Decoma Announces Fiscal 2000 Second Quarter Results
10 March 2000
Decoma Announces Fiscal 2000 Second Quarter Results
CONCORD, ON, March 9 /CNW-PRN/ - Decoma International Inc. (TSE:DEC.A;
NASDAQ:DECAF) today announced its financial results for the second quarter and
first six months of fiscal 2000 ended January 31, 2000.
Three Months Ended Six Months Ended
January 31 January 31
(millions of Canadian dollars,
except per share figures) 2000 1999 2000 1999
Sales $245.6 $227.7 $504.9 $439.3
Operating Income $ 17.0 $ 15.9 $ 39.7 $ 29.7
Net Income $ 12.9 $ 11.5 $ 30.6 $ 23.4
Fully diluted earnings per share $ 0.25 $ 0.22 $ 0.58 $ 0.45
Average number of shares
outstanding on a fully diluted
basis (millions) 59.2 59.2 59.2 59.2
Financial results for Decoma's second quarter of fiscal 2000 demonstrate
continued strong growth and financial performance. Sales for the second
quarter and the first half of fiscal 2000 were $245.6 million and $504.9
million respectively, an increase of 7.9% and 14.9% over the comparable
periods of fiscal 1999. The higher sales level in the second quarter reflects
a 12.1% increase in North American, including Mexican, content per vehicle.
This increase in the first half of the year was realized in a period during
which North American, including Mexican, vehicle production increased 6.8% or
approximately 574,000 units.
Tooling sales included in the above were $25.0 million for the second
quarter and $39.0 million year-to-date compared to $25.0 million in the second
quarter of fiscal 1999 and $50.3 million for the first six months of fiscal
1999. The decrease in tooling sales on a year-to-date basis is a result of the
timing of new platform launches.
Operating income in the second quarter of fiscal 2000 was up 6.9% to $17.0
million compared to $15.9 million in the second quarter of fiscal 1999. This
improvement reflects the higher contribution due to sales growth and improved
margins partially offset by increased depreciation, financing costs and design
and engineering costs. Operating income increased 34.0% to $39.7 million for
the first half of the year compared to the same period in fiscal 1999.
Equity income in the second quarter of fiscal 2000 increased to $2.7
million from $2.1 million in the second quarter of fiscal 1999. This
improvement of 28.6% resulted from operational improvements at Bestop, Inc.
and strong sales and improved operational efficiencies at Decoma Exterior Trim
Inc. Equity income was $6.9 million for the first half of the year compared to
$5.5 million for the first half of fiscal 1999.
Net income for the second quarter of fiscal 2000 increased 12.2% from
$11.5 million in fiscal 1999 to $12.9 million. On a year-to-date basis for
fiscal 2000 net income increased 30.8% to $30.6 million compared to $23.4
million for the first six months of fiscal 1999.
Fully diluted earnings per share increased by 13.6% to $0.25 per share for
the second quarter of fiscal 2000 compared to $0.22 for the comparable period
in fiscal 1999. On a year-to-date basis, fully diluted earnings per share were
$0.58 versus $0.45 in the comparable period of fiscal 1999. The weighted
average number of shares outstanding on a fully diluted basis for the
comparable quarters and first six months of fiscal 1999 and 2000 was 59.2
million.
During the second quarter of fiscal 2000, cash generated from operations
was $14.5 million after investing $9.7 million in non-cash working capital.
Investment in fixed assets during the quarter totalled $18.0 million.
Year-to-date cash generated from operations after non-cash working capital was
$21.7 million for fiscal 2000 compared to $41.4 million for fiscal 1999. A
significant amount has been invested in tooling inventory in fiscal 2000 to
support a considerable number of new program launches scheduled for fiscal
2001.
Commenting on the second quarter of fiscal 2000, Al Power, President and
CEO, stated that "Our financial performance through the first half of the year
is a direct result of strong automotive markets and our focussed strategies
and programs aimed at delivering value to our shareholders. The second quarter
also witnessed a number of developments that will contribute to our continued
growth going forward. Our fascia business continues to grow, and we are
focussing on innovative ways to expand our production capacity. We do not see
any slowdown in demand for the next few years as the light truck sector
follows the car sector in converting to plastic fascias and we continue to win
takeover business from competitors. Major accomplishments in the second
quarter included our joint venture company, Conix, receiving General Motors'
fascia Supplier of the Year Award, the sixth year in a row that we have been
honoured with this prestigious award. As well, as anticipated, Decoma did not
experience any major issues related to the "Year 2000 Issue" at the beginning
of January 2000."
On March 9, 2000 Decoma's Board of Directors declared, in addition to the
dividend on the 5% Convertible Series Preferred Shares, a quarterly dividend
in respect of the second quarter of fiscal 2000 of $0.05 per share on the
Class A Subordinate Voting Shares and Class B Shares payable on April 14, 2000
to shareholders of record on March 31, 2000. The dividend is in keeping with
the shareholder profit participation commitment set out in Decoma's Corporate
Constitution.
Decoma will hold a conference call to discuss its second quarter results
on Friday, March 10, 2000 at 9:30 a.m. EST. The dial-in numbers for the
conference call are (416) 641-6448 and (877) 331-7860 for out of town callers
with call-in required 10 minutes prior to the start of the conference call.
The conference call will be chaired by S. Randall Smallbone, Vice President,
Finance and CFO. Attending the conference call will be Alan J. Power,
President and CEO along with other members of executive management. The
conference call will be recorded and copies of the recording will be made
available by request.
Decoma designs, engineers and manufactures automotive fascias and related
components, plastic body panels and exterior appearance systems for cars and
light trucks, principally for automobile manufacturers in Canada, the United
States, Mexico and Europe. Decoma has approximately 5,300 employees in 14
manufacturing and engineering operations in Canada, the United States, Mexico,
Belgium and England.
This press release contains "forward looking statements" within the
meaning of applicable securities legislation. Such statements involve
important risks and uncertainties that may cause actual results or anticipated
events to be materially different from those expressed or implied herein.
These factors include, but are not limited to, industry cyclicality, changes
in the economic and competitive environments in which Decoma operates and
Decoma's dependence on certain vehicle programs and major OEM customer
relationships. In this regard, readers are referred to the Company's Form 20-F
for its fiscal year ended July 31, 1999 and subsequent SEC filings.
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DECOMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
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(Unaudited)
(Canadian dollars in thousands)
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As at As at July
January 31 31
2000 1999
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ASSETS
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Current assets:
Cash and cash equivalents $ 37,736 $ 67,811
Accounts receivable 124,244 112,943
Inventories 93,460 70,878
Prepaid expenses and other 8,335 8,398
Accounts receivable from
related companies 5,871 3,101
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269,646 263,131
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Investments 47,310 41,335
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Fixed assets, net 406,241 405,377
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Other assets 8,095 9,962
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$ 731,292 $ 719,805
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Bank indebtedness $ 40,210 $ 29,487
Accounts payable 89,395 80,170
Accrued salaries and wages 17,236 22,642
Other accrued liabilities 32,487 25,909
Income taxes payable 7,191 9,342
Long-term debt due within one year 853 13,722
Debt due to Magna within one year 14,062 14,096
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201,434 195,368
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Long-term debt 29,187 26,764
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Long-term debt due to Magna 30,574 39,304
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Deferred income taxes 17,159 18,563
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Convertible Series Preferred Shares 140,831 137,922
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Minority interest 12,385 14,136
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Shareholders' equity:
Convertible Series Preferred Shares 12,395 14,800
Class A Subordinate Voting Shares 103,661 103,661
Class B Shares 95,303 95,303
Retained earnings 81,531 56,600
Currency translation adjustment 6,832 17,384
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299,722 287,748
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$ 731,292 $ 719,805
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
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(Unaudited)
(Canadian dollars in thousands,
except per share figures) Three Months Ended Six Months Ended
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January 31 January 31
2000 1999(x) 2000 1999(x)
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Sales $245,597 $227,707 $504,861 $439,283
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Cost of goods sold 194,515 181,439 395,814 350,978
Depreciation and amortization 12,954 9,644 25,860 18,650
Selling, general and
administrative 14,088 15,509 29,228 30,046
Interest expense, net 1,651 (187) 3,063 (423)
Amortization of discount on
Convertible Series Preferred
Shares 1,462 1,402 2,909 2,790
Affiliation fees and other
charges 3,936 3,824 8,245 7,351
Non-recurring start-up costs - 217 - 217
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Operating income 16,991 15,859 39,742 29,674
Equity income 2,686 2,080 6,851 5,482
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Income before income taxes
and minority interest 19,677 17,939 46,593 35,156
Income taxes 7,753 6,550 17,287 11,904
Minority interest (982) (76) (1,282) (110)
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Net income 12,906 11,465 30,588 23,362
Dividends on Convertible
Series Preferred Shares (net
of return of capital) (666) (715) (1,345) (1,443)
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Net income attributable to
Class A Subordinate Voting
Shares and Class B Shares 12,240 10,750 29,243 21,919
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Retained earnings, beginning
of period 71,447 34,579 56,600 24,704
Dividends on Class A
Subordinate Voting
Shares and Class B Shares (2,156) (1,294) (4,312) (2,588)
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Retained earnings, end of
period $ 81,531 $ 44,035 $ 81,531 $ 44,035
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Earnings per Class A
Subordinate Voting
Share or Class B Share
Basic $ 0.28 $ 0.25 $ 0.67 $ 0.51
Fully diluted $ 0.25 $ 0.22 $ 0.58 $ 0.45
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Average number of Class A
Subordinate Voting Shares
and Class B Shares
outstanding (in millions)
Basic 43.1 43.1 43.1 43.1
Fully diluted 59.2 59.2 59.2 59.2
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(x)NOTE: Certain comparative figures have been reclassified to conform
with the financial statement presentation adopted for the
current year.
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DECOMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
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(Unaudited)
(Canadian dollars in thousands) Three Months Ended Six Months Ended
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January 31 January 31
2000 1999 2000 1999
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Cash provided from (used for):
OPERATING ACTIVITIES
Net Income $ 12,906 $ 11,465 $ 30,588 $ 23,362
Items not involving current
cash flows 11,291 10,776 19,447 17,339
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24,197 22,241 50,035 40,701
Changes in non-cash working
capital (9,651) 17,724 (28,344) 683
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14,546 39,965 21,691 41,384
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INVESTMENT ACTIVITIES
Fixed asset additions (18,038) (33,370) (39,059) (56,792)
Decrease (increase) in
investments and other 231 (3,277) 712 (4,208)
Proceeds from disposition of
fixed assets and other 15 54 38 66
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(17,792) (36,593) (38,309) (60,934)
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FINANCING ACTIVITIES
(Decrease) increase in debt due
to Magna (2,303) 1,394 (7,395) (23,864)
Increase (decrease) in bank
indebtedness 37,618 (5,656) 10,723 25,104
Issues of long term debt 9,725 11,952 24,272 18,040
Repayments of long term debt (31,906) (9,389) (31,906) (14,999)
Dividends on Class A
Subordinate Voting Shares and
Class B Shares (2,156) (1,294) (4,312) (2,588)
Dividends on Convertible Series
Preferred Shares (1,875) (1,875) (3,750) (3,750)
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9,103 (4,868) (12,368) (2,057)
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Effect of exchange rate changes
on cash and cash equivalents (247) (1,928) (1,089) (1,450)
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Net increase (decrease) in cash
and cash equivalents during the
period 5,610 (3,424) (30,075) (23,057)
Cash and cash equivalents,
beginning of period 32,126 75,175 67,811 94,808
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Cash and cash equivalents, end
of period $ 37,736 $ 71,751 $ 37,736 $ 71,751
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