Intermet Guides Lower For Third Quarter

Autoparts Report, Sept 16, 2002

Intermet Corp. said that due to a number of recent events, it will not meet consensus earnings expectations for the third quarter ending September 30, 2002.

Bob Belts, Chief Financial Officer, said, "A number of factors have affected Intermet's near-term results. First, a substantial decline in sales during July was exacerbated by a last-minute customer program delay after we had committed significant resources to the program, including people and equipment.

In addition, one of our machining plants experienced a major breakdown on one of its lines in August that ultimately required substantial overtime and air-freight premiums to meet customer needs. Our European operations also experienced a substantial reduction in sales for both July and August resulting from slowing European automotive production.

Further, as we have previously noted, we continued to experience a significant increase in scrap-metal costs in July and August resulting from rapidly rising steel prices." Chairman and CEO John Doddridge said, "During our second-quarter web cast on July 11, 2002, we pointed out that the third quarter could be volatile for Intermet; however, it has been more volatile than anticipated. It now appears that we will struggle to breakeven for the quarter."