(TSX: LNR)
GUELPH, ON, May 13, 2020 /CNW/ -
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- During the first quarter of 2020 ("Q1 2020"), the Company
experienced lower sales and operating earnings in both segments
which was primarily attributed to the adverse conditions associated
with the global COVID-19 pandemic;
- Free cash flow1 for Q1 2020 increased
572% to $147.1 million compared to
$21.9 million in the first quarter of
2019 ("Q1 2019");
- Liquidity, measured as cash and cash equivalents and available
credit at March 31, 2020, improved to
$1.2 billion;
- We have set up a COVID-19 Global Task Force and developed and
implemented a rapid Action Response Plan;
- We immediately cut capital asset expenditures by 25% to
$90.7 million from $120.4 million in Q1 2019;
- We are conserving cash by swiftly implementing cost reductions,
making necessary workforce adjustments, implementing our highest
level payment controls, and creating a global team to pursue
additional cost and waste reduction initiatives;
- As part of these cash conservation efforts the board has
approved to temporarily reduce the Q1 2020 dividend to CAD$0.06 per share;
- We rapidly ramped up the production of complete ventilator
systems and ventilator components for numerous customers;
- We are supporting our local and global communities during this
crisis in a number of ways including providing and managing
personal protective equipment inventories for local hospitals and
needed trucking services; and
- The launch book remains strong at more than $4.1 billion.
|
Three Months
Ended
|
March 31
|
(in millions of
dollars, except per share figures)
|
2020
|
2019
|
$
|
$
|
Sales
|
1,549.8
|
1,974.5
|
Operating Earnings
(Loss)
|
|
|
Industrial
|
42.9
|
73.1
|
Transportation
|
75.0
|
114.6
|
Operating Earnings
(Loss)1
|
117.9
|
187.7
|
Net Earnings
(Loss)
|
78.5
|
132.3
|
Net Earnings (Loss)
per Share – Diluted
|
1.20
|
2.00
|
Earnings before
interest, taxes and amortization ("EBITDA")1
|
228.0
|
287.7
|
Operating Earnings
(Loss) – Normalized1
|
|
|
Industrial
|
31.4
|
77.9
|
Transportation
|
72.1
|
119.8
|
Operating Earnings
(Loss) – Normalized
|
103.5
|
197.7
|
Net Earnings
(Loss) – Normalized1
|
67.9
|
139.4
|
Net Earnings
(Loss) per Share – Diluted –
Normalized1
|
1.04
|
2.11
|
EBITDA –
Normalized1
|
213.9
|
296.8
|
|
|
1
|
For more information
refer to the section entitled "Non-GAAP and Additional GAAP
Measures" in the Company's separately released Management's
Discussion and Analysis ("MD&A").
|
Operating Highlights
Sales for Q1 2020 were $1,549.8
million, down $424.7 million
from $1,974.5 million in Q1 2019.
The Industrial segment ("Industrial") product sales decreased
35.7%, or $166.1 million, to
$299.0 million in Q1 2020 from Q1
2019. The sales decrease was due to:
- sales declines primarily attributed to adverse conditions
associated with the global COVID-19 pandemic;
- reduced access equipment volumes from certain key customers
that experienced decreases greater than the market; and
- lower agricultural sales as expected due to poor crop
conditions, stagnant commodity prices, and the ongoing trade
dispute between the United States
("US") and China governments.
Sales for the Transportation segment ("Transportation")
decreased by $258.6 million, or 17.1%
in Q1 2020 compared with Q1 2019. The sales in Q1 2020 were
impacted by:
- sales declines primarily attributed to customer shutdowns
associated with the global COVID-19 pandemic; and
- an unfavourable impact on sales from the changes in foreign
exchange rates from Q1 2019.
The Company's normalized operating earnings for Q1 2020 were
$103.5 million. This compares to
$197.7 million in Q1 2019, a decrease
of $94.2 million.
Industrial segment normalized operating earnings in Q1 2020
decreased $46.5 million, or 59.7%
from Q1 2019. The Industrial normalized operating earnings results
were predominantly driven by:
- the lower sales volumes which is primarily, directly and
indirectly, attributed to the adverse conditions associated with
the global COVID-19 pandemic; partially offset by
- targeted cost reductions to match lower demand.
Q1 2020 normalized operating earnings for Transportation were
lower by $47.7 million, or 39.8%
compared to Q1 2019. The Transportation segment's earnings were
impacted by the following:
- sales declines primarily attributed to customer shutdowns
associated with the global COVID-19 pandemic; partially offset
by
- targeted cost reductions to match lower demand.
"The current global environment and economy is certainly a
challenge but it is one that the Linamar team is 100% able to
handle. Linamar is a strong, responsive, agile team with a culture
perfectly suited to handle crisis. We are laser focused on cost
reduction, cash generation, finding new business opportunities and
supporting our global team and communities and delivering on every
one of these counts. Tough times don't last but tough teams do and
we are one tough team," said Linamar CEO Linda Hasenfratz.
Dividends
The Board of Directors today declared an eligible dividend in
respect to the quarter ended March 31,
2020 of CDN$0.06 per share on
the common shares of the company, payable on or after June 8, 2020 to shareholders of record on
May 28, 2020.
Forward Looking Information, Risk and Uncertainties
Certain information provided by Linamar in this press release,
MD&A, the consolidated financial statements and other documents
published throughout the year which are not recitation of
historical facts may constitute forward-looking statements. The
words "may", "would", "could", "will", "likely", "estimate",
"believe", "expect", "plan", "forecast" and similar expressions are
intended to identify forward-looking statements. Readers 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 of the factors and
risks and uncertainties that cause results to differ from current
expectations include, but are not limited to, changes in the
competitive environment in which Linamar operates, OEM outsourcing
and insourcing; sources and availability of raw materials; labour
markets and dependence on key personnel; dependence on certain
customers and product programs; technological change in the sectors
in which the Company operates and by Linamar's competitors; delays
in or operational issues with product launches; foreign currency
risk; long-term contracts that are not guaranteed; acquisition and
expansion risk; foreign business risk; public health threats;
cyclicality and seasonality; legal proceedings and insurance
coverage; credit risk; weather; emission standards; capital and
liquidity risk; tax laws; securities laws compliance and corporate
governance standards; fluctuations in interest rates; environmental
emissions and safety regulations; trade and labour disruptions;
world political events; pricing concessions to customers; and
governmental, environmental and regulatory policies.
The foregoing is not an exhaustive list of the factors that may
affect Linamar's forward-looking statements. These and other
factors should be considered carefully and readers should not place
undue reliance on Linamar's forward-looking statements.
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 2020 Release Information
Linamar will hold a
webcast call on May 13, 2020, at
5:00 p.m. ET to discuss its
first-quarter results. The event will be simulcast and can be
accessed at the following URL
https://www.linamar.com/news-event/q1-2020-earnings-call and can
also be navigated to on the company's website. For those who
wish to listen to an audio only call-in option, the numbers for
this call are (877) 668-0168 (North
America) or (825) 312-2386 (International) conference ID
8792067, with a call-in required 10 minutes prior to the start of
the webcast. 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. ET on May 13, 2020, and
at www.sedar.com by the start of business on May 14, 2020. The webcast replay will be
available at
https://www.linamar.com/news-event/q1-2020-earnings-call after the
call. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
May 13, 2020, for seven days. The
number for the replay is (800) 585-8367, Passcode: 8792067.
In addition, a recording of the call will be posted on
https://www.linamar.com/news-event/q1-2020-earnings-call.
Q2 2020 Release Information
Linamar will hold a
webcast call on August 6, 2020, at
5:00 p.m. ET to discuss its
second-quarter results. The event will be simulcast and can be
accessed at the following URL
https://www.linamar.com/news-event/q2-2020-earnings-call and
can also be navigated to on the company's website. For those
who wish to listen to an audio only call-in option, the numbers for
this call are (877) 668-0168 (North
America) or (825) 312-2386 (International) Conference ID
4440626, with a call-in required 10 minutes prior to the start of
the webcast. 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. ET on August 6, 2020, and
at www.sedar.com by the start of business on August 7, 2020. The webcast replay will be
available at
https://www.linamar.com/news-event/q2-2020-earnings-call after the
call. A taped replay of the conference call will also be made
available starting at 8:00 p.m. on
August 6, 2020, for seven days. The
number for the replay is (800) 585-8367, Passcode: 4440626.
In addition, a recording of the call will be posted on
https://www.linamar.com/news-event/q2-2020-earnings-call.
Linamar Corporation (TSX:LNR) is an advanced manufacturing
company where the intersection of leading edge technology and deep
manufacturing expertise is creating solutions that power vehicles,
motion, work and lives for the future. The Company is made up of 2
operating segments – the Industrial segment and the Transportation
segment, which are further divided into 5 operating groups –
Skyjack, Agriculture, Machining & Assembly, Light Metal Casting
and Forging, all world leaders in the design, development and
production of highly engineered products. The Company's Skyjack and
MacDon companies are noted for their innovative, high quality
mobile industrial and harvesting equipment, notably class-leading
aerial work platforms, telehandlers, draper headers and
self-propelled windrowers. The Company's Machining & Assembly,
Light Metal Casting and Forging operating groups focus on precision
metallic components, modules and systems for driveline, body and
powertrain systems designed for global electrified and
traditionally powered vehicle and industrial markets. Linamar has
27,000 employees in 61 manufacturing locations, 11 R&D centres
and 25 sales offices in 17 countries in North and South America, Europe and Asia which generated sales of $7.4 billion in 2019. For more information about
Linamar Corporation and its industry leading products and services,
visit www.linamar.com or follow us on Twitter at @LinamarCorp.
SOURCE Linamar Corporation