Linamar Sales Continue to Grow Strongly, Launch Book Builds Further, Access Market Recovering
May 11 2011 - 4:00PM
Marketwired Canada
-- Sales increase 32.2% over the first quarter of 2010 ("Q1 2010");
-- Gross margin $68.7 million up 25.4% over Q1 2010
-- Launch book accelerates to more than $2.25 billion;
-- Industrial segment sales up 94% over prior year, backlog continues to
grow as market continues to show positive signs of recovery
Three Months Ended
March 31
2011 2010
(in millions of dollars, except earnings per share
figures) $ $
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Sales $ 675.2 $ 510.7
Operating Earnings (Loss)
Powertrain/Driveline 38.2 39.1
Industrial (2.0) (6.3)
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Operating Earnings (Loss) $ 36.2 $ 32.8
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Net Earnings (Loss) attributable to shareholders of the
company 24.9 23.4
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Earnings (Loss) per Share 0.38 0.36
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Operating Highlights
Sales for the first quarter of 2011 ("Q1 2011") were $675.2 million, up
$164.5 million from $510.7 million from Q1 2010.
Sales for the Powertrain/Driveline segment increased by $132.3 million, or
27.8% in Q1 2011 to $608.9 million compared to $476.6 million in Q1 2010.
The sales increase in the first quarter was impacted by:
-- significant levels of maturing volumes and newly launched programs from
the company's substantial book of launch business;
-- higher sales driven by increased consumer demand in the US and to some
extent in Europe; and
-- higher sales from business related to the acquisition of the assets of
the Famer Group in Q1 2011.
Industrial segment sales increased 94.4%, or $32.2 million from Q1 2010 to
$66.3 million. The sales increase was due to:
-- significant increases in demand in the access equipment markets
resultant from fleet replacement initiatives.
The company's operating earnings for Q1 2011 were $36.2 million. This
compares to $32.8 million operating profit for Q1 2010, an increase of $3.4
million.
Q1 2011 operating earnings of $38.2 million for the Powertrain/Driveline
segment were slightly lower by $0.9 million from the operating earnings of
$39.1 million in Q1 2010. The segment experienced the following in Q1 2011:
-- improved margins as production volumes increased on launching and mature
programs;
-- offset by increased start-up and program acceleration costs on the
significant number of programs that were in launch during the quarter;
and
-- increased investment in labour and fixed overhead costs to support
growth compared to Q1 2010 which was at the beginning of the recovery
and as such the company had not yet begun this re-investment process.
The operating losses for the Industrial segment were $2.0 million in Q1
2011, a decrease in loss of $4.3 million from Q1 2010. The reduction in
Industrial operating losses was predominantly driven by:
-- margin improvements on the increased volumes in the access equipment
market; partially offset by
-- margin reductions as a result of continued investment in labour and
fixed overhead costs at Skyjack to support the future growth in the
market.
"We are very pleased with our first quarter results which have positioned 2011
well with a strong start," said Linamar CEO Linda Hasenfratz. "Sales and
earnings are up substantially again despite moderate vehicle market growth,
content per vehicle is growing and we continue to see great opportunities in the
vehicle market place both for short term and long term business as evidenced by
our considerable launch book that just keeps growing. And of course we couldn't
be more pleased to see Skyjack performing very well on markets that are
significantly up over last year."
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended March 31, 2011 of CDN$0.08 per share on the common shares of the
company, payable on or after June 5, 2011 to shareholders of record on May 26,
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
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.
Q2 Conference Call Information
Linamar will hold a conference call on August 10, 2011 at 5:00 p.m. EST to
discuss its second quarter results. The numbers for this call are (647) 427-3420
(local/overseas) or (888) 300-0053 (North America) confirmation number 64036479,
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 10, 2011 and at www.sedar.com by
the start of business on August 11, 2011. A taped replay of the conference call
will also be made available starting at 6:00 p.m. on August 10, 2011 for seven
days. The number for replay is (800) 642-1687, Conference ID 64036479. 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 14,000 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.
For further information regarding this release please contact Linda Hasenfratz
at (519) 836-7550.
Frank Hasenfratz Linda Hasenfratz
Chairman of the Board Chief Executive Officer
Guelph, Ontario
May 11, 2011
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