Lear Corporation Reports Record Third Quarter, Nine Month Results
26 October 1999
Lear Corporation Reports Record Third Quarter, Nine Month Results
SOUTHFIELD, Mich., Oct. 26 -- Lear Corporation
today reported record third quarter and nine month sales, operating income and
net income for fiscal 1999.
Highlights for the 1999 third quarter included:
* Sales up 57% to $3.0 billion
* Earnings per share up 81% to $0.58
* Awarded Peugeot seating contract
* Awarded electronic distribution contracts for 2 North American programs
* IndustryWeek Magazine selects Lear as one of "The World's 100 Best
Managed Companies"
"We are pleased with our third quarter results which reflect the benefits
of the UTA integration as well as improved operating margins in each region of
the world," stated Kenneth L. Way, Chairman and Chief Executive Officer of
Lear Corporation. "We increased our backlog by winning two important
contracts with Peugeot and another significant OEM which demonstrates the
synergies we are gaining from our UTA integration. Additionally, Automotive &
Transportation Interiors Magazine recently honored Lear and our extractable
seat with the top prize in its 1999 Design and Technology Awards. Every
Formula One driver competing in the 1999 Formula One Series now uses a version
of this seat made in accordance with Lear design specifications. These
accomplishments continue to demonstrate Lear's ability to create value, adapt
rapidly and lead the automotive supplier industry in developing exciting and
new ways to serve our global customers."
Net income for the quarter ended October 2, 1999 increased 82 percent to
$39.3 million, or $.58 per share, compared with earnings of $21.6 million, or
$.32 per share, last year. Operating income for the third quarter of 1999
increased 120 percent to $151.7 million, from $69.1 million in the third
quarter of 1998.
Net sales for the third quarter of 1999 rose approximately 57 percent to
$3.0 billion from $1.9 billion last year. The increase was primarily
attributable to both incremental revenues from Lear's recent acquisitions, as
well as internal growth.
Geographically, approximately 26 percent of the current quarter's
$1.1 billion sales increase was attributable to Lear's operations outside of
the U.S. and Canada. 1999 third quarter sales in Europe increased 45 percent
to $920 million, while sales in other world regions increased 3 percent to
$211 million. U.S. and Canadian sales in the 1999 third quarter rose
73 percent to over $1.9 billion.
Net income for the nine months ended October 2, 1999 increased 22 percent
to $164.4 million, or $2.42 per share, compared with earnings of
$134.6 million, or $1.97 per share, last year. Operating income for the first
nine months of 1999 advanced 45 percent to $462.9 million, from $319.4 million
in last year's comparable period.
Net sales for the nine months ended October 2, 1999 rose 46 percent to
$9.0 billion from $6.2 billion in last year's comparable period. The increase
was primarily attributable to incremental revenues from Lear's recent
acquisitions, as well as internal growth.
Geographically, approximately 30 percent of the sales increase for the
first nine months of 1999 was attributable to Lear's operations outside of the
U.S. and Canada. For the first nine months of 1999, European sales increased
45 percent to $2.8 billion, while sales in other world regions decreased
approximately 5 percent to $575 million, primarily due to the weak economic
situation in South America. U.S. and Canadian sales for the first nine months
of 1999 increased approximately 54 percent to $5.6 billion.
A Fortune 200 Company, Lear Corporation 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 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 (Unaudited)
(In Millions, Except Per Share Data)
(For the Quarters Ended 10/2/99 And 9/26/98)
Third Quarter
1999 1998
Net sales $3,046.7 $1,946.5
Cost of sales 2,741.8 1,784.5
Selling, general & administrative 131.3 80.1
Amortization of goodwill 21.9 12.8
Operating income 151.7 69.1
Interest expense 71.3 29.0
Other expense 13.4 4.5
Income before provision for national
income taxes 67.0 35.6
Provision for national income taxes 27.7 14.0
Net income $39.3 $21.6
Basic net income per share $0.59 $0.32
Diluted net income per share $0.58 $0.32
Weighted average diluted shares
outstanding 67.9 68.2
Depreciation and amortization $94.3 $57.2
Capital expenditures $94.4 $111.8
Nine Months Ended
1999 1998
Net sales $8,967.5 $6,153.6
Cost of sales 8,104.7 5,559.8
Selling, general & administrative 344.7 238.6
Amortization of goodwill 55.2 35.8
Operating income 462.9 319.4
Interest expense 161.6 79.2
Other expense 28.6 18.0
Income before provision for national
income taxes 272.7 222.2
Provision for national income taxes 108.3 87.6
Net income $164.4 $134.6
Basic net income per share $2.46 $2.01
Diluted net income per share $2.42 $1.97
Weighted average diluted shares
outstanding 67.8 68.3
Depreciation and amortization $244.4 $163.7
Capital expenditures $257.0 $236.9
LEAR CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheet
($ In Millions)
ASSETS 10/2/99 12/31/98
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $71.4 $30.0
Accounts receivable, net 2,013.6 1,373.9
Inventories 570.4 349.6
Other 780.2 444.5
3,435.6 2,198.0
LONG-TERM ASSETS:
Property, plant and equipment, net 1,870.0 1,182.3
Goodwill, net 3,328.3 2,019.8
Other 391.8 277.2
TOTAL ASSETS $ 9,025.7 $5,677.3
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short-term borrowings $ 111.2 $ 82.7
Accounts payable 1,982.5 1,600.8
Accrued liabilities 1,254.1 797.5
Current portion of long-term debt 13.6 16.5
3,361.4 2,497.5
LONG-TERM LIABILITIES:
Deferred national income taxes 94.0 39.0
Long-term debt 3,756.6 1,463.4
Other 400.4 377.4
4,251.0 1,879.8
STOCKHOLDERS' EQUITY 1,413.3 1,300.0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $9,025.7 $5,677.3