Linamar Delivers Another Strong Quarter of Record Results and Double Digit Top and Bottom Line Growth

GUELPH, ON, May 4, 2016 /CNW/ - (TSX: LNR)

  • Sales increase 18.8% over the first quarter of 2015 ("Q1 2015") to reach record levels of $1.5 billion;
  • Operating earnings increase 10.5% over Q1 2015 to reach record levels of $172.1 million;
  • Net earnings up 11.2% and earnings per share up 10.9% over Q1 2015 reaching record levels of $126.4 million and $1.94 respectively;
  • Continued business wins leave launch book with $3.7 billion;
  • Powertrain/Driveline delivers excellent sales and operating earnings growth with operating earnings up 29.1% to $144.0 million from Q1 2015 on a sales increase of 23.8%;
  • Content per vehicle growth in every market;
  • Market share growth on newly launched products at Skyjack.



Three Months Ended




March 31




2016

2015

(in millions of dollars, except earnings per share figures)



$

$

Sales



1,518.1

1,277.5

Operating Earnings (Loss)1






Powertrain/Driveline



144.0

111.5


Industrial



28.1

44.3

Operating Earnings (Loss)



172.1

155.8

Net Earnings (Loss)



126.4

113.7

Net Earnings (Loss) per Share



1.94

1.75

 

_______________________

1 For more information refer to the section entitled "Non-GAAP and Additional GAAP Measures" in the Company's separately released Management's Discussion and Analysis ("MD&A").

 

Operating Highlights

Sales for the first quarter of 2016 ("Q1 2016") were $1,518.1 million, up $240.6 million from $1,277.5 million in Q1 2015.

Sales for the Powertrain/Driveline segment ("Powertrain/Driveline") increased by $252.5 million, or 23.8% in Q1 2016 compared with Q1 2015.  The sales increase in Q1 2016 was impacted by:

  • the acquisition of Montupet S.A. in Q1 2016;
  • higher sales resulting from favourable changes in foreign exchange rates across multiple currencies and Linamar's growing global presence; and
  • significant levels of newly launched programs in North America and Europe.

The Industrial segment ("Industrial") product sales decreased 5.5% or $11.9 million to $203.6 million in Q1 2016 from Q1 2015.  The sales decrease was due to:

  • a delay in spending of larger national customers seen in the quarter; partially offset by
  • higher sales resulting from favourable changes in foreign exchange rates across multiple currencies and Linamar's growing global presence;
  • market share growth for telehandlers in North America; and
  • significant global market share growth for booms.

The company's operating earnings for Q1 2016 were $172.1 million.  This compares to $155.8 million in Q1 2015, an increase of $16.3 million.

Q1 2016 operating earnings for Powertrain/Driveline were higher by $32.5 million or 29.1% over Q1 2015.  The Powertrain/Driveline segment experienced the following in Q1 2016:

  • improved earnings as production volumes increased on launching programs;
  • earnings related to the acquisition of Montupet S.A.; and
  • higher earnings resulting from favourable changes in foreign exchange rates across multiple currencies and Linamar's growing global presence; partially offset by
  • increased management and sales costs supporting growth; and
  • acquisition costs related to the purchase of Montupet S.A.

Industrial segment operating earnings in Q1 2016 decreased $16.2 million or 36.6% over Q1 2015. The decrease in Industrial operating earnings was predominantly driven by:

  • delayed earnings as a result of the spending delays of larger national customers;
  • lower margins as a result of the product mix favouring new launching products such as booms and telehandlers with lower margins;
  • increased management and sales costs supporting growth; and
  • the result of a bad debt provision related to a Canadian customer operating primarily in the oil & gas industry; partially offset by
  • higher margins resulting from favourable changes in foreign exchange rates across multiple currencies and Linamar's growing global presence.

"We are off to a solid start in 2016 with another quarter of record financial results and double digit growth," said Linamar CEO Linda Hasenfratz.  "Markets are in good shape enhancing the key driver of our performance; market share growth.  Content per vehicle hit new highs in every region and Skyjack continues to build market share in key products, both are doing a fantastic job of driving our great growth today and will continue to do so in the future."

Dividends

The Board of Directors today declared an eligible dividend in respect to the quarter ended March 31, 2016 of CDN$0.10 per share on the common shares of the company, payable on or after June 2, 2016 to shareholders of record on May 23, 2016.

Forward Looking Information, Risk and Uncertainties

Certain information provided by Linamar in this press release, MD&A, the consolidated financial statements and other documents published throughout the year which are not recitation of historical facts may constitute forward-looking statements. The words "may", "would", "could", "will", "likely", "estimate", "believe", "expect", "plan", "forecast" and similar expressions are intended to identify forward-looking statements. Readers are cautioned that such statements are only predictions and the actual events or results may differ materially. In evaluating such forward-looking statements, readers should specifically consider the various factors that could cause actual events or results to differ materially from those indicated by such forward-looking statements.

Such forward-looking information may involve important risks and uncertainties that could materially alter results in the future from those expressed or implied in any forward-looking statements made by, or on behalf of, Linamar. Some of the factors and risks and uncertainties that cause results to differ from current expectations include, but are not limited to, changes in the various economies in which Linamar operates, fluctuations in interest rates, environmental emission and safety regulations, the extent of OEM outsourcing, industry cyclicality, trade and labour disruptions, world political events, pricing concessions and cost absorptions, delays in program launches, the Company's dependence on certain engine and transmission programs and major OEM customers, currency exposure, technological developments by Linamar's competitors, governmental, environmental and regulatory policies and changes in the competitive environment in which Linamar operates.

The foregoing is not an exhaustive list of the factors that may affect Linamar's forwarding looking statements. These and other factors should be considered carefully and readers should not place undue reliance on Linamar's forward-looking statements. Linamar assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.

Conference Call Information

Q1 2016 Conference Call Information
Linamar will hold a conference call on May 4, 2016 at 5:00 p.m. EST to discuss its first quarter results.  The numbers for this call are (647) 427-3383 (local/overseas) or (888) 424-9894 (North America) confirmation number 68602541, with a call-in required 10 minutes prior to the start of the conference call.  The conference call will be chaired by Linda Hasenfratz, Linamar's Chief Executive Officer.  A copy of the company's quarterly financial statements, including the Management's Discussion & Analysis will be available on the company's website after 4 p.m. EST on May 4, 2016 and at www.sedar.com by the start of business on May 5, 2016.  A taped replay of the conference call will also be made available starting at 7:45 p.m. on May 4, 2016 for ten days.  The number for replay is (855) 859‑2056, Conference ID 68602541.  The conference call can also be accessed by web cast at www.linamar.com, by accessing the investor relations/events menu.

Q2 2016 Conference Call Information
Linamar will hold a conference call on August 10, 2016 at 5:00 p.m. EST to discuss its second quarter results.  The numbers for this call are (647) 427-3383 (local/overseas) or (888) 424-9894 (North America) conference ID 3028764, with a call-in required 10 minutes prior to the start of the conference call.  The conference call will be chaired by Linda Hasenfratz, Linamar's Chief Executive Officer.  A copy of the company's quarterly financial statements, including the Management's Discussion & Analysis will be available on the company's website after 4 p.m. EST on August 10, 2016 and at www.sedar.com by the start of business on August 11, 2016.  A taped replay of the conference call will also be made available starting at 8:00 p.m. on August 10, 2016 for ten days.  The number for replay is (855) 859-2056, Conference ID 3028764.  The conference call can also be accessed by web cast at www.linamar.com, by accessing the investor relations/events menu.

Linamar Corporation (TSX:LNR) is a diversified global manufacturing company of highly engineered products powering vehicles, motion, work and lives. The Company is made up of 2 operating segments – the Powertrain/Driveline segment and the Industrial segment, which are further divided into 4 operating groups – Machining & Assembly, Light Metal Casting, Forging and Skyjack, all world leaders in the design, development and production of highly engineered products.  The Company's Machining and Assembly, Casting and Forging operating groups focus on precision metallic components, modules and systems for engine, transmission, driveline and body systems designed for global vehicle and industrial markets.  The Company's Skyjack operating group is noted for its innovative, high quality mobile industrial equipment, notably its class-leading aerial work platforms and telehandlers.  With more than 24,000 employees in 57 manufacturing locations, 6 R&D centers and 21 sales offices in 17 countries in North and South America, Europe and Asia, Linamar generated sales of $5.2 billion in 2015.  For more information about Linamar Corporation and its industry leading products and services, visit www.linamar.com or follow us on Twitter at @LinamarCorp.

Guelph, Ontario

May 4, 2016

 

SOURCE Linamar Corporation

For further information: regarding this release please contact Linda Hasenfratz at (519) 836-7550.

RELATED LINKS
http://www.linamar.com

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