Magna International Inc.
(TSE: MG.A – news, MG.B – news; NYSE: MGA – news) today reported sales, profits
and earnings per share for the second quarter ended June 30, 2000.
| SIX MONTHS ENDED |
THREE MONTHS ENDED |
|||
|
June
30,2000 |
June
30,1999 |
June
30,2000 |
June
30,1999 |
|
| Sales |
$5,264
|
$4,616
|
$2,562
|
$2,345
|
| Net Income |
$
316(1) |
$
212(2) |
$
170(1) |
$
108(2) |
| Excl. Other Income |
$
288 |
$
212(2) |
$
142 |
$
108(2) |
| Net Income |
$
316(1) |
$
212(2) |
$
170(1) |
$
108(2) |
| Excl. Other Income |
$
288 |
$
212(2) |
$
142 |
$
108(2) |
(1) Includes a $28 million
gain on the sale of the Company’s remaining Class A Subordinate Voting shares
of Tesma International Inc. (“Tesma”).
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(2) Net Income and fully
diluted earnings per share have been restated due to an accounting policy change
relating to design and engineering and pre-production costs. For more information
see note 2 to the Second Quarter Consolidated Financial Statements attached.
All results are reported
in millions of U.S. dollars, except per share figures.
Sales for the second quarter
and first half of fiscal 2000 were $2.6 billion and $5.3 billion, respectively,
an increase of approximately 9% and 14% over the comparable periods ended June
30, 1999. The higher sales level in the second quarter of 2000 reflects a 6%
increase in North American content per vehicle, and a 10% increase in European
content per vehicle, excluding the 11% reduction related principally to the
impact of Euro foreign currency translation, over the comparable quarter, a
period in which North American and European vehicle production increased approximately
5% and 2%, respectively. Tooling and other sales increased by 10% to $242 million
in the second quarter.
Net income for the second
quarter increased 31% to $142 million, excluding the gain of $28 million on
the sale of the Company’s remaining 4,352,644 Class A Subordinate Voting Shares
of Tesma, compared to $108 million in the comparable period in 1999. Magna continues
to own a significant equity interest in Tesma through its holdings of all of
Tesma’s outstanding multiple voting Class B Shares. Including the gain on the
sale of Tesma shares, net income in the second quarter and first half of fiscal
2000 increased to $170 million and $316 million respectively.
Fully diluted earnings per
share were $1.52 and $3.07 for the second quarter and first half of fiscal 2000,
excluding the gain on the sale of Tesma shares, representing an increase of
26% and 29%, respectively, over the comparable periods. Including the gain,
fully diluted earnings per share increased to $1.82 and $3.37 respectively.
During the second quarter
of 2000, cash generated from operations before changes in working capital was
$245 million. Total investment activities during the quarter were $144 million,
including $141 million in fixed assets.
The Board of Directors declared
a dividend of $0.30 per share with respect to the outstanding Class A Subordinate
Voting Shares and Class B Shares for the quarter ended June 30, 2000. The dividend
is payable on September 15, 2000 to shareholders of record on August 31, 2000.
Magna also announced that
it intends to form a working relationship with Covisint, the global internet
based Business to Business Exchange formed by General Motors, Ford, DaimlerChrysler,
Renault and Nissan, pending U.S. Government and legal approvals of the new venture.
Don Walker, President and
C.E.O. of Magna, stated “The Exchange will allow suppliers and customers to
more efficiently transact business and better co-ordinate production planning
and releases. Most importantly, the Exchange will ultimately enable customers
and suppliers to work together on product development through simultaneous design
and real-time engineering changes.”
Magna, one of the most diversified
automotive suppliers in the world, designs, develops and manufactures automotive
systems, assemblies and components, and engineers and assembles complete vehicles,
primarily for sale to original equipment manufacturers of cars and light trucks
in North America, Europe, Mexico, South America and Asia. Magna’s products include:
exterior decorative systems; interior products including complete seats, instrument
and door panel systems and sound insulation; stamped and welded metal parts
and assemblies; electro-mechanical devices and assemblies and navigation systems;
a variety of plastic parts, including body panels and fascias through Decoma
International Inc.; various engine, powertrain and fueling and cooling components
through Tesma International Inc.; a variety of drivetrain components through
Steyr Powertrain; and complete vehicle engineering and assembly through SteyrSymatec.
Magna has over 59,000 employees
in 166 manufacturing operations and 32 product development and engineering centres
in 19 countries.
