Tesma International Inc. - Strong growth in Q1 fiscal 2001 continues
29 November 2000
Tesma International Inc. - Strong growth in Q1 fiscal 2001 continues
CONCORD, ON, Nov. 28 /PRNewswire/ -
Tesma International Inc. a global supplier of
highly-engineered engine, transmission and fueling systems and modules for the
automotive industry, today reported, for the three months ended October 31,
2000, the 21st consecutive quarter (on a comparative year-over-year basis) of
record sales and operating income since going public in 1995.
Three Months Ended
------------------
October 31
----------
(Canadian dollars
in millions,
except per share
figures)
2000 1999
Sales $302.1 $279.4
Income before income taxes $ 36.3 $ 31.4
Net income $ 22.8 $ 19.8
Basic earnings per share $ 0.78 $ 0.69
Fully diluted earnings per share $ 0.77 $ 0.66
Weighted average number of shares outstanding on
a fully diluted basis (in millions) 30.5 30.2
Sales for the quarter increased by 8% over the prior year to $302.1
million. This increase reflects the additional sales generated by existing
products and new production program launches, a 16% and 15% increase in our
North American and European content per vehicle to $48.83 and (euro) 14.03
respectively, increased export sales to Europe, Australia and South America
and a 2.1% growth in European vehicle production volumes over the comparable
period last year. These gains were partially offset by the significant
strengthening of the Canadian dollar versus the Euro and a 3.6% decrease in
North American vehicle production volumes.
Income before income taxes increased 16% to a record $36.3 million,
compared to $31.4 million in the first quarter of fiscal 2000. This increase
is attributed to the Company's new production programs, improved operating
efficiencies, higher sales volumes as a result of our increased content per
vehicle in both North America and Europe and a decrease in interest expense
due to lower debt levels. Net income for the quarter of $22.8 million was also
a record high and compares to $19.8 million a year ago.
Tesma's fully diluted earnings per share for the first quarter increased
by 17% to $0.77, from $0.66 last year.
Cash provided from operations was $35.5 million in the first quarter, an
increase of $3.9 million over fiscal 2000. Net investment activities for the
quarter included $17.7 million for fixed and other asset additions, primarily
related to new business which will be launched over the next 12 months.
The Tesma Board of Directors today declared a dividend in respect of the
first quarter of fiscal 2001 of $0.16 per share on the Class A Subordinate
Voting and Class B shares payable on January 15, 2001 to shareholders of
record on December 29, 2000.
TESMA INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian dollars in thousands)
(Unaudited)
As at As at
October July
31, 2000 31, 2000
ASSETS
Cash $109,883 $143,104
Accounts receivable 179,144 142,657
Inventories 91,052 83,632
Prepaid expenses and other 10,900 9,937
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390,979 379,330
Fixed assets 308,607 306,057
Other assets 27,526 27,284
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$727,112 $712,671
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LIABILITIES AND SHAREHOLDERS' EQUITY
Bank indebtedness $ 51,057 $ 50,207
Accounts payable 95,260 85,624
Accrued salaries and wages 31,287 36,019
Other accrued liabilities 45,502 44,014
Income taxes payable 6,628 13,346
Long-term debt due within one year 7,010 8,243
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236,744 237,453
Long-term debt 73,763 74,990
Future tax liabilities 35,607 33,023
SHAREHOLDERS' EQUITY
Class A Subordinate Voting Shares
(authorized: unlimited, issued: 14,978,379) 186,676 185,851
Class B Shares
(authorized: unlimited, issued: 14,223,900) 2,583 2,583
Retained earnings 200,698 186,554
Currency translation adjustment (8,959) (7,783)
-------------------------------------------------------------------------
380,998 367,205
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$727,112 $712,671
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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
October 31
2000 1999
Sales $302,107 $279,424
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Cost of goods sold 229,371 213,368
Depreciation and amortization 12,195 10,900
Selling, general and administrative 20,673 18,819
Interest (net) (166) 1,417
Affiliation fees and other charges 3,718 3,538
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Income before income taxes 36,316 31,382
Income taxes 13,555 11,538
-------------------------------------------------------------------------
Net income attributable to Class A Subordinate
Voting Shares and Class B Shares 22,761 19,844
Retained earnings, beginning of period 186,554 120,595
Dividends on Class A Subordinate Voting Shares
and Class B Shares (4,672) (2,864)
Cumulative adjustment for change in accounting
policy (Note 1) (3,945)
-------------------------------------------------------------------------
Retained earnings, end of period $200,698 $137,575
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Earnings per Class A Subordinate Voting Share
or Class B Share
Basic $ 0.78 $ 0.69
Fully diluted $ 0.77 $ 0.66
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Average number of Class A Subordinate Voting
Shares and Class B Shares outstanding
(in millions)
Basic 29.2 28.6
Fully diluted 30.5 30.2
-------------------------------------------------------------------------
-------------------------------------------------------------------------
TESMA INTERNATIONAL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Canadian dollars in thousands)
(Unaudited)
THREE MONTHS ENDED
October 31
2000 1999
Cash provided from (used for):
OPERATING ACTIVITIES
Net income $ 22,761 $ 19,844
Items not involving current cash flows 12,707 11,712
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35,468 31,556
Changes in non-cash working capital (46,407) (9,396)
-------------------------------------------------------------------------
(10,939) 22,160
-------------------------------------------------------------------------
INVESTING ACTIVITIES
Fixed asset additions (16,958) (15,564)
Purchase of subsidiaries (800) -
Increase in other assets (72) (118)
Proceeds from disposition of fixed and other assets 82 769
-------------------------------------------------------------------------
(17,748) (14,913)
-------------------------------------------------------------------------
FINANCING ACTIVITIES
Increase in bank indebtedness 1,303 18,755
Issues of long-term debt - 1,377
Repayments of long-term debt (1,935) (1,080)
Issuance of Class A Subordinate Voting Shares 825 735
Dividends on Class A Subordinate Voting Shares
and Class B Shares (4,672) (2,864)
-------------------------------------------------------------------------
(4,479) 16,923
-------------------------------------------------------------------------
Effect of exchange rate changes on cash (55) (519)
-------------------------------------------------------------------------
Net increase in cash during the period (33,221) 23,651
Cash, beginning of period 143,104 78,582
-------------------------------------------------------------------------
Cash, end of period $109,883 $102,233
-------------------------------------------------------------------------
-------------------------------------------------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Accounting Change
Effective August 1, 2000, the Company adopted the Canadian Institute
of Chartered Accountants new recommendations for the accounting and
disclosure of income taxes.
The Company has adopted the new recommendations without restating
the financial statements of any prior periods. Accordingly, the
Company has recorded the cumulative adjustment as a result of
adopting the liability method of tax allocation as a decrease in
retained earnings of $3.9 million and an increase in future tax
liabilities of $3.9 million.
2. Segmented Information
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, 2000 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
Three months ended American European Other
October 31st, 2000 Automotive Automotive Automotive Total
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(Canadian dollars in thousands)
Total Sales $244,074 $ 49,248 $ 11,264 $304,586
Intersegment sales 1,926 553 - 2,479
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Sales to external
customers $242,148 $ 48,695 $ 11,264 $302,107
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Depreciation and
amortization $ 8,893 $ 2,062 $ 1,240 $ 12,195
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Interest, net $ (541) $ (192) $ 567 $ (166)
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Income before income taxes $ 31,105 $ 4,180 $ 1,031 $ 36,316
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Fixed assets, net $212,671 $ 54,523 $ 41,413 $308,607
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Fixed asset additions $ 14,137 $ 2,577 $ 244 $ 16,958
-------------------------------------------------------------------------
Goodwill, net $ 18,835 $ 1,618 $ - $ 20,453
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North
Three months ended American European Other
October 31st, 1999 Automotive Automotive Automotive Total
-------------------------------------------------------------------------
(Canadian dollars in thousands)
Total Sales $215,447 $ 52,431 $ 13,124 $281,002
Intersegment sales 871 707 - 1,578
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Sales to external
customers $214,576 $ 51,724 $ 13,124 $279,424
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Depreciation and
amortization $ 7,502 $ 2,047 $ 1,351 $ 10,900
-------------------------------------------------------------------------
Interest, net $ 582 $ (147) $ 982 $ 1,417
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Income before income taxes $ 26,210 $ 3,937 $ 1,235 $ 31,382
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Fixed assets, net $186,793 $ 51,378 $ 40,093 $278,264
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Fixed asset additions $ 9,633 $ 2,924 $ 3,007 $ 15,564
-------------------------------------------------------------------------
Goodwill, net $ 17,907 $ 1,963 $ - $ 19,870
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3. Capital Stock
Class and Series of Outstanding Securities
The Company's share structure has remained consistent with that in
place as at July 31, 2000. For details concerning the nature of the
Company's securities, please refer to Note 9 "Convertible Series
Preferred Shares" and Note 10 "Capital Stock" of the Company's 2000
Annual Report.
Options
The following table presents the maximum number of shares that would
be outstanding if all of the outstanding options as at October 31,
2000 were exercised:
Number of Shares
----------------------------------------------------------------------
Class A Subordinate Voting Shares outstanding as at
October 31, 2000 14,978,379
Class B Shares outstanding as at October 31, 2000 14,223,900
Options to purchase Class A Subordinate Voting Shares 1,437,900
----------------------------------------------------------------------
30,640,179
----------------------------------------------------------------------
The maximum number of shares reserved to be issued for stock options
is 3,000,000 Class A Subordinate Voting Shares. The number of reserved
but unoptioned shares as at October 31, 2000 is 177,000.