Decoma announces fiscal 1999 third quarter results
11 June 1999
Decoma announces fiscal 1999 third quarter results
CONCORD, ON, June 10 /CNW-PRN/ - Decoma International Inc. (TSE: DEC.A;
NASDAQ: DECAF) today announced its financial results for the third quarter and
first nine months of fiscal 1999 ended April 30, 1999.
Three Months Ended Nine Months Ended
April 30 April 30
1999 1998 1999 1998
(millions of
Canadian dollars,
except per share
figures)
Sales $240.3 $199.3 $679.6 $489.2
Operating Income $ 18.1 $ 18.3 $ 47.7 $ 34.8
Net Income $ 13.4 $ 11.3 $ 36.8 $ 23.5
Fully diluted
earnings per share $ 0.25 $ 0.25 $ 0.70 $ 0.61
Weighted average
number of shares
outstanding on a
fully diluted basis
(millions) 59.2 54.6 59.2 42.5
Sales for the third quarter and the first nine months of fiscal 1999 were
$240.3 million and $679.6 million respectively, an increase of approximately
20.6% and 38.9% over the comparable periods of fiscal 1998. The higher sales
level in the third quarter reflects Decoma's increase in North American and
Mexican vehicle content to $45.70 per vehicle, an increase of 8.6% over the
comparable period of fiscal 1998. During the period vehicle production
increased approximately 7.7% to 4.7 million vehicles.
Tooling sales included in the above were $26.7 million for the third
quarter and $77.0 million year to date, an increase of 59.9% and 120.0% over
the comparable periods of fiscal 1998. The increase in tooling sales reflects
new business awarded to Decoma for future programs.
Operating income for the third quarter of fiscal 1999 was $18.1 million
compared to $18.3 million in the third quarter of fiscal 1998. Excluding the
anticipated impact of both the launch of Decoma's new Norplas facility and the
results of its Mexican operation, Decoma's operating income improved overall
on a third quarter fiscal 1999 over third quarter fiscal 1998 basis and has
increased 37.1% to $47.7 million on a year to date basis over the comparable
period of a year ago.
Equity income for the third quarter of fiscal 1999 increased by 163.6% to
$2.9 million compared to $1.1 million in the third quarter of fiscal 1998.
This improvement reflects higher sales and continually improving operating
performance at Decoma's equity investment operations. Equity income was $8.4
million for the first nine months of the year compared to $3.4 million for the
first nine months of 1998.
Net income for the third quarter and first nine months of fiscal 1999 was
$13.4 million and $36.8 million respectively compared to $11.3 million and
$23.5 million in the comparable periods in fiscal 1998. These improvements
reflect higher sales, operating income and equity income for the first nine
months of fiscal 1999.
Fully diluted earnings per share were $0.25 for the third quarter of
fiscal 1999 compared to $0.25 for the third quarter of fiscal 1998 and $0.70
compared to $0.61 for the corresponding nine month periods. The weighted
average number of shares outstanding on a fully diluted basis was 59.2 million
compared to 54.6 million for the corresponding third quarters and 59.2 million
compared to 42.5 million for the corresponding nine month periods.
During the first nine months of fiscal 1999 cash generated from
operations was $68.3 million. Net investment activities were $94.7 million,
including $92.7 million in fixed assets.
On June 10, 1999 Decoma announced that its Board of Directors declared,
in addition to the dividend on the 5% Convertible Series Preferred Shares, a
quarterly dividend in respect of the third quarter of fiscal 1999 of $0.05 per
share on the Class A Subordinate Voting and Class B Shares payable on July 15,
1999 to shareholders of record on June 30, 1999. The dividend is in keeping
with the shareholder profit participation commitment set out in Decoma's
Corporate Constitution.
Decoma also announced that it has agreed to sell its current operations
in Brazil to Magna International Inc., (``Magna'') or an affiliate of Magna,
for consideration equal to its current investment in the project and the
assumption of the operation's current outstanding debt. The Brazilian
operation supplies plastic parts and components solely for the Mercedes Benz A
Class vehicle manufactured in Juiz de Fora, Brazil. The transaction was
approved by the independent members of Decoma's Board of Directors and is
subject to completion of necessary sale documentation. The transaction is
expected to be completed by the end of July, 1999.
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 and Europe. Decoma has approximately 4,900 employees in 13
manufacturing and engineering facilities in Canada, The United States, Mexico,
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
April 30, 1999 July 31, 1998
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ASSETS
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Current assets:
Cash $ 77,318 $ 94,808
Accounts receivable 140,356 101,314
Inventories 74,930 70,259
Prepaid expenses and other 8,958 8,706
Accounts receivable from related
companies 2,118 2,712
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303,680 277,799
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Investments 41,516 34,300
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Fixed assets (net) 418,134 359,597
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Other assets 10,896 10,198
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$774,226 $681,894
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Bank indebtedness $ 63,174 $ 28,373
Accounts payable 101,474 74,663
Accrued salaries and wages 21,029 12,294
Other accrued liabilities 30,294 21,153
Income taxes payable 11,116 3,260
Long-term debt due within one year 924 13,729
Debt due to Magna within one year 2,122 27,515
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230,133 180,987
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Long-term debt 25,662 1,782
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Long-term debt due to Magna 72,727 75,360
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Deferred income taxes 17,175 23,553
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Convertible Series Preferred Shares 136,490 132,283
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Minority interest 12,564 13,151
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Shareholders' equity:
Convertible Series Preferred Shares 15,984 19,462
Class A Subordinate Voting Shares 103,661 103,661
Class B Shares 95,303 95,303
Retained earnings 54,617 24,704
Currency translation adjustment 9,910 11,648
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279,475 254,778
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$774,226 $681,894
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME, RETAINED EARNINGS AND MAGNA'S NET
INVESTMENT
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(Unaudited)
(Canadian dollars in thousands,
except per share figures)
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Three Months Ended Nine Months Ended
April 30 April 30
1999 1998 1999 1998
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Sales $ 240,304 $ 199,287 $ 679,587 $ 489,165
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Cost of goods sold 192,147 151,376 543,125 370,843
Depreciation and amortization 10,085 9,327 28,735 26,639
Selling, general and 14,590 13,462 44,853 37,838
administrative
Interest expense (net) (57) 879 (480) 7,967
Amortization of discount on
Convertible Series Preferred
Shares 1,417 2,257 4,207 2,257
Affiliation fees and other
charges 4,049 3,716 11,400 8,822
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Operating income 18,073 18,270 47,747 34,799
Equity income 2,892 1,075 8,374 3,402
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Income before income taxes
and minority interest 20,965 19,345 56,121 38,201
Income taxes 8,000 7,383 19,904 13,393
Minority interest (477) 667 (587) 1,351
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Net income 13,442 11,295 36,804 23,457
Dividends on Convertible
Series Preferred Shares
(net of return of capital) (704) - (2,147) -
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Net income attributable to
Class A Subordinate Voting
Shares and Class B Shares 12,738 11,295 34,657 23,457
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Retained earnings, beginning
of period 44,035 9,966 24,704 54,444
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (2,156) - (4,744) -
Magna's net investment,
beginning of period - 346,600 - 196,250
Net distribution to Magna - (346,600) - (252,890)
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Magna's net investment, end
of period - - - -
Retained earnings, end of
period $ 54,617 $ 21,261 $ 54,617 $ 21,261
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Earnings per Class A
Subordinate Voting Share
or Class B Share
Basic $.29 $.29 $.80 $.68
Fully diluted $.25 $.25 $.70 $.61
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Average number of Class A
Subordinate Voting Shares
and Class B Shares
outstanding (in millions)
Basic 43.1 39.4 43.1 34.4
Fully diluted 59.2 54.6 59.2 42.5
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
(Canadian dollars in thousands)
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Three Months Ended Nine Months Ended
April 30 April 30
(restated (restated
(x)) (x))
1999 1998 1999 1998
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Cash provided from (used for):
OPERATING ACTIVITIES
Net Income $ 13,442 $ 11,295 $ 36,804 $ 23,457
Items not involving current
cash flows 5,007 19,655 22,346 38,118
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18,449 30,950 59,150 61,575
Changes in non-cash working
capital 8,488 (10,123) 9,171 (8,782)
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26,937 20,827 68,321 52,793
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INVESTMENT ACTIVITIES
Fixed asset additions (35,954) (33,194) (92,746) (96,030)
Acquisition of subsidiary
net of cash and debt assumed - - - (27,741)
Decrease (increase) in
investments and other 1,988 1,849 (2,220) (1,088)
Proceeds from disposition
of fixed assets and other 189 18 255 137
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(33,777) (31,327) (94,711) (124,722)
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FINANCING ACTIVITIES
Issuance of Convertible
Series Preferred Shares - 150,000 - 150,000
Issuance of Class A
Subordinate Voting Shares - 103,661 - 103,661
Issuance of Class B Shares - 95,303 - 95,303
(Decrease) increase in debt
due to Magna (1,529) 120,300 (25,393) 120,300
Increase (decrease) in bank
indebtedness 9,697 (5,967) 34,801 (10,626)
Issues of long term debt 8,739 1,966 26,779 16,830
Repayments of long term debt - (10,607) (14,999) (44,014)
Net distribution to Magna - (346,600) - (252,890)
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (2,156) - (4,744) -
Dividends on Convertible
Series Preferred Shares (1,875) - (5,625) -
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12,876 108,056 10,819 178,564
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Effect of exchange rate
changes on cash (469) (235) (1,919) 481
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Net increase (decrease)
in cash 5,567 97,321 (17,490) 107,116
Cash, beginning of period 71,751 16,351 94,808 6,556
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Cash, end of period $ 77,318 $ 113,672 $ 77,318 $ 113,672
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(x) Note: The Consolidated Statements of Cash Flows for the three and
nine months ended April 30, 1998 have been restated to reflect the
retroactive adoption of the CICA's revised guidelines for cash flow
statements.