Borg-Warner Automotive Reports Q2 Results
23 July 1997
Record Second Quarter For Borg-Warner Automotive: Income Up 36 Percent
CHICAGO, July 23 -- Borg-Warner Automotive, Inc.
today reported record second quarter income and revenue, the result of
continued global expansion and a focus on technology driven powertrain
applications.
Net income rose 36% to $29.6 million, or $1.25 per share, compared with
$21.8 million, or $.93 per share, reported in the second quarter of 1996.
Revenue was up 18% to $449.7 million compared with $381.8 million in the 1996
second quarter.
Net income for the first six months of 1997 was up 60% to $54.4 million,
or $2.30 per share, compared with $34.1 million, or $1.45 per share, in the
first six months of 1996. Revenue was up 22% to $893.2 million compared with
$730.7 million in 1996.
"We had another strong quarter, with earnings in line with our
expectations despite labor disruptions in the industry and softer car sales,"
said John F. Fiedler, chairman and chief executive officer of Borg-Warner
Automotive. "Comparable sales were up 13% and margins improved as our
operations continue to outperform the industry. We continued to benefit from
strength in the sport-utility and light truck markets, and from new business
in Europe."
Commenting on the remainder of the year, Fiedler said: "We expect our
full-year results to meet current expectations, despite the uncertainty of
second-half auto industry production schedules."
For the quarter, Powertrain Systems' sales increased 6% to $155.4 million,
driven by demand for transfer cases for sport-utility vehicles and light
trucks. If second quarter 1996 revenue from the divested manual transmission
business is excluded, sales were up 33%.
Automatic Transmission Systems' sales rose 4% to $134.6 million with
strong performance in Europe more than offsetting flat U.S. results. Sales
for Morse TEC were up 16% to $81.9 million on the strength of the MORSE
GEMINI(TM) Chain System, a new European timing chain system and 4WD transfer
case applications. Revenue from Air/Fluid Systems climbed 113% to $94.4
million, bolstered by acquisitions made during 1996.
Chicago-based Borg-Warner Automotive, Inc. is a leading supplier of highly
engineered components and systems primarily for automotive drivetrain
applications. The company operates manufacturing facilities in 12 countries
serving the North American, European and Asian automotive markets.
Certain statements contained in this press release are "forward looking
statements" as contemplated by the Private Securities Litigation Reform Act of
1995. Such forward looking statements are subject to risks and uncertainties,
which could cause actual results to differ materially from those projected or
implied in the forward looking statements. Factors which could effect whether
or not these forward looking statements are realized are described in the
company's Securities and Exchange Commission filings.
Borg-Warner Automotive, Inc.
Statement of Operations (Unaudited)
(millions of dollars, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
Net sales $449.7 $381.8 $893.2 $730.7
Cost of sales 346.9 297.5 692.6 575.0
Depreciation 17.7 17.5 34.5 35.9
Selling, general and administrative
expenses 34.0 29.2 70.0 60.0
Minority interest 0.5 0.5 1.2 1.2
Goodwill amortization 4.1 2.8 8.2 5.4
Equity in affiliate earnings
and other income (4.6) (2.8) (8.6) (6.9)
Earnings before interest expense and
finance charges and taxes 51.1 37.1 95.3 60.1
Interest expense and finance charges 6.3 3.5 12.8 7.0
Provision for income taxes 15.2 11.8 28.1 19.0
Net earnings $29.6 $21.8 $54.4 $34.1
Net earnings per share $1.25 $0.93 $2.30 $1.45
Average shares outstanding
(in thousands) 23,672 23,519 23,672 23,519
Borg-Warner Automotive, Inc.
Sales by Operating Group (Unaudited)
(millions of dollars, average
shares outstanding)
Second Second First Six First Six
Quarter Quarter % Months Months %
1997 1996 Change 1997 1996 Change
Powertrain Systems $155.4 $147.0 5.7% $310.6 $286.0 8.6%
Automatic Transmission
Systems 134.6 128.9 4.4% 262.4 248.2 5.7%
Morse TEC 81.9 70.7 15.8% 161.3 136.7 18.0%
Air/Fluid Systems 94.4 44.4 112.6% 189.9 78.2 142.8%
Subtotal 466.3 391.0 19.3% 924.2 749.1 23.4%
Eliminations (16.6) (9.2) 80.4% (31.0) (18.4) 68.5%
Total $449.7 $381.8 17.8% $893.2 $730.7 22.2%
SOURCE Borg-Warner Automotive, Inc.