Linamar Records Another Quarter of Double Digit Sales and Earnings Growth, With Margin and Return on Capital Improvement
March 06 2012 - 3:00PM
Marketwired Canada
Linamar Corporation (TSX:LNR) -
-- Sales increase 21% over the fourth quarter of 2010 ("Q4 2010");
-- Adjusted EPS is up 23% over Q4 2010;
-- Adjusted operating earnings up 39% over Q4 2010;
-- Net debt levels reduced by $35.5 million from the third quarter of 2011
("Q3 2011");
-- New business wins continue to be strong, launch book at $2.5 billion;
-- Industrial segment sales up 104% over Q4 2010;
-- Powertrain/Driveline segment sales up 15.8% and adjusted operating
earnings up 34%; and
-- Return on Capital Employed reached double digits and improved by 14%
from Q4 2010.
Three Year
(in millions of dollars, Months Ended Ended
except earnings per share December 31 December 31
figures) 2011 2010 2011 2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Sales $ 718.0 $ 593.7 $ 2,861.4 $ 2,229.2
Operating Earnings (Loss)
Powertrain/Driveline 37.5 35.3 163.8 152.5
Industrial (3.9) (9.9) (6.8) (26.6)
----------------------------------------------------------------------------
Operating Earnings (Loss) $ 33.6 $ 25.4 $ 157.0 $ 125.9
Unusual Items 9.8 5.9 7.6 5.90
----------------------------------------------------------------------------
Operating Earnings (Loss) -
Adjusted $ 43.4 $ 31.3 $ 164.6 $ 131.8
Net Earnings Attributable
to Shareholders of the
Company $ 27.0 $ 21.4 $ 101.4 $ 90.6
Unusual Items 0.9 1.0 4.6 (2.3)
----------------------------------------------------------------------------
Net Earnings (Loss)
Attributable to
Shareholders of the
Company - Adjusted $ 27.9 $ 22.4 $ 106.0 $ 88.3
Earnings per Share $ 0.42 $ 0.33 $ 1.57 $ 1.40
----------------------------------------------------------------------------
Earnings (Loss) per Share -
Adjusted 0.43 0.35 1.64 1.36
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Unusual Items
Taxable Items before Tax
1) Exchange loss (gain)
on the 2017 and 2021
Private Placement Notes (4.1) (4.5) 3.9 (9.1)
2) Change in key
accounting estimates - 5.9 - 5.9
3) SES Cancellation 9.8 - 9.8 -
Tax Impact (1.5) (0.4) (3.6) 0.9
Non-Taxable Items
4) Bargain purchase gain
on Famer acquisition - - (2.2) -
5) Lower than expected
effective tax rate (3.3) - (3.3) -
----------------------------------------------------------------------------
Total Unusual Items 0.9 1.0 4.6 (2.3)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Operating Highlights
Sales for Q4 2011 were $718.0 million, up $124.3 million from $593.7 million
from Q4 2010.
Sales for the Powertrain/Driveline segment increased by $88.1 million, or 15.8%
in Q4 2011 to $647.0 million compared to $558.9 million in Q4 2010. The sales
increase in the fourth quarter was impacted by:
-- significant levels of newly launched programs from the Company's
substantial book of launch business;
-- higher volumes on increased consumer demand in the US; and
-- higher sales from new and expanded facilities such as the acquisition in
France of the Famer Group, the Company's new German facility and
expanded facilities in Mexico and Hungary.
Industrial segment sales increased 104.0%, or $36.2 million from Q4 2010 to
$71.0 million. The sales increase was:
-- primarily due to significant increases in demand in the access equipment
markets resulting from fleet replacement initiatives; and
-- to a lesser extent due to increases in demand in the agricultural
equipment markets serviced by the European Fabrication Division;
-- as well as increases due to the energy programs that were awarded and
now have started to launch.
The company's adjusted operating earnings for Q4 2011 were $43.4 million. This
compares to $31.3 million in Q4 2010, an increase of $12.1 million.
Q4 2011 adjusted operating earnings of $47.3 million for the
Powertrain/Driveline segment were higher by $12.0 million from the operating
earnings of $35.3 million in Q4 2010. The segment experienced the following in
Q4 2011:
-- improved margins as production volumes increased on launching and mature
programs; and
-- a lower amount of start-up costs in comparison to the level of start-up
activity in Q4 2010.
The Q4 2011 adjusted operating losses for the Industrial segment improved
slightly from Q4 2010 to $3.9 million. The Industrial operating losses were
predominantly driven by:
-- margin improvements on the increased volumes in the access equipment
market; partially offset by
-- launch costs associated with the energy programs; and
-- 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 fourth quarter and full year results for 2011, a
record sales year for Linamar," said Linamar CEO Linda Hasenfratz. "Sales and
earnings are up substantially again in excess of company goals of 15% annually
despite slow growth in global markets, margins are expanding, and we continue to
see great opportunities in the marketplace that are driving our continued growth
in the future. I have never felt more positive about our outlook."
Dividends
The Board of Directors today declared an eligible dividend in respect to the
quarter ended December 31, 2011 of CDN$0.08 per share on the common shares of
the company, payable on or after April 16, 2012 to shareholders of record on
April 2, 2012.
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.
Q4 Conference Call Information
Linamar will hold a conference call on March 6, 2012 at 5:00 p.m. EST to discuss
its fourth quarter/year end results. The numbers for this call are (647)
427-3383 (local/overseas) or (888) 424-9894 (North America) confirmation number
46324403, 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/year
end financial statements, including the Management's Discussion & Analysis will
be available on the company's website after 4 p.m. EST on March 6, 2012 and at
www.sedar.com by the start of business on March 7, 2012. A taped replay of the
conference call will also be made available starting at 6:00 p.m. on March 6,
2012 for seven days. The number for replay is (855) 859-2056, Conference ID
46324403. 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 of the conference call available at
http://www.meetview.com/linamar20120306/index.php.
Q1 2012 Conference Call Information
Linamar will hold a conference call on May 9, 2012 at 5:00 p.m. EST to discuss
its first quarter results. The numbers for this call are (647) 427-3383
(local/overseas) or (888) 424-9894 (North America) confirmation number 47891230,
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/year end financial
statements, including the Management's Discussion & Analysis will be available
on the company's website after 4 p.m. EST on May 9, 2012 and at www.sedar.com by
the start of business on May 10, 2012. A taped replay of the conference call
will also be made available starting at 6:00 p.m. on May 9, 2012 for seven days.
The number for replay is (855) 859-2056, Conference ID 47891230. 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 of the conference call will be available. Please go to our
website (www.linamar.com) and follow the link.
Frank Hasenfratz, Chairman of the Board
Linda Hasenfratz, Chief Executive Officer
Guelph, Ontario.
Linamar (TSX:LNR)
Historical Stock Chart
From May 2024 to Jun 2024
Linamar (TSX:LNR)
Historical Stock Chart
From Jun 2023 to Jun 2024
