GUELPH, ONTARIO , 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
-----------------------------------------------------------------------
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
------------------------------------------------------------
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
Contacts: Linamar Corporation Linda Hasenfratz (519) 836-7550
Website: www.linamar.com
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