Linamar Corporation
TSX : LNR

Linamar Corporation

November 07, 2007 16:00 ET

Linamar Announces Third Quarter Results

GUELPH, ONTARIO--(Marketwire - Nov. 7, 2007) - Linamar Corporation (TSX:LNR) is a diversified global manufacturing company of highly engineered products. The company's Powertrain and Driveline focused divisions are world leaders in the collaborative design, development and manufacture of precision metallic components, modules and systems for global vehicle markets. The company's Industrial division is a world leader in the design and production of innovative mobile industrial products, notably its class-leading aerial work platforms. With close to 11,000 employees in 37 manufacturing locations, 5 R&D centers and 9 sales offices in Canada, the US, Mexico, Germany, Hungary, China, Korea and Japan Linamar generated sales of close to $2.3 Billion in 2006. For more information about Linamar Corporation and its industry leading products and services, visit www.linamar.com.



(CDN dollars in thousands except per share figures)

Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
--------------------------------------------------------------------------
$ $ $ $

Sales 581,559 528,080 1,785,371 1,718,519
Gross Margin 75,677 53,079 235,417 208,470
Operating Earnings(1) 47,484 27,968 147,158 122,761
Earnings from Continuing Operations 25,850 15,121 83,924 73,427
Net Earnings 25,850 14,621 83,924 72,727
--------------------------------------------------------------------------
Diluted Earnings per Share
from Continuing Operations 0.37 0.21 1.20 1.02
Diluted Earnings per Share 0.37 0.20 1.20 1.01
--------------------------------------------------------------------------


Third Quarter Operating Highlights

Sales for the third quarter of 2007 grew 10.1% to $581.6 million, compared to $528.1 million for the third quarter of 2006. Year to date 2007 sales increased $66.9 million to $1,785.4 million compared to $1,718.5 million for the same period in 2006. Sales for the Powertrain/Driveline segment increased $11.7 million or 2.7% compared to the third quarter of 2006. For the first nine months of 2007 Powertrain/Driveline sales are down $33.9 million or 2.4% compared to the same period in 2006. The year to date decline was largely attributable to the sales decline in the medium/heavy duty vehicle volumes. Industrial sales increased $41.8 million for the quarter and $100.8 million for first nine months of 2007, reflecting the continued strong market demand for aerial work platforms produced by Skyjack.



(1) "Operating earnings", as used by the chief operating decision makers and
management, monitors the performance of the business specifically at the
segmented level. Operating earnings is calculated by the company as gross
margin less selling, general and administrative expenses.

Three Months Ended Nine Months Ended
September 30 September 30
2007 2006 2007 2006
-----------------------------------------------------------------------
$ $ $ $

Gross margin 75,677 53,079 235,417 208,470
Selling, general and administrative 28,193 25,111 88,259 85,709
-----------------------------------------------------------------------
Operating earnings 47,484 27,968 147,158 122,761
-----------------------------------------------------------------------

Under Canadian generally accepted accounting principles ("GAAP"), this
financial measure does not have a standardized meaning and is unlikely to
be comparable to similar measures presented by other issuers.


Operating earnings in the third quarter increased 69.6% to $47.5 million, compared to $28.0 million for the same period last year. Year to date operating earnings of $147.1 million represent an increase of 19.8% to 2006 year to date operating earnings of $122.8 million. Powertrain/Driveline operating earnings were up significantly for the third quarter at $32.0 million, or 7.2% of total segment sales as compared to $16.1 million, or 3.7% of total segment sales for the same quarter of 2006. Year to date operating earnings for Powertrain/Driveline were up $1.8 million, or 2.1% compared to the same period in 2006. The increase in Powertrain/Driveline operating earnings were positively impacted by cost recoveries for 2005 and 2006 under the Ontario Automotive Investment Strategy ("OAIS") grant program and startup programs ramping up to production volumes. These increases were tempered by the decline in sales related to the decrease in medium/heavy duty vehicle volumes. The strong demand for aerial work platforms from the Industrial segment led to operating earnings of $15.5 million for the quarter compared to $11.9 million for the same period in 2006, and $59.1 million for the first three quarters of 2007 compared to $36.6 million for the same period in 2006.

Dividends

The Board of Directors today declared an ELIGIBLE dividend in respect to the quarter ended September 30, 2007 of CDN$0.06 per share on the common shares of the company, payable on or after December 13, 2007 to shareholders of record on November 26, 2007.

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 sales are denominated in U.S. dollars and the company also purchases a significant amount of raw materials, supplies and equipment in U.S. dollars. The strengthening of 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

Linamar will hold a conference call on November 7, 2007 at 5:00 pm. EST to discuss its results for the third quarter ended September 30, 2007. The numbers for this call are (416) 642-5212 (local/overseas) or (866) 321-6651 (North America), 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 Wednesday, November 7, 2007 and at www.sedar.com by the start of business on November 8, 2007. A taped replay of the conference call will also be made available starting at 11:00 p.m. on November 7, 2007 for seven days. The number for replay is (416) 915-1028 or (866) 244-4494, Conference ID 269235. 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.

Linamar will hold a conference call on March 5, 2008 at 5:00 p.m. EST to discuss its fourth quarter and year end results. The numbers for this call are (416) 642-5212 (local/overseas) or (866) 321-6651 (North America), 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 Wednesday, March 5, 2008 and at www.sedar.com by the start of business on March 6, 2008. A taped replay of the conference call will also be made available starting at 11:00 p.m. on March 5, 2008 for seven days. The number for replay is (416) 915-1028 or (866) 244-4494, Conference ID 863056. 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.

Frank Hasenfratz, Chairman of the Board

Linda Hasenfratz, Chief Executive Officer

Contact Information

  • Linamar Corporation
    Linda Hasenfratz
    (519) 836-7550
    Website: www.linamar.com