Linamar Corporation (TSX:LNR)
-- Sales increase 14.8% over the second quarter of 2011 ("Q2 2011") to
reach $852 million;
-- Operating earnings up 47.7% over Q2 2011 to reach $64.7 million;
-- EPS is up 51.2% over Q2 2011 to reach $0.65;
-- New business wins continue to be strong, launch book at more than $2.3
billion;
-- Industrial segment sales up 48.6% over Q2 2011
-- Industrial segment operating earnings return to double digit
profitability of 10.1%;
-- Powertrain/Driveline segment sales up 9.5% and operating earnings up
14.8%;
-- Return on Capital Employed improved by 35.9% from Q2 2011 to reach
12.5%;
-- Return on Equity reaches 17.3%; and
-- Positive Cash Flow reduces Net Debt by nearly $50 million from the first
quarter of 2012 ("Q1 2012)
Three Months Ended Six Months Ended
June 30 June 30
2012 2011 2012 2011
(in millions of dollars, except
earnings per share figures) $ $ $ $
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Sales 852.3 742.7 1,692.1 1,417.9
Operating Earnings (Loss)
Powertrain/Driveline 49.7 43.3 100.8 81.5
Industrial 15.0 0.5 21.5 (1.5)
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Operating Earnings (Loss) 64.7 43.8 122.3 80.0
Net Earnings Attributable to
Shareholders of the Company 42.1 28.0 81.7 52.9
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Earnings per Share 0.65 0.43 1.26 0.82
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Operating Highlights
Sales for the second quarter of 2012 ("Q2 2012") were $852.3
million, up $109.6 million from $742.7 million in Q2 2011.
Sales for the Powertrain/Driveline segment increased by $61.0
million, or 9.5% in Q2 2012 to $703.7 million compared to $642.7
million in Q2 2011. The sales increase in the first quarter was
impacted by:
-- significant levels of newly launched programs in each of Canada, Mexico
and Asia from the Company's substantial book of launch business;
-- additional sales from new and expanded facilities such as the Company's
new German facility; and
-- higher volumes on increased consumer demand in the US;
-- offset somewhat by decreased consumer demand in Europe.
Industrial segment sales increased 48.6%, or $48.6 million from
Q2 2011 to $148.6 million. The sales increase was:
-- primarily due to significant increases in demand in the access equipment
markets resulting from fleet replacement initiatives.
The company's operating earnings for Q2 2012 were $64.7 million.
This compares to $43.8 million in Q2 2011, an increase of $20.9
million.
Q2 2012 operating earnings of $49.7 million for the
Powertrain/Driveline segment were higher by $6.4 million from
operating earnings of $43.3 million in Q2 2011. The segment
experienced the following in Q2 2012:
-- improved margins as production volumes increased on launching and mature
programs; and
-- lower amount of start-up costs in comparison to the level of start-up
activity in Q2 2011.
The Q2 2012 operating earnings for the Industrial segment was
$15.0 million, a 2900% improvement from operating earnings of $0.5
million in Q2 2011. The Industrial operating earnings were
predominantly driven by:
-- margin improvements on the increased volumes in the access equipment
market; and
-- favourable mix towards higher margin sales; partially offset by
-- launch costs associated with the energy programs.
"We are delighted to register another record quarter in Q2 on
both sales and earnings," said Linamar CEO Linda Hasenfratz.
"Earnings growth is outpacing sales growth by a factor of 3, the
Industrial segment continues to perform very well and we continue
to see great improvements in ROCE and ROE. In addition with a solid
quarter of free cash flow we continue to drive a very strong
balance sheet at Linamar. Our launches are driving great growth in
the near term, and our competitive strength and an opportunistic
market is helping us build for long term sustainable growth at
Linamar."
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended June 30, 2012 of CDN$0.08 per share on
the common shares of the company, payable on or after September 13,
2012 to shareholders of record on August 24, 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.
Conference Call Information
Q2 2012 Conference Call Information
Linamar will hold a conference call on August 8, 2012 at 5:00
p.m. EST to discuss its second quarter results. The numbers for
this call are (647) 427-3383 (local/overseas) or (888) 424-9894
(North America) confirmation number 76899563, 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 quarterly
financial statements, including the Management's Discussion &
Analysis will be available on the company's website after 4 p.m.
EST on August 8, 2012 and at www.sedar.com by the start of business
on August 9, 2012. A taped replay of the conference call will also
be made available starting at 6:00 p.m. on August 8, 2012 for seven
days. The number for replay is (855) 859-2056, Conference ID
76899563. 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. Please go
to our website (www.linamar.com) and follow the link.
Q3 2012 Conference Call Information
Linamar will hold a conference call on November 14, 2012 at 5:00
p.m. EST to discuss its third quarter results. The numbers for this
call are (647) 427-3382 (local/overseas) or (888) 424-9894 (North
America) confirmation number 12303441, 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 quarterly financial statements,
including the Management's Discussion & Analysis will be
available on the company's website after 4 p.m. EST on November 14,
2012 and at www.sedar.com by the start of business on November 15,
2012. A taped replay of the conference call will also be made
available starting at 11:00 p.m. on November 14, 2012 for seven
days. The number for replay is (855) 859-2056, Conference ID
12303441. 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. Please go
to our website (www.linamar.com) and follow the link.
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 2
operating segments - the Powertrain/Driveline segment and the
Industrial segments which are further divided into 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 its innovative, high quality mobile
industrial equipment, notably its class-leading aerial work
platforms and telehandlers. With more than 16,800 employees in 39
manufacturing locations, 5 R&D centers and 15 sales offices in
12 countries in North America, Europe and Asia, Linamar generated
sales of more than $2.8 Billion in 2011. For more information about
Linamar Corporation and its industry leading products and services,
visit www.linamar.com.
Contacts: Linamar Corporation Linda Hasenfratz Chief Executive
Officer (519) 836-7550 Linamar Corporation Frank Hasenfratz
Chairman of the Board (519) 836-7550 www.linamar.com
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