Onex Corporation
TSX : OCX.SV

Onex Corporation

August 10, 2005 16:00 ET

Onex Reports $239 Million For Second-Quarter Earnings

TORONTO, ONTARIO--(CCNMatthews - Aug. 10, 2005) -

All amounts in Canadian dollars unless otherwise stated

Onex Corporation (TSX:OCX.SV) today reported its consolidated financial results for the second quarter ended June 30, 2005.

- Revenues were $4.2 billion, up $477 million, or 13% from $3.7 billion for the second quarter of 2004.

- Operating earnings grew to $192 million more than double the $90 million for the second quarter of last year.

- Net earnings were $239 million ($1.72 per share) compared to a net loss of $69 million ($0.49 per share) for the second quarter of 2004.

- Cash from operations for the quarter, excluding changes in working capital and other liabilities, totalled $157 million, up from $95 million for the second quarter of 2004.

- At June 30, 2005, consolidated assets totalled $13.9 billion and shareholders' equity was approximately $1.2 billion.

"Our second-quarter revenues and operating earnings continued to benefit from the acquisitions completed in the last half of 2004 and first half of 2005. Our new healthcare businesses have performed particularly well," said Gerald W. Schwartz, President and CEO of Onex Corporation. "Substantial gains were also recorded from the sales of a little over half of our ownership in Magellan and our remaining interest in Compagnie Generale de Geophysique. As well, the large value in our Celestica forward sale agreements was realized in the quarter."

The acquisitions of Center for Diagnostic Imaging and Emergency Medical Services, collectively added revenues of $586 million and operating earnings of $37 million in the second quarter of 2005.

During the second quarter of 2005, Onex and Onex Partners sold 56%, or 4.7 million shares, of their Magellan holdings in a secondary offering in the United States. Total proceeds were $176 million, of which Onex' share was $41 million. Onex' portion of the $83 million pre-tax gain on sale was $20 million. Following this sale, Onex ceased to have voting control of Magellan and therefore, for accounting purposes, Magellan's results, including the gain on sale, are required to be presented as discontinued operations.

There were gains on sales of operating investments of $213 million in the second quarter of 2005. Approximately $191 million of the gains resulted from the close out of the Celestica forward sale agreements in June 2005. In addition, Onex' and Onex Partners' sale of their remaining investment of Compagnie Generale de Geophysique in May and June 2005 resulted in a $20 million gain.

Earnings from discontinued operations for the second quarter of 2005 were $17 million ($0.12 per share) compared to $13 million ($0.09 per share) for the second quarter of 2004.

Revenues for the six months ended June 30, 2005 were $7.9 billion, up 13% from the $6.9 billion reported for the first six months of 2004. Operating earnings to June 30, 2005 were $342 million, up from $123 million of operating earnings for the first half of 2004. Operating earnings increased due primarily to the improved operating results at Celestica, which added $96 million to operating earnings and the inclusion of Center for Diagnostic Imaging's and Emergency Medical Services' operating earnings of $65 million. This was partially offset by lower results in J.L. French.

Earnings from continuing operations for the first six months of 2005 were $831 million ($5.98 per share) compared to a loss of $42 million ($0.29 per share) for the six months ended June 30, 2004. Included in the earnings from continuing operations for the first six months of 2005 were $751 million of gains recorded by Onex on the close out of the Celestica exchangeable debentures and forward sale agreements. Earnings from discontinued operations for six months ended June 30, 2005 were $129 million compared to $10 million of earnings in the same period last year. Included in the 2005 year-to-date earnings from discontinued operations was a $73 million gain recorded by Onex on the sale of InsLogic, a $37 million gain recorded by CMC Electronics on the sale of a portion of its NovAtel shares and a $15 million after-tax gain on the sale of Magellan shares. Net earnings for the first six months of 2005 totalled $960 million ($6.91 per share) compared to a net loss of $32 million ($0.22 per share) reported for the first six months of 2004.

For the six months ended June 30, 2005, cash from operations, excluding changes in non-cash net working capital and other liabilities, totalled $278 million, up from $176 million for the first six months of 2004.

The Consolidated Statements of Earnings for the three and six months ended June 30, 2005 and 2004 are attached. In accordance with required accounting rules, the 2004 results have been restated from those previously reported for those businesses that have been discontinued in 2005.

Operating earnings is Earnings Before the Undernoted Items (as shown in the attached Consolidated Statements of Earnings) less amortization of property, plant and equipment and stock-based compensation plus equity-accounted investments, interest and other income and foreign exchange gains.

Onex Corporation is a diversified company with annual consolidated revenues of approximately $17 billion and consolidated assets of approximately $14 billion. Onex is one of Canada's largest companies with global operations in service, manufacturing and technology industries. Its operating companies include Celestica Inc., Spirit AeroSystems, Inc., Magellan Health Services, Inc., Emergency Medical Services Corporation, ClientLogic Corporation, Cineplex Galaxy LP, J.L. French Automotive Castings, Inc., Res-Care, Inc., Cosmetic Essence, Inc., Center for Diagnostic Imaging, Inc. and Radian Communication Services Corporation. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX.SV.

This news release may contain forward-looking statements that are based on management's current expectations and are subject to known and unknown uncertainties and risks, which could cause actual results to differ materially from those contemplated or implied by such forward-looking statements. Onex is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

At 4:30 p.m. today, Onex will webcast a live conference call to review the Company's Second Quarter 2005 Results in listen-only mode on its website, www.onex.com.

For more information on Onex, visit its website at www.onex.com.

The company's security filings can also be accessed at www.sedar.com.



ONEX CORPORATION
Consolidated Statements of Earnings

(Unaudited) Three months ended Six months ended
(in millions of dollars June 30 June 30
except per share data) 2005 2004 2005 2004
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Revenues $ 4,188 $ 3,711 $ 7,862 $ 6,939

Cost of sales (3,657) (3,327) (6,893) (6,225)

Selling, general and
administrative expenses (271) (192) (512) (382)
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Earnings Before the
Undernoted Items $ 260 $ 192 $ 457 $ 332

Amortization of property,
plant and equipment (103) (99) (197) (187)

Amortization of intangible
assets and deferred charges (23) (17) (47) (34)

Interest expense of operating
companies (78) (36) (138) (71)

Interest and other income 19 - 65 5

Equity-accounted investments 3 2 5 2

Foreign exchange gains 21 13 33 16

Stock-based compensation (8) (18) (21) (45)

Derivative instruments - (59) 1 (79)

Gains on sales of operating
investments, net 213 3 816 92

Acquisition, restructuring
and other expenses (54) (74) (97) (98)

Debt prepayment costs - (2) - (2)

Writedown of goodwill (2) (5) (2) (5)

Writedown of long-lived assets - - - (2)
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Earnings (loss) before income
taxes, non-controlling
interests and discontinued
operations 248 (100) 875 (76)

Recovery of (provision for)
income taxes (10) 3 (28) 8

Non-controlling interests of
operating companies (16) 15 (16) 26
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Earnings (loss) from
continuing operations 222 (82) 831 (42)

Earnings from discontinued
operations 17 13 129 10
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Net Earnings (Loss) for the
Period $ 239 $ (69) $ 960 $ (32)
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Net Earnings (Loss) per
Subordinate Voting Share

Basic and Diluted:

Continuing operations $ 1.60 $ (0.58) $ 5.98 $ (0.29)

Discontinued operations $ 0.12 $ 0.09 $ 0.93 $ 0.07

Net earnings (loss) $ 1.72 $ (0.49) $ 6.91 $ (0.22)

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Contact Information

  • Onex Corporation
    Ewout R. Heersink
    (416) 362-7711
    or
    Onex Corporation
    Donald W. Lewtas
    (416) 362-7711