Linamar Announces Third Quarter Results
November 04 2008 - 3:00PM
Marketwired Canada
Linamar Corporation (TSX:LNR), a diversified global manufacturing company of
highly engineered products, today announced its financial results for the third
quarter ended September 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 close to 12,000 employees in 37 manufacturing locations, 5 R&D centres and
11 sales offices in Canada, the US, Mexico, the UK, Germany, Hungary, China,
Korea and Japan, Linamar generated sales in excess of $2.3 billion in 2007. For
more information about Linamar Corporation and its industry leading products and
services, visit www.linamar.com.
(CDN dollars in thousands except per share figures)
Three Months Ended Nine Months Ended
Sept 30 Sept 30
2008 2007 2008 2007
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$ $ $ $
Sales 540,360 581,559 1,780,314 1,785,371
Gross Margin 40,188 75,677 207,057 235,417
Selling, general and
administrative 32,957 28,193 97,552 88,259
Operating Earnings(1) 7,231 47,484 109,505 147,158
Earnings from Continuing
Operations 3,345 25,850 64,806 83,924
Net Earnings 11,484 25,850 72,945 83,924
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Diluted Earnings per Share
from Continuing Operations 0.05 0.37 0.96 1.20
Diluted Earnings per Share 0.17 0.37 1.08 1.20
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(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. 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.
Third Quarter Operating Highlights
Sales for the third quarter of 2008 at $540.4 million were down $41.2 million
compared to $581.6 million for the third quarter of 2007. Sales for the
Powertrain/Driveline Segment ("Powertrain/Driveline") decreased by $12.1
million, or 2.7% in the third quarter compared with 2007. The decrease was
driven by significant volume reductions by North American OEMs notably GM,
Chrysler and Ford. The Industrial Segment ("Industrial") product sales decreased
21.3% or $29.2 million for the quarter. The sales for the third quarter of 2008
differed from the corresponding period in 2007 due to significant volume
reductions due to uncertainty in the market and the restricted credit
availability, particularly in Europe.
The company's operating earnings decreased to $7.3 million for the third quarter
of 2008 compared to $47.5 million for the third quarter of 2007, a decrease of
40.2 million. Third quarter operating earnings for Powertrain/Driveline were
lower by $27.1 million or 84.7% over the same quarter of 2007. Operating
Earnings for Industrial decreased $13.1 million or 84.5% over the third quarter
of 2007 to $2.4 million. The decrease in both segments were driven by under
absorption of fixed costs due to the significant volume reductions.
Earnings from continuing operations for the quarter were $3.3 million (0.6% of
sales) versus $25.9 million (4.5% of sales) in 2007, a decrease of 87.3%.
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended September 30, 2008 of CDN$0.06 per share on the common shares of
the company, payable on or after December 12, 2008 to shareholders of record on
November 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 cashflows are denominated in foreign
currencies. The movement of foreign currency exchange rates against 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
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 seven day period.
Q4 Conference Call Information
Linamar will hold a conference call on March 5, 2009 at 5:00 p.m. EST to discuss
its fourth quarter and year end results. The numbers for this call are (416)
642-5212 (local/overseas) or (866) 321-6651 (North America) confirmation number
2204708, 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 March 5, 2009 and at www.sedar.com by the
start of business on March 6, 2009. A taped replay of the conference call will
also be made available starting at 11:00 p.m. on March 5, 2009 for seven days.
The number for replay is (647) 436-0148 or (888) 203-1112, Conference ID
2204708. 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 seven day period.
Frank Hasenfratz Linda Hasenfratz
Chairman of the Board Chief Executive Officer
Guelph, Ontario
November 4, 2008
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