Onex Corporation
TSX : OCX

Onex Corporation

May 08, 2008 08:00 ET

Onex Reports First Quarter 2008 Results

TORONTO, ONTARIO--(Marketwire - May 8, 2008) -

All amounts in Canadian dollars unless otherwise stated

Onex Corporation (TSX:OCX) today announced its consolidated financial results for the first quarter ended March 31, 2008.

First-Quarter Results Summary

- Revenues rise 13% to $6.2 billion

- Operating earnings were $390 million compared to $385 million in the first quarter last year. However, this year's operating earnings included over $80 million of non-cash purchase accounting charges stemming from the acquisition of Husky in December 2007

- Earnings from continuing operations were $40 million, up 21% from $33 million in the first quarter of 2007

- Net earnings were $45 million ($0.36 per share) compared to $149 million ($1.16 per share) in the first quarter last year, which included $116 million ($0.90 per share) from discontinued operations

- Cash flow from operations was $126 million, an improvement from $32 million of cash used in operations in the first quarter last year

- Assets totalled $27.1 billion at March 31, 2008, up from $26.2 billion at December 31, 2007

During the first quarter of 2008, overall Onex' operating companies reported solid revenue and operating earnings growth and closed the quarter with strong balance sheets. Acquisitions completed over the last 12 months added to revenues.

"While the current credit environment has significantly slowed acquisition activity and made this a quiet quarter, we will continue to find appropriate acquisition opportunities," said Gerald W. Schwartz, Chairman and Chief Executive Officer of Onex. "Onex has deep expertise in certain industries such as healthcare and aerospace and we are actively researching and developing expertise in other industries where we can identify attractive acquisitions. As well, Onex' track record of success with complex "carve-out" transactions makes us an ideal partner for those companies that have determined that certain of their activities or business lines are no longer strategically important and should be sold. We believe we will continue to see these "carve-out" opportunities."

Shareholders' equity totalled $1.7 billion at March 31, 2008, essentially unchanged from December 31, 2007. The increase to shareholders' equity from net earnings in the first quarter was essentially offset by share repurchases. During the first quarter, Onex repurchased 1.7 million Subordinate Voting Shares at a total cost of $53 million ($31.16 average cost per share). In April 2008, Onex renewed its Issuer Bid, which will permit Onex to repurchase up to 10% of the public float in its shares or approximately 9.4 million shares.

Operating earnings as referred to in this press release are a non-GAAP measure. See Onex' Management's Discussion and Analysis for the definition and the reconciliation to the consolidated statements of earnings.

Attached are the Consolidated Balance Sheets, Statements of Earnings, Statements of Cash Flows and information by industry segment for the three months ended March 31, 2008 and 2007. The complete financial statements, including Onex' Management's Discussion and Analysis of the results, are posted on Onex' website, www.onex.com and are also available on SEDAR.

Webcasts

Onex management will host a conference call to review the Company's First Quarter 2008 Results at 4:30 p.m. today. A live webcast of this conference call will be available in listen-only mode on its website, www.onex.com.

Onex Corporation's Annual Meeting of Shareholders is being held today at 10:00 a.m. at the Scotiabank Theatre, 259 Richmond Street West, Toronto. A live webcast of the meeting can also be heard at www.onex.com beginning at 10:00 a.m. ET.

About Onex

Onex makes private equity investments through the Onex Partners and ONCAP families of funds. Onex also manages alternative asset platforms focused on Real Estate and Credit Securities. Through its Funds, Onex generates annual management fee income from third parties and is also entitled to a carried interest on $4.1 billion of that capital. In addition, Onex invests its own $3.9 billion of capital in both direct investments and as a Limited Partner in its Funds. Onex' businesses generate annual revenues of $35 billion, have assets of $39 billion and employ 237,000 people worldwide. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX. 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.

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.




Consolidated Balance Sheets

-------------------------------------------------------------------------
(Unaudited)
As at March 31 As at December 31
(in millions of dollars) 2008 2007
-------------------------------------------------------------------------
Assets
Current assets
Cash and short-term investments $ 2,463 $ 2,462
Marketable securities 848 813
Accounts receivable 3,640 3,463
Inventories 2,774 2,539
Other current assets 1,503 1,461
-------------------------------------------------------------------------
11,228 10,738
Property, plant and equipment 3,586 3,489
Investments 3,360 3,203
Other long-term assets 2,652 2,634
Intangible assets 2,696 2,692
Goodwill 3,542 3,443
-------------------------------------------------------------------------
$ 27,064 $ 26,199
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable and accrued liabilities $ 4,089 $ 4,033
Other current liabilities 1,023 864
Current portion of long-term debt and
capital leases, without recourse to Onex 234 321
Current portion of warranty reserves and
unearned premiums 1,632 1,544
-------------------------------------------------------------------------
6,978 6,762
Long-term debt and capital leases of
operating companies, without recourse to
Onex 6,522 6,185
Long-term portion of warranty reserves
and unearned premiums 2,443 2,364
Other long-term liabilities 1,700 1,663
Future income taxes 1,344 1,373
-------------------------------------------------------------------------
18,987 18,347
Non-controlling interests 6,383 6,149
Shareholders' equity 1,694 1,703
-------------------------------------------------------------------------
$ 27,064 $ 26,199
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Consolidated Statements of Earnings

-------------------------------------------------------------------------
(Unaudited) Three months ended March 31
(in millions of dollars, except per
share data) 2008 2007
-------------------------------------------------------------------------
Revenues $ 6,226 $ 5,521
Cost of sales (5,078) (4,617)
Selling, general and administrative
expenses (629) (429)
-------------------------------------------------------------------------
Earnings Before the Undernoted Items 519 475
Amortization of property, plant and
equipment (149) (125)
Amortization of intangible assets and
deferred charges (129) (68)
Interest expense of operating companies (131) (116)
Interest income 20 35
Earnings (loss) from equity-accounted
investments (28) 8
Foreign exchange gains (loss) 46 (8)
Stock-based compensation income
(expense) 50 (56)
Other income (expense) (4) 3
Gains on sales of operating investments,
net - 6
Acquisition, restructuring and other
expenses (48) (21)
-------------------------------------------------------------------------
Earnings before income taxes,
non-controlling interests and
discontinued operations 146 133
Provision for income taxes (49) (42)
Non-controlling interests (57) (58)
-------------------------------------------------------------------------
Earnings from continuing operations 40 33
Earnings from discontinued operations 5 116
-------------------------------------------------------------------------
Net Earnings for the Period $ 45 $ 149
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net Earnings per Subordinate Voting
Share
Basic and Diluted:
Continuing operations $ 0.32 $ 0.26
Discontinued operations $ 0.04 $ 0.90
Net earnings $ 0.36 $ 1.16
-------------------------------------------------------------------------
-------------------------------------------------------------------------


Consolidated Statements of Cash Flows

-------------------------------------------------------------------------
(Unaudited) Three months ended March 31
(in millions of dollars) 2008 2007
-------------------------------------------------------------------------
Operating Activities
Net earnings for the period $ 45 $ 149
Earnings from discontinued operations (5) (116)
Items not affecting cash:
Amortization of property, plant and
equipment 149 125
Amortization of intangible assets and
deferred charges 129 68
Non-controlling interests 57 58
Future income taxes (41) 7
Stock-based compensation expense
(income) (50) 56
Loss (earnings) from equity-accounted
investments 28 (8)
Foreign exchange loss (gains) (22) 11
Gains on sales of operating
investments, net - (6)
Other 29 2
-------------------------------------------------------------------------
319 346
Changes in non-cash working capital
items:
Accounts receivable (75) (19)
Inventories (142) 107
Other current assets (6) 76
Accounts payable, accrued liabilities
and other current liabilities 15 (662)
-------------------------------------------------------------------------
Decrease in cash due to changes in
working capital items (208) (498)
Increase in warranty reserves and
unearned premiums and other
liabilities 15 120
-------------------------------------------------------------------------
126 (32)
-------------------------------------------------------------------------
Financing Activities
Issuance of long-term debt 231 1,180
Repayment of long-term debt (150) (658)
Cash dividends paid (4) (4)
Repurchase of share capital (53) -
Issuance of share capital by operating
companies 48 534
Distributions by operating companies (55) (14)
Increase (decrease) due to other
financing activities 2 (14)
-------------------------------------------------------------------------
19 1,024
-------------------------------------------------------------------------
Investing Activities
Acquisition of operating companies, net
of cash in acquired
companies of nil (2007 - $124) (20) (1,189)
Purchase of property, plant and
equipment (146) (179)
Decrease due to other investing
activities (61) (143)
Cash from discontinued operations 5 196
-------------------------------------------------------------------------
(222) (1,315)
-------------------------------------------------------------------------
Decrease in Cash for the Period (77) (323)
Increase (decrease) in cash due to
changes in foreign exchange rates 78 (18)
Cash, beginning of the period -
continuing operations 2,462 2,944
Cash, beginning of the period -
discontinued operations - 11
-------------------------------------------------------------------------
Cash, End of the Period 2,463 2,614
Short-term investments - -
-------------------------------------------------------------------------
Cash and Short-term Investments Held by
Continuing Operations $ 2,463 $ 2,614
-------------------------------------------------------------------------
-------------------------------------------------------------------------




INFORMATION BY INDUSTRY SEGMENT

(Unaudited)
(in millions of dollars) Electronics
Three months ended March Manufacturing Aerostruc- Financial
31, 2008 Services tures Healthcare Services
----------------------------------------------------------------------------
Revenues $ 1,843 $ 1,041 $ 1,353 $ 330
Cost of sales (1,707) (836) (1,002) (188)
Selling, general and
administrative
expenses (66) (44) (185) (62)
----------------------------------------------------------------------------
Earnings (loss) before
the undernoted items 70 161 166 80
Amortization of property,
plant and equipment (22) (25) (46) (3)
Amortization of
intangible assets
and deferred charges (4) (1) (54) (34)
Interest expense of
operating companies (16) (9) (58) (3)
Interest income 7 6 1 -
Earnings (loss) from
equity -accounted investments - - 4 -
Foreign exchange gains 6 - 14 -
Stock-based compensation
income (expense) (5) (4) (1) -
Other income (expense) - 1 - (1)
Acquisition,
restructuring and
other expenses (3) - (30) (2)
----------------------------------------------------------------------------
Earnings (loss) before
income
taxes, non-controlling
interests
and discontinued
operations $ 33 $ 129 $ (4) $ 37
----------------------------------------------------------------------------
Recovery of (provision
for) income taxes (3) (45) (16) (13)
Non-controlling interests (26) (78) 7 (17)
----------------------------------------------------------------------------
Earnings (loss) from
continuing operations 4 6 (13) 7
Earnings from
discontinued operations - - - -
----------------------------------------------------------------------------
Net earnings (loss) 4 6 (13) 7
----------------------------------------------------------------------------
Total assets $ 4,504 $ 3,748 $ 5,914 $ 5,758
----------------------------------------------------------------------------
Long-term debt(b) $ 791 $ 658 $ 2,920 $ 201
----------------------------------------------------------------------------
----------------------------------------------------------------------------


(Unaudited)
(in millions of dollars) Customer
Three months ended March Support Metal Consolidated
31, 2008 Services Services Other(a) Total
-------------------------------------------------------------------------
Revenues $ 478 $ 614 $ 567 $ 6,226
Cost of sales (312) (573) (460) (5,078)
Selling, general and
administrative
expenses (136) (13) (123) (629)
-------------------------------------------------------------------------
Earnings (loss) before
the undernoted items 30 28 (16) 519
Amortization of property,
plant and equipment (13) (15) (25) (149)
Amortization of
intangible assets
and deferred charges (4) (3) (29) (129)
Interest expense of
operating companies (14) (10) (21) (131)
Interest income 1 - 5 20
Earnings (loss) from
equity -accounted investments - - (32) (28)
Foreign exchange gains 5 - 21 46
Stock-based compensation
income (expense) - - 60 50
Other income (expense) - - (4) (4)
Acquisition,
restructuring and
other expenses (5) - (8) (48)
-------------------------------------------------------------------------
Earnings (loss) before
income
taxes, non-controlling
interests
and discontinued
operations $ - $ - $ (49) 146
-------------------------------------------------------------------------
Recovery of (provision
for) income taxes (5) - 33 (49)
Non-controlling interests (1) - 58 (57)
-------------------------------------------------------------------------
Earnings (loss) from
continuing operations (6) - 42 40
Earnings from
discontinued operations - - 5 5
-------------------------------------------------------------------------
Net earnings (loss) (6) - 47 45
-------------------------------------------------------------------------
Total assets $ 1,027 $ 992 $ 5,121 $ 27,064
-------------------------------------------------------------------------
Long-term debt(b) $ 743 $ 387 $ 1,000 $ 6,700
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(a) Includes Cineplex Entertainment, CEI, Hawker Beechcraft, Allison
Transmission, Husky, Radian, ONCAP, Onex Real Estate, Onex Credit
Partners and the parent company.
(b) Long-term debt includes current portion, excludes capital leases and is
net of deferred charges.




INFORMATION BY INDUSTRY SEGMENT

(Unaudited)
(in millions of dollars) Electronics
Three months ended March Manufacturing Aerostruc- Financial
31, 2007 Services tures Healthcare Services
----------------------------------------------------------------------------
Revenues $ 2,158 $ 1,118 $ 814 $ 346
Cost of sales (2,041) (910) (670) (168)
Selling, general and
administrative
expenses (81) (47) (41) (73)
----------------------------------------------------------------------------
Earnings before the undernoted
items 36 161 103 105
Amortization of property,
plant and equipment (29) (20) (25) (2)
Amortization of intangible
assets and deferred charges (7) (2) (6) (45)
Interest expense of operating
companies (22) (10) (29) (4)
Interest income 2 9 2 -
Earnings from equity-accounted
investments - - 3 -
Foreign exchange gains (loss) 2 - - -
Stock-based compensation
expense (4) (7) (1) -
Other income - 2 - -
Gains on sales of operating
investments, net - - - -
Acquisition, restructuring and
other expenses (9) (6) (3) -
----------------------------------------------------------------------------
Earnings (loss) before income
taxes, non-controlling
interests
and discontinued operations $ (31) $ 127 $ 44 $ 54
----------------------------------------------------------------------------
Recovery of (provision for)
income taxes (10) (42) (16) (19)
Non-controlling interests 35 (74) (20) (24)
----------------------------------------------------------------------------
Earnings (loss) from
continuing operations (6) 11 8 11
Earnings from discontinued
operations - - - -
----------------------------------------------------------------------------
Net earnings (loss) (6) 11 8 11
----------------------------------------------------------------------------
Total assets at December 31,
2007 $ 4,419 $ 3,272 $ 5,745 $ 5,536
----------------------------------------------------------------------------
Long-term debt at December 31,
2007(b) $ 752 $ 567 $ 2,835 $ 194
----------------------------------------------------------------------------
----------------------------------------------------------------------------



(Unaudited)
(in millions of dollars) Customer
Three months ended March Support Metal Consolidated
31, 2007 Services Services Other(a) Total
-------------------------------------------------------------------------
Revenues $ 441 $ 321 $ 323 $ 5,521
Cost of sales (284) (292) (252) (4,617)
Selling, general and
administrative
expenses (117) (9) (61) (429)
-------------------------------------------------------------------------
Earnings before the undernoted
items 40 20 10 475
Amortization of property,
plant and equipment (14) (12) (23) (125)
Amortization of intangible
assets and deferred charges (1) (2) (5) (68)
Interest expense of operating
companies (18) (10) (23) (116)
Interest income - - 22 35
Earnings from equity-accounted
investments - - 5 8
Foreign exchange gains (loss) - - (10) (8)
Stock-based compensation
expense (2) - (42) (56)
Other income 1 - - 3
Gains on sales of operating
investments, net - - 6 6
Acquisition, restructuring and
other expenses (1) - (2) (21)
-------------------------------------------------------------------------
Earnings (loss) before income
taxes, non-controlling
interests
and discontinued operations $ 5 $ (4) $ (62) 133
-------------------------------------------------------------------------
Recovery of (provision for)
income taxes (6) 1 50 (42)
Non-controlling interests (2) 2 25 (58)
-------------------------------------------------------------------------
Earnings (loss) from
continuing operations (3) (1) 13 33
Earnings from discontinued
operations - - 116 116
-------------------------------------------------------------------------
Net earnings (loss) (3) (1) 129 $ 149
-------------------------------------------------------------------------
Total assets at December 31,
2007 $ 1,039 $ 881 $ 5,307 $ 26,199
-------------------------------------------------------------------------
Long-term debt at December 31,
2007(b) $ 688 $ 380 $ 960 $ 6,376
-------------------------------------------------------------------------
-------------------------------------------------------------------------
(a) Includes Cineplex Entertainment, CEI, Radian, ONCAP, Onex Real Estate
and the parent company.

(b) Long-term debt includes current portion, excludes capital leases and
is net of deferred charges.

Contact Information

  • Onex Corporation
    Donald W. Lewtas
    (416) 362-7711
    Website: www.onex.com