Lear Corporation Posts Record Full-Year
Results
SOUTHFIELD, Mich., Feb. 1 Lear Corporation ,
the world's fifth-largest automotive supplier, today reported financial
performance for the full year 2000. For the period, Lear posted net sales of
$14.1 billion, operating income of $835.4 million and net income of $274.7
million or $4.17 per share, all full year records for the company. Excluding
non-recurring items, Lear had record full year net income of $276.6 million or
$4.20 per share.
"We are pleased with our fourth quarter and record full year results given
the tough market conditions which closed the year," stated Bob Rossiter,
President and Chief Executive Officer of Lear Corporation. "Foreign exchange
volatility, rising interest rates and customer production cuts made the second
half of the year particularly challenging."
Rossiter continued, "We remain focused on our customers and our
shareholders and continue to run the business under the guiding principles
that have made us successful. The Lear team really pulled together to get the
job done in terms of debt reduction, earnings, cash flow and cost containment.
We also divested several non-core businesses during the year, allowing us to
repurchase approximately 3.3 million shares of Lear stock."
Rossiter concluded, "We have the product platform for growth in place.
Our backlog of new business is a healthy $3.5 billion. Our team is confident
in the long-term prospects of this company, as evidenced by management's
recent investment of $10 million in Lear stock through the company's
Management Stock Purchase Program."
Earnings per share in the quarter, excluding non-recurring items, were
essentially flat with a year ago at $1.35 versus $1.36 in the fourth quarter
of 1999, as the negative impact of lower production levels and weaker European
currencies was offset by aggressive cost actions and a lower number of shares
outstanding.
In December 2000, the company completed the sale of four European plastic
and metal manufacturing facilities for approximately $30.0 million, resulting
in a pretax loss of $19.8 million and an after tax loss $14.9 million or $.23
per share. These non-core businesses were located in Italy and Sweden,
employed approximately 1,000 people and had external sales of approximately
$60 million for the year ended December 31, 2000.
Net sales for the quarter fell 3 percent to $3.4 billion from $3.5 billion
in last year's fourth quarter. The decrease was attributable to lower
production, foreign exchange and divestitures. Excluding the impact of
foreign exchange and divestitures, sales increased 4 percent.
Sales in the U.S. and Canada region decreased 5 percent from $2.1 billion
in the fourth quarter of 1999 to $2.0 billion due to lower production levels.
In Europe, revenues were down 10 percent to $1.0 billion, as a result of
weaker European currencies. Rest of the world region sales jumped $115
million to $352 million due to new programs.
Excluding non-recurring items, operating income for the quarter decreased
3 percent from $246.0 million in the fourth quarter of 1999 to
$238.4 million. Despite a more difficult than expected operating environment,
the Company generated more than $300 million in free cash flow during the
quarter.
For the full year, excluding non-recurring items, net income increased
9 percent to $276.6 million, and earnings per share grew by 12 percent to
$4.20 per share, compared with earnings of $254.5 million and $3.76 per share
in 1999.
Net sales for the full year ended December 31, 2000 rose 13 percent to a
record $14.1 billion from $12.4 billion in 1999. Sales in the U.S. and Canada
region increased $914 million to $8.6 billion. European sales increased
$205 million to $4.1 billion, and revenues in the Rest of the World region
increased $525 million to $1.3 billion.
Excluding non-recurring items, operating income for the full year 2000
advanced 18 percent to $835.4 million from $708.9 million in the prior year.
For the full year, the company generated $430 million in free cash flow.
Lear Corporation, a Fortune 150 company headquartered in Southfield,
Mich., USA, focuses on automotive interiors and electronics and is the world's
fifth-largest automotive supplier. Sales in 2000 were $14.1 billion. The
company's world-class products are designed, engineered and manufactured by
approximately 120,000 employees in over 300 facilities located in 33
countries. Information about Lear and its products is available on the
internet at http://www.lear.com .
This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from the anticipated results as a result of certain risks
and uncertainties, including but not limited to general economic conditions in
the markets in which Lear operates, fluctuations in the production of vehicles
for which the company is a supplier, labor disputes involving the company or
its significant customers, risks associated with conducting business in
foreign countries and other risks detailed from time to time in the company's
Securities and Exchange Commission filings.
Lear Corporation and Subsidiaries
Consolidated Statements of Income
(in millions, except per share data)
Fourth Quarter Ended
12/31/00 12/31/99
Net sales $3,362.2 $3,461.3
Cost of sales 2,975.9 3,054.9
Selling, general and administrative expenses 125.5 139.0
Restructuring and other credits - (1.8)
Amortization of goodwill 22.4 21.4
Operating income $238.4 $247.8
Interest expense 76.7 73.5
Other expense, net (a) 33.4 15.9
Income before provision for
national income taxes $128.3 $158.4
Provision for national income taxes 55.9 65.7
Net income $72.4 $92.7
Basic net income per share $1.13 $1.38
Diluted net income per share $1.12 $1.37
Diluted net income per share - from Operations $1.35 $1.36
Weighted average number of
diluted shares outstanding 64.7 67.7
Depreciation and amortization $97.0 $96.5
Capital expenditures $94.5 $134.4
Year Ended
12/31/00 12/31/99
Net sales $14,072.8 $12,428.8
Cost of sales 12,622.7 11,159.6
Selling, general and administrative expenses 524.8 483.7
Restructuring and other credits - (4.4)
Amortization of goodwill 89.9 76.6
Operating income $835.4 $713.3
Interest expense 316.2 235.1
Other expense, net (b) 47.2 47.1
Income before provision for
national income taxes $472.0 $431.1
Provision for national income taxes 197.3 174.0
Net income $274.7 $257.1
Basic net income per share $4.21 $3.84
Diluted net income per share $4.17 $3.80
Diluted net income per share - from Operations $4.20 $3.76
Weighted average number of
diluted shares outstanding 65.8 67.7
Depreciation and amortization $392.2 $340.9
Capital expenditures $322.3 $391.4
(a),(b) See additional disclosure
Lear Corporation and Subsidiaries
Consolidated Balance Sheets
(in millions)
12/31/00 12/31/99
ASSETS
Current:
Cash and cash equivalents $ 98.8 $106.9
Accounts receivable, net 1,639.0 1,866.1
Inventories 538.8 577.3
Recoverable customer engineering and tooling 273.2 304.9
Other 278.2 299.0
2,828.0 3,154.2
Long-Term:
PP&E, net 1,891.3 1,970.0
Goodwill, net 3,266.6 3,210.5
Other 389.6 382.9
5,547.5 5,563.4
Total Assets $8,375.5 $8,717.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Short-term borrowings $ 72.4 $103.6
Accounts payable and drafts 2,174.0 2,245.3
Accrued liabilities 969.6 1,074.9
Current portion of long-term debt 155.6 63.6
3,371.6 3,487.4
Long-Term:
Long-term debt 2,852.1 3,324.8
Other 551.0 440.1
3,403.1 3,764.9
Stockholders' Equity: 1,600.8 1,465.3
Total Liabilities and Stockholders' Equity $8,375.5 $8,717.6
ADDITIONAL DISCLOSURE
(a) In December 2000, the Company completed the sale of certain foreign
businesses for approximately $30.0 million, resulting in a loss of
$19.8 million ($14.9 million or $.23 per dilutive share after tax). The
businesses had external sales of approximately $60 million for the year ended
December 31, 2000.
(b) In addition to the transactions described above in (a), in June 2000,
the company sold its sealants and foam rubber business and recorded other
transactions, including charges related to the disposal of idle plant
equipment, resulting in a gain of $23.0 million ($13.0 million gain or $.20
per dilutive share after tax). For the year ended December 31, 2000, the
impact of all of these transactions result in a net gain of $3.2 million ($1.9
million loss or $.03 per dilutive share loss after tax). The lower tax rates
applicable to the loss transactions result in a net after tax loss. Going
forward, these transactions will result in an external sales decline of
approximately $125 million versus full year 2000.
Lear Corporation and Subsidiaries
Supplemental Data
(Unaudited, in millions, except content per vehicle data)
Fourth Quarter Ended
12/31/00 12/31/99
Net sales
U.S. and Canada $1,993 $2,098
Europe 1,017 1,126
Rest of World 352 237
Total $3,362 $3,461
Operating income before amortization $261 $267
Goodwill amortization (23) (21)
Operating income after amortization $238 $246
Content per vehicle - North America $555 $531
Content per vehicle - Western Europe $241 $257
Content per vehicle - South America $113 $92
Full Year Ended
12/31/00 12/31/99
Net sales
U.S. and Canada $8,610 $7,696
Europe 4,126 3,921
Rest of World 1,337 812
Total $14,073 $12,429
Operating income before amortization $925 $786
Goodwill amortization (90) (77)
Operating income after amortization $835 $709
Content per vehicle - North America $551 $478
Content per vehicle - Western Europe $237 $227
Content per vehicle - South America $102 $101
