Results January-March 2000

Results January-March 2000 ·SinterCast System 2000 installed at Daros Piston Rings ·Collaboration established with Grainger & Worrall to provide rapid prototyping of Compacted Graphite Iron (CGI) components ·Car and truck manufacturers maintain their plans and time schedules to enter into volume production with SinterCast technology. Market Development Several car and truck manufacturers are conducting their final evaluations of SinterCast CGI in anticipation of decisions for actual commercial production. The first quarter of 2001 has seen continued strong interest from the automotive industry and foundries in the SinterCast method of producing Compacted Graphite Iron (CGI). Automotive manufacturers and foundries continue to acquire more comprehensive knowledge about CGI and its properties as a result of their own experiences in engine applications and casting and machining trials. Consumer demand and environmental legislation continue to drive the development of the high performance diesel engine. With less emissions and more power from smaller packages, the diesel engine is expected to power 30-35% of all new European passenger car sales in 2001. According to present industry estimates, this figure may exceed 50% in 2005. The continued development of the diesel engine requires higher cylinder pressures and thus higher operating loads on the cylinder block and head. Car and truck manufacturers openly acknowledge that they have reached the limit of conventional grey iron and aluminium and that CGI allows them to reach the next levels of performance and emissions requirements. As a long-standing development partner to the automotive and foundry industries, SinterCast is poised to support and benefit from the increased production of diesel engines. Even if expected decisions about volume production have not yet been announced, car and truck manufacturers maintain their plans and time schedules for the start of volume production in 2003 with strong year-on-year growth thereafter. SinterCast remains confident about its future and its role to serve the foundries and the automotive industry. Alliance with Grainger & Worrall In support of the increased development activity for CGI powertrain components, Grainger & Worrall, England, and SinterCast have joined forces to provide rapid CGI prototyping to the passenger car and commercial vehicle industries. Together, SinterCast and Grainger& Worrall can provide CGI prototypes within 8 weeks from receipt of component design. Grainger & Worrall is a leading prototype and limited run production foundry, whose customers include Ford, General Motors, DaimlerChrysler, Aston Martin, Rolls-Royce and Jaguar Racing. Installations A SinterCast System 2000 was delivered to Daros Piston Rings AB in Gothenburg, Sweden, in April 2001. The system is now installed and Daros aims to be in full production by the end of May 2001. In addition to the installation at Daros, SinterCast process control systems for CGI production have already been installed at the Halberg foundry in Germany, VDP in Italy, Cifunsa in Mexico, Caterpillar in the USA and Tupy in Brazil. One additional system has been installed at the SKF foundry in Sweden for ductile iron production. In addition to these commercial installations, SinterCast also has a system for CGI prototyping and development at Isuzu in Japan. Delivery of probes During the period, approximately 1,500 SinterCast sampling probes have been delivered to customers, (1,300 for the same period last year). These probes are being used for prototype castings and production. The SinterCast probe is the most accurate thermal analysis device in the world. Its resolution is critical for the successful volume production of CGI engine blocks and cylinder heads, which requires a narrow CGI specification to avoid shrinkage defects and to optimise machinability and engine performance. Customer production Production of CGI engine components at Caterpillar and of the Audi 3.3 litre V8 CGI diesel engine cylinder block at Halberg continues. During the period, Allen Power Engineering, part of the Rolls-Royce Group, United Kingdom, has had limited production of CGI cylinder heads and engine frames for large stationary diesel engines at the VDP foundry in Italy. Although these SinterCast CGI production activities have so far resulted in only limited volumes, they represent important technical references for SinterCast vis-à-vis the automotive and heavy diesel engine industries. Likewise, the daily operation of the System 2000 for ductile iron production at the SKF foundry provides valuable confirmation of the robustness and reliability of SinterCast's automated process control system. The SinterCast System 2000 is recognised throughout the industry as a robust and user-friendly state-of-the-art technology, that can reliably support volume production. Patents SinterCast owns 24 patents and patent applications. Two new patent applications are currently being drafted. Competition SinterCast enjoys the highest respect among the world's foundries and automotive companies for process control technology, and CGI volume production know-how. No other method has been proven suitable for CGI volume production of engine blocks and cylinder heads. Operating result, investments and accounting principles The Group's turnover for the period amounted to SEK 1.4 million (SEK 1.0 million for the previous year). The turnover mainly relates to income from production and demonstrations. The turnover is SEK 0.4 million higher than the previous year, mainly due to increased production. The result for the Group, after calculated tax, amounted to SEK -8.6 million, SEK -2.1 per share excluding outstanding warrants and SEK 2.0 including outstanding warrants (SEK -9.6 million, SEK -2.3 per share excluding outstanding warrants and SEK 2.1 including outstanding warrants). The operating expenses for the Group have been reduced by SEK 0.8 million as a result of reorganisation and further consolidation of activities. The financial net is SEK 0.4 million lower than the previous year, primarily due to changes in the Group's results. Other operating income and other operating expenses relate to sub-letting of office space in SinterCast Ltd. Investments by the Group during the period amounted to SEK 0.2 million (SEK 0.2 million). The accounting principles have not been changed during the period. Liquidity The Group's liquidity on 31 March 2001 amounted to SEK 39.0 million (SEK 74.6 million). Although the Company anticipates some initial income to continue during 2001, SinterCast will not generate positive cash flow in 2001. Including the income from existing production the liquidity should see the Company through until mid 2002. In the current year SinterCast expects decisions to be made by automotive manufacturers for volume production of SinterCast CGI components. Based on this the Board is confident that during 2001 the Company will be able to find an appropriate financial solution in the form of new equity, debt or a combination of both in order to secure the Company until a positive cash flow is established. High Risk Until a decision on large-scale production has been announced and the Company's long-term financing has been resolved, the risk remains high. Annual General Meeting The Annual General Meeting of SinterCast AB (publ) will be held on Monday, 21 May 2001 at 15:00 hours, at the premises of the Royal Swedish Academy of Engineering Sciences (IVA), Grev Turegatan 16, Stockholm. Interim Reports and Preliminary Financial Result The Interim Report January-June 2001 will be issued on 16 August 2001. The Interim Report January-September 2001 will be issued on 21 November 2001. The Preliminary Financial Results for 2001 will be issued on 20 February 2002. Stockholm, 17 May 2001 On behalf of the Board of Directors Bertil Hagman President and CEO SinterCast Tel: +46 8 660 7750 AB (publ) Box 10203 Fax: +46 8 661 7979 SE-100 55 e-mail: Stockholm info@sintercast.com Sweden website: http://www.sintercas t.com No audit has been performed of this report of the company auditors. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/05/17/20010517BIT00180/bit0002.doc http://www.bit.se/bitonline/2001/05/17/20010517BIT00180/bit0002.pdf http://www.bit.se/bitonline/2001/05/17/20010517BIT00180/bit0002.xls