Tesma announces fiscal 1999 second quarter results
5 March 1999
Tesma announces fiscal 1999 second quarter results
CONCORD, ON, March 4 /CNW-PRN/ - Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMA) today announced record second quarter sales, income and earnings
per share for the period ended January 31, 1999.
Three Months Ended Six Months Ended
January 31 January 31
1999 1998 1999 1998
Sales $191.2 $149.4 $395.8 $302.8
Income before income taxes $ 17.8 $ 13.3 $ 37.3 $ 20.3
Net income $ 11.2 $ 8.0 $ 23.1 $ 11.5
Basic earnings per share $ 0.39 $ 0.32 $ 0.81 $ 0.45
Fully diluted earnings per share $ 0.38 $ 0.29 $ 0.78 $ 0.42
Fully diluted earnings per share
(excluding litigation settlement) $ 0.78 $ 0.62
Weighted average number of shares
outstanding on a fully diluted
basis (millions) 30.1 30.0 30.1 30.0
All results are reported in millions of Canadian dollars, except per
share figures.
Tesma's sales for the second quarter of fiscal 1999 were $191.2 million,
an increase of 28% over the prior year. For the six month period, reported
sales were a record $395.8 million, an increase of 31% 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.
For the second quarter, Tesma's income before income taxes was $17.8
million, an improvement of 34% over the $13.3 million reported in the second
quarter of fiscal 1998. This $4.5 million improvement is the result of higher
sales and improved operating performance at certain divisions. For the six
month period, income before income taxes increased from $20.3 million to $37.3
million primarily due to the improvements noted above and the absence of the
non-recurring charge recorded in 1998.
Tesma's fully diluted earnings per share increased 31% to $0.38 from
$0.29 for the second quarter of fiscal 1999 and, excluding the prior year's
litigation settlement, 26% to $0.78 from $0.62 for the six month period.
Cash provided from operations was $20.8 million in the second quarter, an
increase of $5.4 million over fiscal 1998. Net investment activities for the
quarter included $28.0 million for fixed and other asset additions and $11.8
million for the purchase of Hanwha Automotive Components Corporation
(``HACC''), a South Korean manufacturer of oil and water pumps. For the six
month period, cash provided from operations was $39.6 million, with net
investment activities totalling $86.0 million, primarily for the purchase of
fixed assets and the acquisitions of HACC and Triam Sterling Heights.
The Tesma Board of Directors declared a quarterly dividend in respect of
the second quarter of fiscal 1999 of $0.07 per share on the Class A
Subordinate Voting and Class B shares payable on April 15, 1999 to
shareholders of record on March 31, 1999.
The Company also announced that, effective February 16, 1999, its Class A
share stock symbol on NASDAQ was changed to ``TSMA'' (previously TSMAF).
Tesma's Class A share stock symbol on The Toronto Stock Exchange remains
unchanged as ``TSM.A''.
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 3,500
employees in North America, Europe and Asia in 20 manufacturing facilities and
2 research centres.
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
January 31, 1999 July 31, 1998
ASSETS
Cash $ 29,629 $ 43,998
Accounts receivable 123,751 90,340
Inventories 74,503 57,991
Prepaid expenses and other 8,351 5,857
------------------------------------------------------------------------
236,234 198,186
Fixed assets 272,687 186,583
Other assets 33,124 14,562
------------------------------------------------------------------------
$ 542,045 $ 399,331
------------------------------------------------------------------------
------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 59,355 $ 6,002
Accounts payable 66,584 43,897
Accrued salaries and wages 19,382 16,054
Other accrued liabilities 39,586 32,015
Income taxes payable 3,540 310
Long-term debt due within one year 17,475 4,036
------------------------------------------------------------------------
205,922 102,314
Long-term debt 29,474 14,019
Deferred income taxes 24,547 21,525
SHAREHOLDERS' EQUITY
Class A Subordinate Voting Shares 179,629 179,367
Class B Shares 2,583 2,583
Retained earnings 96,168 77,085
Currency translation adjustment 3,722 2,438
------------------------------------------------------------------------
282,102 261,473
------------------------------------------------------------------------
$ 542,045 $ 399,331
------------------------------------------------------------------------
------------------------------------------------------------------------
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
January 31 January 31
1999 1998 1999 1998
Sales $191,214 $149,390 $395,803 $302,819
------------------------------------------------------------------------
Cost of goods sold 148,151 116,041 307,394 234,568
Depreciation and amortization 8,045 5,958 15,685 11,386
Selling, general and
administrative 14,205 11,701 29,829 22,996
Interest (net) 501 29 545 (177)
Amortization of discount on
Convertible Series
Preferred Shares - 334 - 665
Affiliation fees and other
charges 2,494 1,985 5,066 3,911
------------------------------------------------------------------------
Income before litigation
settlement and income taxes 17,818 13,342 37,284 29,470
Litigation settlement - - - 9,132
------------------------------------------------------------------------
Income before income taxes 17,818 13,342 37,284 20,338
Income taxes 6,582 5,305 14,210 8,830
------------------------------------------------------------------------
Net income for the period 11,236 8,037 23,074 11,508
Dividends on Convertible Series
Preferred Shares (net of return
of capital) - (593) - (1,172)
------------------------------------------------------------------------
Net income attributable to Class
A Subordinate Voting Shares
and Class B Shares 11,236 7,444 23,074 10,336
Retained earnings, beginning
of period 86,927 57,471 77,085 55,721
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (1,995) (1,146) (3,991) (2,288)
------------------------------------------------------------------------
Retained earnings, end
of period $96,168 $63,769 $96,168 $63,769
------------------------------------------------------------------------
Earnings per Class A Subordinate
Voting Share or Class B Share
Basic $0.39 $0.32 $0.81 $0.45
Fully diluted $0.38 $0.29 0.78 $0.42
------------------------------------------------------------------------
Average number of Class A
Subordinate Voting Shares and
Class B Shares outstanding
(in millions)
Basic 28.5 22.9 28.5 22.8
Fully diluted 30.1 30.0 30.1 30.0
------------------------------------------------------------------------
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
January 31 January 31
1999 1998 1999 1998
CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES
Net income $11,236 $8,037 $23,074 $11,508
Items not involving current
cash flows 9,594 7,444 16,567 11,880
------------------------------------------------------------------------
20,830 15,481 39,641 23,388
Changes in non-cash working
capital (204) (960) (9,058) (4,182)
------------------------------------------------------------------------
20,626 14,431 30,583 19,206
------------------------------------------------------------------------
INVESTING ACTIVITIES
Fixed asset additions (24,738) (11,553) (42,345) (34,687)
Purchase of subsidiaries (12,605) (8,271) (44,785) (8,271)
Increase in other assets (3,242) (2,641) (3,538) (3,225)
Proceeds from disposition
of fixed and other assets 75 1,106 814 1,479
Cash acquired on purchase
of subsidiaries 3,866 3,108 3,866 3,108
------------------------------------------------------------------------
(36,644) (18,251) (85,988) (41,596)
------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of notes receivable
from employees - 120 - 249
Increase (decrease) in bank
indebtedness 21,414 (12) 42,919 (621)
Issues of long-term debt 3,659 1,745 3,772 2,307
Repayments of long-term debt (1,623) (2,337) (2,078) (3,726)
Issuance of Class A
Subordinate Voting Shares 262 1,108 262 1,108
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (1,995) (1,146) (3,991) (2,288)
Dividends on Convertible
Series Preferred Shares - (967) - (1,877)
------------------------------------------------------------------------
21,717 (1,489) 40,884 (4,848)
------------------------------------------------------------------------
Effect of exchange rate
changes on cash (892) (128) 152 521
------------------------------------------------------------------------
Net increase (decrease) in
cash during the period 4,807 (5,347) (14,369) (26,717)
Cash, beginning of period 24,822 54,440 43,998 75,810
------------------------------------------------------------------------
Cash, end of period $29,629 $49,093 $29,629 $49,093
------------------------------------------------------------------------
------------------------------------------------------------------------
(x) Note: The Consolidated Statements of Cash Flows for the three and
six month periods ended January 31, 1998 have been restated to
reflect the retroactive adoption of the CICA's revised guidelines
for cash flow statements.