Linamar Records Another Quarter of Double Digit Sales and Earnings Growth, Margin Improvement
November 09 2011 - 2:00PM
Marketwired Canada
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
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