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 To the Shareholders
Automodular Corporation earned $2.5 million (before goodwill write-down) on sales of
$83 million in 2008, down from $6.9 million on $100 million in sales the prior year.
Production volumes fell sharply in the fourth quarter of 2008 as the North American
economy weakened and consumer purchases of vehicles dropped dramatically. This
trend continues into 2009, with significant downtime at all assembly plants served by
Automodular.
In the current environment, it is simply not prudent to forecast sales or profits. Automodular
has maintained a conservative balance sheet and is operating at or near a cash break even
despite the significant decline in production, and expects to emerge from the downturn
without major damage to its ability to carry on as a going concern, although a bankruptcy
of one or more of its major customers would be challenging. Automodular has insured
approximately $9 million of its accounts receivable for a period of 6 months, to protect it
from such a calamitous event.
On behalf of the directors,
Michael F. Blair
President and Chief Executive Officer
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