Magna Announces Record 1998 Third Quarter Operating Results
10 June 1998
Magna Announces Record 1998 Third Quarter Operating Results
AURORA, Ont., June 10 /CNW-PRN/ - Magna International Inc. (TSE: MG.A,
MG.B; ME: MG.A; NYSE: MGA) today reported sales, profits and earnings per
share for the third quarter ended April 30, 1998.
Nine Months Ended Three Months Ended
April 30 April 30
1998 1997 1998 1997
---- ---- ---- ----
Sales $6714.9 $5720.4 $2462.8 $2088.0
Operating Income 546.3 500.7 239.5 190.3
Net Income 401.8 (3) 461.4 (2) 168.4 (1) 125.4
Excl. Other Income 350.1 322.7 152.5 125.4
Fully diluted earnings
per share 5.00 5.94 2.03 1.60
Excl. Other Income 4.37 4.18 1.84 1.60
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(1) Includes a $15.9 million gain on the issue of shares by Decoma
(2) Includes a $138.7 million gain on the sale of an 80% interest in
MST/TBCA
(3) Includes a $15.9 million gain on the issue of shares by Decoma and a
$35.8 million gain on the sale of the remaining 20% interest in
MST/TBCA
All results are reported in millions of Canadian dollars, except per
share figures.
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Sales for the third quarter and first nine months of fiscal 1998 were a
record $2.46 billion and $6.71 billion respectively, an increase of
approximately 18% and 17% over the comparable periods of fiscal 1997. The
higher sales levels in the third quarter reflect a 12% increase in North
American content per vehicle over the comparable period of fiscal 1997, a
period in which North American vehicle production increased approximately 3%
to 3.99 million vehicles. European production sales increased $223 million in
the third quarter, reflecting a 56% increase in content per vehicle over the
comparable period in fiscal 1997 and a 5% increase in European vehicle
production to 3.79 million vehicles.
Net income for the third quarter increased 22% to $152.5 million compared
to $125.4 million in the third quarter of fiscal 1997, excluding a gain of
$15.9 million recorded on the initial public offering of shares by Decoma
International Inc. Including this gain, net income was $168.4 in the third
quarter of fiscal 1998 compared to $125.4 in the prior fiscal year.
Fully diluted earnings per share increased to $1.84 in the third quarter
compared to $1.60 for the third quarter of fiscal 1997, excluding the gain on
the issue of shares by Decoma. Including this gain, fully diluted earnings per
share was $2.03 in the third quarter of fiscal 1998 compared to $1.60 in the
prior fiscal year.
During the first nine months of fiscal 1998, cash generated from
operations was $618 million. Investment activities were $1.11 billion,
including $757 million invested in fixed assets and $262 million for the
purchase of subsidiaries, principally for the acquisition of the YMOS
Automotive Group, Roltra Morse, Decomex and Paulisch.
The Board of Directors declared a dividend of $0.33 per share with respect
to the Class A Subordinate Voting Shares and Class B Shares for the quarter
ended April 30, 1998 payable on July 15, 1998 to shareholders of record on
June 30, 1998.
Magna recently announced the completion of its purchase of 66.8% of
Steyr-Daimler-Puch AG and 50% of Steyr-Daimler-Puch Fahrzeugtechnik AG& Co. KG
and Steyr-Daimler-Puch Fahrzeugtechnik AG. Don Walker, President & CEO states
``the addition of Steyr-Daimler-Puch and the launch of our Symatec Group in
North America makes Magna unique amongst tier one suppliers. We now have the
ability to provide OEM customers with complete vehicle engineering and
complete vehicle assembly. This significantly enhances our vehicle
integration and program management capability given the addition of such a
strong technical workforce. Given this expertise we are now capable of moving
beyond the role of a traditional Tier One, into a closer relationship with our
customers.
Magna, one of the most diversified automotive suppliers in the world,
designs, develops and manufactures automotive systems, assemblies and
components, and engineers and assembles complete vehicles, primarily for sale
to original equipment manufacturers of cars and light trucks in North America,
Europe, Mexico, and South America. Magna's products include: exterior
decorative systems; interior products including complete seats, instrument and
door panel systems and sound insulation; stamped and welded metal parts and
assemblies; sunroofs; electro-mechanical devices and assemblies; a variety of
plastic parts, including body panels and fascias through Decoma International
Inc.; various engine, powertrain and fueling and cooling components through
Tesma International Inc.; and a variety of drivetrain components and complete
vehicle engineering and assembly through the Steyr-Daimler-Puch Group.
Magna has over 49,000 employees in 155 manufacturing operations and 30
product development and engineering centres in 16 countries.
For further information, please contact Graham Orr, Executive
Vice-President, Corporate Development at (905) 726-7099
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
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(Unaudited)
(Canadian dollars in millions,
except per share figures) NINE MONTHS ENDED THREE MONTHS ENDED
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APRIL 30 APRIL 30
1998 1997 1998 1997
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Sales $6,714.9 $5,720.4 $2,462.8 $2,088.0
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Cost of goods sold 5,529.0 4,726.0 2,000.9 1,729.3
Depreciation and amortization 210.7 170.4 74.4 57.4
Selling, general and
administrative 448.6 360.4 157.1 127.6
Interest income (1.9) (13.0) (2.8) (6.1)
Equity income (17.8) (24.1) (6.3) (10.5)
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Operating income 546.3 500.7 239.5 190.3
Other income 54.2 148.7 15.9
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Income before income taxes and
minority interest 600.5 649.4 255.4 190.3
Income taxes 189.6 177.1 82.3 63.1
Minority interest 9.1 10.9 4.7 1.8
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Net income 401.8 461.4 168.4 125.4
Retained earnings, beginning of
period 1,302.3 798.3 1,480.7 1,087.4
Accretion of other paid-in capital (18.7) (14.4) (8.4) (4.8)
Dividends on Class A Subordinate
Voting Shares and Class B Shares (68.3) (58.6) (23.6) (21.3)
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Retained earnings, end of period $1,617.1 $1,186.7 $1,617.1 $1,186.7
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Earnings per Class A Subordinate
Voting Share or Class B Share:
Basic $ 5.38 $ 6.38 $ 2.25 $ 1.69
Fully diluted $ 5.00 $ 5.94 $ 2.03 $ 1.60
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Cash dividends paid per Class A
Subordinate Voting Share or
Class B Share $ 0.96 $ 0.84 $ 0.33 $ 0.30
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Average number of Class A
Subordinate Voting Shares and
Class B Shares outstanding
during the period (in millions):
Basic 71.2 70.1 71.2 71.0
Fully diluted 82.0 79.0 85.7 79.9
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MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
(Canadian dollars in millions) NINE MONTHS ENDED THREE MONTHS ENDED
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APRIL 30 APRIL 30
1998 1997 1998 1997
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Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 401.8 $ 461.4 $ 168.4 $ 125.4
Items not involving current
cash flows 216.4 40.7 95.9 64.0
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618.2 502.1 264.3 189.4
Changes in non-cash working
capital (57.7) (42.8) 242.4 (2.2)
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560.5 459.3 506.7 187.2
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INVESTMENT ACTIVITIES
Fixed asset additions (756.7) (474.2) (258.4) (176.3)
Purchase of subsidiaries (262.1) (346.9) (77.8) (84.3)
Increase in investments and other (88.5) (26.6) (38.8) (11.3)
Proceeds from disposition of fixed
assets and other 199.7 377.5 33.5 2.6
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(907.6) (470.2) (341.5) (269.3)
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FINANCING ACTIVITIES
Net repayment of debt (10.9) (58.9) (155.7) (86.9)
Repayment of debentures' interest
obligation (19.8) (17.7) (9.0) (7.9)
Issues of Class A Subordinate
Voting Shares 1.9 104.9 1.5 81.8
Issue of convertible subordinated
debentures 665.5 665.5
Issue of shares by subsidiaries 42.3 41.2
Conversion of convertible
subordinated debentures (0.5) (0.4)
Dividends paid to minority interests (1.8) (9.1) (0.6) (0.4)
Dividends (68.3) (58.6) (23.6) (21.3)
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608.4 (39.4) 518.9 (34.7)
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Net increase (decrease) in cash 261.3 (50.3) 684.1 (116.8)
Cash, beginning of period 878.8 1,089.8 456.0 1,156.3
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Cash, end of period $1,140.1 $1,039.5 $1,140.1 $1,039.5
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MAGNA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
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(Unaudited)
(Canadian dollars in millions)
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APRIL 30 JULY 31
1998 1997
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ASSETS
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Current assets:
Cash $1,140.1 $ 878.8
Accounts receivable 1,457.8 1,165.0
Inventories 761.2 669.3
Prepaid expenses and other 40.5 34.9
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3,399.6 2,748.0
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Investments 63.1 99.9
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Fixed assets (net) 2,923.9 2,071.1
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Goodwill 354.6 297.8
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Other assets 186.9 111.9
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$6,928.1 $5,328.7
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Bank indebtedness $ 56.7 $ 30.3
Accounts payable and other accruals 1,906.0 1,535.8
Long-term debt due within one year 31.6 14.2
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1,994.3 1,580.3
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Long-term debt 105.1 80.8
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Debentures' interest obligation 337.0 168.1
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Deferred income taxes 121.1 120.0
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Minority interest 159.3 113.5
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Shareholders' equity:
Capital stock issued and outstanding -
Class A Subordinate Voting Shares
(issued: 70,110,660;
July 31, 1997 - 70,084,554) 1,569.9 1,568.0
Class B Shares
(convertible into Class A Subordinate
Voting Shares)
(issued: 1,098,309) 1.3 1.3
Other paid-in capital 976.1 457.8
Retained earnings 1,617.1 1,302.3
Currency translation adjustment 46.9 (63.4)
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4,211.3 3,266.0
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$6,928.1 $5,328.7
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