Intermet Reports Fiscal Year and Fourth-Quarter Results
27 January 2000
Intermet Reports Fiscal Year and Fourth-Quarter Results
Sales for year and quarter set records; earnings impacted by plant shutdown
TROY, Mich., Jan. 27 -- Intermet Corporation
today reported all-time record sales of $957 million for 1999, keeping pace
with record auto sales. Compared with 1998, sales were up $115 million, or
14%, over the previous annual record 1998 sales of $842 million. 1999 and
1998 included sales of $57 million and $55 million, respectively, for the
Ironton facility that will be closed in 2000.
Net income for the year was $36.4 million, or $1.42 per diluted share,
compared with $41.0 million, or $1.58 per diluted share, in 1998. Earnings
per diluted share, excluding one-time events, were $1.59. 1999 earnings were
impacted by manufacturing facilities operating at over-capacitized levels to
meet customer demand. The earnings also include several one-time events:
recognition of a $0.47 per diluted share charge for the closure of a foundry
in Ohio; a tax benefit of $0.33 per diluted share resulting from non-recurring
tax events; and a $0.03 per diluted share cost associated with the
acquisitions of two light-metal casting companies.
Intermet today also reported record fourth-quarter sales of $241 million
driven by the unprecedented record level of automotive demand. These sales
include $5 million from the newly acquired companies and compare with sales of
$209 million in the same period last year. Fourth-quarter earnings of $0.2
million, or $0.01 per diluted share, also reflect several charges totaling,
after tax, $12.7 million, or $0.50 per diluted share, and a one-time tax
benefit of $4.0 million, or $0.16 per diluted share. Earnings per diluted
share for this quarter are $0.30 less than fourth quarter 1998. However,
earnings per diluted share, exclusive of the fourth-quarter one-time events,
of $0.35 improved $0.04 over the same quarter last year, and $0.06 over the
previous quarter in 1999.
In late December 1999, Intermet acquired Ganton Technologies and
Diemakers, two metal casting companies, with plants in Wisconsin, Missouri and
Tennessee. These acquisitions added substantial casting capacity in light
metals and further strengthened Intermet's strategy of expanding into non-
ferrous automotive components. Intermet combined all of its light-metals
plants into one group and has reorganized the company into two units: Ferrous
Metals and Light Metals.
Also, in December 1999, Intermet announced that it was closing its Ironton
Iron foundry in Ironton, Ohio. The closure is expected to result in asset
impairment and shutdown costs totaling $18.6 million in 1999. Continuing
losses from the Ironton Iron operation also are expected to impact Intermet's
first quarter of 2000.
John Doddridge, chairman and chief executive officer, said, "Our last
quarter presented us with numerous challenges and opportunities. We are very
pleased with our acquisition of Ganton and Diemakers. Along with the Tool
Products operations acquired last year, these two well-managed companies give
us critical mass in aluminum, magnesium and zinc castings, which is consistent
with our goal of becoming the world's leading full-service metal casting
company. We expect the Ganton and Diemakers operations to be accretive during
the year 2000.
"Looking at the first quarter of 2000 and beyond, we see continued strong
production numbers from both our ferrous foundry operations and the light
metals group," Doddridge said. "As we assimilate the new acquisitions into
the corporation and move away from the Ironton Iron situation, we see much-
improved opportunities for growing our bottom line. Intermet's order board
continues to be strong. If vehicle build rates remain near record levels, we
have the necessary capacity and operational efficiencies in place to make 2000
a very good year for us."
The Intermet board of directors voted to approve a quarterly dividend of
$0.04 per share, payable March 31, 2000, to shareholders of record as of March
1, 2000.
With headquarters in Troy, Michigan, Intermet Corporation is a full-
service supplier of powertrain, chassis/suspension and structural cast-metal
components to the worldwide automotive industry. Intermet also manufactures
cranes and specialty service vehicles. The company has more than 8,000
employees at facilities located in North America and Europe. More information
about the company is available on the Internet at http://www.intermet.com .
This news release may include forecasts and forward-looking statements
about Intermet, its industry and the markets in which it operates. Forward-
looking statements and the achievement of any forecasts or projections are
subject to risks, uncertainties and other factors that could cause actual
results to differ materially from those expressed or denied. Such risks and
uncertainties are fully detailed as a preface to the Management's Discussion
and Analysis of Financial Condition in the Company's 1998 Annual Report for
the year ended December 31, 1998.
Intermet Corporation Condensed Consolidated Income Statements
(In thousands, except per share data)
Three months ended Twelve months ended
December 31 December 31 December 31 December 31,
1999 1998 1999 1998
Net sales $240,557 $208,900 $956,832 $841,598
Cost of sales 210,083 182,128 835,086 730,857
Gross profit 30,474 26,772 121,746 110,741
Selling, general and
administrative 12,963 9,796 41,627 35,092
Asset impairment and
shutdown costs 17,958 - 17,958 -
Operating (loss)
profit (447) 16,976 62,161 75,649
Other expense, net 4,063 2,446 13,708 10,461
(Loss) income before
income taxes (4,510) 14,530 48,453 65,188
(Benefit) provision
for income taxes (4,686) 6,463 12,076 24,199
Net income $176 $8,067 $36,377 $40,989
Income per common share
-- Basic $0.01 $0.31 $1.43 $1.60
Income per common share
-- Diluted $0.01 $0.31 $1.42 $1.58
Weighted average shares outstanding:
Basic 25,338 25,743 25,480 25,610
Diluted 25,376 25,918 25,571 25,947
Intermet Corporation Condensed Consolidated Balance Sheets
(In thousands)
December 31 December 31
1999 1998
Assets:
Cash and cash equivalents $3,416 $5,848
Other current assets 310,335 191,582
Property, plant and equipment, net 370,651 240,702
Other noncurrent assets 273,810 145,883
Total assets $958,212 $584,015
Liabilities and shareholders' equity:
Debt $455,040 $163,101
Other liabilities 258,457 201,572
Total liabilities 713,497 364,673
Minority interest 2,337 2,337
Total shareholders' equity 242,378 217,005
Total liabilities and
shareholders' equity $958,212 $584,015