Donnelly Reports Highest-Ever Quarterly Operating Earnings
2 May 2000
Donnelly Reports Highest-Ever Quarterly Operating Earnings
HOLLAND, Mich., May 2 Donnelly Corporation (NYSE: DON)
today announced financial results for the first quarter of 2000 that included
the company's highest-ever operating income for a single quarter.
Aided by record-breaking new vehicle sales in North America and continuing
strong sales in Europe, Donnelly posted net sales of $237 million during the
period, compared with sales of $233 million during the year-earlier period.
For comparative purposes it is important to note that Donnelly's total sales
in the year-earlier period included an additional $15 million in sales from
the company's interest in Lear Donnelly Overhead Systems, which Donnelly sold
during the second half of 1999.
Net income for the period was $6.8 million, or $0.67 per share, an
increase of 69 percent over operating earnings of $4.0 million, or $0.40 per
share, during the same period in calendar 1999. The $0.67 per share
represents Donnelly's highest ever single-quarter earnings on operations.
"Our results are clear proof of the solid momentum we've gained in our
drive to improve our operating efficiency and profitability," said Dwane
Baumgardner, Donnelly chairman and chief executive officer. "During a boom
time when capacity-level production is placing tremendous upward pressure on
expenses all across the industry, the teams at Donnelly have done a remarkable
job of holding costs down to help us capture maximum benefits from our
increased sales."
Donnelly's January-March record earnings were the latest milestone in the
company's long-term drive to deliver improved profitability. The period
marked the fifth consecutive quarter of record earnings at the company and
pushed reported 12-month trailing earnings on operations to $2.03 per share.
The ability to manage overtime, premium freight and other costs impacted
by unexpectedly high sales is one of the key factors contributing to the
company's strong earnings during the quarter. Also contributing were
Donnelly's ongoing initiatives to control and leverage overhead expenses.
Donnelly's North American sales of automotive products during the first
quarter were up over 7 percent when compared to the same period in 1999. This
excludes Lear Donnelly sales for both periods. Sales in North America were
aided by Donnelly's strong product presence on popular vehicles such as the
Ford Expedition and Taurus, and the Chrysler minivan and LH programs.
Sales in Europe during the first quarter were higher by 28 percent.
However, when adjusted for a 17 percent negative impact due to foreign
currency fluctuations, the net sales increase for Europe was 11 percent. The
increase reflects significant new product launches last year, favorable mix
and continuing strong vehicle sales in the European market. Overall,
Donnelly's European operations performed at a profitable level during the
period, the second straight quarter of profitability following an extended
period of restructuring.
Through its various product lines, Donnelly is a technology-driven,
customer-focused supplier to every major automotive manufacturer in the world.
The company has been based in Holland, Michigan, since 1905, and today has
approximately 6,100 employees in 12 countries worldwide. Donnelly has been
named by the Society of Automotive Engineers as a model company in lean
manufacturing practices. In addition, Donnelly is nationally recognized as a
leader in the application of participative management principles and systems.
More information on Donnelly is available at the company's site on the World
Wide Web, at http://www.donnelly.com .
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
April 1, April 3,
In thousands, except share data 2000 1999
Net sales $237,404 $233,154
Cost of sales 196,124 195,191
Gross profit 41,280 37,963
Operating expenses:
Selling, general and administrative 20,569 20,560
Research and development 9,762 9,570
Restructuring and other charges - 8,777
Total operating expenses 30,331 38,907
Operating income (loss) 10,949 (944)
Non-operating (income) expenses:
Interest expense 1,783 2,202
Gain on sale of equity investment - (5,130)
Other income, net (502) 197
Non-operating (income) expenses 1,281 (2,731)
Income before taxes on income 9,668 1,787
Taxes on income (credit) 2,653 (281)
Income before minority interest
and equity earnings 7,015 2,068
Minority interest in net (earnings) losses
of subsidiaries (285) 1,783
Equity in earnings (losses)
of affiliated companies 44 (31)
Net income $6,774 $3,820
Per share of common stock:
Diluted net income per share $0.67 $0.38
Basic net income per share $0.67 $0.38
Cash dividends declared $0.10 $0.10
Average common shares
outstanding 10,153,601 10,093,510
DONNELLY CORPORATION AND SUBSIDIARIES
CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
April 1, December 31,
In thousands 2000 1999
ASSETS
Current assets:
Cash and cash equivalents $1,713 $4,153
Accounts receivable, net 96,469 80,605
Inventories 47,275 50,392
Prepaid expenses and other
current assets 28,355 28,784
Total current assets 173,812 163,934
Net property, plant and equipment 200,301 198,386
Other assets 67,609 66,543
Total assets $441,722 $428,863
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $108,940 $92,098
Other current liabilities 55,553 46,483
Current maturities of long-term debt 89 94
Total current liabilities 164,582 138,675
Long-term debt, less
current maturities 90,111 107,383
Deferred income taxes and
other liabilities 59,355 58,059
Total liabilities 314,048 304,117
Minority interest 1,090 951
Shareholders' equity 126,584 123,795
Total liabilities and
shareholders' equity $441,722 $428,863