Linamar Corporation
TSX : LNR

Linamar Corporation

March 09, 2011 16:00 ET

Linamar Announces Significant Improvement Over 2009 Results, Expands Global Footprint and Increases Dividend

GUELPH, ONTARIO--(Marketwire - March 9, 2011) - Linamar Corporation (TSX:LNR)

  • Sales increase 31.4% over the fourth quarter of 2009 ("Q4 2009");
  • Adjusted net earnings of $20.2 million or $0.31 per share up almost double over 2009;
  • Adjusted operating earnings up $15.3 million or 115% over Q4 2009;
  • Launch book accelerates to over $2.1 billion;
  • Global expansion and diversification strategies realized through acquisition in France;
  • Access business up 69% over prior year on an adjusted basis, market continues to show positive signs of recovery;
  • The revolving credit facility due to expire in late 2011 was early renewed for a 4 year term and the facility increased to $600 million.
  Three Months Ended  
  December 31  
  2010   2009  
(in millions of dollars, except earnings per share figures) $   $  
Sales $ 593.7   $ 451.9  
Operating Earnings (Loss)            
  Powertrain/Driveline   38.1     28.8  
  Industrial   (11.0 )   (21.0 )
Operating Earnings (Loss) $ 27.1   $ 7.8  
  Unusual Items $ 1.4   $ 5.4  
Operating Earnings (Loss) – Adjusted $ 28.5   $ 13.2  
             
Net Earnings (Loss) attributable to shareholders of the company   19.2     14.6  
  Unusual Items   1.0     (3.9 )
Net Earnings (Loss) attributable to shareholders of the company – Adjusted   20.2     10.7  
             
Earnings (Loss) per Share   20.2     10.7  
Earnings (Loss) per Share - Adjusted   0.31     0.17  
             
Unusual Items            
Taxable Items before Tax            
  1) Capital asset impairments due to market conditions   -     2.8  
  2) Closure announcement of Invar   -     6.4  
  3) Access equipment contract converted from previous period sale to a rental contract   -     2.5  
  4) Change in key accounting estimates   5.9     (6.3 )
  5) Exchange gains on $130 million USD Private Placement Notes   (4.5 )   -  
    1.4     5.4  
Tax Impact   (0.4 )   (1.6 )
    1.0     3.8  
             
Non-Taxable Items            
  6) Rate changes on future income taxes in Canada   -     (3.7 )
  7) Utilization of previously unrecognized tax losses   -     (4.0 )
Total Unusual Items   1.0     (3.9 )

Operating Highlights

Sales for the fourth quarter of 2010 ("Q4 2010") were $593.7 million, up $141.8 million from $451.9 million from Q4 2009:

Sales for the Powertrain/Driveline segment increased by $121.3 million, or 27.7% in Q4 2010 to $558.9 million compared to $437.6 million in Q4 2009. The sales increase in the fourth quarter was impacted by:

  • significant levels of maturing volumes and newly launched programs from the company's substantial book of launch business; and
  • higher sales driven by moderately increased consumer demand in the US and Asia.

Industrial segment sales increased 143.4%, or $20.5 million from Q4 2009 to $34.8 million. The sales increase was due to:

  • significant increases in demand in the access equipment markets

The company's adjusted operating earnings for Q4 2010 were $28.5 million. This compares to $13.2 million adjusted operating profit for Q4 2009, an increase of $15.3 million:

  • the increase was driven primarily by improved margins as production volumes increased on mature and launching new programs in the Powertrain/Driveline segment; and
  • improved margins on the increased volumes in the access equipment.
  • Q4 2010 adjusted operating earnings of $38.0 million for the Powertrain/Driveline segment were higher by $12.6 million from the adjusted operating earnings of $25.4 million in Q4 2009;
  • the adjusted operating losses for the Industrial segment were $9.5 million in Q4 2010, a decrease in loss of $2.7 million from Q4 2009.

"We are very pleased with our 4th quarter results capping off a year of rapid recovery from the lows of 2009," said Linamar CEO Linda Hasenfratz, "Sales, earnings, content per vehicle, global market presence and booked business launches are all growing, poising Linamar for continued successful growth in the coming years."

Dividends

The Board of Directors today declared an eligible dividend in respect to the quarter ended December 31, 2010 of CDN$0.08 per share on the common shares of the company, payable on or after April 15, 2011 to shareholders of record on April 1, 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

Q4 Conference Call Information

Linamar will hold a conference call on March 9, 2011 at 5:00 p.m. EST to discuss its fourth quarter/year end results. The numbers for this call are (647) 427-3420 (local/overseas) or (888) 300-0053 (North America) confirmation number 42706437, 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 9, 2011 and at www.sedar.com by the start of business on March 10, 2011. A taped replay of the conference call will also be made available starting at 11:00 p.m. on March 9, 2011 for seven days. The number for replay is (800) 642-1687, Conference ID 42706437. 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 11, 2011 at 5:00 p.m. EST to discuss its first quarter results. The numbers for this call are (647) 427-3420 (local/overseas) or (888) 300-0053 (North America) confirmation number 42722371, 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 11, 2011 and at www.sedar.com by the start of business on May 12, 2011. A taped replay of the conference call will also be made available starting at 11:00 p.m. on May 11, 2011 for seven days. The number for replay is (800) 642-1687, Conference ID 42722371. 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 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 12,500 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
March 9, 2011

Contact Information

  • Linamar Corporation
    Linda Hasenfratz
    (519) 836-7550