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