Linamar Corporation (TSX:LNR) -
-- Sales increase 30.4% over the third quarter of 2010 ("Q3 2010");
-- Adjusted EPS is up 44.4% over Q3 2010;
-- Adjusted operating earnings up 62.2% over Q3 2010;
-- Launch book at $2.5 billion;
-- Industrial segment sales up 123.3% over Q3 2010;
-- Powertrain/Driveline segment sales up 23.2% and adjusted operating
earnings up 31.8%; and
-- Additional $130 million of long-term debt secured to further strengthen
balance sheet.
Three Months Ended Nine Months Ended
September 30 September 30
(in millions of dollars, except
earnings per share figures) 2011 2010 2011 2010
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Sales $ 725.6 $ 556.3 $ 2,143.5 $ 1,635.5
Operating Earnings (Loss)
Powertrain/Driveline 44.9 32.4 126.4 117.1
Industrial (1.5) (7.0) (3.0) (16.6)
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Operating Earnings (Loss) $ 43.4 $ 25.4 $ 123.4 $ 100.5
Unusual Items (2.2) - (2.2) -
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Operating Earnings (Loss) -
Adjusted $ 41.2 $ 25.4 $ 121.2 $ 100.5
Net Earnings Attributable to
Shareholders of the Company $ 21.5 $ 20.7 $ 74.4 $ 69.1
Unusual Items 3.6 (3.3) 3.6 (3.3)
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Net Earnings (Loss) Attributable
to Shareholders of the Company -
Adjusted $ 25.1 $ 17.4 $ 78.0 $ 65.8
Earnings per Share $ 0.33 $ 0.32 $ 1.15 $ 1.07
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Earnings (Loss) per Share -
Adjusted 0.39 0.27 1.21 1.02
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Unusual Items
Taxable Items before Tax
1) Exchange loss (gain) on the
2017 and 2021 Private
Placement Notes 7.9 (4.6) 7.9 (4.6)
Tax Impact (2.1) 1.3 (2.1) 1.3
Non-Taxable Items
2) Negative Goodwill on Famer
Acquisition (2.2) - (2.2) -
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Total Unusual Items 3.6 (3.3) 3.6 (3.3)
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Operating Highlights
Sales for the third quarter of 2011 ("Q3 2011") were $725.6
million, up $169.3 million from $556.3 million from Q3 2010:
Sales for the Powertrain/Driveline segment increased by $120.0
million, or 38.6% in Q3 2011 to $636.3 million compared to $516.3
million in Q3 2010. The sales increase in the third quarter was
impacted by:
-- significant levels of newly launched programs from the Company's
substantial book of launch business, including the Company's new German
facility;
-- higher volumes on increased consumer demand in the US and in Asia; and
-- higher sales from business related to the acquisition of the assets of
the Famer Group.
Industrial segment sales increased 123.3%, or $49.3 million from
Q3 2010 to $89.3 million. The sales increase was:
-- primarily due to significant increases in demand in the access equipment
markets resulting from fleet replacement initiatives;
-- partially due to increases in demand in the agricultural equipment
markets serviced by the European Fabrication Division; and
-- increases due to the wind energy programs that have started to launch.
The company's adjusted operating earnings for Q3 2011 were $41.2
million. This compares to $25.4 million operating profit for Q3
2010, an increase of $15.8 million.
Q3 2011 adjusted operating earnings of $42.7 million for the
Powertrain/Driveline segment were higher by $10.3 million from the
operating earnings of $32.4 million in Q3 2010. The segment
experienced the following in Q3 2011:
-- improved margins as mature program production volumes increased; offset
to some extent by
-- marginally higher amount of start-up costs compared to the level of
start up activity in Q3 2010.
The operating losses for the Industrial segment were $1.5
million in Q3 2011, an improvement of $5.5 million from Q3 2010.
The decreased Industrial operating losses were predominantly driven
by:
-- margin improvements on increased volumes in the access equipment market
and to some extent the European Fabrication Division; 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 thrilled with our third quarter results which are
driving us towards a record year in 2011," said Linamar CEO Linda
Hasenfratz. "Sales and earnings are up substantially again in
double digits despite slow growth in global vehicle markets,
margins are expanding, content per vehicle is again growing in
every global centre and we continue to see great opportunities in
the vehicle market place as evidenced by our considerable launch
book that just keeps growing. "
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended September 30, 2011 of CDN$0.08 per
share on the common shares of the Company, payable on or after
December 9, 2011 to shareholders of record on November 25,
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
Q3 Conference Call Information
Linamar will hold a conference call on November 9, 2011 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 64044743, 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 9, 2011 and at www.sedar.com by the start of business on
November 10, 2011. A taped replay of the conference call will also
be made available starting at 6:00 p.m. on November 9, 2011 for
seven days. The number for replay is (800) 642-1687, Conference ID
64044743. 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.
AUDIO ONLY STREAMING:
http://us.meeting-stream.com/linamarcorporation_110911
The audio for this event will be streamed via your computer speakers. NOTE:
Please test your connection prior to joining to ensure a successful user
experience.
Connection Test: http://test.meeting-stream.com
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 15,200 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
November 9, 2011
Contacts: Linamar Corporation Linda Hasenfratz (519)
836-7550www.linamar.com
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