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
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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)
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Operating Earnings (Loss) $ 33.6 $ 25.4 $ 157.0 $ 125.9
Unusual Items 9.8 5.9 7.6 5.90
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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)
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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
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Earnings (Loss) per Share -
Adjusted 0.43 0.35 1.64 1.36
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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) -
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Total Unusual Items 0.9 1.0 4.6 (2.3)
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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.
Contacts: Linamar Corporation Linda Hasenfratz Chief Executive
Officer (519) 836-7550
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