Intermet Reports Record Third Quarter Earnings
15 October 1998
Intermet Reports Record Third Quarter Earnings
TROY, Mich., Oct. 15 -- Intermet Corporation
today reported a third quarter income of $0.36 per diluted share on net income
of $9.3 million compared with $0.28 per diluted share on net income of $7.4
million in the third quarter of 1997. Earnings were an Intermet third quarter
record. The impact of the GM strike during the quarter lowered earnings by
about $0.07 per share.
Net third quarter sales of $189 million were essentially equal to last
year's record quarterly sales of $190 million. Excluding divested operations,
third quarter sales were up 7.4 percent compared with the same period last
year. In this quarter, Intermet was able to realize some tax benefits related
to foreign losses.
John Doddridge, chairman and chief executive officer, said, "The third
quarter was a difficult quarter for Intermet. The GM strike impacted sales
and earnings. We also had an unusually high number of production equipment
problems, including damage caused by a lightning strike at one plant and a
fire at another, causing us to under ship customer requirements."
Intermet posted record nine-month sales and earnings of $633 million and
$32.9 million ($1.27 per diluted share), respectively, compared with 1997
nine-month sales of $610 million and net earnings of $29.4 million ($1.15 per
diluted share). 1998 sales year-to-date reflect strong domestic and European
markets.
"Our fourth quarter order board remains strong," said Doddridge. "We are
attempting to run our plants at 100 percent capacity, which leads to some
inefficiencies. Given the high maintenance requirements of ferrous foundries,
we consider the 90 percent capacity area most ideal.
"We have substantial new booked business going into 1999 that will
continue to strain our capacity if vehicular production builds stay at their
current levels," Doddridge added. "We have incrementally been adding capacity
to our existing plants and will continue to do so; however, we continue to
'walk the tight rope' of attempting to not over-invest due to concerns of a
possible economic slowdown. This strategy is causing us some short-term pain,
but overall we believe it allows us greater flexibility given the market
uncertainties. Our foundries are at capacity in Europe and North America;
however we are seeing some market softening at our machining and truck body
operations. Fortunately, we have no market exposure to Asia or South
America."
The Intermet board of directors voted to approve a quarterly dividend of 4
cents per share, payable December 31, 1998, to shareholders of record as of
December 1, 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.
Intermet also produces precision machined components and manufactures cranes
and specialty service vehicles. The company has more than 5,700 employees at
sixteen locations in North America and Europe. The company's internet address
is http://www.intermet.com.
This news release may include forecasts and forward-looking statements
about Intermet, its industry and the markets in which it operates. Forward-
looking statements and the achievement of any forecasts or projections are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or denied. Such risks and
uncertainties are fully detailed as a preface to the Management's Discussion
and Analysis of Financial Condition in the Company's 1997 Annual Report for
the year ended December 31, 1997.
Intermet Corporation Condensed Consolidated Income Statements
(In thousands, except per share data)
Three Months Ended Nine Months Ended
(unaudited) (unaudited)
September 30, September 30, September 30, September 30,
1998 1997 1998 1997
Net sales $188,808 $189,535 $632,698 $609,924
Cost of sales 166,314 167,472 548,729 532,010
Gross profit 22,494 22,063 83,969 77,914
Operating expenses 7,765 7,863 25,296 23,482
Operating profit 14,729 14,200 58,673 54,432
Other expense, net 2,182 3,197 8,427 9,241
Income before income
taxes and minority
interest 12,547 11,003 50,246 45,191
Provision for
income taxes 3,233 3,647 17,736 15,748
Income before
minority interest 9,314 7,356 32,510 29,443
Minority interest - - 412 -
Net income $9,314 $7,356 $32,922 $29,443
Earnings per
share - basic $0.36 $0.29 $1.29 $1.17
Earnings per
share - diluted $0.36 $0.28 $1.27 $1.15
Weighted average
shares outstanding:
Basic 25,679 25,222 25,565 25,202
Diluted 25,976 25,814 25,939 25,693
Intermet Corporation Condensed
Consolidated Balance Sheets (in thousands)
September 30, December 31,
1998 1997
(unaudited)
Assets:
Cash and cash equivalents $2,756 $7,022
Other current assets 195,356 186,260
Property plant and equipment (net) 211,739 241,899
Other non-current assets 108,588 103,624
Total assets $518,439 $538,805
Liabilities and shareholders' equity:
Current liabilities $124,841 $135,954
Long-term debt 123,838 167,295
Other long-term liabilities 57,435 57,791
Total liabilities 306,114 361,040
Minority interest 2,337 2,337
Shareholders' equity 209,988 175,428
Total liabilities and
shareholders' equity $518,439 $538,805