Magna announces first quarter results
11 December 1998
Magna announces first quarter results
AURORA, ON, Dec. 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 first quarter ended October 31, 1998.
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THREE MONTHS ENDED
October 31
1998 1997
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Sales $3033.4 $2084.3
Operating Income $ 233.4 $ 147.3
Net Income $ 147.8 $ 95.1
Fully diluted earnings per share $ 1.67 $ 1.22
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All results are reported in millions of Canadian dollars,
except per share figures.
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Sales for the quarter ended October 31, 1998 were $3.03 billion, a 45.5%
increase over the first quarter of the prior fiscal year. The higher sales
level reflects a 24.4% and 133.2% increase in North American and European
content per vehicle respectively over the comparable period in fiscal 1998, a
period in which North American and European vehicle production increased
approximately 3% and 5% to 4.4 million and 3.3 million vehicles respectively.
The increase in European sales relates principally to the recent acquisitions
of the Steyr-Daimler-Puch Group, the Ymos Automotive Group, Roltra Morse and
Paulisch. Tooling sales increased to $273 million, which reflects increased
involvement by Magna in new programs and vehicle launches by OEM customers.
Net income for the quarter ended October 31, 1998 was $147.8 million, a
55.4% increase compared to $95.1 million in the first quarter of fiscal 1998.
The first quarter of fiscal 1998 was adversely affected by the unusually slow
ramp-up of the Chrysler LH mid-sized vehicles. Production volumes for this
platform were very strong in the quarter ended October 31, 1998. Fully diluted
earnings per share for the current quarter increased 36.9% to $1.67 compared
to $1.22 per share for the comparable quarter in fiscal 1998.
During the quarter ended October 31, 1998, cash generated from operations
was $280.9 million. Total investment activities during the current quarter
were $345.5 million, including $274.9 million in fixed assets and $70.6
million in investments, principally for the acquisition of the remaining
minority interest in Steyr-Daimler-Puch AG (``SDP'').
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 October 31, 1998 payable on January 15, 1999 to shareholders of record
on December 31, 1998.
The Company also reported that it has now completed the purchase of 100%
of the outstanding common shares of SDP and now has ownership of 100% of the
Steyr-Daimler-Puch Group. Through the acquisition of SDP, Magna now has the
ability to provide OEM customers with complete vehicle engineering and
assembly and is capable of moving beyond the role of a traditional tier-one
supplier into a closer relationship with its customers.
The Company's shareholders today approved the change in its fiscal year
end to December 31, commencing December 31, 1998. The Company will also report
its financial results in United States dollars. Both changes will more fully
reflect the global nature of its automotive business.
In addition, Magna announced that its MI real estate group, together with
its other non-automotive assets, has been established as a wholly-owned legal
entity. The Company continues to examine how and when to spin-out its equity
to form a separate public company.
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 159 manufacturing operations and 31
product development and engineering centres in 17 countries.
MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
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(Unaudited)
(Canadian dollars in millions,
except per share figures) Three Months Ended
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October 31
1998 1997
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Sales $3,033.4 $2,084.3
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Cost of goods sold 2,499.8 1,730.5
Depreciation and amortization 108.8 65.8
Selling, general and
administrative expenses 200.2 147.6
Interest income, net (1.4) (0.7)
Equity income (7.4) (6.2)
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Income before income taxes and
minority interest 233.4 147.3
Income taxes 79.1 50.1
Minority interest 6.5 2.1
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Net income 147.8 95.1
Retained earnings, beginning of period 1,697.8 1,302.3
Accretion of other paid-in capital (9.3) (5.1)
Dividends on Class A Subordinate Voting Shares
and Class B Shares (25.8) (21.4)
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Retained earnings, end of period $1,810.5 $1,370.9
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Earnings per Class A Subordinate Voting Share
or Class B Share:
Basic $ 1.77 $ 1.26
Fully diluted $ 1.67 $ 1.22
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Cash dividends paid per Class A Subordinate
Voting Share or Class B Share $ 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 78.4 71.2
Fully diluted 91.3 80.1
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MAGNA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
(Canadian dollars in millions) Three Months Ended
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October 31
1998 1997
(See Note)
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Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 147.8 $ 95.1
Items not involving current cash flows 133.1 72.0
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280.9 167.1
Changes in non-cash working capital (329.6) (234.1)
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(48.7) (67.0)
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INVESTMENT ACTIVITIES
Fixed asset additions (274.9) (246.5)
Purchase of subsidiaries (36.1) (32.5)
Increase in investments and other (34.5) (17.0)
Proceeds from disposition of fixed assets
and other 32.6 2.1
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(312.9) (293.9)
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FINANCING ACTIVITIES
Issue of debt, net 104.1 137.5
Repayment of debentures' interest obligation (18.9) (8.2)
Issues of Class A Subordinate Voting Shares 0.1 0.1
Dividends paid to minority interests (0.8) (0.6)
Dividends (25.8) (21.4)
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58.7 107.4
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Effect of exchange rate changes on
cash and cash equivalents 33.5 23.5
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Net decrease in cash and cash equivalents (269.4) (230.0)
Cash and cash equivalents, beginning
of period 1,019.6 878.8
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Cash and cash equivalents, end of period $ 750.2 $ 648.8
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Note: Restated to separately disclose the effect of exchange
rate changes on cash and cash equivalents as required by new
accounting recommendations issued by The Canadian Institute
of Chartered Accountants.
MAGNA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
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(Unaudited)
(Canadian dollars in millions)
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October 31 July 31
1998 1998
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ASSETS
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Current assets:
Cash and cash equivalents $ 750.2 $1,019.6
Accounts receivable 2,398.1 1,801.9
Inventories 1,151.0 1,094.7
Prepaid expenses and other 92.4 75.6
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4,391.7 3,991.8
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Investments 176.1 147.9
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Fixed assets, net 4,008.1 3,737.9
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Goodwill, net 488.2 464.6
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Other assets 304.5 278.5
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$9,368.6 $8,620.7
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Bank indebtedness $ 238.3 $ 231.8
Accounts payable and other accruals 2,960.4 2,594.1
Long-term debt due within one year 64.1 69.8
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3,262.8 2,895.7
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Long-term debt 330.7 208.7
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Debentures' interest obligation 278.7 293.7
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Future tax liabilities 91.6 89.7
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Minority interest 178.7 187.5
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Shareholders' equity:
Capital stock issued and outstanding -
Class A Subordinate Voting Shares
(issued: 77,256,183; July 31, 1998
- 77,253,520) 2,188.5 2,188.2
Class B Shares
(convertible into Class A
Subordinate Voting Shares)
(issued: 1,098,109; July 31, 1998
- 1,098,309) 1.3 1.3
Other paid-in capital 907.9 894.7
Retained earnings 1,810.5 1,697.8
Currency translation adjustment 317.9 163.4
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5,226.1 4,945.4
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$9,368.6 $8,620.7
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