Donnelly Announces Record Twelve Month Net
Earnings From Operations
HOLLAND, Mich., Feb. 13 Donnelly Corporation
today announced record twelve-month net earnings from operations of $1.86 per
share for the 2000 calendar year compared to $1.76 for 1999. Sales for the
current period were $857 million, 8 percent higher than the prior year after
adjusting for Lear Donnelly Overhead Systems sales and foreign exchange rate
fluctuations.
Reported net earnings for the 2000 calendar year were $18.5 million, or
$1.81 per share, including one-time adjustments. Reported net earnings for
the 1999 calendar year of $2.88 per share, versus net operating earnings of
$1.76, were positively impacted by the one-time gain on Donnelly's sale of its
ownership in Lear Donnelly Overhead Systems.
Sales for the fourth quarter were $200 million, 2 percent higher than
sales posted for the year earlier period after adjusting for foreign exchange
rate fluctuations.
Net operating earnings for the fourth quarter were $4.4 million, or $0.43
per share, compared to $5.3 million, or $0.51 per share, in the year earlier
period.
Reported net earnings for the fourth quarter of $3.9 million, or $0.38 per
share, included three one-time adjustments that resulted in a $0.5 million, or
$0.05 per share, reduction in net earnings for the period:
* A $0.22 per share write-down of the German deferred tax asset
associated with the reduction of the German corporate tax rates.
* A $0.15 per share return-to-income from a reduction of the European
restructuring reserve in accordance with Generally Accepted Accounting
Principles (GAAP).
* A $0.02 per share gain on the sale of Donnelly's 17.1 percent interest
in KAM Truck Components, Inc., a manufacturer of heavy truck mirrors and a
non-core product segment for Donnelly.
The prior year fourth quarter reported net earnings of $8.1 million, or
$0.80 per share, included a one-time gain of $2.9 million, or $0.29 per share,
which was a deferred gain from the sale of Donnelly's stake in Lear Donnelly
Overhead Systems.
Donnelly delivered the second best fourth quarter in its history in spite
of a slowdown of customer production schedules and high launch related costs
compared to historic fourth quarter levels.
"This past year's record profit was a result of Donnelly's focus on its
core business, an aggressive pursuit of new business opportunities and keeping
a sharp eye on expense control," said Chairman and Chief Executive Officer
Dwane Baumgardner.
"The successful launch of several components (electrochromic mirrors, rear
window and door handles) on the new GM compact sport utility platform provides
an excellent example of our potential growth opportunities," Baumgardner
continued. "This is now our highest content vehicle and we are pleased that
this is a popular high volume platform."
"Donnelly has a strong global presence. We supply every major auto
manufacturer in the world through a worldwide manufacturing and distribution
system. With the recent introduction of improved electrochromic technology,
the positioning of our company as a leader in advanced electronic vision
systems and a product focus on exterior systems -- we are well positioned to
support the continued growth of our business," Baumgardner concluded.
Through its electronics and vision products, Donnelly is a technology-
driven, customer-focused, growth-oriented supplier to every major automotive
manufacturer in the world. The Company has been based in Holland, Michigan
since 1905, and today has approximately 6,100 employees in 12 countries
worldwide. Donnelly has been named by the Society of Automotive Engineers as
a model company in lean manufacturing practices, and was recognized by
Automotive Industries magazine as one of the "Best of the Best" suppliers of
interior and electronic systems. In addition, Donnelly is nationally
recognized as a leader in the application of participative management
principles and systems. More information on Donnelly is available at the
company's site on the World Wide Web, at http://www.donnelly.com .
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Investors are
cautioned that any current expectations of the Company, or its management, are
not guarantees of future performance and involve risk and uncertainties.
Actual results may differ materially from those in forward-looking statements
as a result of various factors including, but not limited to (a) general
economic and currency conditions in the markets in which the Company operates;
(b) fluctuation in worldwide or regional automobile and light truck
production; (c) changes in practices and/or policies of the Company's
significant customers; (d) human resource constraints which could impede
changes in Europe; and (e) other risks and uncertainties.
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended Twelve Months Ended
December 31, December 31, December 31, December 31,
In thousands, 2000 1999 2000 1999
except share data
Net sales $199,899 $ 212,724 $ 857,479 $ 897,914
Cost of sales 168,325 177,638 720,503 760,890
Gross profit 31,574 35,086 136,976 137,024
Operating expenses:
Selling, general and
administrative 19,341 18,473 79,442 79,933
Research and development 8,288 8,643 35,179 31,617
Restructuring and
other charges (3,796) - (3,796) 8,777
Total operating
expenses
23,833 27,116 110,825 120,327
Operating income 7,741 7,970 26,151 16,697
Non-operating
(income) expenses:
Interest expense 1,705 1,442 7,660 6,551
Gain on sale of
equity investment (352) (4,386) (352) (23,588)
Other income, net (1,318) (392) (4,796) (3,821)
Non-operating (income)
expenses 35 (3,336) 2,512 (20,858)
Income before taxes
on income 7,706 11,306 23,639 37,555
Taxes on income 4,012 3,679 7,593 11,766
Income before minority
interest and equity
earnings 3,694 7,627 16,046 25,789
Minority interest
in net (earnings)
losses of subsidiaries (37) 318 1,175 4,149
Equity in earnings of
affiliated companies 257 163 1,235 234
Income before cumulative
effect of change in
accounting principle 3,914 8,108 18,456 30,172
Cumulative effect of
adopting SOP 98-5 - - - (1,010)
Net income $3,914 $8,108 $18,456 $29,162
Per share of common stock:
Basic EPS
Income before
cumulative effect
of change in accounting
principle $0.38 $0.80 $1.81 $2.98
Cumulative effect of
adopting SOP 98-5 - (0.10) - (0.10)
Net income $0.38 $0.70 $1.81 $2.88
Diluted EPS
Income before
cumulative effect
of change in
accounting
principle $0.38 $0.80 $1.81 $2.97
Cumulative effect of
adopting SOP 98-5 - (0.10) - (0.10)
Net income $0.38 $0.70 $1.81 $2.87
Cash dividends
declared $0.10 $0.10 $0.40 $0.40
Average common shares
outstanding 10,182,194 10,143,935 10,167,999 10,119,385
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
In thousands 2000 1999
ASSETS
Current assets:
Cash and cash equivalents $4,599 $4,153
Accounts receivable, net 83,219 80,605
Inventories 55,933 50,392
Prepaid expenses and other current assets 28,990 28,784
Total current assets 172,741 163,934
Net property, plant and equipment 212,134 198,386
Other assets 79,145 66,543
Total assets $464,020 $428,863
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 89,163 $ 92,098
Other current liabilities 39,727 46,483
Current maturities of long-term debt 90 94
Total current liabilities 128,980 138,675
Long-term debt, less current maturities 132,608 107,383
Deferred income taxes and other liabilities 66,298 58,059
Total liabilities 327,886 304,117
Minority interest 1,353 951
Shareholders' equity 134,781 123,795
Total liabilities and shareholders' equity $464,020 $428,863
