Lear Corporation Reports Record Second Quarter
26 July 1999
Lear Corporation Reports Record Second Quarter - Highest Sales and Earnings Ever Reported
SOUTHFIELD, Mich., July 26 -- Lear Corporation
today reported record sales, operating income and net income for the second
quarter of 1999.
Highlights for the 1999 second quarter included:
* Sales up nearly 50 percent to $3.2 billion -- Highest quarterly sales
ever
* Earnings up nearly 15 percent to $1.10 per share -- Highest quarterly
earnings ever
* Completed UT Automotive transaction -- New platform for growth
* Financing package completed -- Bank facility and senior notes
* Motors business divested to Johnson Electric -- Raised $310 million
* Integrated new electronics capabilities -- Ahead of schedule
Commenting on the Company's second quarter accomplishments,
Kenneth L. Way, Lear Chairman and Chief Executive Officer, stated, "We are
extremely pleased with both our record financial results as well as the other
operational objectives we achieved in the quarter. Lear's financial
performance continues to benefit from our asset management focus, our
strategic acquisition program and our global leadership in automotive
interiors. Additionally, we completed the acquisition and financing of
UT Automotive, moved quickly to divest the non-strategic Motors business,
significantly paid down debt and integrated our new electronics capabilities.
These accomplishments continue to demonstrate Lear's ability to move quickly,
create value and lead the automotive supplier industry in developing new and
better ways to serve our global customers."
Net income for the quarter ended July 3, 1999 was a record $74.8 million,
or $1.10 per share, compared with $65.7 million, or $.96 per share, in the
second quarter of 1998. Operating income for the 1999 second quarter advanced
37 percent to $190.8 million, versus $139.6 million for 1998's second quarter.
For the most recent quarter, the Company had approximately five hundred
thousand fewer shares outstanding on a weighted average basis.
Net sales for the second quarter of 1999 rose to an all-time record of
over $3.2 billion, as compared to approximately $2.2 billion in the second
quarter of 1998. More than 20 percent of the second quarter sales increase
was due to internally generated new business.
Geographically, almost one-third of the second quarter's record sales
increase was attributable to Lear's operations outside of the U.S. and Canada.
For the first time ever, European sales reached the billion-dollar mark,
rising 55 percent from $662 million in the year-ago period. Also for the
first time ever, sales in the U.S. and Canada reached the two-billion-dollar
mark, a 55 percent increase from $1.3 billion in the year ago period. Due
primarily to continued softness in the South American market, second quarter
sales in other world regions declined from $217 million to $197 million.
Net income for the six months ended July 3, 1999 increased 11 percent to a
record $125.1 million, or $1.85 per share, compared with earnings of
$113.0 million, or $1.65 per share, in the comparable 1998 period. Operating
income for the first six months of 1999 advanced 24 percent to $311.2 million,
from $250.3 million in last year's comparable period. For the first six
months of 1999, the Company had approximately seven hundred thousand fewer
shares outstanding on a weighted average basis.
Net sales for the six months ended July 3, 1999 rose 41 percent to a
record $5.9 billion from $4.2 billion. More than 30 percent of the six-month
sales increase was due to internally generated new business.
Geographically, almost one-third of the sales increase for the first six
months of 1999 was attributable to Lear's operations outside of the U.S. and
Canada. For the first six months of 1999, European sales increased 46 percent
to $1.9 billion, while sales in other world regions declined 9 percent to
$365 million. U.S. and Canada sales for the first six months of 1999
increased 46 percent to $3.7 billion.
Way continued, "Lear's record performance continues to reflect our ability
to deliver industry-leading automotive solutions, while simultaneously
maintaining our position as a flexible, low-cost supplier. Our strategy of
expanding our capabilities and market position as a leading global automotive
supplier should continue to drive Lear's long-term sales and earnings growth.
We remain confident that our strong position in electronics will serve to
further this objective."
Lear Corporation, a Fortune 200 company headquartered in Southfield,
Michigan, is one of the world's largest automotive suppliers, with 1998
pro forma sales of more than $12 billion. The company's world-class products
are designed, engineered and manufactured by more than 100,000 employees in
over 300 facilities located in 33 countries. Information about Lear and its
products is available on the Internet at http://www.lear.com .
This news 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 because 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 (Unaudited)
(In Millions, Except Per Share Data)
Second Quarter
1999 1998
Net sales $3,233.6 $2,175.0
Cost of sales 2,894.4 1,943.4
Selling, general & admin. expenses 129.1 80.5
Amortization of goodwill 19.3 11.5
Operating income 190.8 139.6
Interest expense 60.2 25.5
Other expense 7.3 5.5
Income before provision for national
income taxes 123.3 108.6
Provision for national income taxes 48.5 42.9
Net income $74.8 $65.7
Basic net income per share $1.12 $0.98
Diluted net income per share $1.10 $0.96
Wtd. avg. no. of diluted shares outstanding 67.9 68.4
Depreciation and amortization $87.8 $51.6
Capital expenditures $91.0 $76.9
Six Months Ended
7/3/99 6/27/98
Net sales $5,920.8 $4,207.1
Cost of sales 5,362.9 3,775.3
Selling, general & admin. expenses 213.4 158.5
Amortization of goodwill 33.3 23.0
Operating income 311.2 250.3
Interest expense 90.3 50.2
Other expense 15.2 13.5
Income before provision for national
income taxes 205.7 186.6
186.6
Provision for national income taxes 80.6 73.6
Net income $125.1 $113.0
Basic net income per share $1.87 $1.69
Diluted net income per share $1.85 $1.65
Wtd. avg. no. of diluted shares outstanding 67.7 68.4
Depreciation and amortization $150.1 $106.5
Capital expenditures $162.6 $125.1
Lear Corporation and Subsidiaries
Consolidated Balance Sheet
($ In Millions)
7/3/99 12/31/98
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $32.3 $30.0
Accounts receivable, net 1,968.0 1,373.9
Inventories 481.1 349.6
Other 720.5 444.5
3,201.9 2,198.0
LONG-TERM ASSETS:
Property, plant and equipment, net 1,810.3 1,182.3
Goodwill, net 3,315.5 2,019.8
Other 375.7 277.2
TOTAL ASSETS $8,703.4 $ 5,677.3
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $64.4 $82.7
Accounts payable 2,030.4 1,600.8
Accrued liabilities 1,418.9 797.5
Current portion of long-term debt 13.5 16.5
3,527.2 2,497.5
LONG-TERM LIABILITIES:
Deferred national income taxes 95.2 39.0
Long-term debt 3,273.3 1,463.4
Other 454.1 377.4
3,822.6 1,879.8
STOCKHOLDERS' EQUITY 1,353.6 1,300.0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 8,703.4 $ 5,677.3