Onex Reports First Quarter Results
TORONTO--May 9, 2002--Onex Corporation (TSX: OCX) today released its financial results for the first quarter ended March 31, 2002.
| -- | Revenues were $5.5 billion compared to $6.2 billion for first quarter 2001. |
| -- | Operating earnings were $265 million, down from $287 million. |
| -- | Net earnings from continuing operations were $22 million ($0.14 per share) compared to a loss of $13 million ($0.08 per share) in the first quarter of 2001. Net earnings in first quarter 2002 were $22 million compared to $16 million in the same quarter of 2001. |
| -- | Cash flow from operations increased to $312 million from $282 million for the first quarter of 2001. |
| -- | Assets totalled $22.8 billion and shareholders' equity was $2.0 billion as at March 31, 2002. |
"A number of our companies continue to be affected by slowing activity in their industries," said Gerald W. Schwartz, President and CEO of Onex Corporation. "The management teams at these companies adjusted operations and implemented strategies to improve the efficiency of their businesses. The positive result was higher net earnings and stronger cash flow from operations in the first quarter of 2002 compared to the quarter last year."
Lower consolidated revenues and operating earnings in the first quarter of 2002 were primarily due to the results at Celestica and Dura Automotive. Revenue declines at those companies more than offset what was otherwise healthy revenue growth achieved at ClientLogic and Radian.
"There were some significant achievements at Onex during the first quarter," said Mr. Schwartz. "We completed the acquisition of Loews Cineplex Entertainment following that company's emergence from bankruptcy. This was a year-long effort that resulted in Loews Cineplex now being a financially strong leader in the feature film exhibition industry. We see this as a terrific foundation for growth. As well, we exchanged our ownership in Lantic Sugar for trust units of the Rogers Sugar Income Fund. The combined Lantic Sugar-Rogers Sugar operations form an excellent platform for potential acquisitions."
Onex, the parent company, continues to be in a very strong financial position. Cash and near cash items at March 31, 2002 totalled approximately $1.8 billion and there is no debt at the parent company.
Effective January 1, 2002, Onex and its subsidiaries adopted new accounting standards for "Business Combinations" and "Goodwill and Other Intangible Assets". These new standards resulted in the discontinuation of amortization for all goodwill, which resulted in a lower amortization charge for the first quarter of 2002. Onex and its subsidiaries are required to assess, under new methodology, if goodwill is impaired at January 1, 2002. Any goodwill that is determined to be impaired will be charged against retained earnings at January 1, 2002. There are specific steps and time frames up to December 31, 2002 to complete and record this process. Based on preliminary information, the Company believes there will be a one-time charge to opening retained earnings at January 1, 2002 for the adoption of this new accounting standard and that amount could be meaningful.
Onex Corporation is a diversified company with annual consolidated revenues of approximately $24 billion and consolidated assets of approximately $23 billion. Onex is Canada's 4th largest company with global operations in service, manufacturing and technology industries. Its subsidiaries include Celestica, Inc., Loews Cineplex Entertainment, ClientLogic Corporation, Lantic Sugar Limited, Rogers Sugar Ltd., Dura Automotive Systems, Inc., J.L. French Automotive Castings, Inc., MAGNATRAX Corporation, InsLogic Corporation, Performance Logistics Group, Inc., Radian Communication Services Corporation and Galaxy Entertainment, Inc. Onex shares trade on the Toronto Stock Exchange under the stock symbol OCX.
Statements contained in this press release, which are not historical facts, are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that could cause actual results to be materially different from those anticipated in these forward-looking statements.
For further information: Ewout R. Heersink - (416) 362-7711
At 10:00 a.m. today, Onex will webcast live its Annual Shareholders Meeting in listen-only mode on its website, www.onex.com. Also, at 4:30 p.m. today, Onex will webcast a live conference call in listen-only mode to review the Company's First Quarter 2002 Results.
Consolidated Statements of Earnings
Three Months ended March 31
(unaudited)
(in millions of dollars except
per share amounts) 2002 2001
---------------------------------------------------------------
Revenues $ 5,480 $ 6,157
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Earnings Before the Undernoted Items $ 417 $ 387
Amortization of property, plant and
equipment (177) (139)
Amortization of goodwill,
intangible assets and deferred charges (39) (87)
Interest expense of operating companies (104) (111)
Interest and other income 25 39
Gains on shares of operating companies, net 3 1
-------------------
125 90
Acquisition, restructuring and other expenses (7) (15)
-------------------
Earnings before income taxes and
non-controlling interests 118 75
Provision for income taxes (19) (31)
-------------------
Earnings before non-controlling interests 99 44
Non-controlling interests of
operating companies (77) (57)
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Earnings (loss) from continuing operations 22 (13)
Earnings from discontinued operations - 29
-------------------
Net Earnings for the Period $ 22 $ 16
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Net Earnings (Loss) per
Subordinate Voting Share
Basic
Continuing Operations $ 0.14 $ (0.08)
Discontinued Operations $ - $ 0.18
Net Earnings $ 0.14 $ 0.10
Diluted
Continuing Operations $ 0.13 $ (0.08)
Discontinued Operations $ - $ 0.18
Net Earnings $ 0.13 $ 0.10