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
Contacts: Linamar Corporation Linda Hasenfratz Chief Executive
Officer (519) 836-7550 Website: www.linamar.com
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