------------------------------------------------------------
    Cash used in financing
     activities             (2,915)         (631)       (5,795)       (8,794)
    -------------------------------------------------------------------------

    -------------------------------------------------------------------------
    Effect of exchange rate
     changes on cash and
     cash equivalents         (519)          454          (302)          474
    -------------------------------------------------------------------------

    Net increase in cash
     and cash equivalents
     during the period      24,131        43,266         6,874        55,937
    Cash and cash
     equivalents,
     beginning of period    79,855        31,820        97,112        19,149
    -------------------------------------------------------------------------
    Cash and cash
     equivalents,
     end of period         103,986        75,086       103,986        75,086
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Supplementary cash
     flow information
    Cash income taxes
     paid, net               4,944         2,158         7,203         2,752
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Cash interest paid, net  4,155         4,375         3,502         4,537
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------



                   HUSKY INJECTION MOLDING SYSTEMS LTD.
                           SEGMENTED INFORMATION

    (IN THOUSANDS OF US DOLLARS, UNAUDITED)

                          Three Months Ended January 31, 2007
               --------------------------------------------------------------
                Service and Sales territories
               --------------------------------
                                                     Manu-  Elimi-
                 North   Latin             Asia  facturing nations
               America America   Europe Pacific operations & other(i)  Total
    -------------------------------------------------------------------------

    External
     sales     108,591  25,385   66,287  59,792        -         -   260,055
    Intersegment
     sales           -       -        -       -  227,071  (227,071)        -
    -------------------------------------------------------------------------
    Total
     sales     108,591  25,385   66,287  59,792  227,071  (227,071)  260,055
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross
     profit     15,736   3,282    8,285   6,824   20,365     1,903    56,395
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Depreciation
     and amorti-
     zation        769     214      406     468    9,540     1,383    12,780
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Capital asset
     additions      91      84      412     289    6,488       644     8,008
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     assets    100,666  27,829   93,349 107,591  362,525   152,949   844,909
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                          Three Months Ended January 31, 2006
               --------------------------------------------------------------
                Service and Sales territories
               --------------------------------
                                                     Manu-  Elimi-
                 North   Latin             Asia  facturing nations
               America America   Europe Pacific operations & other(i)  Total
    -------------------------------------------------------------------------

    External
     sales     102,629  23,083   60,466  45,441        -         -   231,619
    Intersegment
     sales           -       -        -       -  199,054  (199,054)        -
    -------------------------------------------------------------------------
    Total
     sales     102,629  23,083   60,466  45,441  199,054  (199,054)  231,619
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross
     profit     15,862   3,790    6,871   7,104   19,681     1,165    54,473
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Depreciation
     and amorti-
     zation        833     203      515     289    9,811     1,322    12,973
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Capital asset
     additions      53      69      144     333    6,521     1,146     8,266
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     assets    109,082  27,051   92,389  90,669  372,321   125,500   817,012
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            Six Months Ended January 31, 2007
               --------------------------------------------------------------
                Service and Sales territories
               --------------------------------
                                                     Manu-  Elimi-
                 North   Latin             Asia  facturing nations
               America America   Europe Pacific operations & other(i)  Total
    -------------------------------------------------------------------------

    External
     sales     173,351  41,631  132,860 103,690        -         -   451,532
    Intersegment
     sales           -       -        -       -  371,803  (371,803)        -
    -------------------------------------------------------------------------
    Total
     sales     173,351  41,631  132,860 103,690  371,803  (371,803)  451,532
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross
     profit     28,864   6,408   16,347  12,893   17,338     4,407    86,257
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Depreciation
     and amorti-
     zation      1,560     423      857     960   19,154     2,620    25,574
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Capital asset
     additions     115     228      576     738    7,171     1,302    10,130
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     assets    100,666  27,829   93,349 107,591  362,525   152,949   844,909
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


                            Six Months Ended January 31, 2006
               --------------------------------------------------------------
                Service and Sales territories
               --------------------------------
                                                     Manu-  Elimi-
                 North   Latin             Asia  facturing nations
               America America   Europe Pacific operations & other(i)  Total
    -------------------------------------------------------------------------

    External
     sales     171,161  44,914  116,666  74,765        -         -   407,506
    Intersegment
     sales           -       -        -       -  346,201  (346,201)        -
    -------------------------------------------------------------------------
    Total
     sales     171,161  44,914  116,666  74,765  346,201  (346,201)  407,506
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Gross
     profit     29,093   7,409   13,502  12,314   17,807     1,399    81,524
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Depreciation
     and amorti-
     zation      1,673     406    1,035     600   19,573     2,536    25,823
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Capital asset
     additions      95      69      278     731   14,072     1,229    16,474
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Total
     assets    109,082  27,051   92,389  90,669  372,321   125,500   817,012
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    (i) Eliminations and other includes Corporate activities and assets not
        attributable to the operating segments.

    External sales to customers in Canada and the United States for the
    three month period ended January 31, 2007 were $3,512 (2006 - $6,530)
    and $105,079 (2006 - $96,099), respectively.  External sales to
    customers in Canada and the United States for the six month period ended
    January 31, 2007 were $5,813 (2006 - $10,807) and $167,538
    (2005 - $160,354), respectively.

    Capital assets in Canada, the United States and Luxembourg as at January
    31, 2007 were $103,831(2006 - $119,398), $75,910 (2006 - $89,598) and
    $95,220 (2006 - $102,366), respectively.

    SUBSEQUENT EVENTS

    On March 8, 2007 the Company has initiated a review which will include
    the possibility of a sale of part or all of the Company's shares or a
    strategic combination with another business. However, there is no
    assurance that it will result in any specific strategic or financial
    transaction. The Company has retained Citigroup Corporate and Investment
    Banking as its financial advisor to assist in the review.

    On March 8, 2007 the Company announced a workforce reduction of 85
    people on the Bolton, Ontario campus.  The Company expects this
    restructuring will have an impact on cash and net income of
    approximately $5.0 million in the third quarter.

    On March 8, 2007 the Company's Board of Directors approved a dividend
    of C$0.02 per common share.  The dividend will be paid on
    April 30, 2007 to the shareholders of record as of April 16, 2007.
    The Company's intention is to continue with a regular quarterly
    dividend. The payment of dividends will result in a reduction of cash
    and cash equivalents and shareholders' equity of approximately
    $2.1 million.



    
    %SEDAR: 00011000E




For further information:

For further information: Daniel Gagnon, Vice President, Finance & CFO,
(905) 951-5000

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HUSKY INJECTION MOLDING SYSTEMS LTD.

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