Lear Corporation Posts Record Third-Quarter Earnings
24 October 2000
Lear Corporation Posts Record Third-Quarter Earnings
SOUTHFIELD, Mich., Oct. 24 Lear Corporation ,
the world's fifth-largest automotive supplier, today reported record financial
performance for the third quarter of 2000. Net sales of $3.1 billion,
operating income of $157.8 million and earnings of $.59 per share are all
third-quarter records for the company.
"Our third-quarter record results were very solid," stated Bob Rossiter,
President and Chief Executive Officer of Lear Corporation. "The Lear team
remains focused on our customers and generating consistent organic growth.
Our $3.5 billion backlog of new business reflects more than $1.0 billion in
business awarded within the last year. Additionally, we continued to manage
our cash flow effectively and expect to deliver more than $300 million in free
cash flow this year."
Earnings per share in the quarter increased 2 percent to $.59, versus
$.58 in the third quarter of 1999, as the benefit of new program sales and a
lower number of average shares outstanding offset the impact of the weaker
European currencies, divestitures and lower production levels. Operating
income for the third quarter of 2000 increased 4 percent to $157.8 million,
from $151.7 million in the same quarter of 1999.
Net sales for the quarter rose 3 percent to $3.1 billion, from
$3.0 billion in last year's third quarter. Excluding the impact of the weak
Euro and other foreign currencies and divestitures, sales would have been
8 percent higher. The increase was attributable to strong internal growth as
well as increasing content on existing programs.
During the quarter, sales in the U.S. and Canada increased $13 million to
$1.929 billion, from $1.916 billion in the third quarter of 1999. In Europe,
sales were down $50 million to $870 million, as weaker European currencies
caused sales to be $114 million lower due to currency translation. Sales in
other world regions increased $134 million to $345 million.
Net income, excluding non-recurring items, for the nine months ended
September 30, 2000, increased 15 percent to a record $189.3 million, or
$2.85 per share, compared with earnings of $164.4 million, or $2.42 per share,
in the comparable 1999 period. Operating income for the first nine months of
2000 advanced 29 percent to $597.0 million, from $462.9 million in last year's
comparable period.
Net sales for the same period rose $1.743 billion, or 19 percent, to a
record $10.711 billion from $8.968 billion in 1999. Sales in the U.S. and
Canada increased $1.019 billion to $6.617 billion. European sales increased
$314 million to $3.109 billion, and sales in the rest of the world increased
$410 million to $985 million.
Lear Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited, in millions, except per share data)
Third Quarter Ended
09/30/00 10/02/99
Net sales $ 3,144.1 $ 3,046.7
Cost of sales 2,844.3 2,741.8
Selling, general and administrative expenses 119.3 131.3
Amortization of goodwill 22.7 21.9
Operating income $ 157.8 $ 151.7
Interest expense 80.0 71.3
Other expense, net 12.5 13.4
Income before provision for national
income taxes $ 65.3 $ 67.0
Provision for national income taxes 26.7 27.7
Net income $ 38.6 $ 39.3
Basic net income per share $ 0.60 $ 0.59
Diluted net income per share $ 0.59 $ 0.58
Weighted average number of diluted
shares outstanding 65.1 67.9
Depreciation and amortization $ 95.9 $ 94.3
Nine Months Ended
09/30/00 10/02/99
Net sales $10,710.6 $ 8,967.5
Cost of sales 9,646.8 8,104.7
Selling, general and administrative expenses 399.3 344.7
Amortization of goodwill 67.5 55.2
Operating income $ 597.0 $ 462.9
Interest expense 239.5 161.6
Other expense, net (a) 13.8 28.6
Income before provision for national
income taxes $ 343.7 $ 272.7
Provision for national income taxes 141.4 108.3
Net income $ 202.3 $ 164.4
Basic net income per share $ 3.08 $ 2.46
Diluted net income per share $ 3.05 $ 2.42
Weighted average number of diluted
shares outstanding 66.3 67.8
Depreciation and amortization $ 295.2 $ 244.4
Capital expenditures $ 227.8 $ 257.0
(a) See additional disclosure
Lear Corporation and Subsidiaries
Consolidated Balance Sheets
(In millions)
09/30/00 12/31/99
ASSETS (Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $ 80.7 $ 106.9
Accounts receivable, net 1,898.9 1,866.1
Inventories 545.1 577.3
Recoverable customer engineering and tooling 289.0 304.9
Other 346.2 299.0
Total current assets $ 3,159.9 $ 3,154.2
Long-Term Assets:
Property, plant and equipment, net $ 1,870.3 $ 1,970.0
Goodwill, net 3,260.6 3,210.5
Other 390.9 382.9
Total long-term assets $ 5,521.8 $ 5,563.4
Total Assets $ 8,681.7 $ 8,717.6
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 108.2 $ 103.6
Accounts payable and drafts 2,174.1 2,245.3
Accrued liabilities 1,240.2 1,074.9
Current portion of long-term debt 129.1 63.6
Total current liabilities $ 3,651.6 $ 3,487.4
Long-Term Liabilities:
Long-term debt $ 3,081.9 $ 3,324.8
Other 438.3 440.1
Total long-term liabilities $ 3,520.2 $ 3,764.9
Stockholders' Equity $ 1,509.9 $ 1,465.3
Total Liabilities and
Stockholders' Equity $ 8,681.7 $ 8,717.6
ADDITIONAL DISCLOSURE
(a) The Company recorded certain transactions in connection with the
divestiture of non-core businesses and assets. On June 14, 2000, the
Company completed the sale of its sealants and foam rubber business
for approximately $92.5 million, resulting in a gain of $36.6 million.
The business had sales of approximately $100 million for the year
ended December 31, 1999. The Company also recorded other
transactions, including charges related to the disposal of idle plant
equipment. The result of these transactions was a net gain of
$23.0 million ($13.0 million or $ .20 per dilutive share, after tax).
Lear Corporation and Subsidiaries
Supplemental Data
(Unaudited, in millions, except content per vehicle data)
Third Quarter Ended
09/30/00 10/02/99
Net sales
U.S. and Canada $ 1,929 $ 1,916
Europe 870 920
Rest of World 345 211
Total $ 3,144 $ 3,047
Operating income before amortization $ 181 $ 174
Goodwill amortization (23) (22)
Operating income after amortization $ 158 $ 152
Content per vehicle - North America $ 564 $ 529
Content per vehicle - Western Europe $ 231 $ 221
Content per vehicle - South America $ 101 $ 111
Nine Months Ended
09/30/00 10/02/99
Net sales
U.S. and Canada $ 6,617 $ 5,598
Europe 3,109 2,795
Rest of World 985 575
Total $10,711 $ 8,968
Operating income before amortization $ 665 $ 518
Goodwill amortization (68) (55)
Operating income after amortization $ 597 $ 463