Linamar Announces Second Quarter Results
August 14 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 second
quarter ended June 30, 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 38 manufacturing locations, 5 R&D centres and 12
sales offices in Canada, the US, Mexico, the UK, Germany, Hungary, China, Korea
and Japan, Linamar generated sales in excess of $2.3 billion in 2007. For more
information about Linamar Corporation and its industry leading products and
services, visit www.linamar.com.
(CDN dollars in thousands except per share figures)
Three Months Ended Six Months Ended
June 30 June 30
2008 2007 2008 2007
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$ $ $ $
Sales 625,438 624,393 1,239,954 1,203,812
Gross Margin 86,491 88,977 166,869 159,740
Selling, general and administrative 34,154 34,130 64,595 60,066
Operating Earnings(1) 52,337 54,847 102,274 99,674
Earnings from Continuing Operations 31,974 31,332 61,461 58,074
Net Earnings 31,974 31,332 61,461 58,074
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Diluted Earnings per Share
from Continuing Operations 0.48 0.45 0.90 0.83
Diluted Earnings per Share 0.48 0.45 0.90 0.83
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Second Quarter Operating Highlights
Sales for the second quarter of 2008 at $625.4 million were up $1 million
compared to $624.4 million for the second quarter of 2007. Powertrain/Driveline
sales were steady at $474.7 million compared to $473.6 million in the same
quarter last year. Industrial sales remained stable at $150.7 million for the
quarter compared to $150.8 million for the same quarter in 2007.
The company's operating earnings decreased to $52.3 million for the second
quarter of 2008 compared to $54.8 million for the second quarter of 2007, a
decrease of $2.5 million. Powertrain/Driveline operating earnings of $38.0
million for the quarter compared to $34.9 million for the same quarter last
year, an increase of 8.9%. This improvement was driven by improved results in
Europe due to new program launches and margin improvement on other key programs
exiting the start up phase. In addition, Q2 2007 results included an unusual
loss due to foreign exchange changes related to the Hungarian Forint. These
improvements were limited by the significant volume reductions and increase
pricing pressures by North American OEMs. Operating earnings for Industrial were
lower in the second quarter of 2008 at $14.3 million as compared to $19.9
million for the same quarter of 2007. Industrial operating earnings decline was
largely attributable to lower margins on new boom and telehandlers sales still
in the ramp up phase, a shift in Skyjack sales mix to smaller units with lower
per unit margins, launch costs related to the move and start up of the energy
market business, increased investment in sales, marketing and research &
development ("R&D") costs at Skyjack.
Earnings from continuing operations for the quarter were $32.0 million (5.1% of
sales) versus $31.3 million (5.0% of sales) in 2007, an increase of 0.1%.
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended June 30, 2008 of CDN$0.06 per share on the common shares of the
company, payable on or after September 15, 2008 to shareholders of record on
August 29, 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
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.
Q3 Conference Call Information
Linamar will hold a conference call on November 4, 2008 at 5:00 p.m. EST to
discuss its third quarter results. The numbers for this call are (416) 642-5212
(local/overseas) or (866) 321-6651 (North America) confirmation number 3022641,
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 November 4, 2008 and at www.sedar.com by
the start of business on November 5, 2008. A taped replay of the conference call
will also be made available starting at 11:00 p.m. on November 4, 2008 for seven
days. The number for replay is (647) 436-0148 or (888) 203-1112, Conference ID
3022641. 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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