Lear Reports Record Q2, Six Month Results
20 July 1998
Lear Reports Record Second Quarter, Six Month Results
SOUTHFIELD, Mich., July 20 -- Lear Corporation
today reported record sales, operating income and net income for the second
quarter of fiscal 1998.
Net income for the quarter ended June 27, 1998 increased 8 percent to
$65.7 million, or $.96 per share, compared with earnings of $61.1 million or
$.90 per share, last year. Excluding the impact from the work stoppages at
General Motors, Lear estimates that net income per share would have increased
to $1.10 per share. Operating income for the 1998 second quarter advanced to
$139.6 million, from $136.6 million in the second quarter of 1997. For the
quarter, the Company had approximately three hundred thousand more shares
outstanding on a weighted average basis.
Commenting on the Company's financial performance, Kenneth L. Way,
Chairman and Chief Executive Officer of Lear Corporation stated, "We are
extremely pleased with our record second quarter results. Looking beyond the
impact of the General Motors work stoppages, Lear's performance continues to
benefit from both our North American and International operations. Our
corporate focus on strategic acquisitions, consumer-pleasing technology and
offering one-stop shopping to our customers remains the primary driver for
this global growth."
Net sales for the second quarter of 1998 rose 18 percent to $2.2 billion
from $1.8 billion last year. The $336 million increase is attributable to
additional revenues from recent acquisitions -- which contributed $254 million
-- as well as internal growth. The Company estimates that second quarter
revenues would have increased to approximately $2.3 billion were it not for
the aforementioned work stoppages and the effect of foreign currency
translation.
Geographically, 70 percent of the second quarter's $336 million sales
increase was attributable to Lear's operations outside of the U.S. and Canada.
1998 second quarter sales in Europe increased 37 percent to $662 million,
while sales in other world regions increased 34 percent, to $217 million, as
compared to $161 million for the second quarter of 1997. U.S. and Canada
sales in the 1998 second quarter rose 9 percent to $1.3 billion.
Net income for the six months ended June 27, 1998 increased 10 percent to
$113.0 million, or $1.65 per share, compared with earnings of $103.0 million,
or $1.51 per share last year. Excluding the impact from the aforementioned
work stoppages, the Company estimates that net income per share would have
increased to $1.79 per share. Operating income for the first six months of
1998 advanced to $250.3 million, from $238.7 million in last year's comparable
period. For the first six months of 1998, the Company had approximately three
hundred thousand more shares outstanding on a weighted average basis.
Net sales for the six months ended June 27, 1998 rose 18 percent to $4.2
billion from $3.6 billion. The increase is attributable to additional
revenues from Lear's recent acquisitions -- which contributed $519 million --
as well as internal growth. Excluding the effects of foreign currency
translation and the second quarter work stoppages, the Company estimates that
revenues for the six months ended June 27, 1998 would have increased to
approximately $4.4 billion.
Geographically, 74 percent of the sales increase for the first six months
of 1998 was attributable to Lear's operations outside of the U.S. and Canada.
For the first six months of 1998, European sales increased 43 percent to
$1.3 billion, while sales in other world regions rose 29 percent to
$399 million versus $309 million for the first six months of 1997. U.S. and
Canada sales for the first six months of 1998 increased 7 percent to
$2.5 billion.
Way continued, "Lear's performance continues to reflect our ability to
expand our capabilities and position in the global automotive interior arena,
while maintaining our position as a flexible, low-cost supplier. Our strategy
of delivering industry leading automotive interior solutions should continue
to drive Lear's long-term sales and earnings growth."
A Fortune 500 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
54,000 employees in over 190 facilities located in 28 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 (UNAUDITED)
(IN MILLIONS EXCEPT PER SHARE DATA)
Second Quarter
1998 1997
Sales $2,175.0 $1,839.3
Cost of sales 1,943.4 1,625.8
Selling, general & admin. expenses 80.5 67.2
Amortization of goodwill 11.5 9.7
Operating income 139.6 136.6
Interest expense 25.5 26.7
Other expense 5.5 7.3
Income before provision for
national income taxes 108.6 102.6
Provision for national income taxes 42.9 41.5
Net income $65.7 $61.1
Basic net income per share $0.98 $0.92
Diluted net income per share $0.96 $0.90
Wtd. avg. no. of diluted
shares outstanding 68.4 68.1
Depreciation and amortization $51.6 $43.8
Capital expenditures $76.8 $42.5
Six Months Ended
6/27/98 6/28/97
Sales $4,207.1 $3,563.3
Cost of sales 3,775.3 3,171.9
Selling, general & admin. expenses 158.5 133.3
Amortization of goodwill 23.0 19.4
Operating income 250.3 238.7
Interest expense 50.2 53.9
Other expense 13.5 12.8
Income before provision for
national income taxes 186.6 172.0
Provision for national income taxes 73.6 69.0
Net income $113.0 $103.0
Basic net income per share $1.69 $1.56
Diluted net income per share $1.65 $1.51
Wtd. avg. no. of diluted
shares outstanding 68.4 68.1
Depreciation and amortization $106.5 $87.3
Capital expenditures $125.0 $75.1
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ IN MILLIONS)
6/27/98 12/31/97
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 28.2 $ 12.9
Accounts receivable, net 1,370.2 1,065.8
Inventories 263.0 231.4
Other 368.1 304.8
2,029.5 1,614.9
LONG-TERM ASSETS:
Property, plant and equipment, net 1,017.7 939.1
Goodwill, net 1,789.5 1,692.3
Other 279.2 212.8
TOTAL ASSETS $5,115.9 $ 4,459.1
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 52.2 $ 37.9
Accounts payable 1,364.3 1,186.5
Accrued liabilities 752.8 620.5
Current portion of long-term debt 13.0 9.1
2,182.3 1,854.0
LONG-TERM LIABILITIES:
Deferred national income taxes 60.3 61.7
Long-term debt 1,277.8 1,063.1
Other 277.3 273.3
1,615.4 1,398.1
STOCKHOLDERS' EQUITY 1,318.2 1,207.0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,115.9 $ 4,459.1