Zemex Corp. reported a net loss from continuing operations of $1.8 million for the year, compared to income from continuing operations of $0.9 million for fiscal 2001. Revenues were $73.9 million versus $57.3 million in 2001. Sales in the industrial minerals group and the aluminum recycling group improved by $8.5 million and $8.0 million, respectively. The company is a producer of specialty materials and products for use in a variety of industrial applications. Zemex operates through two major divisions: industrial minerals and aluminum recycling.
The increase in revenue from the industrial minerals group was mainly due to the revenue generated from the attapulgite clay operation which was acquired by Zemez last February. In the aluminum recycling group, $5.6 million of the increase in revenue arose from the acquisition of the West Virginia aluminum dross processor in the first quarter of last year.
The net loss reflects one-time charges of $3.9 million incurred to settle the litigation with Hecla Mining Company that was recorded as an accrued liability in December 2002 and $1.3 million arising from the employment contracts between the company and its former president and chief executive officer, and two other executives.
R. Peter Gillin, president and CEO, stated, "The positive impact of the two acquisitions completed in 2002, along with the improved performance of the aluminum recycling business, would have increased income generated from operations to $4.1 million in 2002 excluding the one-time charges arising from the employment contracts and litigation settlement. This would have represented an increase of $2.2 million, or 120.7 percent, over 2001."
The aluminum recycling group business began a turn-around in 2002 that is continuing in 2003.
Additionally, the company, headquartered in Toronto, Canada, announced that it has entered into an acquisition agreement with Cementos Pacasmayo S.A.A., a publicly listed corporation in Peru, pursuant to which a company controlled by Pacasmayo will acquire all of the outstanding common shares of Zemex.