Linamar Corporation (TSX: LNR) -
- Sales increase 11.4% over the second quarter of 2009;
- Reported adjusted net earnings of $1.1 million or $0.02 per
share;
- Powertrain/Driveline segment operating earnings increased $7.2
million from the third quarter of 2008
- New business wins YTD with start of production by mid 2010 now
close to $300 million;
- North American content per vehicle up 10% from the second
quarter of 2009 and 25% from the third quarter of 2008; and
- Debt net of cash reduced by a further $15.2 million from June
30, 2009 for a total YTD reduction of $115.6 million.
Three Months Ended
Sep 30 Jun 30 Sep 30
2009 2009 2008
(in millions of dollars, except
earnings per share figures) $ $ $
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Sales $ 421.1 $ 378.0 $ 540.4
Operating Earnings (Loss)
Powertrain/Driveline 12.0 (52.6) 4.8
Industrial (8.5) (10.4) 2.4
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Operating Earnings (Loss) $ 3.5 $ (63.0) $ 7.2
Unusual Items 2.3 53.2 3.9
Operating Earnings (Loss) - Adjusted $ 5.8 $ (9.8) $ 11.1
Net Earnings (Loss) $ (0.5) $ (48.4) $ 12.0
Unusual Items 1.6 38.3 2.7
Net Earnings (Loss) - Adjusted 1.1 (10.1) 14.7
Earnings (Loss) per Share (0.01) (0.75) 0.17
Earnings (Loss) per Share - Adjusted 0.02 (0.16) 0.22
---------------------------------------------------------------------------
Unusual Items
Taxable Items before Tax
1) Severance related to the global
economic slow down $ 2.3 $ 5.4 $ 3.9
2) Capital asset impairments due to
market conditions - 46.3 -
----------------------------------
2.3 51.7 3.9
Tax Impact (0.7) (14.9) (1.2)
----------------------------------
1.6 36.8 2.7
Non-Taxable Items
3) Intangible Asset Impairments - 1.5 -
----------------------------------
Total Unusual Items after Tax $ 1.6 $ 38.3 $ 2.7
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Operating Highlights
Sales for the third quarter of 2009 were $421.1 million, up
$43.1 million from $378.0 million from the second quarter of
2009:
- Sales for the Powertrain/Driveline segment increased by $54.9
million, or 16.0% in the third quarter to $379.2 million compared
to $324.3 million in the second quarter of 2009. The increase was a
result of improved Powertrain volumes driven from General Motors
and Chrysler resuming production after the extended shutdowns in
the second quarter of 2009;
- Industrial segment sales decreased 22.0% or $11.8 million for
the quarter from $53.7 million in the second quarter of 2009 to
$41.9 million in the third quarter of 2009. The sales decrease in
the third quarter of 2009 was due to the seasonality of the
Consumer Products, the Industrial Fabrication and the Access
Equipment Divisions.
The company's operating earnings for the third quarter of 2009
was $5.8 million after adjusting for unusual items in the quarter.
This compares to $9.8 million adjusted operating loss for the
second quarter of 2009, an increase of $15.6 million:
- The increase was driven by the better absorption of fixed
costs due to the improved volume in global markets in
Powertrain/Driveline and by the continued overhead and fixed cost
reduction program executed in the quarter in both segments;
- Third quarter adjusted operating earnings for the
Powertrain/Driveline segment were higher by $14.3 million from
$0.6m in the second quarter of 2009;
- The adjusted operating losses for the Industrial segment were
$7.9 million in third quarter of 2009, an increase of $1.3 million
or 14.1% over the second quarter of 2009.
Taking into account the unusual items in the respective
quarters, adjusted net earnings for the third quarter of 2009 was
$1.1 million or $0.02 net earnings per share versus $10.1 million
or $0.16 per share in the second quarter of 2009.
The company generated $64.4 million in operational cash flow,
$24.4 million of which was from reductions in non-cash working
capital. The company generated $21.9 million in Free
Cashflow(1).
At September 30, 2009 the amount available under the company's
syndicated revolving credit facility was $207.4 million, up $5.9
million from June 30, 2009.
"After a very challenging first 6 months we are very pleased to
see production and sales levels picking up and a return to
profitability," said Linamar CEO Linda Hasenfratz, "We continue to
execute strongly on every aspect of our action plan, from strong
market share growth to continued cash generation and cost
improvement, and look optimistically towards continuing to enjoy
the benefits of those results in the future."
(1) "Free Cashflow" is defined as Cash from Operating
Activities, Payments for purchase of property, plant and equipment
and Dividends to shareholders as present on the company's
Consolidated Statements of Cash Flows.
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended September 30, 2009 of CDN$0.03 per
share on the common shares of the company, payable on or after
December 11, 2009 to shareholders of record on November 26.
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 cash flows 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 12, 2009 at 5:00
p.m. EST to discuss its third quarter results. The numbers for this
call are (647) 427-3420 (local/overseas) or (888) 300-0053 (North
America) confirmation number 17906931, 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 12, 2009 and at www.sedar.com by the start of business on
November 13, 2009. A taped replay of the conference call will also
be made available starting at 11:00 p.m. on November 12, 2009 for
seven days. The number for replay is (800) 766-3735, Conference ID
17906931. 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.
Q4 Conference Call Information
Linamar will hold a conference call on March 4, 2010 at 5:00
p.m. EST to discuss its fourth quarter results. The numbers for
this call are (647) 427-3420 (local/overseas) or (888) 300-0053
(North America) confirmation number 38693646, 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 4, 2010 and at www.sedar.com by the start of business
on March 5, 2010. A taped replay of the conference call will also
be made available starting at 11:00 p.m. on March 4, 2010 for seven
days. The number for replay is (800) 642-1687, Conference ID
38693646. 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.
Linamar Corporation (TSX: LNR) is a diversified global
manufacturing company of highly engineered products. The company's
Powertrain and Driveline focused divisions are world leaders in the
collaborative design, development and manufacture of precision
metallic components, modules and systems for global vehicle and
power generation markets. The company's Industrial division is a
world leader in the design and production of innovative mobile
industrial equipment, notably its class-leading aerial work
platforms and telehandlers. With more than 9,200 employees in 37
manufacturing locations, 5 R&D centers and 11 sales offices in
Canada, the US, Mexico, Germany, Hungary, the UK, China, Korea and
Japan, Linamar generated sales of over $2.2 Billion in 2008. For
more information about Linamar Corporation and its industry leading
products and services, visit www.linamar.com.
Contacts: Linamar Corporation Linda Hasenfratz (519) 836-7550
www.linamar.com
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