Decoma Announces Fiscal 1999 First Quarter Results
10 December 1998
Decoma Announces Fiscal 1999 First Quarter Results
CONCORD, ON, Dec. 9 /CNW-PRN/ - Decoma International Inc. (TSE:DEC.A;
NASDAQ:DECAF) today announced its financial results for the first quarter of
fiscal 1999 ended October 31, 1998.
<<
Three Months Ended
October 31
1998 1997
(millions of Canadian dollars,
except per share figures)
Sales $ 211.6 $ 142.5
Operating Income $ 13.8 $ 7.6
Net Income $ 11.9 $ 5.6
Fully diluted earnings per share $ 0.23 N/A
>>
Sales for the first quarter of fiscal 1999 were a record $211.6 million,
an increase of 48.5% compared to the first quarter of fiscal 1998. The higher
sales level reflects a 36.8% increase in North American content per vehicle,
including Mexico, during a period in which North American vehicle production
increased only 3.2%. In addition, tooling sales in the first quarter of 1999
were $25.3 million for new future programs.
Operating income in the first quarter of fiscal 1999 was up 81.6% to
$13.8 million compared to $7.6 million in the first quarter of fiscal 1998.
This $6.2 million improvement is the result of higher sales, improved capacity
utilization and operating efficiencies offset by design and engineering costs
on future programs.
Equity income in the first quarter of fiscal 1999 was $3.4 million,
compared to $1.4 million in the comparable period of fiscal 1998. This
improvement of 133.5% is a result of improved operating efficiencies and
capacity utilization.
Net income for the first quarter of fiscal 1999 increased $6.3 million or
112.5% to $11.9 million, compared to $5.6 million in the comparable period.
Fully diluted earnings per share were $0.23 for the first quarter of
fiscal 1999. The fully diluted average number of shares outstanding for the
first quarter of fiscal 1999 was 59.2 million.
During the first quarter of fiscal 1999 cash generated from operations
was $1.4 million after investing $17 million in non-cash working capital. Net
investment activities were $24.3 million, including $23.4 million in fixed
assets.
On December 8, 1998 the Decoma Board of Directors declared, in addition
to the dividend on the Convertible Series Preferred Shares, a quarterly
dividend in respect of the first quarter of fiscal 1999 of $0.03 per share on
the Class A Subordinate Voting Shares and the Class B Shares payable on
January 15, 1999 to shareholders of record on December 31, 1998.
Commenting on the first quarter results for Decoma, Mr. Alan Power,
President and Chief Executive Officer of Decoma noted that ``Overall it has
been an excellent quarter for Decoma and its shareholders. We believe that the
success of our strategies to grow globally and focus on technology are
reflected in our financial results and market position''.
Decoma designs, engineers and manufactures automotive fascias, and
related components and plastic body panels and exterior appearance systems for
cars and light trucks, principally for automobile manufacturers in North
America, Mexico, South America and Europe. Decoma has approximately 4,900
employees in 14 manufacturing and engineering facilities in Canada, The United
States, Mexico, Brazil, Belgium and England.
<<
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DECOMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
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(Unaudited)
(Canadian dollars in thousands)
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As at As at
October 31 July 31
1998 1998
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ASSETS
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Current assets:
Cash $ 75,175 $ 94,808
Accounts receivable 149,621 101,314
Inventories 60,372 70,259
Prepaid expenses and other 9,663 8,706
Accounts receivable from related companies 2,078 2,712
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296,909 277,799
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Investments 37,702 34,300
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Fixed assets (net) 370,345 359,597
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Other assets 10,889 10,198
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$715,845 $681,894
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Bank indebtedness $ 59,133 $ 28,373
Accounts payable 90,070 74,663
Accrued salaries and wages 14,754 12,294
Other accrued liabilities 21,537 21,153
Income taxes payable 6,711 3,260
Long-term debt due within one year 8,279 13,729
Debt due to Magna within one year 2,257 27,515
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202,741 180,987
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Long-term debt 8,041 1,782
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Long-term debt due to Magna 76,926 75,360
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Deferred income taxes 19,115 23,553
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Convertible Series Preferred Shares 133,671 132,283
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Minority interest 13,118 13,151
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Shareholders' equity:
Convertible Series Preferred Shares 18,315 19,462
Class A Subordinate Voting Shares 103,661 103,661
Class B Shares 95,303 95,303
Retained earnings 34,579 24,704
Currency translation adjustment 10,375 11,648
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262,233 254,778
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$715,845 $681,894
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND MAGNA'S NET
INVESTMENT
-------------------------------------------------------------------------
(Unaudited)
(Canadian dollars in thousands, Three Months Ended
except per share figures)
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October 31
1998 1997
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Sales $211,576 $142,490
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Cost of goods sold 169,539 109,982
Depreciation and amortization 9,006 8,954
Selling, general and administrative 14,537 10,048
Interest expense (net) (236) 3,412
Amortization of discount on Convertible Series
Preferred Shares 1,388 -
Affiliation fees and other charges 3,527 2,511
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Operating income 13,815 7,583
Equity income 3,402 1,457
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Income before income taxes and minority interest 17,217 9,040
Income taxes 5,354 2,906
Minority interest (34) 485
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Net income 11,897 5,649
Dividends on Convertible Series Preferred
Shares (net of return of capital) (728) -
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Net income attributable to Class A Subordinate
Voting Shares and Class B Shares 11,169 5,649
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Retained earnings, beginning of period 24,704 -
Dividends on Class A Subordinate Voting Shares
and Class B Shares (1,294) -
Magna's net investment, beginning of period - 259,586
Net contribution by (distribution to) Magna - 64,145
Change in currency translation adjustment - 2,378
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Magna's net investment, end of period - $331,758
Retained earnings, end of period $34,579 -
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Earnings per Class A Subordinate Voting
Share or Class B Share
Basic $0.26 -
Fully diluted $0.23 -
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Average number of Class A Subordinate
Voting Shares and Class B Shares
outstanding (in millions)
Basic 43.1 -
Fully diluted 59.2 -
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
(Canadian dollars in thousands) Three Months Ended
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October 31
(restated(x))
1998 1997
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Cash provided from (used for):
OPERATING ACTIVITIES
Net Income $ 11,897 $ 5,649
Items not involving current cash flows 6,563 10,190
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18,460 15,839
Changes in non-cash working capital (17,041) 4,639
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1,419 20,478
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INVESTMENT ACTIVITIES
Fixed asset additions (23,422) (30,036)
Acquisition of subsidiary net of cash and
debt assumed - (27,741)
Increase in investments and other (931) (1,211)
Proceeds from disposition of fixed assets and other 12 1
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(24,341) (58,987)
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FINANCING ACTIVITIES
Decrease in debt due to Magna (25,258) -
Increase (decrease) in bank indebtedness 30,760 (4,768)
Issues of long term debt 12,655 13,595
Repayments of long term debt (12,177) (19,752)
Net contribution by Magna - 64,145
Dividends on Class A Subordinate Voting Shares
and Class B shares (1,294) -
Dividends on Convertible Series Preferred Shares (1,875) -
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2,811 53,220
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Effect of exchange rate changes on cash 478 290
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Net (decrease) increase in cash (19,633) 15,001
Cash, beginning of period 94,808 6,556
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Cash, end of period $ 75,175 $ 21,557
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(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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