Tesma Announces Record Fiscal 1999 First Quarter Results
2 December 1998
Tesma Announces Record Fiscal 1999 First Quarter Results
CONCORD, ON, Dec. 1 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMAF) today announced record first quarter sales, income and earnings
per share for the period ended October 31, 1998.
Three Months
Ended
October 31
1998 1997
Sales $204.6 $153.4
Income before income taxes $ 19.5 $ 7.0
Net income $ 11.8 $ 3.5
Basic earnings per share $ 0.42 $ 0.13
Fully diluted earnings per share $ 0.40 $ 0.13
Fully diluted earnings per share
(excluding litigation settlement) - $ 0.33
Weighted average number of shares
outstanding on a fully diluted basis 30.1 30.0
(millions)
All results are reported in millions of Canadian dollars, except per
share figures.
Tesma's sales for the first quarter of fiscal 1999 were $204.6 million,
an increase of 33% over the prior year. Principal factors contributing to this
growth were Tesma's increased North American and European content per vehicle,
the inclusion of sales generated by recently acquired subsidiaries including
Triam Sterling Heights, higher vehicle production volumes and increased
tooling sales.
Income before income taxes was $19.5 million compared to $7.0 million for
the first quarter of 1998. This $12.5 million improvement is the result of
higher sales, improved operating performance at certain divisions, as well as
the absence of the non-recurring $9.1 million relating to a patent litigation
settlement reported in the first quarter of fiscal 1998. Net income was $11.8
million for the first quarter of fiscal 1999 compared to $3.5 million a year
ago.
``Reflected in the first quarter results are costs relating to the
expansion of our European and Detroit sales activities, the costs of reviewing
various acquisition opportunities and the costs of quoting on new outsourcing
opportunities in Europe and North America,'' stated Anthony Dobranowski,
Tesma's Chief Financial Officer. ``These are activities which are all expected
to contribute to Tesma's continuing growth.''
Excluding the prior year's litigation settlement, Tesma's fully diluted
earnings per share increased 21% to $0.40 from $0.33 for the first quarter of
fiscal 1999.
Cash provided from operations was $10.0 million in the first quarter, an
improvement of $5.3 million over fiscal 1998. Net investment activities
totalled $49.3 million in the quarter for fixed and other asset additions and
the acquisition of Triam Sterling Heights.
The Tesma Board of Directors today declared a quarterly dividend in
respect of the first quarter of fiscal 1999 of $0.07 per share on the Class A
Subordinate Voting and Class B shares payable on January 15, 1999 to
shareholders of record on December 31, 1998.
Tesma is a global supplier of highly engineered engine, transmission and
fueling systems and components for the automotive industry. Tesma's strong
market presence and strategy for continuing growth results from its unique
focus on Innovation, Engineering and Performance. Tesma employs over 3,000
employees in 19 manufacturing facilities in North America and Europe.
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
October 31, July 31,
1998 1998
ASSETS
Cash $ $
24,822 43,998
Accounts receivable 134,403 90,340
Inventories 61,937 57,991
Prepaid expenses and other 5,793 5,857
226,955 198,186
Fixed assets 217,784 186,583
Other assets 29,146 14,562
$473,885 $399,331
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ $
29,150 6,002
Accounts payable 61,097 43,897
Accrued salaries and wages 21,953 16,054
Other accrued liabilities 36,329 32,015
Income taxes payable 4,150 310
Long-term debt due within one year 4,693 4,036
157,372 102,314
Long-term debt 17,665 14,019
Deferred income taxes 22,342 21,525
SHAREHOLDERS' EQUITY
Class A Subordinate Voting Shares 179,367 179,367
Class B Shares 2,583 2,583
Retained earnings 86,927 77,085
Currency translation adjustment 7,629 2,438
276,506 261,473
$473,885 $399,331
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS
ENDED
October 31
1998 1997
Sales $204,58 $153,429
9
Cost of goods sold 159,243 118,527
Depreciation and amortization 7,640 5,428
Selling, general and administrative 15,624 11,295
Interest (net) 44 (206)
Amortization of discount on Convertible Series - 331
Preferred Shares
Affiliation fees and other charges 2,572 1,926
Income before litigation settlement and income 19,466 16,128
taxes
Litigation settlement - 9,132
Income before income taxes 19,466 6,996
Income taxes 7,628 3,525
Net income for the period 11,838 3,471
Dividends on Convertible Series Preferred Shares - (579)
(net of return of capital)
Net income attributable to Class A Subordinate 11,838 2,892
Voting Shares and Class B Shares
Retained earnings, beginning of period 77,085 55,721
Dividends on Class A Subordinate Voting Shares and (1,996) (1,142)
Class B Shares
Retained earnings, end of period $ $
86,927 57,471
Earnings per Class A Subordinate Voting Share or
Class B Share $ $
Basic 0.42 0.13
Fully diluted $ $
0.40 0.13
Average number of Class A Subordinate Voting Shares
and Class B Shares outstanding (in millions)
Basic 28.5 22.8
Fully diluted 30.1 30.0
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS
ENDED
October 31
1998 1997
(restated(x))
CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES
Net income $ $
11,838 3,471
Items not involving current cash flows 6,973 4,436
18,811 7,907
Changes in non-cash working capital (8,854) (3,222)
9,957 4,685
INVESTING ACTIVITIES
Fixed asset additions (17,607) (23,134)
Purchase of subsidiaries (32,180) -
Increase in investments and other (296) (584)
Proceeds from disposition of fixed assets and other 739 373
(49,344) (23,345)
FINANCING ACTIVITIES
Repayment of notes receivable from employees - 129
Increase (decrease) in bank indebtedness 21,505 (609)
Issues of long-term debt 113 562
Repayments of long-term debt (455) (1,389)
Dividends on Class A Subordinate Voting Shares and (1,996) (1,142)
Class B Shares
Dividends on Convertible Series Preferred Shares - (910)
19,167 (3,359)
Effect of exchange rate changes on cash 1,044 649
Decrease in cash during the period (19,176) (21,370)
Cash, beginning of period 43,998 75,810
Cash, end of period $ $
24,822 54,440
(x) Note: The Consolidated Statement of Cash Flow for the three months
ended October 31, 1997 has been restated to reflect the retroactive adoption
of the CICA's revised guidelines for cash flow statements.
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