Donnelly Reports First-Quarter Profits Despite Industry Climate; Company Also Plans to Sell Assets of Irish Subsidiary

Apr 24, 2001, 01:00 ET from Donnelly Corporation

    HOLLAND, Mich., April 24 /PRNewswire Interactive News Release/ -- Donnelly
 Corporation (NYSE:   DON) today announced 2001 first quarter net income of $1.2
 million, or $0.12 per share, despite a tough industry climate with irregular
 and reduced production schedules.  During the first quarter, overall North
 American industry production declined 17%, and average production among the
 three largest domestic original equipment manufacturers was down more than
 20%.  First quarter net income compares to $6.8 million, or $0.67 per share,
 in the first quarter of 2000.  Donnelly's net sales of $220 million for the
 first quarter of 2001 are down 7% from $237 million in the year-earlier
 period.
     "Due to growth from new business, our sales were down only 7% despite the
 significant decline in vehicle production, especially among our largest
 customers, the 'Big Three' automakers," said Chairman and Chief Executive
 Officer Dwane Baumgardner.  "First quarter industry issues, launch costs on
 key new products, and costs associated with the integration of the Donnelly
 Electronics acquisition, completed during the quarter, affected our
 profitability."
     Donnelly is making significant investments to expand capacity in
 electrochromic mirror production, support rapid development of technology in
 telematic mirrors, implement SmartRelease(TM) into production, and advance its
 camera vision technology while bringing existing camera vision products to the
 market.
     "We believe our commitment to the rapid expansion of sophisticated
 electronic products provides Donnelly the opportunity for sustained growth in
 revenues and profitability," said Baumgardner.
     Donnelly Corporation also announced that it has signed a non-binding
 letter of intent with diversified industrial manufacturer Eaton Corporation to
 sell certain assets of Donnelly subsidiary, Donnelly Vision Systems Europe
 Ltd. located in Manorhamilton, Ireland.  The subsidiary currently manufactures
 mirrors and mirror actuators.  Under the agreement, Eaton will assume control
 and responsibility for manufacturing a Donnelly actuator currently used on
 certain vehicles in Europe.  The agreement should be finalized by the end of
 July 2001.
     "The decision to initiate this transaction with Eaton in Manorhamilton
 supports Donnelly's plan to effectively consolidate its European manufacturing
 capacity and streamline operations," said Baumgardner.  "We will continue to
 manufacture actuators for many of our mirrors at Donnelly's operations in
 Mexico.  This agreement, while strengthening our relationship with Eaton
 Corporation, fits Donnelly's long-term strategic plans for actuator
 development and manufacturing at Donnelly de Mexico."
     Donnelly is a technology-driven, customer-focused, growth-oriented
 supplier of electronic and exterior systems for every major automotive
 manufacturer in the world and the information display industry.  The Company,
 based in Holland, Michigan, has approximately 6,400 employees in 14 countries
 worldwide.  Donnelly has been named by the Society of Automotive Engineers as
 a model company in lean manufacturing practices, and was recognized by
 Automotive Industries magazine as one of the "Best of the Best" suppliers of
 electronic and interior systems.  In addition, Donnelly is nationally
 recognized as a leader in the application of participative management
 principles and systems.  More information is available at www.donnelly.com .
     This press release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995.  Investors are
 cautioned that any current expectations of Donnelly, or its management, are
 not guarantees of future performance and involve risk and uncertainties.
 Actual results may differ materially from those in forward-looking statements
 as a result of various factors including, but not limited to (a) general
 economic and currency conditions in the markets in which Donnelly operates;
 (b) fluctuation in worldwide or regional automobile and light truck
 production; (c) changes in practices and/or policies of Donnelly's significant
 customers; (d) human resource constraints which could impede changes in
 Europe; and (e) other risks and uncertainties.
 
                     DONNELLY CORPORATION AND SUBSIDIARIES
              CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME
 
 
                                                   Three Months Ended
                                               March 31,          April 1,
     In thousands, except share data             2001               2000
 
     Net sales                                 $220,001           $237,404
     Cost of sales                              187,154            196,124
         Gross profit                            32,847             41,280
     Operating expenses:
     Selling, general and administrative         20,708             20,569
     Research and development                     9,444              9,762
     Total operating expenses                    30,152             30,331
         Operating income                         2,695             10,949
     Non-operating (income) expenses:
     Interest expense                             2,104              1,783
     Other income, net                             (549)              (502)
     Non-operating expenses                       1,555              1,281
         Income before taxes on income            1,140              9,668
     Taxes on income (credit)                       (72)             2,653
         Income before minority interest
          and equity earnings                     1,212              7,015
     Minority interest in net earnings             (237)              (285)
         of subsidiaries
     Equity in earnings of affiliated companies     269                 44
     Net income                                  $1,244             $6,774
 
     Per share of common stock:
         Diluted net income per share             $0.12              $0.67
         Basic net income per share               $0.12              $0.67
         Cash dividends declared                  $0.10              $0.10
 
         Average common shares outstanding   10,255,270         10,153,601
 
 
                       DONNELLY CORPORATION AND SUBSIDIARIES
                   CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
 
                                                March 31,        December 31,
     In thousands                                 2001               2000
 
     ASSETS
     Current assets:
     Cash and cash equivalents                   $4,974             $4,599
     Accounts receivable, net                    85,011             83,219
     Inventories                                 62,046             55,933
     Prepaid expenses and other current assets   28,697             28,990
         Total current assets                   180,728            172,741
     Net property, plant and equipment          217,013            212,134
     Other assets                                76,046             79,145
         Total assets                          $473,787           $464,020
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Accounts payable                           $95,774            $89,163
     Other current liabilities                   41,998             39,727
     Current maturities of long-term debt            82                 90
         Total current liabilities              137,854            128,980
     Long-term debt, less current maturities    130,616            132,608
     Deferred income taxes and other
      liabilities                                68,681             66,298
         Total liabilities                      337,151            327,886
 
     Minority interest                            2,740              1,353
     Shareholders' equity                       133,896            134,781
         Total liabilities and
          shareholders' equity                 $473,787           $464,020
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X02306537
 
 

SOURCE Donnelly Corporation
    HOLLAND, Mich., April 24 /PRNewswire Interactive News Release/ -- Donnelly
 Corporation (NYSE:   DON) today announced 2001 first quarter net income of $1.2
 million, or $0.12 per share, despite a tough industry climate with irregular
 and reduced production schedules.  During the first quarter, overall North
 American industry production declined 17%, and average production among the
 three largest domestic original equipment manufacturers was down more than
 20%.  First quarter net income compares to $6.8 million, or $0.67 per share,
 in the first quarter of 2000.  Donnelly's net sales of $220 million for the
 first quarter of 2001 are down 7% from $237 million in the year-earlier
 period.
     "Due to growth from new business, our sales were down only 7% despite the
 significant decline in vehicle production, especially among our largest
 customers, the 'Big Three' automakers," said Chairman and Chief Executive
 Officer Dwane Baumgardner.  "First quarter industry issues, launch costs on
 key new products, and costs associated with the integration of the Donnelly
 Electronics acquisition, completed during the quarter, affected our
 profitability."
     Donnelly is making significant investments to expand capacity in
 electrochromic mirror production, support rapid development of technology in
 telematic mirrors, implement SmartRelease(TM) into production, and advance its
 camera vision technology while bringing existing camera vision products to the
 market.
     "We believe our commitment to the rapid expansion of sophisticated
 electronic products provides Donnelly the opportunity for sustained growth in
 revenues and profitability," said Baumgardner.
     Donnelly Corporation also announced that it has signed a non-binding
 letter of intent with diversified industrial manufacturer Eaton Corporation to
 sell certain assets of Donnelly subsidiary, Donnelly Vision Systems Europe
 Ltd. located in Manorhamilton, Ireland.  The subsidiary currently manufactures
 mirrors and mirror actuators.  Under the agreement, Eaton will assume control
 and responsibility for manufacturing a Donnelly actuator currently used on
 certain vehicles in Europe.  The agreement should be finalized by the end of
 July 2001.
     "The decision to initiate this transaction with Eaton in Manorhamilton
 supports Donnelly's plan to effectively consolidate its European manufacturing
 capacity and streamline operations," said Baumgardner.  "We will continue to
 manufacture actuators for many of our mirrors at Donnelly's operations in
 Mexico.  This agreement, while strengthening our relationship with Eaton
 Corporation, fits Donnelly's long-term strategic plans for actuator
 development and manufacturing at Donnelly de Mexico."
     Donnelly is a technology-driven, customer-focused, growth-oriented
 supplier of electronic and exterior systems for every major automotive
 manufacturer in the world and the information display industry.  The Company,
 based in Holland, Michigan, has approximately 6,400 employees in 14 countries
 worldwide.  Donnelly has been named by the Society of Automotive Engineers as
 a model company in lean manufacturing practices, and was recognized by
 Automotive Industries magazine as one of the "Best of the Best" suppliers of
 electronic and interior systems.  In addition, Donnelly is nationally
 recognized as a leader in the application of participative management
 principles and systems.  More information is available at www.donnelly.com .
     This press release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995.  Investors are
 cautioned that any current expectations of Donnelly, or its management, are
 not guarantees of future performance and involve risk and uncertainties.
 Actual results may differ materially from those in forward-looking statements
 as a result of various factors including, but not limited to (a) general
 economic and currency conditions in the markets in which Donnelly operates;
 (b) fluctuation in worldwide or regional automobile and light truck
 production; (c) changes in practices and/or policies of Donnelly's significant
 customers; (d) human resource constraints which could impede changes in
 Europe; and (e) other risks and uncertainties.
 
                     DONNELLY CORPORATION AND SUBSIDIARIES
              CONDENSED COMBINED CONSOLIDATED STATEMENTS OF INCOME
 
 
                                                   Three Months Ended
                                               March 31,          April 1,
     In thousands, except share data             2001               2000
 
     Net sales                                 $220,001           $237,404
     Cost of sales                              187,154            196,124
         Gross profit                            32,847             41,280
     Operating expenses:
     Selling, general and administrative         20,708             20,569
     Research and development                     9,444              9,762
     Total operating expenses                    30,152             30,331
         Operating income                         2,695             10,949
     Non-operating (income) expenses:
     Interest expense                             2,104              1,783
     Other income, net                             (549)              (502)
     Non-operating expenses                       1,555              1,281
         Income before taxes on income            1,140              9,668
     Taxes on income (credit)                       (72)             2,653
         Income before minority interest
          and equity earnings                     1,212              7,015
     Minority interest in net earnings             (237)              (285)
         of subsidiaries
     Equity in earnings of affiliated companies     269                 44
     Net income                                  $1,244             $6,774
 
     Per share of common stock:
         Diluted net income per share             $0.12              $0.67
         Basic net income per share               $0.12              $0.67
         Cash dividends declared                  $0.10              $0.10
 
         Average common shares outstanding   10,255,270         10,153,601
 
 
                       DONNELLY CORPORATION AND SUBSIDIARIES
                   CONDENSED COMBINED CONSOLIDATED BALANCE SHEETS
 
                                                March 31,        December 31,
     In thousands                                 2001               2000
 
     ASSETS
     Current assets:
     Cash and cash equivalents                   $4,974             $4,599
     Accounts receivable, net                    85,011             83,219
     Inventories                                 62,046             55,933
     Prepaid expenses and other current assets   28,697             28,990
         Total current assets                   180,728            172,741
     Net property, plant and equipment          217,013            212,134
     Other assets                                76,046             79,145
         Total assets                          $473,787           $464,020
 
     LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
     Accounts payable                           $95,774            $89,163
     Other current liabilities                   41,998             39,727
     Current maturities of long-term debt            82                 90
         Total current liabilities              137,854            128,980
     Long-term debt, less current maturities    130,616            132,608
     Deferred income taxes and other
      liabilities                                68,681             66,298
         Total liabilities                      337,151            327,886
 
     Minority interest                            2,740              1,353
     Shareholders' equity                       133,896            134,781
         Total liabilities and
          shareholders' equity                 $473,787           $464,020
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X02306537
 
 SOURCE  Donnelly Corporation

RELATED LINKS

http://www.donnelly.com