Lear Corporation Reports Q2 Results
22 July 1997
Lear Corporation Reports Record Second Quarter, Six Month Results
SOUTHFIELD, Mich., July 22 -- Lear Corporation
today reported record sales, operating income and net income for the second
quarter of fiscal 1997.
Net income for the quarter ended June 28, 1997 increased 22 percent to
$61.1 million, or $.89 per share, compared with earnings of $50.1 million or
$.83 per share, last year. Excluding the impact from the previously concluded
work stoppages at General Motors' Pontiac East assembly plant and Chrysler's
Mound Road engine plant, Lear estimates that net income per share would have
increased to $1.00 per share. Operating income for the 1997 second quarter
advanced 24 percent to $136.6 million, from $110.5 million in the second
quarter of 1996. For the current quarter, the Company had approximately 8.2
million more shares outstanding on a weighted average basis.
Commenting on the Company's financial performance, Kenneth L. Way,
Chairman and Chief Executive Officer of Lear Corporation stated, "We are
extremely pleased with our record second quarter results, and had it not been
for recent customer work stoppages, our operations could have posted even more
impressive gains. The $11 million increase in quarterly earnings reflects
solid contributions from both our North American and international operations.
Lear's growth continues to benefit from four key factors: favorable product
mix, geographic expansion and industry consolidation, increasing interior
content and our strong process and product breadth."
Net sales for the second quarter of 1997 rose 14 percent to $1.8 billion
from $1.6 billion last year. The Company estimates that second quarter net
sales would have increased to over $1.9 billion were it not for the
aforementioned work stoppages and the effect of foreign currency translation.
The increase in net sales is attributable to additional revenues from
acquisitions, which contributed $226 million, as well as internal growth.
Geographically, over 32 percent of the current quarter's $220.6 million
sales increase was attributable to Lear's operations outside of the U.S. and
Canada. 1997 second quarter sales in Europe increased 12 percent to $484.2
million, while sales in Mexico and other world regions increased 16 percent,
rising to $161.3 million, as compared to $139.1 million for the second quarter
of 1996. U.S. and Canada sales in the 1997 second quarter rose approximately
14 percent to $1.2 billion.
Net income for the six months ended June 28, 1997 increased 36 percent to
$103.0 million, or $1.51 per share, compared with earnings of $75.9 million,
or $1.26 per share last year. Excluding the impact from the aforementioned
work stoppages, the Company estimates that net income per share would have
increased to $1.62 per share. Operating income for the first six months of
1997 advanced 32 percent to $238.7 million, from $180.5 million in last year's
comparable period. For the first six months of 1997, the Company had
approximately 8.1 million more shares outstanding on a weighted average basis.
Net sales for the six months ended June 28, 1997 rose 18 percent to $3.6
billion from $3.0 billion. Excluding the effects of foreign currency
translation and the second quarter work stoppages, the Company estimates that
net sales for the six months ended June 28, 1997 would have increased to
approximately $3.7 billion. The increase in net sales is attributable to
additional revenues from acquisitions, which contributed $434 million, as well
as internal growth.
Geographically, approximately 27 percent of the sales increase for the
first six months of 1997 was attributable to Lear's operations outside of the
U.S. and Canada. For the first six months of 1997, European sales increased
10 percent to $899.3 million, while sales in Mexico and other world regions
rose approximately 26 percent to $308.6 million versus $245.4 million for the
first six months of 1996. U.S. and Canada sales for the first six months of
1997 increased approximately 20 percent to $2.4 billion.
Way continued, "Lear's performance continues to reflect our ability to
deliver industry leading automotive interior systems, while simultaneously
maintaining our position as a flexible, low-cost supplier. Our strategy of
expanding our capabilities and market position in the global automotive
interior arena should continue to drive Lear's long-term sales and earnings
growth. Upon the completion of our previously announced Keiper Car Seating
acquisition, we are confident that the addition of their premier seat systems
will serve to further this objective."
A Fortune 250 Company, Lear Corporation is one of the world's largest
automotive suppliers, with 1996 sales of $6.2 billion. The Company's world
class products are manufactured by more than 45,000 employees in over 140
facilities located in 22 countries.
Information about Lear and its products is available on the Internet at
http://www.lear.com.
This press 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 (UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE DATA)
Second Quarter
1997 1996
Sales $1,839.3 $1,618.7
Cost of sales 1,625.8 1,451.8
Selling, general & admin. expenses 67.2 49.0
Amortization of goodwill 9.7 7.4
Operating income 136.6 110.5
Interest expense 26.7 23.1
Other expense 7.3 3.9
Income before provision for
national income taxes 102.6 83.5
Provision for national income taxes 41.5 33.4
Net income $61.1 $50.1
Net income per share $0.89 $0.83
Wtd. avg. no. of fully diluted
shares outstanding 68.3 60.1
Depreciation and amortization $43.8 $34.5
Capital expenditures $42.5 $31.2
Six Months Ended
6/28/97 6/29/96
Sales $3,563.3 $3,024.5
Cost of sales 3,171.9 2,737.0
Selling, general & admin. expenses 133.3 92.3
Amortization of goodwill 19.4 14.7
Operating income 238.7 180.5
Interest expense 53.9 47.5
Other expense 12.8 7.0
Income before provision
for national income taxes 172.0 126.0
Provision for national income taxes 69.0 50.1
Net income $103.0 $75.9
Net income per share $1.51 $1.26
Wtd. avg. no. of fully diluted
shares outstanding 68.2 60.1
Depreciation and amortization $87.3 $67.7
Capital expenditures $75.1 $64.9
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ IN MILLIONS)
6/28/97 12/31/96
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $16.5 $26.0
Accounts receivable, net 1,102.6 909.6
Inventories 190.5 200.0
Other 217.5 211.8
1,527.1 1,347.4
LONG-TERM ASSETS:
Property, plant and equipment, net 868.4 866.3
Goodwill, net 1,452.8 1,448.2
Other 166.6 154.9
TOTAL ASSETS $4,014.9 $3,816.8
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $24.5 $10.3
Accounts payable 1,050.4 960.5
Accrued liabilities 601.7 520.2
Current portion of long-term debt 9.7 8.3
1,686.3 1,499.3
LONG-TERM LIABILITIES:
Deferred national income taxes 43.8 49.6
Long-term debt 994.1 1,054.8
Other 185.8 194.4
1,223.7 1,298.8
STOCKHOLDERS' EQUITY 1,104.9 1,018.7
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,014.9 $3,816.8
SOURCE Lear Corporation