Lear Corporation Reports Record Fourth Quarter and Full Year 1999 Results
14 February 2000
Lear Corporation Reports Record Fourth Quarter and Full Year 1999 Results
SOUTHFIELD, Mich., Feb. 14 -- Lear Corporation
today reported record fourth quarter and full year sales, operating income and
net income for fiscal 1999.
Highlights for 1999 included:
-- Sales rose 37 percent to a record $12.4 billion
-- 18th consecutive year of sales growth
-- Record operating income of $713 million
-- Record net income of $257 million
-- Record earnings per share of $3.80
-- Successfully integrated strategic acquisitions
-- Won first major interior business in France
-- Awarded significant electronics programs
-- Business backlog increase to $3.3 billion
"We are pleased with our record fourth quarter and full year results,
which reflect the benefit of acquisitions as well as improved operating
margins in our base business," stated Kenneth L. Way, Chairman and Chief
Executive Officer of Lear Corporation. "A year ago our backlog stood at $2.0
billion and it now stands at $3.3 billion and includes four recent North
American complete interior awards."
Way continued, "These accomplishments continue to demonstrate Lear's
ability to create value, adapt rapidly, and advance relentlessly in developing
exciting new ways to serve our global customers."
Net income for the quarter ended December 31, 1999 increased to
$92.7 million, or $1.37 per share, compared with a loss of $19.1 million, or
($.28) per share, last year. Excluding restructuring charges and credits, net
income for the quarter rose 25 percent to $91.7 million, or $1.36 per share,
compared with net income of $73.4 million, or $1.09 per share, for the same
quarter in 1998. Operating income for the fourth quarter of 1999, excluding
the restructuring charges and credits, increased by 58 percent to
$246.0 million, from $155.8 million in the fourth quarter of 1998.
Net sales for the fourth quarter of 1999 rose 19 percent to $3.5 billion,
from $2.9 billion last year. The increase was attributable to incremental
revenues from Lear's recent acquisitions as well as internal growth.
Geographically, approximately 36 percent of the current quarter's
$555.5 million sales increase was attributable to Lear's operations outside of
the U.S. and Canada. Fourth quarter 1999 sales in Europe increased nearly
15 percent to $1.1 billion, while sales in other world regions increased
32 percent to $237 million. U.S. and Canadian sales in the fourth quarter of
1999 rose over 20 percent to nearly $2.1 billion.
Net income for the full year ended December 31, 1999 increased to
$257.1 million, or $3.80 per share, compared with earnings of $115.5 million,
or $1.70 per share, last year. Excluding restructuring charges and credits,
net income for 1999 rose 22 percent to $254.5 million, or $3.76 per share,
compared with net income of $208 million, or $3.06 per share, for 1998.
Operating income for the full year of 1999, excluding restructuring charges
and credits, advanced 49 percent to $708.9 million, from $475.2 million last
year.
Net sales for the full year ended December 31, 1999 rose 37 percent to
$12.4 billion from last year's sales of $9.1 billion.
Geographically, 31 percent of the sales increase for the full year 1999
was attributable to Lear's operations outside of the U.S. and Canada. For the
full year of 1999, European sales increased 35 percent to $3.9 billion, while
sales in other world regions increased approximately 4 percent to
$812 million. U.S. and Canadian sales for the full year of 1999 increased
more than 43 percent to $7.7 billion.
Due to over $550 million of cash flows from operations for 1999, the ratio
of net debt to total capitalization ended the year at 69.8%.
Way concluded, "1999 was another outstanding year for Lear, as we exceeded
all of our financial goals. Entering the new millennium, we are positioned to
provide our shareholders with continued double-digit earnings growth, by
selling exciting new products, generating strong cash flows, and through a
continued emphasis on operational efficiency."
Lear Corporation, a Fortune 200 company headquartered in Southfield,
Michigan, USA, is one of the world's largest automotive suppliers, with 1999
sales of more than $12.4 billion. The company's world-class products are
designed, engineered and manufactured by approximately 120,000 employees in
more than 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 Operations
(in millions, except per share data)
Quarter ended December 31
1999 1998
Net sales $3,461.3 $2,905.8
Cost of sales 3,054.9 2,638.2
Selling, general
and administrative expenses 139.0 98.4
Restructuring and other
charges (credits) (1.8) 133.0
Amortization of goodwill 21.4 13.4
Operating income 247.8 22.8
Interest expense 73.5 31.3
Other expense 15.9 4.3
Income (loss) before provision
for national income taxes 158.4 (12.8)
Provision for national income taxes 65.7 6.3
Net income (loss) $92.7 $ (19.1)
Diluted net income (loss) per share $1.37 $ (0.28)
Net income - before restructuring
and other charges (credits) $91.7 $73.4
Diluted net income per share
- before restructuring
and other charges (credits) $1.36 $1.09
Depreciation and amortization $96.5 $56.0
Capital expenditures $ 134.4 $ 114.5
Weighted average number
of diluted shares outstanding 67.7 67.5
Year ended December 31
1999 1998
Net sales $12,428.8 $9,059.4
Cost of sales 11,159.6 8,198.0
Selling, general
and administrative expenses 483.7 337.0
Restructuring and other
charges (credits) (4.4) 133.0
Amortization of goodwill 76.6 49.2
Operating income 713.3 342.2
Interest expense 235.1 110.5
Other expense 47.1 22.3
Income before provision
for national income taxes 431.1 209.4
Provision for national income taxes 174.0 93.9
Net income $ 257.1 $ 115.5
Diluted net income per share $ 3.80 $ 1.70
Net income - before restructuring
and other charges (credits) $ 254.5 $ 208.0
Diluted net income per share
- before restructuring
and other charges (credits) $ 3.76 $ 3.06
Depreciation and amortization $ 340.9 $ 219.7
Capital expenditures $ 391.4 $ 351.4
Weighted average number
of diluted shares outstanding 67.7 68.0
Lear Corporation and Subsidiaries
Consolidated Balance Sheets
(in millions)
12/31/1999 12/31/1998
ASSETS
Current:
Cash and cash equivalents $ 106.9 $ 30.0
Accounts receivable, net 1,866.1 1,373.9
Inventories 577.3 349.6
Customer engineering / tooling 304.9 221.4
Other 299.0 223.1
3,154.2 2,198.0
Long-Term:
PP&E, net 1,970.0 1,182.3
Goodwill, net 3,210.5 2,019.8
Other 382.9 277.2
5,563.4 3,479.3
Total Assets $8,717.6 $5,677.3
LIABILITIES AND STOCKHOLDERS' EQUITY
Current:
Short-term borrowings $103.6 $82.7
Accounts payable 2,245.3 1,600.8
Accrued liabilities 1,074.9 797.5
Current portion of long-term debt 63.6 16.5
3,487.4 2,497.5
Long-Term:
Deferred national income taxes 16.8 39.0
Long-term debt 3,324.8 1,463.4
Other 423.3 377.4
3,764.9 1,879.8
Stockholders' Equity 1,465.3 1,300.0
Total Liabilities
and Stockholders' Equity $8,717.6 $5,677.3
Lear Corporation and Subsidiaries
Supplemental Data (unaudited)
(in millions, except content per vehicle data)
Quarter ended December 31
1999 1998
Sales
U.S and Canada $2,098 $1,744
Europe 1,126 982
Rest of World 237 180
Total $3,461 $2,906
Operating income
before amortization (1) $ 267 $ 169
Amortization (21) (13)
Operating income
after amortization (1) $ 246 $ 156
Content per vehicle - North America $ 531 $ 436
Content per vehicle - Western Europe $ 257 $ 237
Content per vehicle - South America $ 92 $ 116
Year ended December 31
1999 1998
Sales
U.S and Canada $ 7,696 $ 5,371
Europe 3,921 2,904
Rest of World 812 784
Total $12,429 $ 9,059
Operating income
before amortization (1) $ 786 $ 524
Amortization (77) (49)
Operating income
after amortization (1) $ 709 $ 475
Content per vehicle - North America $ 478 $ 369
Content per vehicle - Western Europe $ 227 $ 176
Content per vehicle - South America $ 101 $ 134
(1) 1999 and 1998 excluding impact of resstructuring and other charges
(credits)