Tesma International Inc. record performance continues
15 September 2000
Tesma International Inc. record performance continues
CONCORD, ON, Sept. 14 /PRNewswire/ - Tesma International Inc.
today announced record sales, income and earnings per
share for the quarter and year ended July 31, 2000.
Three Months Ended Twelve Months Ended
July 31 July 31
2000 1999 2000 1999
(Canadian dollars in millions,
except per share figures)
Sales $277.9 $246.2 $1,127.8 $893.7
Income before income taxes $ 31.0 $ 22.3 $ 133.6 $ 84.5
Net income $ 19.5 $ 13.7 $ 84.9 $ 52.3
Operating cash flow $ 39.3 $ 38.7 $ 147.2 $ 93.8
Basic earnings per share $ 0.67 $ 0.48 $ 2.95 $ 1.83
Fully diluted earnings
per share $ 0.65 $ 0.46 $ 2.83 $ 1.76
Weighted average number
of shares outstanding on
a fully diluted basis
(in millions) 30.3 30.1 30.2 30.1
The fourth quarter of fiscal 2000 represents the 20th consecutive quarter
(on a comparative year-over-year basis) of record sales and operating income
reported by Tesma since going public in 1995.
Sales for the quarter increased by 13% over the prior year to $277.9
million. This increase reflects the sales generated by new products and
production programs launched over the past twelve months, a 10% increase in
our North American content per vehicle to $46, increased sales to our export
markets of Australia and South America and an increase in vehicle production
volumes in North America which were up 3.8% over the comparable period last
year. The gains were somewhat offset by the strengthening of the Canadian
dollar versus the Euro which resulted in a growth rate in European sales of
only 4% compared to the fourth quarter of fiscal 1999. For the twelve month
period, reported sales were a record $1,127.8 million, an increase of 26% over
the prior year.
Income before income taxes increased by 39% to a record $31.0 million,
compared to $22.3 million in the fourth quarter of fiscal 1999. This increase
is attributed to the Company's new production programs, improved operating
efficiencies and higher sales volumes as a result of our increased content per
vehicle and higher North American production volumes. Net income for the
quarter of $19.5 million was also a record for the fourth quarter and compares
to $13.7 million a year ago. Year-to-date net income was $84.9 million
compared to $52.3 million a year ago, a 62.3% increase.
Tesma's fully diluted earnings per share for the fourth quarter of fiscal
2000 increased by 41% to $0.65 from $0.46 last year. For the year, fully
diluted earnings per share increased by 61% to $2.83 from $1.76 last year.
Cash provided from operations was $39.3 million in the fourth quarter, an
increase of $0.6 million over fiscal 1999. Net investment activities for the
quarter included $24.6 million for fixed and other asset additions, primarily
related to awarded new business which will be launched over the next twelve
months and the construction of a new manufacturing facility in Austria. For
the year, cash generated from operations was $147.2 million, compared to $93.8
million a year ago.
As we outlined in our 1999 annual report, management is committed to
increasing shareholder value through a focus on operational excellence, a
strong balance sheet and superior financial results. Our performance in fiscal
2000 demonstrates the successful achievement of these goals. The strong
operating performance of our manufacturing facilities has generated very
positive cash flows, resulting in a stronger balance sheet - one of the best
among our peer group in the industry.
The Tesma Board of Directors today declared a dividend in respect of the
fourth quarter of fiscal 2000 of $0.16 per share on the Class A Subordinate
Voting and Class B shares payable on October 16, 2000 to shareholders of
record on September 29, 2000.
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
July 31, 2000 July 31, 1999
ASSETS
Cash $143,104 $ 78,582
Accounts receivable 142,657 134,395
Inventories 83,632 76,043
Prepaid expenses and other 9,937 9,813
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379,330 298,833
Fixed assets 306,057 276,297
Other assets 27,284 32,173
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$712,671 $607,303
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 50,207 $ 30,618
Accounts payable 85,624 78,654
Accrued salaries and wages 36,019 25,108
Other accrued liabilities 44,014 41,854
Income taxes payable 13,346 5,673
Long-term debt due within one year 8,243 10,029
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237,453 191,936
Long-term debt 74,990 82,340
Deferred income taxes 33,023 29,538
SHAREHOLDERS' EQUITY
Class A Subordinate Voting Shares 185,851 180,265
Class B Shares 2,583 2,583
Retained earnings 186,554 120,595
Currency translation adjustment (7,783) 46
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367,205 303,489
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$712,671 $607,303
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
July 31 July 31
2000 1999 2000 1999
Sales $277,855 $246,157 $1,127,785 $893,671
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Cost of goods sold 214,092 191,613 857,757 694,567
Depreciation and
amortization 10,118 10,128 43,513 35,391
Selling, general and
administrative 20,275 18,622 76,314 65,720
Interest (net) (81) 485 3,271 2,295
Affiliation fees and
other charges 2,466 3,036 13,343 11,213
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Income before income taxes 30,985 22,273 133,587 84,485
Income taxes 11,530 8,546 48,693 32,151
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Net income attributable to
Class A Subordinate Voting
Shares and Class B Shares 19,455 13,727 84,894 52,334
Retained earnings,
beginning of period 174,980 109,705 120,595 77,085
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (4,658) (2,837) (15,712) (8,824)
Surrender of stock options (3,223) - (3,223) -
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Retained earnings,
end of period $186,554 $120,595 $186,554 $120,595
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Earnings per Class A
Subordinate Voting Share
or Class B Share
Basic $0.67 $0.48 $2.95 $1.83
Fully diluted $0.65 $0.46 $2.83 $1.76
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Average number of Class A
Subordinate Voting Shares
and Class B Shares
outstanding (in millions)
Basic 29.0 28.6 28.8 28.5
Fully diluted 30.3 30.1 30.2 30.1
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TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED TWELVE MONTHS ENDED
July 31 July 31
2000 1999 2000 1999
CASH PROVIDED FROM
(USED FOR):
OPERATING ACTIVITIES
Net income $ 19,455 $ 13,727 $ 84,894 $ 52,334
Items not involving
current cash flows 12,643 14,128 51,747 41,274
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32,098 27,855 136,641 93,608
Changes in non-cash
working capital 7,205 10,887 10,568 170
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39,303 38,742 147,209 93,778
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INVESTING ACTIVITIES
Fixed asset additions (24,619) (14,980) (81,947) (67,455)
Purchase of subsidiaries - 177 (800) (44,608)
Increase in other assets 28 (531) (1,288) (5,126)
Proceeds from disposition
of fixed and other assets 851 318 3,065 1,198
Cash acquired on purchase
of subsidiaries - - - 3,863
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(23,740) (15,016) (80,970) (112,128)
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FINANCING ACTIVITIES
Increase (decrease) in
bank indebtedness 5,738 (16,919) 19,353 14,616
Issues of long-term debt - 60,653 1,377 64,657
Repayments of long-term debt (2,990) (4,799) (7,617) (17,650)
Issuance of Class A
Subordinate Voting Shares 1,948 636 5,586 898
Dividends on Class A
Subordinate Voting Shares
and Class B Shares (4,658) (2,837) (15,712) (8,824)
Surrender of stock options (3,223) - (3,223) -
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(3,185) 36,734 (236) 53,697
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Effect of exchange rate
changes on cash 198 529 (1,481) (763)
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Net increase in cash
during the period 12,576 60,989 64,522 34,584
Cash, beginning of period 130,528 17,593 78,582 43,998
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Cash, end of period $ 143,104 $ 78,582 $ 143,104 $ 78,582
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NOTE TO CONSOLIDATED FINANCIAL STATEMENTS
The Company currently operates in one industry segment, the automotive
powertrain business, designing and manufacturing parts and assemblies
primarily for the automotive OEMs or their Tier 1 powertrain component
manufacturers.
The Company operates internationally and its manufacturing facilities are
arranged geographically to match the requirements of the Company's
customers in each market. Each manufacturing facility has the capability
to offer many different powertrain parts and assemblies as the
technological processes employed can be used to make many different parts
and assemblies. Additionally, specific marketing and distribution
strategies are required in each geographic region. The Company currently
operates in four geographic segments of which only two are reportable
segments. The accounting policies for the segments are the same as those
described in Note 1 to the July 31, 1999 consolidated financial
statements and intersegment sales are accounted for at prices which
approximate fair value.
Executive management assesses the performance of each segment based on
income before income taxes as the management of income tax expense is
centralized.
North American European Other Total
Automotive Automotive
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(Canadian dollars in thousands)
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July 31, 2000
Total Sales $ 883,295 $ 208,830 $ 42,748 $ 1,134,873
Intersegment sales (4,241) (2,847) - (7,088)
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Sales to external
customers $ 879,054 $ 205,983 $ 42,748 $ 1,127,785
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Interest (net) $ 1,042 $ (808) $ 3,037 $ 3,271
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Depreciation and
amortization $ 31,265 $ 7,760 $ 4,488 $ 43,513
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Income before income
taxes $ 116,111 $ 14,949 $ 2,527 $ 133,587
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Fixed assets, net $ 208,393 $ 55,977 $ 41,687 $ 306,057
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Fixed asset additions $ 54,292 $ 21,018 $ 6,637 $ 81,947
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Goodwill, net $ 17,788 $ 1,704 $ - $ 19,492
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July 31, 1999
Total Sales $ 665,590 $ 216,381 $ 17,490 $ 899,461
Intersegment sales (2,611) (3,179) - (5,790)
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Sales to external
customers $ 662,979 $ 213,202 $ 17,490 $ 893,671
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Interest (net) $ 1,093 $ (123) $ 1,325 $ 2,295
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Depreciation and
amortization $ 26,177 $ 7,344 $ 1,930 $ 35,391
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Income before income
taxes $ 72,800 $ 11,714 $ (29) $ 84,485
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Fixed assets, net $ 184,581 $ 52,489 $ 39,227 $ 276,297
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Fixed asset additions $ 52,069 $ 14,302 $ 1,084 $ 67,455
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Goodwill, net $ 18,451 $ 2,049 $ - $ 20,500
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