Intier announces second quarter and year to date results
Intier announces second quarter and year to date results
AURORA, ON, Aug. 14 - Intier Automotive Inc.
today reported sales, profits and pro forma earnings per share
for the second quarter and six month period ended June 30, 2001.
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All results are reported in millions of U.S. dollars, except per share
figures and weighted average number of shares outstanding
THREE MONTHS ENDED SIX MONTHS ENDED
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June 30, June 30, June 30, June 30,
2001 2000 2001 2000
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Sales $ 851.1 $ 737.0 $ 1,672.9 $ 1,512.1
Operating income $ 40.8 $ 26.7 $ 64.1 $ 62.2
Net Income $ 18.4 $ 11.5 $ 25.2 $ 27.2
Pro forma diluted
earnings per
share (1) $ 0.40 $ 0.20 $ 0.57 $ 0.50
Pro forma weighted
average number of
shares outstanding
on a diluted basis
(millions) (1) 57.7 57.7 57.7 57.7
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(1) For more information see note 4 to the Second Quarter Consolidated
Financial Statements attached.
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Sales increased 15% to $851.1 million for the three month period ended
June 30, 2001 compared to $737.0 million for the three month period ended June
30, 2000. North American production sales grew 21% to $543.6 million in the
second quarter of 2001 compared to $448.9 million in the second quarter of
2000. North American average content per vehicle increased 36% to $125
compared to $92 for the second quarter of 2000. This increase was achieved at
a time when North American vehicle production volumes declined by
approximately 500,000 units to 4.3 million units for the three months ended
June 30, 2001 as compared to 4.8 million units for the three months ended June
30, 2000.
Western European production sales remained relatively unchanged at $233.2
million for the second quarter of 2001 compared to $233.3 million for the
second quarter of 2000. Western European average content per vehicle was
approximately $52 during both the second quarter of 2001 and 2000. The
weakening of the euro and British pound relative to the U.S. dollar adversely
impacted reported Western European production sales and average content per
vehicle. Excluding the negative impact of the foreign exchange translation,
average Western European content per vehicle grew by approximately 7%. Western
European vehicle production volumes remained stable at approximately 4.5
million units for the second quarter of 2001 and 2000.
Consolidated tooling and engineering sales for the three month period
ended June 30, 2001 grew by 36% to $74.3 million from $54.8 million for the
three month period ended June 30, 2000.
Operating income increased by 53% to $40.8 million for the three month
period ended June 30, 2001 compared to $26.7 million for the three month
period ended June 30, 2000. The improvement in operating income was
attributable to higher gross margin earned from the increased sales and higher
average content per vehicle.
The Company earned net income in the second quarter of fiscal 2001 of
$18.4 million. This represents a 60% increase over the second quarter fiscal
2000 net income of $11.5 million.
Pro forma diluted earnings per share was $0.40 for the three months ended
June 30, 2001 compared to $0.20 for the three months ended June 30, 2000. On a
year to date basis, pro forma diluted earnings per share was $0.57 for the six
months ended June 30, 2001 compared to $0.50 for the six months ended June 30,
2000.
During the second quarter of fiscal 2001 cash generated from operations
before changes in working capital was $39.7 million. Total investment
activities during the quarter were $15.2 million, including $14.3 million in
fixed assets additions.
The Company announced that on August 9, 2001 it completed the previously
announced public offering and sale in both Canada and the United States of
4,761,905 Class A Subordinate Voting Shares for net proceeds of approximately
$60 million.
Commenting on the second quarter results, Mr. Donald Walker, the
President and Chief Executive Officer of the Company, stated that "Management
is very excited with the creation of Intier as a separate public company and
look forward to working with our many customers as we develop and launch new
products for the market".
2001 OUTLOOK
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The Company's results are expected to be impacted by the conditions that
are affecting the automotive industry generally, including production cut-
backs, summer plant shut downs, OEM price concessions under long-term
arrangements, continued weakness of the euro and general economic uncertainty.
The Company expects full year fiscal 2001 average dollar content per
vehicle in North America to range between $115 and $130 and in Europe between
$50 and $60. Further, the Company is forecasting declines in fiscal 2001
production volumes of approximately 9% in North America and approximately 3%
in Europe relative to fiscal 2000 production volumes. Based on the declines in
production volumes, the increases in average dollar content per vehicle in
North America and Europe and anticipated tooling and engineering sales, the
Company expects its sales for the full year fiscal 2001 to range from
approximately $3.1 billion to approximately $3.3 billion, compared to fiscal
2000 sales of $3.0 billion.
Intier is a global full service supplier and integrator of automotive
interior and closure components, systems and modules. It directly supplies
most of the major automobile manufacturers in the world and employs
approximately 20,000 people at 62 manufacturing facilities, 17 product
development, engineering and testing centers and 13 sales offices in North
America, Europe, Brazil and China.
Intier will hold a conference call to discuss the second quarter results
and other developments on Thursday, August 16, 2001 at 9:30 a.m. EST. The
number to use for this call is (416) 641-6659. Please call in 10 minutes prior
to the conference call. The conference call will be chaired by Don Walker,
President and Chief Executive Officer and Michael McCarthy, Executive Vice-
President, Finance.
This press release may contain forward looking statements within the
meaning of applicable securities legislation. Such statements involve certain
risks, assumptions and uncertainties which may cause the Company's actual
future results and performance to be materially different from those expressed
or implied in these statements. These risks, assumptions and uncertainties
include, but are not limited to: industry cyclicality, including reductions or
increases in production volumes; trade and labour disruption; pricing
concessions and cost absorptions; product warranty, recall and product
liability costs; the Company's financial performance; changes in the economic
and competitive markets in which the Company competes; relationships with OEM
customers; customer price pressures; the Company's dependence on certain
vehicle programs; currency exposure; energy prices; and certain other risks,
assumptions and uncertainties disclosed in the Company's public filings. The
Company disclaims any intention and undertakes no obligation to update or
revise any forward-looking statements to reflect subsequent information,
events or circumstances or otherwise.
INTIER AUTOMOTIVE INC.
CONSOLIDATED BALANCE SHEETS
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(U.S. dollars in millions)
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As at As at
June 30, December 31,
2001 2000
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(unaudited)
ASSETS
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Current assets:
Cash and cash equivalents $ 69.6 $ 51.6
Accounts receivable 596.8 476.4
Inventories 175.3 223.1
Prepaid expenses and other 35.2 37.2
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876.9 788.3
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Fixed assets, net 409.7 416.6
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Goodwill, net 139.7 150.2
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Future tax assets 102.3 102.1
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Other assets 9.4 8.5
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$1,538.0 $1,465.7
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LIABILITIES AND MAGNA'S NET INVESTMENT
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Current liabilities:
Bank indebtedness $ 13.4 $ 9.9
Accounts payable 504.5 424.3
Accrued salaries and wages 45.9 44.8
Other accrued liabilities 32.2 28.0
Income taxes payable 9.2 13.5
Long-term debt due within one year 7.3 8.2
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612.5 528.7
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Long-term debt 31.1 32.2
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Other long-term liabilities 21.7 21.9
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Future tax liabilities 32.4 30.8
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Minority interest 1.8 1.9
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Magna's net investment 838.5 850.2
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$1,538.0 $ 1,465.7
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See accompanying notes
INTIER AUTOMOTIVE INC.
CONSOLIDATED STATEMENTS OF INCOME
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(U.S. dollars in millions)
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Three months ended Six months ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
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(unaudited) (unaudited)
Sales $ 851.1 $ 737.0 $1,672.9 $1,512.1
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Cost of goods sold 730.1 646.1 1,455.3 1,317.0
Depreciation and amortization 21.4 21.9 43.5 44.5
Selling, general and
administrative 42.7 36.0 79.7 72.4
Affiliation fees and
other charges 16.1 6.3 30.3 16.0
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Operating income 40.8 26.7 64.1 62.2
Interest expense, net 6.8 6.6 14.4 13.6
Equity loss - 0.1 0.4 0.4
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Income before income taxes
and minority interest 34.0 20.0 49.3 48.2
Income taxes 15.5 8.4 24.1 20.9
Minority interest 0.1 0.1 - 0.1
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Net income $ 18.4 $ 11.5 $ 25.2 $ 27.2
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See accompanying notes
INTIER AUTOMOTIVE INC.
CONSOLIDATED STATEMENTS OF CHANGES IN MAGNA'S NET INVESTMENT
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(U.S. dollars in millions)
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Three months ended Six months ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
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(unaudited) (unaudited)
Magna's net investment,
beginning of period $ 844.9 $ 806.0 $ 850.2 $ 781.8
Net income 18.4 11.5 25.2 27.2
Net (distribution to)
contribution by Magna (31.3) 7.2 (31.1) 24.8
Change in currency
translation adjustment 6.5 (8.2) (5.8) (17.3)
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Magna's net investment,
end of period $ 838.5 $ 816.5 $ 838.5 $ 816.5
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See accompanying notes
INTIER AUTOMOTIVE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(U.S. dollars in millions)
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Three months ended Six months ended
June 30, June 30, June 30, June 30,
2001 2000 2001 2000
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(unaudited) (unaudited)
Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 18.4 $ 11.5 $ 25.2 $ 27.2
Items not involving
current cash flows 21.3 19.1 41.7 38.2
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39.7 30.6 66.9 65.4
Changes in non-cash
working capital (75.9) (27.4) (0.4) (67.6)
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(36.2) 3.2 66.5 (2.2)
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INVESTMENT ACTIVITIES
Fixed asset additions (14.3) (23.3) (37.6) (47.8)
Increase in investments
and other assets (0.9) - (1.0) -
Proceeds from disposition
of fixed assets 1.3 0.6 1.8 1.6
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(13.9) (22.7) (36.8) (46.2)
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FINANCING ACTIVITIES
Increase (decrease) in
bank indebtedness 8.2 (3.6) 2.0 (4.1)
Repayments of long-term debt (0.9) (1.1) (6.1) (2.8)
Net (distribution to)
contribution by Magna (24.6) 14.0 (5.3) 36.6
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(17.3) 9.3 (9.4) 29.7
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Effect of exchange rate
changes on cash and
cash equivalents (0.6) (1.6) (2.3) (2.3)
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Net (decrease) increase in
cash and cash equivalents
during the period (68.0) (11.8) 18.0 (21.0)
Cash and cash equivalents,
beginning of period 137.6 98.3 51.6 107.5
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Cash and cash equivalents,
end of period $ 69.6 $ 86.5 $ 69.6 $ 86.5
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See accompanying notes
Intier Automotive Inc.
Notes to Consolidated Financial Statements
(all amounts in U.S. dollars unless otherwise noted and all tabular
amounts in millions, except per share figures)
(all amounts as at June 30, 2001 and for the three months and six
months ended June 30, 2001 and 2000 are unaudited)
1. BASIS OF PRESENTATION
The unaudited interim consolidated financial statements have been
prepared in U.S. dollars following the accounting policies as set out
in the fiscal 2000 annual combined financial statements.
The unaudited interim consolidated financial statements do not conform
in all respects to the requirements of generally accepted accounting
principles for annual financial statements. Accordingly, these
unaudited interim consolidated financial statements should be read in
conjunction with the fiscal 2000 annual combined financial statements.
In the opinion of management, the unaudited interim consolidated
financial statements reflect all adjustments, which consist only of
normal and recurring adjustments, necessary to present fairly the
financial position at June 30, 2001 and the results of operations and
cash flows for the three month and six month periods ended June 30,
2001 and 2000.
2. CYCLICALITY
Substantially all revenue is derived from sales to North American and
European facilities of the major automobile manufacturers. The
Company's operations are exposed to the cyclicality inherent in the
automotive industry and to changes in the economic and competitive
environments in which the Company operates. The Company is dependent
on continued relationships with the major automobile manufacturers.
3. USE OF ESTIMATES
The preparation of the unaudited interim consolidated financial
statements in conformity with generally accepted accounting principles
require management to make estimates and assumptions that affect the
amounts reported in the unaudited interim consolidated financial
statements and accompanying notes. Management believes that the
estimates utilized in preparing its unaudited interim consolidated
financial statements are reasonable and prudent; however, actual
results could differ from these estimates.
4. PRO FORMA EARNINGS PER SHARE FOR THE THREE MONTH AND SIX MONTH PERIODS
ENDED JUNE 30, 2001 AND 2000
The following pro forma adjustments, as described in the Supplemented
Prep Prospectus dated July 31, 2001, have been made to arrive at pro
forma earnings per share for the three month and six month periods
ended June 30, 2001 and 2000.
- adjustments to reflect the Company's new capital structure as
described in the Supplemented Prep Prospectus dated July 31, 2001
under "The 2001 Reorganization";
- adjustments that give effect to the payment of the revised
affiliation fees and social commitment fees pursuant to the
affiliation and social commitment agreements;
- the Company's President and Chief Executive Officer's cash
compensation arrangements; and
- the tax effect of the foregoing adjustments, where applicable, using
an assumed income tax rate of 40%.
Basic and diluted pro forma earnings per Class A Subordinate Voting or
Class B Share is based on the assumption that 42,751,938 Class B Shares
and 2,250,000 Convertible Series Preferred Shares were issued and
outstanding for the entire periods presented.
The following table summarizes the calculation of pro forma earnings per
share:
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Three months Six months
ended June 30 ended June 30
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2001 2000 2001 2000
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Net income attributable
to Class B Shares $ 18.4 $ 11.5 $ 25.2 $ 27.2
Pro forma adjustments
(net of tax effects):
Amortization of discount
on Convertible
Series Preferred Shares (2.7) (2.7) (5.3) (5.3)
Interest on debt due to Magna 4.5 4.0 8.5 8.1
Net adjustment to
affiliation fees
and other corporate charges - (4.0) (0.6) (6.4)
Dividends on Convertible
Series Preferred Shares (0.4) (0.4) (0.7) (0.7)
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Pro forma net income
attributable to
Class B Shares $ 19.8 $ 8.4 $ 27.1 $ 22.9
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Pro forma basic earnings
per Class B Share $ 0.46 $ 0.20 $ 0.63 $ 0.54
Pro forma diluted earnings per
Class B Share and Class A
Subordinate Voting Share $ 0.40 $ 0.20 $ 0.57 $ 0.50
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Average number of pro
forma shares
outstanding (in millions)
Basic 42.8 42.8 42.8 42.8
Diluted 57.7 57.7 57.7 57.7
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5. SEGMENTED INFORMATION
The Company's segmented results of operations are as follows:
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Three months ended Three months ended
June 30, 2001 June 30, 2000
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Income Income
Total (loss) Fixed Total (loss) Fixed
Sales before assets, Sales before assets,
income net income net
taxes taxes
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Interior
Systems
North
America $ 415.1 $ 31.9 $ 198.2 $ 348.6 $ 3.5 $ 192.6
Europe 239.9 (4.9) 137.5 213.4 2.5 135.5
Closure
Systems
North
America 166.1 11.6 35.3 139.7 14.4 37.5
Europe 31.5 0.5 38.7 36.8 (0.2) 37.2
Corporate,
other and
intersegment
eliminations (1.5) (5.1) (1.5) (0.2)
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Total
reportable
segments $ 851.1 $ 34.0 409.7 $ 737.0 $ 20.0 402.8
Current assets 876.9 751.6
Goodwill,
future
tax and
other assets 251.4 273.3
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Consolidated
total assets $1,538.0 $1,427.7
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Six months ended Six months ended
June 30, 2001 June 30, 2000
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Income Income
Total (loss) Fixed Total (loss) Fixed
Sales before assets, Sales before assets,
income net income net
taxes taxes
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Interior
Systems
North
America $ 824.2 $ 43.0 $ 198.2 $ 714.2 $ 15.4 $ 192.6
Europe 454.4 (9.9) 137.5 442.5 6.5 135.5
Closure Systems
North America 324.1 22.7 35.3 286.2 27.9 37.5
Europe 71.8 (1.2) 38.7 71.4 (1.2) 37.2
Corporate,
other and
intersegment
eliminations (1.6) (5.3) (2.2) (0.4)
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Total
reportable
segments $1,672.9 $ 49.3 409.7 $1,512.1 $ 48.2 402.8
Current assets 876.9 751.6
Goodwill,
future
tax and
other assets 251.4 273.3
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Consolidated
total assets $1,538.0 $1,427.7
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6. SUBSEQUENT EVENTS
These interim financial statements do not reflect the closing of the
Company's initial public offering which took place on August 9, 2001
and should be read in conjunction with the financial statements and
pro forma consolidated statements contained within the Company's
Supplemental Prep Prospectus dated July 31, 2001. Subsequent to the
completion of the Company's corporate re-organization and the closing
of the Company's initial public offering, the Company's share capital
will consist of 4,761,905 Class A Subordinate Voting Shares,
42,751,938 Class B Shares and 2,250,000 Convertible Series Preferred
Shares.