Intermet Reports Record First Quarter
16 April 1998
Intermet Reports Record First Quarter
TROY, Mich., April 16 -- Intermet Corporation
today reported record first quarter sales of $224 million and a net income of
$11.3 million, also a first quarter record. This marks the eighth consecutive
quarterly sales increase year-over-year for Intermet. Net income was up 2.9%
over the same quarter in 1997. Basic and diluted earnings per share were
$0.44 and $0.43 respectively, slightly better than 1997 first quarter record
earnings.
Sales rose 7%, or $15 million, over 1997 first quarter results reflecting
increased sales from the company's iron foundry operations as well as $7
million in revenue from IWESA GmbH, a machining joint venture in Germany,
which was previously unconsolidated. The 5% higher foundry sales were driven
primarily by an overall increase in demand plus new product introductions or
ramp ups for the Ford PHN131, Mercedes SUV, Dodge Durango, Honda Accord and
Chrysler LH programs.
Intermet's board of directors approved a quarterly dividend of $0.04 per
share, payable on June 30, 1998 to shareholders of record on June 1, 1998.
Intermet enjoyed strong gross margins; however, these margins were lowered
almost 0.9% by IWESA. IWESA, of which Intermet said it reluctantly took
management control in 1997, remains distressed. Intermet added that it
continues to work diligently with customers and lenders to attempt to
restructure this debt-laden company.
Commenting on the company's quarterly results, John Doddridge, Intermet's
chairman and chief executive officer, said, "The positive numbers indicate a
continuing strong market for Intermet's iron foundry operations, with several
enjoying record shipments. Increases in demand in the U.S. for sport utility
vehicles and new business from the Ford PHN131 and Chrysler LH programs
underpin the strong showing from our foundry group. The economic climate has
continued steady in the U.S. and remains very strong in Europe. Solid demand
for trucks in Europe has translated into record results for our German
foundry."
Doddridge continued: "With the change to new General Managers in the first
quarter at our Alexander City and Ironton plants, we have seen significant
progress in improving their operations. This first quarter gives us good
momentum for the rest of the year and provides us with improvement
opportunities. We expect the automotive industry to continue at its current
pace in 1998 and 1999, but we are taking appropriate and prudent steps in
balancing capacity to sales should there be any slight downturn going into
2000."
Intermet also reported that it terminated negotiations to buy POLCAST Sp.
z o.o. in Poland. "After almost two years of work on this project," said
Doddridge, "the obstacles became insurmountable and we concluded all further
discussions on this matter. But we clearly consider Europe a growth market
and are pursuing opportunities there. We hope to have additional production
capacity in Europe before the middle of 1998."
With headquarters in Troy, Michigan, Intermet Corporation and its
subsidiaries design and manufacture precision iron and aluminum cast
components for automotive and industrial equipment manufacturers worldwide,
produce precision machined components, cranes and specialty service vehicles,
and provide custom coating applications. Intermet has more than 6,500
employees at twenty-three operating locations in North America and Europe.
Certain statements included in this news release are "forward-looking"
within the meaning of the Private Securities Litigation Reform Act of 1995
(the "Act"), and are made in good faith by Intermet pursuant to the Act's
"safe harbor" provisions. Forward-looking statements include information
concerning possible or assumed future risks and may include words such as
"believes," "expects," "anticipates," or similar expressions. Such forward-
looking statements are not guarantees of future performance, and may involve
known and unknown risks, uncertainties and other factors that could cause
actual results to differ materially from those expressed or implied. Risks
and uncertainties include, without limitation, global and regional economic
conditions, business conditions in the overall automotive industry, and the
cost, timing and success of the company's acquisition/divestiture program.
They also include other factors discussed herein and those detailed from time
to time in the company's Securities and Exchange Commission filings.
Intermet Corporation Condensed Consolidated Income Statements
(in thousands, except per share data)
Three Months Ended (unaudited)
March 31, March 31,
1998 1997
Net sales $224,033 $209,491
Cost of sales 194,058 181,886
Gross profit 29,975 27,605
Operating expenses 7,266 6,970
Operating profit 22,709 20,635
Other expense, net 3,139 2,927
Income before income taxes
and minority interest 19,570 17,708
Provision for income taxes 8,606 6,757
Income before minority
interest 10,964 10,951
Minority interest 307 -
Net income $11,271 $10,951
Earnings per share
(basic) $0.44 $0.43
(diluted) $0.43 $0.43
Weighted average
shares outstanding
(basic) 25,404 25,178
(diluted) 25,952 25,679
Intermet Corporation Condensed Consolidated Balance Sheets (in thousands)
March 31, December 31,
1998 1997
(unaudited)
Assets:
Cash and cash equivalents $6,066 $7,022
Other current assets 204,950 186,260
Property, plant and
equipment (net) 227,292 241,899
Other noncurrent assets 111,006 103,624
Total assets $549,314 $538,805
Liabilities and shareholders' equity:
Current liabilities $137,160 $135,954
Long-term debt 165,143 167,295
Other long-term liabilities 56,605 57,791
Total liabilities 358,908 361,040
Minority interest 1,688 2,337
Shareholders' equity 188,718 175,428
Total liabilities and
shareholders' equity $549,314 $538,805
SOURCE Intermet Corporation