Tesma Announces Fiscal 1997 Year End and Fourth Quarter Results
23 September 1997
Tesma Announces Fiscal 1997 Year End and Fourth Quarter Results
CONCORD, Ont., Sept. 23 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMAF) today announced fourth quarter and twelve months sales, profits
and earnings per share for the period ended July 31, 1997.
Twelve Months Ended Three Months Ended
July 31 July 31
1997 1996 1997 1996
(restated) (restated)
Sales $551.5 $455.6 $146.3 $116.5
Income before income taxes $ 45.7 $ 35.3 $ 9.5 $ 8.3
Net income $ 26.5 $ 19.5 $ 5.7 $ 4.9
Basic earnings per share $ 1.31 $ 1.03 $ 0.24 $ 0.25
Fully diluted earnings $ 1.13 $ 0.91 $ 0.23 $ 0.23
per share
All results are reported in millions of Canadian dollars, except per share
figures. The fiscal 1996 figures have been restated to reflect the retroactive
adoption of the CICA's financial instruments guidelines.
Sales for fiscal 1997 were a record $551.5 million, an increase of 21%
over the prior year despite unchanged North American vehicle production
volumes. Major contributing factors to this growth were Tesma's increased
production exports to customers in Europe, Asia, South America and Australia,
increased North American content per vehicle, the acquisition of Eralmetall
GmbH on January 31, 1997, and continued new product launches. (For the
quarter, reported sales of $146.3 million include $14.5 million of tooling
sales ($6.6 million in the fourth quarter of 1996)).
Net income was $26.5 million for the year, an increase of 36% or $7.0
million over the prior year. For the fourth quarter, Tesma's net income was
$5.7 million, an increase of 18% or $0.8 million over the fourth quarter of
fiscal 1996. Higher sales and improved operating performance at several
manufacturing divisions have resulted in better capacity utilization which,
combined with lower effective tax rates, have improved overall results.
However, legal and litigation costs, as well as operating losses incurred by
Eralmetall, offset a portion of these gains in the fourth quarter.
As a result of Tesma's higher net income, fully diluted earnings per share
increased 24% to $1.13 from $0.91 for fiscal 1997, and for the quarter were
unchanged at $0.23 versus a year ago. Fourth quarter earnings per share were
also affected by the increase in the weighted average fully diluted shares
outstanding to 28.6 million, up 13% from 25.2 million a year ago, as a result
of the Company's public offering of 4,680,000 Class A Subordinate Voting
Shares which closed on June 5, 1997.
Cash provided from operations was $53.3 million for the year, an
improvement of $13.6 million over fiscal 1996. This improvement was primarily
the result of higher net income and non-cash expenses. Net investment
activities totalled $49.8 million in fiscal 1997.
As announced previously, a verdict of willful infringement was returned
against the Company by a U.S. jury following a fuel cap patent infringement
claim filed by a competitor. A separate jury trial to determine damages is
scheduled to occur in October, 1997. The Company believes that its case
continues to have substantive merit and that legitimate grounds exist to
overturn the jury verdict on review or appeal. Because the final outcome is
uncertain and the potential effect on financial position non-determinable, no
provision has been recorded in the accounts of the Company at July 31, 1997.
The Tesma Board of Directors today declared, in addition to the quarterly
dividend on the 6.5% Convertible Series Preferred Shares, a quarterly dividend
in respect of the fourth quarter of fiscal 1997 of $0.05 per share on the
Class A Subordinate Voting and Class B Shares payable on October 31, 1997 to
shareholders of record on October 15, 1997.
Tesma is a global supplier of highly engineered powertrain, fueling and
cooling systems and components for the automotive industry. Tesma's strong
market presence and strategy for continuing growth results from its unique
focus on Innovation, Engineering and Performance. Tesma employs over 2,600
employees in 18 manufacturing facilities in North America and Europe.
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands, except
per share figures) (Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
July 31 July 31
1997 1996 1997 1996
(restated) (restated)
Sales $146,310 $116,476 $551,518 $455,580
-------------------------------------------------------------------------
Cost of goods sold 116,052 91,102 428,151 358,202
Depreciation and amortization 5,220 4,637 19,058 14,829
Selling, general and
administration 12,323 9,125 43,609 33,940
Interest (net) (67) 5 335 343
Amortization of discount on
Convertible Series Preferred Shares 716 761 3,052 2,988
Affiliation fees and other charges 2,575 2,528 11,596 9,991
-------------------------------------------------------------------------
Income before income taxes 9,491 8,318 45,717 35,287
Income taxes 3,757 3,444 19,239 15,792
-------------------------------------------------------------------------
Net income for the period 5,734 4,874 26,478 19,495
Dividends on Convertible Series
Preferred Shares (net of return
of capital) (463) (444) (1,864) (956)
-------------------------------------------------------------------------
Net income attributable to Class
A Subordinate Voting Shares and
Class B Shares 5,271 4,430 24,614 18,539
Retained earnings, beginning of
period 51,591 31,421 34,953 19,105
Dividends on Class A Subordinate
Voting Shares and Class B Shares (1,141) (898) (3,846) (2,691)
-------------------------------------------------------------------------
Retained earnings, end of period $55,721 $34,953 $55,721 $34,953
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per Class A Subordinate
Voting Share or Class B Share
Basic $0.24 $0.25 $1.31 $1.03
Fully diluted $0.23 $0.23 $1.13 $0.91
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of Class A
Subordinate Voting Shares and
Class B Shares outstanding
(in millions)
Basic 21.1 18.0 18.8 18.0
Fully diluted 28.6 25.2 26.6 25.1
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS TWELVE MONTHS
July 31 July 31
1997 1996 1997 1996
(restated) (restated)
CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES
Net income $ 5,734 $ 4,874 $ 26,478 $ 19,495
Items not involving current cash
flows 10,461 10,144 26,815 20,183
-------------------------------------------------------------------------
16,195 15,018 53,293 39,678
Changes in non-cash working
capital (6,700) 9,039 (22,386) (2,054)
-------------------------------------------------------------------------
9,495 24,057 30,907 37,624
-------------------------------------------------------------------------
INVESTMENT ACTIVITIES
Fixed asset additions (12,746) (8,624) (48,052) (29,175)
Increase in investments and other (273) (553) (1,802) (1,142)
Purchase of subsidiaries - - (2,549) -
Proceeds from disposition of
fixed assets and other 1,155 412 2,620 1,041
-------------------------------------------------------------------------
(11,864) (8,765) (49,783) (29,276)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of notes receivable
from employees 137 135 543 551
Increase (decrease) in bank
indebtedness 1,653 (636) (104) (3,272)
Issues of long-term debt 239 94 1,915 94
Repayments of long-term debt (1,494) (1,139) (3,300) (1,955)
Repayments of debt due to Magna - - - (9,944)
Conversion of Convertible Series
Preferred Shares (9,910) - (9,910) -
Issuance of Class A Subordinate
Voting Shares 77,049 (95) 78,799 (95)
Dividends on Class A Subordinate
Voting Shares and Class B Shares (1,141) (898) (3,846) (2,691)
Dividends on Convertible Series
Preferred Shares (1,234) (1,109) (4,675) (3,565)
-------------------------------------------------------------------------
65,299 (3,648) 59,422 (20,877)
-------------------------------------------------------------------------
Increase (decrease) in cash
during the period 62,930 11,644 40,546 (12,529)
Cash, beginning of period 12,880 23,620 35,264 47,793
-------------------------------------------------------------------------
Cash, end of period $ 75,810 $ 35,264 $ 75,810 $ 35,264
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
July 31, 1997 July 31, 1996
(restated)
ASSETS
Current
Cash $ 75,810 $ 35,264
Accounts receivable 74,039 57,429
Inventories 42,918 44,096
Prepaid expenses and other 6,895 4,654
Income taxes receivable 1,420
Accounts receivable from related companies 1,638 1,431
-------------------------------------------------------------------------
202,720 142,874
Investments 1,141 542
Fixed assets 138,442 107,078
Other assets 7,192 7,927
-------------------------------------------------------------------------
$349,495 $258,421
-------------------------------------------------------------------------
-------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 7,469 $ 6,623
Accounts payable 35,118 30,609
Accrued salaries and wages 14,448 11,362
Other accrued liabilities 20,314 15,919
Income taxes payable 2,798
Accounts payable to related companies 2,061 2,362
Long-term debt due within one year 4,549 3,310
-------------------------------------------------------------------------
83,959 72,983
Long-term debt 13,358 15,934
Deferred income taxes 20,050 22,019
Convertible Series Preferred Shares 57,197 64,055
SHAREHOLDERS' EQUITY
Convertible Series Preferred Shares 2,596 6,428
Class A Subordinate Voting Shares 116,413 36,593
Class B Shares 2,583 2,583
Retained earnings 55,721 34,953
Currency translation adjustment (2,382) 2,873
-------------------------------------------------------------------------
174,931 83,430
-------------------------------------------------------------------------
$349,495 $258,421
-------------------------------------------------------------------------
-------------------------------------------------------------------------
SOURCE Tesma International Inc.