Tesma International Inc. Reports Record Second Quarter Results
3 March 2000
Tesma International Inc. Reports Record Second Quarter Results; Quarterly Dividend Increased
CONCORD, ON, March 3 -- Tesma International Inc. (TSE:TSM.A;
NASDAQ:TSMA) today announced record second quarter sales, income and earnings
per share for the period ended January 31, 2000.
Three Months Ended Six Months Ended
January 31 January 31
(Canadian dollars in millions,
except per share figures)
2000 1999 2000 1999
Sales $266.8 $191.2 $546.3 $395.8
Income before income taxes $ 32.7 $ 17.8 $ 64.1 $ 37.3
Net income $ 20.7 $ 11.2 $ 40.6 $ 23.1
Operating cash flow $ 42.9 $ 20.6 $ 65.1 $ 30.6
Basic earnings per share $ 0.73 $ 0.39 $ 1.42 $ 0.81
Fully diluted earnings
per share $ 0.69 $ 0.38 $ 1.35 $ 0.78
Weighted average number of
shares outstanding on a
fully diluted basis
(in millions) 30.2 30.1 30.2 30.1
The second quarter of fiscal 2000 represents Tesma's 18th consecutive
quarter (on a comparative year-over-year basis) of record sales and operating
income.
Sales for the quarter increased by 40% over the prior year to $266.8
million. This increase reflects the sales generated by new products and
production programs launched in the last half of fiscal 1999, the inclusion of
our South Korean subsidiary acquired in January 1999, as well as the continued
strong vehicle production volumes in North America which were up 6% over the
comparable period last year. Year-to-date sales increased by 38% to $546.3
million, compared to $395.8 million last year.
Income before income taxes increased by 84% to a record $32.7 million,
compared to $17.8 million in the second quarter of fiscal 1999. This increase
is attributed to the Company's new business, higher sales volumes and
improvements in operating efficiencies. Net income for the quarter of $20.7
million was also a record high and compares to $11.2 million a year ago.
Year-to-date net income was $40.6 million, compared to $23.1 million a year
ago.
Tesma's fully diluted earnings per share for the second quarter of fiscal
2000 increased by 82% to $0.69 from $0.38 last year. Year-to-date fully
diluted earnings per share increased by 73% to $1.35 from $0.78 last year.
Cash provided from operations was $42.9 million in the second quarter, an
increase of $22.3 million over fiscal 1999. Net investment activities for the
quarter included $22.1 million for fixed and other asset additions, primarily
related to new business which will be launched over the next twelve months.
Year-to-date cash generated from operations was $65.1 million, compared to
$30.6 million a year ago.
"We anticipate that the continued solid operating and financial
performance of Tesma will ultimately be reflected in our share price," stated
Anthony Dobranowski, Tesma's Executive Vice President and Chief Financial
Officer. "In the meantime, we will continue to expand our investor relations
activities and focus on improving shareholder value."
In accordance with Tesma's Corporate Constitution, the Board of Directors
announced a 28% increase in the Company's quarterly dividend over the first
quarter. Accordingly, in respect of the second quarter of fiscal 2000, the
Board declared a dividend of $0.16 per share on the Company's Class A
Subordinate Voting and Class B shares payable on April 14, 2000 to
shareholders of record on March 31, 2000.
Consistent with earlier communications, Tesma did not experience any
significant problems with the "Year 2000 Issue".
Tesma is a global supplier of highly-engineered engine, transmission and
fueling systems and components for the automotive industry, focusing on
Innovation, Engineering and Performance. Tesma employs over 3,900 employees in
North America, Europe and Asia in 21 manufacturing facilities and two research
centres.
Tesma will hold a conference call to discuss its second quarter 2000
results on Friday, March 3, 2000 at 1:30 p.m. EST. The numbers for this call
are 416-641-6677 (local/overseas) or 1-800-381-6756 (North America), with
call-in required 10 minutes prior to the start of the conference call. The
conference call will be chaired by Anthony Dobranowski. A taped replay of the
conference call will also be made available from 3:00 p.m. on March 3, 2000
until 12:00 midnight on March 17, 2000. The numbers for the replay are
416-626-4100, reference number 14340180 (local/overseas) or 1-800-558-5253,
reference number 14340432 (North America).
This press release may contain forward looking statements within the
meaning of applicable securities legislation. Such statements involve
certain risks and uncertainties which may cause actual results or
objectives to be materially different from those expressed or implied
herein. These factors include the Company's financial performance,
changes in the economic and competitive markets in which the Company
competes, relationships with customers and other factors as set out
in the Company's Form 40-F for its fiscal year ended July 31, 1999
and subsequent SEC filings.
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
January 31, 2000 July 31, 1999
ASSETS
Current
Cash $107,931 $ 78,582
Accounts receivable 148,498 134,395
Inventories 75,763 76,043
Prepaid expenses and other 10,204 9,813
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342,396 298,833
Fixed assets 283,322 276,297
Other assets 29,936 32,173
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655,654 $607,303
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Bank indebtedness $ 39,659 $ 30,618
Accounts payable 82,255 78,654
Accrued salaries and wages 26,696 25,108
Other accrued liabilities 46,696 41,854
Income taxes payable 9,713 5,673
Long-term debt due within one year 9,086 10,029
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214,105 191,936
Long-term debt 78,878 82,340
Deferred income taxes 30,889 29,538
SHAREHOLDERS' EQUITY
Class A Subordinate Voting Shares 181,420 180,265
Class B Shares 2,583 2,583
Retained earnings 154,701 120,595
Currency translation adjustment (6,922) 46
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331,782 303,489
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$655,654 $607,303
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands, except per share figures)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
January 31 January 31
2000 1999 2000 1999
Sales $266,834 $191,214 $546,258 $395,803
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Cost of goods sold 201,216 148,151 414,584 307,394
Depreciation and amortization 10,926 8,045 21,826 15,685
Selling, general and
administrative 17,289 14,205 36,108 29,829
Interest, net 1,248 501 2,665 545
Affiliation fees and
other charges 3,437 2,494 6,975 5,066
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Income before income taxes 32,718 17,818 64,100 37,284
Income taxes 12,009 6,582 23,547 14,210
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Net income for the period 20,709 11,236 40,553 23,074
Retained earnings,
beginning of period 137,575 86,927 120,595 77,085
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (3,583) (1,995) (6,447) (3,991)
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Retained earnings,
end of period $154,701 $96,168 $154,701 $96,168
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Earnings per Class A
Subordinate Voting Share
or Class B Share
Basic $0.73 $0.39 $1.42 $0.81
Fully diluted $0.69 $0.38 $1.35 0.78
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Average number of Class A
Subordinate Voting Shares
and Class B Shares
outstanding (in millions)
Basic 28.7 28.5 28.6 28.5
Fully diluted 30.2 30.1 30.2 30.1
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
January 31 January 31
2000 1999 2000 1999
CASH PROVIDED FROM (USED FOR):
OPERATING ACTIVITIES
Net income $20,709 $11,236 $40,553 $23,074
Items not involving
current cash flows 13,199 9,594 24,911 16,567
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33,908 20,830 65,464 39,641
Changes in non-cash working
capital 8,993 (204) (403) (9,058)
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42,901 20,626 65,061 30,583
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INVESTING ACTIVITIES
Fixed asset additions (21,024) (24,738) (36,588) (42,345)
Purchase of subsidiaries (800) (12,605) (800) (44,785)
Increase in other assets (1,026) (3,242) (1,144) (3,538)
Proceeds from disposition
of fixed and other assets 1,589 75 2,358 814
Cash acquired on purchase
of subsidiaries - 3,866 - 3,866
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(21,261) (36,644) (36,174) (85,988)
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FINANCING ACTIVITIES
Increase (decrease) in
bank indebtedness (9,656) 21,414 9,099 42,919
Issues of long-term debt - 3,659 1,377 3,772
Repayments of long-term debt (2,254) (1,623) (3,334) (2,078)
Issuance of Class A
Subordinate Voting Shares 420 262 1,155 262
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (3,583) (1,995) (6,447) (3,991)
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(15,073) 21,717 1,850 40,884
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Effect of exchange rate
changes on cash (869) (892) (1,388) 152
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Net increase (decrease)
in cash during the period 5,698 4,807 29,349 (14,369)
Cash, beginning of period 102,233 24,822 78,582 43,998
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Cash, end of period $107,931 $29,629 $107,931 $29,629
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