Linamar Announces Significant Improvement Over 2009 Results, Expands Global Footprint and Increases Dividend
March 09 2011 - 3:00PM
Marketwired Canada
Linamar Corporation (TSX:LNR)
-- Sales increase 31.4% over the fourth quarter of 2009 ("Q4 2009");
-- Adjusted net earnings of $20.2 million or $0.31 per share up almost
double over 2009;
-- Adjusted operating earnings up $15.3 million or 115% over Q4 2009;
-- Launch book accelerates to over $2.1 billion;
-- Global expansion and diversification strategies realized through
acquisition in France;
-- Access business up 69% over prior year on an adjusted basis, market
continues to show positive signs of recovery;
-- The revolving credit facility due to expire in late 2011 was early
renewed for a 4 year term and the facility increased to $600 million.
Three Months Ended
December 31
2010 2009
(in millions of dollars, except earnings per share
figures) $ $
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Sales $ 593.7 $ 451.9
Operating Earnings (Loss)
Powertrain/Driveline 38.1 28.8
Industrial (11.0) (21.0)
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Operating Earnings (Loss) $ 27.1 $ 7.8
Unusual Items $ 1.4 $ 5.4
Operating Earnings (Loss) - Adjusted $ 28.5 $ 13.2
Net Earnings (Loss) attributable to shareholders of
the company 19.2 14.6
Unusual Items 1.0 (3.9)
Net Earnings (Loss) attributable to shareholders of
the company - Adjusted 20.2 10.7
Earnings (Loss) per Share 20.2 10.7
Earnings (Loss) per Share - Adjusted 0.31 0.17
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Unusual Items
Taxable Items before Tax
1) Capital asset impairments due to market
conditions - 2.8
2) Closure announcement of Invar - 6.4
3) Access equipment contract converted from
previous period sale to a rental contract - 2.5
4) Change in key accounting estimates 5.9 (6.3)
5) Exchange gains on $130 million USD Private
Placement Notes (4.5) -
-------------------------
1.4 5.4
Tax Impact (0.4) (1.6)
-------------------------
1.0 3.8
Non-Taxable Items
6) Rate changes on future income taxes in Canada - (3.7)
7) Utilization of previously unrecognized tax
losses - (4.0)
-------------------------
Total Unusual Items 1.0 (3.9)
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Operating Highlights
Sales for the fourth quarter of 2010 ("Q4 2010") were $593.7 million, up $141.8
million from $451.9 million from Q4 2009:
Sales for the Powertrain/Driveline segment increased by $121.3 million, or 27.7%
in Q4 2010 to $558.9 million compared to $437.6 million in Q4 2009. The sales
increase in the fourth quarter was impacted by:
-- significant levels of maturing volumes and newly launched programs from
the company's substantial book of launch business; and
-- higher sales driven by moderately increased consumer demand in the US
and Asia.
Industrial segment sales increased 143.4%, or $20.5 million from Q4 2009 to
$34.8 million. The sales increase was due to:
-- significant increases in demand in the access equipment markets
The company's adjusted operating earnings for Q4 2010 were $28.5 million. This
compares to $13.2 million adjusted operating profit for Q4 2009, an increase of
$15.3 million:
-- the increase was driven primarily by improved margins as production
volumes increased on mature and launching new programs in the
Powertrain/Driveline segment; and
-- improved margins on the increased volumes in the access equipment.
-- Q4 2010 adjusted operating earnings of $38.0 million for the
Powertrain/Driveline segment were higher by $12.6 million from the
adjusted operating earnings of $25.4 million in Q4 2009;
-- the adjusted operating losses for the Industrial segment were $9.5
million in Q4 2010, a decrease in loss of $2.7 million from Q4 2009.
"We are very pleased with our 4th quarter results capping off a year of rapid
recovery from the lows of 2009," said Linamar CEO Linda Hasenfratz, "Sales,
earnings, content per vehicle, global market presence and booked business
launches are all growing, poising Linamar for continued successful growth in the
coming years."
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended December 31, 2010 of CDN$0.08 per share on the common shares of
the company, payable on or after April 15, 2011 to shareholders of record on
April 1, 2011.
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
Q4 Conference Call Information
Linamar will hold a conference call on March 9, 2011 at 5:00 p.m. EST to discuss
its fourth quarter/year end results. The numbers for this call are (647)
427-3420 (local/overseas) or (888) 300-0053 (North America) confirmation number
42706437, 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 9, 2011 and at
www.sedar.com by the start of business on March 10, 2011. A taped replay of the
conference call will also be made available starting at 11:00 p.m. on March 9,
2011 for seven days. The number for replay is (800) 642-1687, Conference ID
42706437. 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.
Q1 Conference Call Information
Linamar will hold a conference call on May 11, 2011 at 5:00 p.m. EST to discuss
its first quarter results. The numbers for this call are (647) 427-3420
(local/overseas) or (888) 300-0053 (North America) confirmation number 42722371,
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 May 11, 2011 and at www.sedar.com by the
start of business on May 12, 2011. A taped replay of the conference call will
also be made available starting at 11:00 p.m. on May 11, 2011 for seven days.
The number for replay is (800) 642-1687, Conference ID 42722371. 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 powering vehicles, motion, work and lives. The
company is made up of 4 key divisions - Manufacturing, Driveline, Industrial
Commercial Energy (ICE) and Skyjack, all world leaders in the design,
development and production of highly engineered products. The company's
Manufacturing and Driveline divisions focus on precision metallic components,
modules and systems for engine, transmission and driveline systems designed for
passenger vehicle markets. The ICE group concentrates on similar products for on
and off highway vehicle, energy and other industrial markets. The company's
Skyjack division is noted for their innovative, high quality mobile industrial
equipment, notably its class-leading aerial work platforms and telehandlers.
With more than 12,500 employees in 39 manufacturing locations, 5 R&D centers and
13 sales offices in 11 countries in North America, Europe and Asia, Linamar
generated sales of more than $2.2 Billion in 2010. For more information about
Linamar Corporation and its industry leading products and services, visit
www.linamar.com.
Frank Hasenfratz Linda Hasenfratz
Chairman of the Board Chief Executive Officer
Guelph, Ontario
March 9, 2011
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