Linamar Announces First Quarter Results
May 08 2008 - 4:00PM
Marketwired Canada
Linamar Corporation (TSX:LNR), a diversified global manufacturing company of
highly engineered products, today announced its financial results for the first
quarter ended March 31, 2008. The company's Powertrain and Driveline divisions
("Powertrain/Driveline") are world leaders in the collaborative design,
development and manufacture of precision metallic components, modules and
systems for global vehicle markets. The company's Industrial division
("Industrial") is a world leader in the design and production of innovative
mobile industrial products, notably its class-leading aerial work platforms.
With over 12,000 employees in 37 manufacturing locations, 5 R&D centres and 12
sales offices in Canada, the US, Mexico, Germany, Hungary, China, Korea and
Japan, Linamar generated sales of close to $2.3 billion in 2007. For more
information about Linamar Corporation and its industry leading products and
services, visit www.linamar.com.
(CDN dollars in thousands except per share figures)
Three Months Ended
March 31
2008 2007
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$ $
Sales 614,516 579,419
Gross Margin 80,378 70,763
Operating Earnings(1) 49,937 44,827
Earnings from Continuing Operations 29,487 26,742
Net Earnings 29,487 26,742
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Diluted Earnings per Share
from Continuing Operations 0.43 0.38
Diluted Earnings per Share 0.43 0.38
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First Quarter Operating Highlights
Sales for the first quarter of 2008 at $614.5 million were up $35.1 million
compared to $579.4 million for the first quarter of 2007. Powertrain/Driveline
sales were up 7.6% to $484.1 million compared to $449.8 million in the same
quarter last year. The major contributor to the sales increase was the ramping
up of key programs that were in the start up phase in the first quarter of 2007,
our acquisition of the driveline plant in Mexico in late 2007, the strong growth
in Europe, and the continuing ramp of our Asian operations. Industrial sales
remained stable at $130.4 million for the quarter compared to $129.6 million for
the same quarter in 2007.
(1) "Operating earnings", as used by the chief operating decision makers and
management, monitors the performance of the business specifically at the
segmented level. Operating earnings is calculated by the company as gross margin
less selling, general and administrative expenses.
Three Months Ended
March 31
2008 2007
------------------------------------------------------------
$ $
Gross margin 80,378 70,763
Selling, general and administrative 30,441 25,936
------------------------------------------------------------
Operating earnings 49,937 44,827
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Under Canadian generally accepted accounting principles ("GAAP"), this financial
measure does not have a standardized meaning and is unlikely to be comparable to
similar measures presented by other issuers.
The company's operating earnings increased to $49.9 million for the first
quarter of 2008 compared to $44.8 million for the first quarter of 2007, an
increase of $5.1 million. Significant growth in Powertrain/Driveline sales with
strong gross margins led to operating earnings of $31.1 million for the quarter
compared to $21.1 million for the same quarter last year, an increase of 47.4%.
Operating earnings for Industrial were lower in the first quarter of 2008 at
$18.8 million as compared to $23.7 million for the same quarter of 2007.
Industrial operating earnings decline were largely attributable to increased
sales, marketing and research and development costs related to the new Booms and
Telehandler product offerings, continued startup costs for Linamar Consumer
Products, increased research & development costs and increased raw material
component and outsourcing costs.
Earnings from continuing operations for the quarter were $29.5 million (4.8% of
sales) versus $26.7 million (4.6% of sales) in 2007, an increase of 10.5%.
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended March 31, 2008 of CDN$0.06 per share on the common shares of the
company, payable on or after June 6, 2008 to shareholders of record on May 26,
2008.
Risk and Uncertainties (forward looking statements)
Linamar no longer provides a financial outlook.
Certain information provided by Linamar in these unaudited interim financial
statements, MD&A and other documents published throughout the year that are not
recitation of historical facts may constitute forward-looking statements. The
words "estimate", "believe", "expect" and similar expressions are intended to
identify forward-looking statements. Persons reading this report are cautioned
that such statements are only predictions and the actual events or results may
differ materially. In evaluating such forward-looking statements, readers should
specifically consider the various factors that could cause actual events or
results to differ materially from those indicated by such forward-looking
statements.
Such forward-looking information may involve important risks and uncertainties
that could materially alter results in the future from those expressed or
implied in any forward-looking statements made by, or on behalf of, Linamar.
Some risks and uncertainties may cause results to differ from current
expectations. The factors which are expected to have the greatest impact on
Linamar include but are not limited to (in the various economies in which
Linamar operates): the extent of OEM outsourcing, industry cyclicality, trade
and labour disruptions, pricing concessions and cost absorptions, delays in
program launches, the company's dependence on certain engine and transmission
programs and major OEM customers, currency exposure, and technological
developments by Linamar's competitors.
A large proportion of the company's sales are denominated in U.S. dollars and
the company also purchases a significant amount of raw materials, supplies and
equipment in U.S. dollars. The strengthening of the Canadian dollar has the
potential to have a negative impact on financial results. The company has
employed a hedging strategy as appropriate to attempt to mitigate the impact but
cannot be completely assured that the entire exchange effect has been offset.
Other factors and risks and uncertainties that could cause results to differ
from current expectations are discussed in the MD&A and include, but are not
limited to: fluctuations in interest rates, environmental emission and safety
regulations, governmental, environmental and regulatory policies, and changes in
the competitive environment in which Linamar operates. Linamar assumes no
obligation to update the forward-looking statements, or to update the reasons
why actual results could differ from those reflected in the forward-looking
statements.
Conference Call Information
Q1 Conference Call Information:
Linamar will hold a conference call on May 8, 2008 at 5:00 p.m. EST to discuss
its first quarter results. The numbers for this call are (416) 642-5212
(local/overseas) or (866) 321-6651 (North America), with a call-in required 10
minutes prior to the start of the conference call. The conference call will be
chaired by Linda Hasenfratz, Linamar's Chief Executive Officer. A copy of the
company's full quarterly financial statements, including the Management's
Discussion & Analysis will be available on the company's website after 4 p.m.
EST on Thursday, May 8, 2008 and at www.sedar.com by the start of business on
May 9, 2008. A taped replay of the conference call will also be made available
starting at 11:00 p.m. on May 8, 2008 for seven days. The number for replay is
(647) 436-0148 or (888) 203-1112, Conference ID 1944408. The conference call can
also be accessed by web cast at www.linamar.com, by accessing the investor
relations/events menu, and will be available for a 7 day period.
Q2 Conference Call Information
Linamar will hold a conference call on August 14, 2008 at 5:00 p.m. EST to
discuss its second quarter results. The numbers for this call are (416) 642-5212
(local/overseas) or (866) 321-6651 (North America), with a call-in required 10
minutes prior to the start of the conference call. The conference call will be
chaired by Linda Hasenfratz, Linamar's Chief Executive Officer. A copy of the
company's full quarterly financial statements, including the Management's
Discussion & Analysis will be available on the company's website after 4 p.m.
EST on August 14, 2008 and at www.sedar.com by the start of business on August
15, 2008. A taped replay of the conference call will also be made available
starting at 11:00 p.m. on August 14, 2008 for seven days. The number for replay
is (647) 436-0148 or (888) 203-1112, Conference ID 3473280. The conference call
can also be accessed by web cast at www.linamar.com, by accessing the investor
relations/events menu, and will be available for a 7 day period.
Frank Hasenfratz, Chairman of the Board
Linda Hasenfratz, Chief Executive Officer
Linamar (TSX:LNR)
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