Lear Reports Record Fourth Quarter, Year End Results
3 February 1998
Lear Reports Record Fourth Quarter, Year End Results
SOUTHFIELD, Mich., Feb. 3 -- Lear Corporation
today reported record sales, operating income and net income for the 4th
quarter and year ended December 31, 1997.
Net income for the quarter ended December 31, 1997, increased 34 percent
to $68.6 million, or $1.00 per share, compared to $51.2 million, or $.75 per
share in the fourth quarter of 1996. Operating income advanced 26 percent to
$148.6 million, versus $117.8 million for 1996's fourth quarter. For the most
recent quarter, the Company had approximately half-a-million more shares
outstanding on a diluted weighted average basis.
Net income for the year ended December 31, 1997 increased 36 percent to
$207.2 million, or $3.04 per share, and excluding a $1.0 million third quarter
extraordinary charge resulting from the early retirement of debt, would have
increased to $208.2 million, or $3.05 per share. Net income and earnings per
share for 1996 were $151.9 million and $2.38 per share, respectively.
Operating income for 1997 advanced 28 percent to $481.1 million, from
$375.8 million in 1996. For all of 1997, the Company had approximately
4.4 million more shares outstanding on a diluted weighted average basis.
"We are very pleased with Lear's record-breaking fourth quarter and year
end results," stated Lear Corporation Chairman and Chief Executive Officer,
Kenneth L. Way. "The combination of our global market share growth, smooth
integration of strategic acquisitions and strong product and process
offerings, continue to result in record sales and earnings for Lear."
Net sales for the fourth quarter of 1997 rose 25 percent to $2.1 billion,
compared to $1.7 billion in 1996. The $424.7 million fourth quarter sales
increase is attributable to incremental revenues from Lear's recent
acquisitions -- which contributed $230.9 million -- as well as internal
growth. Sales in the 1997 fourth quarter were negatively impacted by
approximately $75 million due to foreign exchange translation.
Geographically, 55 percent of the fourth quarter's sales increase was
attributable to Lear's operations outside of the U.S. and Canada. Sales for
Lear's European operations were up 36 percent to $641.6 million, while sales
in Mexico and other world regions registered a 40 percent increase, rising to
$227.8 million. Sales in the U.S. and Canada advanced by 18 percent to
$1.3 billion.
For the year ended December 31, 1997, net sales rose 18 percent to
$7.3 billion, with incremental revenues from Lear's recent acquisitions
accounting for $764.1 million of the $1.1 billion sales increase. Excluding
the effects of foreign currency translation, the Company estimates that sales
for the year ended December 31, 1997 would have increased to $7.5 billion.
Geographically, Lear's operations outside of the U.S. and Canada accounted
for 44 percent of the sales increase in 1997. Sales in Europe advanced
20 percent to $1.9 billion, while sales in Mexico and other world regions rose
28 percent to $728.3 million. Sales in the U.S. and Canada increased by
15 percent to $4.7 billion.
Way continued, "Lear reached new levels of success in 1997. In addition
to our strong financial performance, we strengthened our market position
throughout the world and implemented a new global management structure.
Through the completion of four strategic acquisitions and one global joint
venture we expanded both our product offerings and market opportunities, while
we simultaneously reduced our debt-to-capitalization ratio to the lowest level
in our history. These accomplishments demonstrate our commitment to supplying
our global customers with high-quality, low-cost interior systems while
generating excellent financial results for our shareholders. With this focus,
we are more confident than ever that the value of Lear's interior solutions
will be second to none."
A Fortune 250 Company, Lear Corporation is one of the world's largest
automotive suppliers, with 1997 sales of $7.3 billion. The Company's
world-class products are designed, engineered and manufactured by more than
50,000 employees in over 170 facilities located in 25 countries. Information
about Lear and its products is available on the Internet at
http://www.lear.com.
This news 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
(IN MILLIONS, EXCEPT PER SHARE DATA)
Fourth Quarter
1997 1996
Sales $2,143.7 $1,719.0
Cost of sales 1,901.0 1,530.5
Selling, general & admin. expenses 82.4 61.1
Amortization of goodwill 11.7 9.6
Operating income 148.6 117.8
Interest expense 24.4 26.9
Other expense 7.4 5.0
Income before provision for
national income taxes 116.8 85.9
Provision for national income taxes 48.2 34.7
Net income $68.6 $51.2
Basic net income per share $1.03 $0.78
Diluted net income per share $1.00 $0.75
Wtd. avg. no. of diluted
shares outstanding 68.4 67.9
Depreciation and amortization $51.4 $35.0
Capital expenditures $74.8 $53.8
Twelve Months Ended
12/31/97 12/31/96
Sales $7,342.9 $6,249.1
Cost of sales 6,533.5 5,629.4
Selling, general & admin. expenses 286.9 210.3
Amortization of goodwill 41.4 33.6
Operating income 481.1 375.8
Interest expense 101.0 102.8
Other expense 28.8 19.6
Income before provision for
national income taxes 351.3 253.4
Provision for national income taxes 143.1 101.5
Net income before extraordinary item 208.2 151.9
Extraordinary item - debt retirement 1.0 ----
Net income $207.2 $151.9
Basic net income per share
before extraordinary item $3.14 $2.51
Basic net income per share
after extraordinary item $3.13 $2.51
Diluted net income per share
before extraordinary item $3.05 $2.38
Diluted net income per share
after extraordinary item $3.04 $2.38
Wtd. avg. no. of diluted
shares outstanding 68.2 63.8
Depreciation and amortization $184.4 $142.3
Capital expenditures $187.9 $153.8
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ IN MILLIONS)
ASSETS 12/31/97 12/31/96
CURRENT ASSETS:
Cash and cash equivalents $ 12.9 $ 26.0
Accounts receivable, net 1,065.8 909.6
Inventories 231.4 200.0
Other 304.8 211.8
1,614.9 1,347.4
Property, plant and equipment, net 939.1 866.3
Goodwill, net 1,692.3 1,448.2
Other 212.8 154.9
TOTAL ASSETS $4,459.1 $ 3,816.8
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 37.9 $ 10.3
Accounts payable 1,186.5 960.5
Accrued liabilities 620.5 520.2
Current portion of long-term debt 9.1 8.3
1,854.0 1,499.3
LONG-TERM LIABILITIES:
Deferred national income taxes 61.7 49.6
Long-term debt 1,063.1 1,054.8
Other 273.3 194.4
1,398.1 1,298.8
STOCKHOLDERS' EQUITY 1,207.0 1,018.7
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $4,459.1 $3,816.8
SOURCE Lear Corporation