Linamar Corporation
TSX : LNR

Linamar Corporation

March 05, 2009 16:58 ET

Linamar Announces Fourth Quarter Results and Reduced Dividend

GUELPH, ONTARIO--(Marketwire - March 5, 2009) - 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 and energy 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 and award winning cordless rechargeable lawn mower. With close to 11,300 employees in 37 manufacturing locations, 5 research and development ("R&D") centers and 10 sales offices in Canada, the US, the UK, Mexico, Germany, Sweden, Hungary, China, Korea and Japan, Linamar generated sales over $2.2 Billion in 2008. 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 Twelve Months Ended
Dec 31 Dec 31
2008 2007 2008 2007
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$ $ $ $

Sales 476,686 528,180 2,257,000 2,313,551
Gross Margin 22,585 52,765 229,642 288,182
Selling, general and administrative 28,475 27,763 126,027 116,022
Operating Earnings (5,890) 25,002 103,615 172,160
Earnings from Continuing Operations (8,766) 25,063 56,040 108,987
Net Earnings (2,595) 25,407 70,350 109,331
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Diluted Earnings per Share
from Continuing Operations (0.14) 0.36 0.84 1.56
Diluted Earnings per Share (0.04) 0.36 1.05 1.57
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Fourth Quarter Operating Highlights

Sales for the fourth quarter of 2008 were $476.7 million, down $51.4 million from $528.1 million for the fourth quarter of 2007. Sales for Powertrain/Driveline segment decreased by $6.0 million, or 1.4% in the fourth quarter to $422.1 million compared to $428.1 million in the fourth quarter of 2007. The decrease was driven by significant volume reductions by North American OEMs notably GM, Chrysler and Ford. Industrial segment sales decreased 45.5% or $45.5 million for the quarter from $100.1 million in the fourth quarter of 2007 to $54.6 million in the fourth quarter of 2008. The sales for the fourth quarter of 2008 differed from the corresponding period in 2007 due to significant volume reductions as a result of uncertainty in the market and restricted credit availability.

The company's operating earnings decreased to a loss of $5.9 million for the fourth quarter of 2008 compared to a profit of $25.0 million for the fourth quarter of 2007, a decrease of $30.9 million. Fourth quarter operating earnings for the Powertrain/Driveline segment were lower by $23.8 million or 140.8% to a loss $6.9 million over the same quarter of 2007 where operating earnings were $16.9 million. The Operating Earnings for the Industrial segment were $1.0 million in fourth quarter 2008, a decrease of $7.1 million or 87.7% over the fourth quarter of 2007. The decrease in both segments was driven by under absorption of fixed costs due to the significant volume reductions.

Earnings from continuing operations for the quarter were a loss of $8.8 million (1.8% of sales) versus a profit of $25.1 million (4.8% of sales) in 2007.

Dividends

The Board of Directors today declared an eligible dividend in respect of the quarter ended December 31, 2008 of CDN$0.03 per share on the common shares of the company, payable on or after April 15, 2009 to shareholders of record on April 1, 2009. In light of current conditions affecting the company and its businesses, the Board of Directors determined that this reduction in the company's quarterly dividend for the fourth quarter of 2008 is a prudent step and is in the best interests of the company. In considering future dividends, the Board will consider prevailing financial, economic, operating and other relevant circumstances, including the company's working capital requirements and overall financial position.

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

Q4 Conference Call Information

Linamar will hold a conference call on March 5, 2009 at 5:00 p.m. EST to discuss its fourth quarter/year end results. The numbers for this call are (416) 640-3404 (local/overseas) or (866) 322-1159 (North America) confirmation number 2204708, 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 March 5, 2009 and at www.sedar.com by the start of business on March 5, 2009. A taped replay of the conference call will also be made available starting at 11:00 p.m. on March 4, 2009 for seven days. The number for replay is (647) 436-0148 or (888) 203-1112, Conference ID 2204708. 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.

Q1 Conference Call Information:

Linamar will hold a conference call on May 4, 2009 at 5:00 p.m. EST to discuss its first quarter results. The numbers for this call are (416) 640-3404 (local/overseas) or (866) 322-1159 (North America) confirmation number 5141377, 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 May 4, 2009 and at www.sedar.com by the start of business on May 5, 2009. A taped replay of the conference call will also be made available starting at 11:00 p.m. on May 4, 2009 for seven days. The number for replay is (647) 436-0148 or (888) 203-1112, Conference ID 5141377. 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