Tesma Announces Fiscal 1998 First Quarter Results
3 December 1997
Tesma Announces Fiscal 1998 First Quarter Results
CONCORD, Ont., Dec. 3 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMAF) today announced first quarter sales, profits and earnings per
share for the period ended October 31, 1997.
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Three Months Ended
October 31
1997 1996
Sales $153.4 $136.3
Operating income $ 16.1 $ 11.9
Net income $ 3.5 $ 6.7
Basic earnings per share $ 0.13 $ 0.35
Basic earnings per share
(excluding non-recurring item) $ 0.38 $ 0.35
Fully diluted earnings per share $ 0.13 $ 0.30
Fully diluted earnings per share
(excluding non-recurring item) $ 0.33 $ 0.30
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All results are reported in millions of Canadian dollars, except per share
figures.
Sales for the first quarter of fiscal 1998 were a record $153.4 million,
an increase of 13% over the prior year. Major contributing factors to this
growth were the 4% increase in North American vehicle production volumes,
increased North American and European content per vehicle, the acquisition of
Eralmetall GmbH on January 31, 1997, and continued new product launches.
Operating income increased 35% to $16.1 million for the first quarter of
fiscal 1998 compared to a year ago. Higher sales and improved operating
performance at several manufacturing divisions have resulted in better
capacity utilization. A provision of $9.1 million, representing the present
and future costs of the previously disclosed patent litigation settlement
agreement, has been booked in the first quarter. As a result of this one-time
provision, income before income taxes was $7.0 million, a decline of $4.9
million from $11.9 million in the year earlier period.
Reported fully diluted earnings per share decreased from $0.30 to $0.13
for the first quarter of fiscal 1998. Excluding the effect of the litigation
settlement, fully diluted earnings per Class A Subordinate Voting or Class B
Share would have been $0.33 in the first quarter, a 10% increase over the
prior year.
Cash provided from operations was $7.9 million for the quarter, a decline
of $3.2 million over fiscal 1997. This decline was primarily the result of
lower net income. Net investment activities in the quarter included $13.4
million for the purchase of fixed and other assets as well as $9.9 million for
plant and property.
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 first quarter of fiscal 1998 of $0.05 per share on the Class
A Subordinate Voting and Class B Shares payable on January 15, 1998 to
shareholders of record on December 29, 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 2,700
employees in 18 manufacturing facilities in North America and Europe.
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands, except
per share figures) (Unaudited)
THREE MONTHS ENDED
October 31
1997 1996
Sales $153,429 $136,306
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Cost of goods sold 118,527 105,828
Depreciation and amortization 5,428 4,354
Selling, general and administration 11,295 10,618
Interest (net) (206) 72
Amortization of discount on Convertible
Series Preferred Shares 331 769
Affiliation fees and other charges 1,926 2,791
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16,128 11,874
Litigation settlement 9,132 -
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Income before income taxes 6,996 11,874
Income taxes 3,525 5,151
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Net income for the period 3,471 6,723
Dividends on Convertible Series Preferred
Shares (net of return of capital) (579) (475)
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Net income attributable to Class A
Subordinate Voting Shares and Class B Shares 2,892 6,248
Retained earnings, beginning of period 55,721 34,952
Dividends on Class A Subordinate Voting
Shares and Class B Shares (1,142) (897)
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Retained earnings, end of period $57,471 $ 40,303
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----------------------------------------------------------------------
Earnings per Class A Subordinate Voting Share
or Class B Share
Basic $0.13 $0.35
Fully diluted $0.13 $0.30
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----------------------------------------------------------------------
Average number of Class A Subordinate
Voting Shares and Class B Shares outstanding
(in millions)
Basic 22.8 18.0
Fully diluted 30.0 25.4
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED
October 31
1997 1996
CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES
Net income $ 3,471 $ 6,723
Items not involving current cash flows 4,436 4,389
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7,907 11,112
Changes in non-cash working capital (2,573) (9,767)
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5,334 1,345
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INVESTMENT ACTIVITIES
Fixed asset additions (23,134) (11,963)
Increase in investments and other (584) (368)
Proceeds from disposition of fixed
assets and other 373 362
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(23,345) (11,969)
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FINANCING ACTIVITIES
Repayment of notes receivable from employees 129 137
Increase (decrease) in bank indebtedness (609) 310
Issues of long-term debt 562 3
Repayments of long-term debt (1,389) (331)
Issuance of Class A Subordinate Voting Shares - 1,687
Dividends on Class A Subordinate
Voting Shares and Class B Shares (1,142) (897)
Dividends on Convertible Series
Preferred Shares (910) (1,147)
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(3,359) (238)
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Decrease in cash during the period (21,370) (10,862)
Cash, beginning of period 75,810 35,264
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Cash, end of period $54,440 $24,402
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TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
October 31, July 31,
1997 1997
ASSETS
Current
Cash $ 54,440 $ 75,810
Accounts receivable 89,087 74,039
Inventories 47,994 42,918
Prepaid expenses and other 4,962 6,895
Income taxes receivable 258 1,420
Accounts receivable from related companies 1,803 1,638
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198,544 202,720
Investments 1,132 1,141
Fixed assets 158,217 138,442
Other assets 8,276 7,192
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$366,169 $349,495
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 6,859 $ 7,469
Accounts payable 44,258 35,118
Accrued salaries and wages 13,516 14,448
Other accrued liabilities 26,859 20,314
Accounts payable to related companies 1,588 2,061
Long-term debt due within one year 4,639 4,549
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97,719 83,959
Long-term debt 13,974 13,358
Deferred income taxes 17,862 20,050
Convertible Series Preferred Shares 57,528 57,197
SHAREHOLDERS' EQUITY
Convertible Series Preferred Shares 2,265 2,596
Class A Subordinate Voting Shares 116,413 116,413
Class B Shares 2,583 2,583
Retained earnings 57,471 55,721
Currency translation adjustment 354 (2,382)
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179,086 174,931
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$366,169 $349,495
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SOURCE Tesma International Inc.