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LDM Technologies Announces FY 1998 Results

29 December 1998

LDM Technologies Announces Fiscal Year 1998 Financial Results

    AUBURN HILLS, Mich., Dec. 29 -- LDM Technologies, Inc.
reported net sales for the year ended September 27, 1998 of $483.2 million, an
increase of $190.2 million or 64.9% from $293.0 million in 1997.  The strong
sales growth was mainly attributable to acquisitions made during 1998:  Kenco
Plastics, Inc., Aeroquip-Vickers International GmbH's Beienheim (Germany
facility), and Huron Plastics, Inc.
    1998 operating profit increased $6.1 million to $22.6 million.  1998
operating profit expressed as a percentage of net sales was 4.7% versus 5.6%
in 1997.  The decrease was partially attributable to a strike at General
Motors Corporation which resulted in lost product sales and related gross
margin of approximately $13.0 million and $3.5 million, respectively.  If the
General Motors strike had not occurred, 1998 operating profit would have been
approximately $26.1 million or 5.3% as a percentage of net sales.  The
remaining decrease in operating profit as a percentage of net sales relates to
gross margins at Kenco and Beienheim being lower than those achieved
historically at the Company.
    Interest expense for the year ended September 27, 1998 was $19.8 million
versus $11.1 million for the year ended September 28, 1997.  The increased
interest was due to the incurrence of additional debt used to fund
acquisitions during fiscal years 1997 and 1998.
    Since its acquisition on September 30, 1997, the Kenco business has
performed significantly below original expectations, causing management to
undertake a strategic review of the future viability of the business.  The
Company evaluated the ongoing value of long-lived assets associated with the
Kenco business and determined its value to be impaired.  As a result, the
Company took a charge of $10.5 million during the fourth quarter of its fiscal
1998 for impairment of the value of long-lived assets related to the Kenco
business.
    Net loss for 1998 was $7.1 million compared to net income in 1997 of $3.1
million.  The loss during fiscal 1998 is attributed to the General Motors
strike, the impairment charge related to the Kenco business long-lived assets
and lower margins achieved at the Kenco and Beienheim businesses.
    EBITDA for 1998 was $42.6 million compared to $28.2 million for 1997.  The
increase is due to additional sales volumes related to acquisitions made
during 1997 and 1998.