Lear 1998 Sales Top $9 Billion
3 February 1999
Lear 1998 Sales Top $9 Billion
SOUTHFIELD, Mich., Feb. 3 -- Lear Corporation
today reported financial results for the fourth quarter and full year 1998.
Highlights for 1998 included:
* Net sales rose 23 percent to $9.1 billion; 17th consecutive year of
sales increases
* Strengthened business backlog to $2 billion
* Signed two total interior contracts
* Completed four strategic acquisitions
* Expanded global operations into three new countries
* Launched products for over 30 new automotive programs
* Achieved record earnings of $3.06 per share excluding one-time charge
"During 1998, Lear continued to advance its position throughout the world.
We launched products for over thirty new automotive interior programs during
the year, and also signed two contracts to provide total interiors," stated
Lear Corporation Chairman and Chief Executive Officer, Kenneth L. Way.
"Through the acquisitions of Delphi Seating, Chapman, Pianfei and Strapazzini,
we strengthened our customer relationships and broadened our product
offerings. We expanded our global footprint into three new countries --
Belgium, Portugal and Russia, and enhanced our competitive position and
lowered our cost structure, through a global restructuring program. In
summary, we are confident that our 1998 accomplishments demonstrate that our
interior strategy, in tandem with our organization's innovation, flexibility
and aggressive customer support, is on target and positions Lear to drive
value for our customers and shareholders in 1999 and beyond."
Net income for the fourth quarter 1998 reached a record $73.4 million or
$1.09 per share, excluding the previously announced fourth quarter pre-tax
restructuring charge of $133 million, or $1.37 per share. Fourth quarter 1997
net income was $68.6 million, or $1.00 per share. Including the charge, the
Company incurred a fourth quarter net loss of $19.1 million, or $.28 per
share. Operating income for the fourth quarter excluding the charge rose to a
record $155.8 million, versus $148.6 million for the fourth quarter of 1997.
For the most recent quarter, the Company had approximately 900,000 fewer
shares outstanding on a weighted average basis.
Way continued, "Lear's 1998 fourth quarter performance excluding the
charge, was characterized by record sales, operating and net income. Our
growth continues to be driven by industry consolidation, global expansion and
the ever-increasing importance of interiors for today's automotive consumers."
To enhance operational comparisons, the remainder of this release, unless
otherwise noted, excludes the impact of the above-mentioned 1998 fourth
quarter charge.
Net sales for the fourth quarter of 1998 rose 36 percent to $2.9 billion,
as compared to $2.1 billion in 1997. The $762 million net sales increase was
almost evenly split between incremental revenues from Lear's recent
acquisitions and internal growth.
Geographically, 38 percent of the fourth quarter's net sales increase was
attributable to Lear's operations outside of the U.S. and Canada. Net sales
for Lear's European operations were up 53 percent to $982 million, while net
sales in other world regions declined to $180 million as compared to $228
million in the year ago period. Net sales in the U.S. and Canada advanced by
37 percent to $1.7 billion.
Net income for full year 1998 rose to a record $208.0 million or $3.06 per
share, as compared with earnings of $207.2 million, or $3.04 per share in
1997. Including the restructuring charge, the Company reported 1998 net
income of $115.5 million, or $1.70 per share. Operating income for 1998 was
$475.2 million, as compared to $481.1 million last year. For all of 1998, the
Company had approximately 200,000 fewer shares outstanding on a weighted
average basis.
For the year ended December 31, 1998, net sales rose 23 percent to $9.1
billion, compared to $7.3 billion in 1997. The increase was attributable to
incremental revenues from Lear's recent acquisitions as well as internal
growth from the launches of interior products for over thirty new global light
vehicle programs. The growth in revenues was partially offset by $292 million
due to customer work stoppages and the effect of foreign currency translation.
Geographically, 59 percent of 1998's net sales increase was attributable
to Lear's operations outside of the U.S. and Canada. Net sales for Lear's
European operations were up 49 percent to $2.9 billion, while net sales in
other world regions registered an eight percent increase, rising to $784
million. Net sales in the U.S. and Canada advanced by 15 percent to $5.4
billion.
A Fortune 500 Company, Lear Corporation is one of the world's largest
automotive suppliers, with 1998 sales of $9.1 billion. The Company's world-
class automotive interior products are designed, engineered and manufactured
by over 60,000 employees at over 200 facilities located in 28 countries.
Information about Lear and its products is available on the Internet at
http://www.lear.com.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Actual results may
differ materially from the anticipated results as a result of certain risks
and uncertainties, including but not limited to general economic conditions in
the markets in which Lear operates, fluctuations in the production of vehicles
for which the Company is a supplier, labor disputes involving the Company or
its significant customers, risks associated with conducting business in
foreign countries and other risks detailed from time to time in the Company's
Securities and Exchange Commission filings.
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN MILLIONS, EXCEPT PER SHARE DATA)
Fourth Quarter
Adjusted
1998 1998 (1) 1997
Net sales $2,905.8 $2,905.8 $2,143.7
Cost of sales 2,638.2 2,638.2 1,901.0
Selling, general &
admin. expenses 98.4 98.4 82.4
Restructuring and
other charges 133.0 -- --
Amortization of goodwill 13.4 13.4 11.7
Operating income 22.8 155.8 148.6
Interest expense 31.3 31.3 24.4
Other expense 4.3 4.3 7.4
Income/(loss) before provision for
National income taxes (12.8) 120.2 116.8
Provision for national
income taxes 6.3 46.8 48.2
Net income/(loss) ($19.1) $73.4 $68.6
Diluted net income/(loss)
per share ($0.28) $1.09 $1.00
Wtd. avg. no. of diluted
Shares outstanding 67.5 67.5 68.4
Depreciation and
amortization $56.0 $56.0 $51.4
Capital expenditures $114.5 $114.5 $74.8
Twelve Months Ended
Adjusted
12/31/98 12/31/98(1) 12/31/97
Net sales $9,059.4 $9,059.4 $7,342.9
Cost of sales 8,198.0 8,198.0 6,533.5
Selling, general &
admin. expenses 337.0 337.0 286.9
Restructuring and
other charges 133.0 -- --
Amortization of goodwill 49.2 49.2 41.4
Operating income 342.2 475.2 481.1
Interest expense 110.5 110.5 101.0
Other expense 22.3 22.3 28.8
Income before provision for
National income taxes 209.4 342.4 351.3
Provision for national
income taxes 93.9 134.4 143.1
Net income before
extraordinary item 115.5 208.0 208.2
Extraordinary item
- debt retirement -- -- 1.0
Net income $115.5 $208.0 $207.2
Diluted net income per
share before
extraordinary item $1.70 $3.06 $3.05
Diluted net income per
share after
extraordinary item $1.70 $3.06 $3.04
Wtd. avg. no. of diluted
Shares outstanding 68.0 68.0 68.2
Depreciation and
amortization $219.7 $219.7 $184.4
Capital expenditures $351.4 $351.4 $187.9
(1) Excludes impact of restructuring and other charges
LEAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ IN MILLIONS)
ASSETS 12/31/98 12/31/97
CURRENT ASSETS:
Cash and cash equivalents $30.0 $12.9
Accounts receivable, net 1,373.9 1,065.8
Inventories 349.6 231.4
Other 444.5 304.8
2,198.0 1,614.9
Property, plant and equipment, net 1,182.3 939.1
Goodwill, net 2,019.8 1,692.3
Other 277.2 212.8
TOTAL ASSETS $5,677.3 $4,459.1
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $82.7 $37.9
Accounts payable 1,600.8 1,186.5
Accrued liabilities 797.5 620.5
Current portion of long-term debt 16.5 9.1
2,497.5 1,854.0
LONG-TERM LIABILITIES:
Deferred national income taxes 39.0 61.7
Long-term debt 1,463.4 1,063.1
Other 377.4 273.3
1,879.8 1,398.1
STOCKHOLDERS' EQUITY 1,300.0 1,207.0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $5,677.3 $4,459.1