Magna Announces 1997 Fourth Quarter And Record Fiscal Year Results
22 September 1997
Magna Announces 1997 Fourth Quarter And Record Fiscal Year Results
MARKHAM, Ont., Sept. 22 /CNW/ - Magna International Inc. (TSE:MG.A, MG.B;
ME:MG.A; NYSE:MGA) today reported sales, profits and earnings per share for
the fourth quarter and fiscal year ended July 31, 1997.
------------------------------------------------------------------------
Years Ended Three Months Ended
July 31 July 31
1997 1996 1997 1996
(restated) (restated)
Sales $7691.8 $5856.2 $1971.4 $1659.0
Income before income taxes
and minority interest $ 849.5 $ 500.8 $ 200.1 $ 139.7
Net Income $ 603.4(1) $ 319.2 $ 142.0(2) $ 89.2
Fully diluted earnings
per share $ 7.74 $ 4.71 $ 1.80 $ 1.25
Excluding Other Income $ 5.50 $ 4.71 $ 1.32 $ 1.25
(1) Includes an aggregate $177.1 million gain on the sale of MST and TBCA
and on the issue/sale of shares by Tesma/Magna
(2) Includes a $38.4 million gain on the issue/sale of shares by
Tesma/Magna
All results are reported in millions of Canadian dollars, except per
share figures. In accordance with the CICA's new recommendations for the
presentation and disclosure of financial instruments, fiscal 1996 figures
have been restated
-------------------------------------------------------------------------
Sales for the fourth quarter and fiscal year 1997 were $1.97 billion and
$7.69 billion respectively, representing increases of 19% and 31% over the
comparable periods in fiscal 1996. The higher sales levels for fiscal 1997
reflect a 31% increase in North American content per vehicle over fiscal 1996,
a period in which North American vehicle production of 14.3 million vehicles
was essentially unchanged from the prior year, a 26% increase in European
production sales and a 39% increase in tooling sales.
Net income for the fiscal year 1997 was a record $603.4 million compared
to $319.2 million in fiscal 1996. During the second quarter of fiscal 1997,
the Company recognized a gain, net of tax, of $138.7 million on the sale of
MST and TBCA. In addition, the Company recorded a gain, net of tax, of $38.4
million on the issue of Tesma shares and related secondary market sale of
Tesma shares by Magna in the fourth quarter of fiscal 1997. Prior to the Tesma
share gain, net income for the fourth quarter was $103.6 million, an increase
of 16% over the same period in fiscal 1996.
Fully diluted earnings per share for the fourth quarter and fiscal year
1997 were $1.80 and $7.74 per share respectively compared to $1.25 and $4.71
per share for the comparable periods in fiscal 1996. Excluding the gain on the
sale of MST and TBCA and the Tesma share gain, fully diluted earnings per
share were $1.32 and $5.50 for the fourth quarter and fiscal year 1997.
In the fourth quarter of fiscal 1997, Magna continued to integrate four
recent acquisitions, Douglas & Lomason, Caradon, Naher and Tricom which
currently operate at lower gross margin percentages. Gross margin, as a
percentage of production sales was 19.9% in the fourth quarter compared to
20.5% in the comparable period in fiscal 1996. Excluding the impact of these
acquisitions, gross margins continued to improve in both North American and
European operations.
During fiscal 1997, cash generated from operations was $689.9 million.
Net investment activities during fiscal 1997 were $1.24 billion, including
$722.5 million in fixed assets and $466.8 million in investments, principally
for the acquisitions of Douglas & Lomason, Caradon, Naher, Tricom and the
remaining minority interest in Magna's Atoma International Inc. subsidiary.
The Board of Directors declared a dividend of $0.30 per share with
respect to the Class A Subordinate Voting Shares and Class B Shares for the
quarter ended July 31, 1997 payable on October 15, 1997 to shareholders of
record on September 30, 1997.
Magna, one of the most diversified automotive suppliers in the world,
designs, develops and manufactures automotive systems, assemblies and
components primarily for sale to original equipment manufacturers of cars and
light trucks in North America, Mexico and Europe. Magna's products include
exterior decorative systems, interior products including seating systems, door
and other panels, stamped and welded metal parts and assemblies, sunroofs,
electro-mechanical devices and assemblies, various engine, powertrain and
fueling and cooling components, and a variety of plastic parts, including body
panels and fascias.
Magna has over 36,000 employees in 128 manufacturing operations and 20
product development and engineering centres in 11 countries.
MAGNA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
------------------------------------------------------------------------
(See note)
(Canadian dollars in millions)
July 31 July 31
1997 1996
--------- -------
(restated)
ASSETS
Current assets:
Cash $ 878.8 $1,089.8
Accounts receivable 1,165.0 927.2
Inventories 669.3 526.1
Prepaid expenses 34.9 24.3
-------------------------------------------------------------------------
2,748.0 2,567.4
-------------------------------------------------------------------------
Investments 99.9 82.6
-------------------------------------------------------------------------
Fixed assets (net) 2,071.1 1,509.5
-------------------------------------------------------------------------
Goodwill 297.8 126.5
-------------------------------------------------------------------------
Other assets 111.9 91.3
-------------------------------------------------------------------------
$5,328.7 $4,377.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
-------------------------------------------------------------------------
Current liabilities:
Bank indebtedness $ 30.3 $ 20.9
Accounts payable and other accruals 1,535.8 1,005.2
Long-term debt due within one year 14.2 32.0
-------------------------------------------------------------------------
1,580.3 1,058.1
-------------------------------------------------------------------------
Long-term debt 80.8 95.9
-------------------------------------------------------------------------
Debentures' interest obligation 168.1 188.1
-------------------------------------------------------------------------
Deferred income taxes 120.0 123.5
-------------------------------------------------------------------------
Minority interest 113.5 154.7
-------------------------------------------------------------------------
Shareholders' equity:
Capital stock issued and outstanding -
Class A Subordinate Voting Shares
(issued: 70,084,554; July 31, 1996
- 68,506,610) 1,568.0 1,463.1
Class B Shares
(convertible into Class A Subordinate
Voting Shares)
(issued: 1,098,309) 1.3 1.3
Other paid-in capital 457.8 430.1
Retained earnings 1,302.3 798.3
Currency translation adjustment (63.4) 64.2
-------------------------------------------------------------------------
3,266.0 2,757.0
-------------------------------------------------------------------------
$5,328.7 $4,377.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
------------------------------------------------------------------------
(See note) (Canadian dollars
in millions, except per
share figures) Years Ended Three Months Ended
------------ ------------------
(Unaudited)
July 31 July 31
1997 1996 1997 1996
---- ---- ---- ----
(restated) (restated)
-------------------------------------------------------------------------
Sales $7,691.8 $5,856.2 $1,971.4 $1,659.0
-------------------------------------------------------------------------
Cost of goods sold 6,366.2 4,811.2 1,640.2 1,371.7
Depreciation and amortization 232.1 190.3 61.7 50.2
Selling, general and
administrative 481.7 377.8 121.3 103.6
Interest income (16.5) (4.3) (3.5) (1.1)
Equity income (31.6) (19.6) (7.5) (5.1)
-------------------------------------------------------------------------
Operating income 659.9 500.8 159.2 139.7
Other income 189.6 40.9
-------------------------------------------------------------------------
Income before income taxes
and minority interest 849.5 500.8 200.1 139.7
Income taxes 232.5 162.3 55.4 45.4
Minority interest 13.6 19.3 2.7 5.1
-------------------------------------------------------------------------
Net income 603.4 319.2 142.0 89.2
Retained earnings,
beginning of period 798.3 561.8 1,186.7 732.5
Accretion of other paid-in
capital (19.5) (14.5) (5.1) (4.6)
Dividends on Class A Subordinate
Voting Shares and Class B Shares (79.9) (68.2) (21.3) (18.8)
-------------------------------------------------------------------------
Retained earnings, end
of period $1,302.3 $ 798.3 $1,302.3 $ 798.3
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per Class A Subordinate
Voting Share or Class B Share:
Basic $ 8.30 $ 4.90 $ 1.92 $ 1.32
Fully diluted $ 7.74 $ 4.71 $ 1.80 $ 1.25
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Cash dividends paid per
Class A Subordinate Voting
Share or Class B Share $ 1.14 $ 1.08 $ 0.30 $ 0.27
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of Class A
Subordinate Voting Shares and
Class B Shares outstanding
during the period (in millions):
Basic 70.4 62.2 71.2 64.3
Fully diluted 79.3 69.6 80.1 73.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------------------------------------------
(See note) Years Ended Three Months Ended
(Canadian dollars in millions) -------------- ------------------
(Unaudited)
July 31 July 31
1997 1996 1997 1996
---- ---- ---- ----
(restated) (restated)
-------------------------------------------------------------------------
Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 603.4 $ 319.2 $ 142.0 $ 89.2
Items not involving current
cash flows 86.5 219.2 45.8 57.2
-------------------------------------------------------------------------
689.9 538.4 187.8 146.4
Changes in non-cash working
capital (5.7) (229.6) 37.1 78.7
-------------------------------------------------------------------------
684.2 308.8 224.9 225.1
-------------------------------------------------------------------------
INVESTMENT ACTIVITIES
Fixed asset additions (722.5) (330.7) (248.3) (77.0)
Purchase of subsidiaries (466.8) (147.5) (119.9) (34.1)
Increase in investments
and other (49.6) (23.1) (23.0) 9.0
Proceeds from disposition
of fixed assets and other 401.7 19.9 24.2 3.7
-------------------------------------------------------------------------
(837.2) (481.4) (367.0) (98.4)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Issue of Class A Subordinate
Voting Shares 104.9 506.3 506.0
Issue of convertible
subordinated debentures 454.1
Issue of shares by subsidiary 68.8 68.8
Net (repayment) issue of debt (121.9) 5.4 (63.0) (12.5)
Repayment of debentures'
interest obligation (20.3) (11.8) (2.6) (2.4)
Repayment of notes payable (35.5)
Conversion of convertible
subordinated debentures (0.2)
Dividends paid to minority
interests (9.6) (1.6) (0.5) (0.8)
Dividends (79.9) (68.2) (21.3) (18.8)
-------------------------------------------------------------------------
(58.0) 848.5 (18.6) 471.5
-------------------------------------------------------------------------
Net (decrease) increase in cash (211.0) 675.9 (160.7) 598.2
Cash, beginning of period 1,089.8 413.9 1,039.5 491.6
-------------------------------------------------------------------------
Cash, end of period $ 878.8 $1,089.8 $ 878.8 $1,089.8
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Note: In accordance with the Canadian Institute of Chartered Accountants
new recommendations for the presentation and disclosure of
financial instruments, fiscal 1996 figures have been restated.
SOURCE Magna International Inc.