Lear Posts First-Quarter Results in Line with Guidance

Apr 23, 2001, 01:00 ET from Lear Corporation

    SOUTHFIELD, Mich., April 23 /PRNewswire Interactive News Release/ -- Lear
 Corporation (NYSE:   LEA), the world's fifth-largest automotive supplier, today
 reported its financial results for the first quarter of 2001.  For the
 quarter, Lear posted net sales of $3.5 billion, operating income of $134.6
 million and net income of $14.5 million, or $.22 per share.  Excluding non-
 recurring items, Lear had net income of $16.9 million, or $.26 per share.
     "Our first quarter results were affected by the tough market conditions as
 our customers significantly reduced their first quarter production," stated
 Bob Rossiter, President and Chief Executive Officer of Lear Corporation.
 "Production decreases of 17 percent in North America and 4 percent in Europe,
 coupled with weaker European currencies, made the quarter particularly
 challenging."
     Rossiter continued, "We remain focused on working with our customers,
 improving returns to our shareholders and continuing to run a lean and
 efficient company.  During the quarter, we took steps to further align our
 business for the competitive marketplace.  Additionally, we are pleased with
 the successful completion of our Eurobond offering and the extension of our
 revolving credit facility, each closing during the quarter."
     Earnings per share in the quarter, excluding non-recurring items, were
 $.26 versus $.93 in the first quarter of 2000, as the negative impact of lower
 production levels, weaker European currencies and divestitures was partially
 offset by aggressive cost actions and fewer shares outstanding.
     In March 2001, the Company completed the sale of a non-core Spanish wire
 business for $35.5 million and recorded a $3.1 million pre-tax charge for the
 write-down of certain long-term assets to net realizable value.  The net
 result of these transactions was a pre-tax gain of $9.3 million and an after-
 tax gain of $2.5 million or $.04 per share.
     During the quarter, the Company reduced its hourly and salaried workforce.
 These workforce reductions took place in North America and Europe and were
 primarily hourly employees.  The net cost of these severance actions for the
 quarter was $4.2 million pre-tax and $2.5 million after-tax, or $.04 per
 share.
     The Company completed several financing transactions during the quarter,
 which had the effect of extending maturities of the Company's credit
 facilities and diversifying its capital base.  The Company's $2.1 billion
 revolving credit facility was amended to extend its maturity to March 2006 and
 reduce commitments to $1.7 billion.  During the quarter, Lear also drew $300
 million under a recently established 364-day asset-backed securitization
 financing program and issued 250 million euro of 8.125%, 7-year senior notes.
 The Company incurred $3.0 million in non-recurring expenses related to the
 securitization and wrote off $1.0 million of deferred financing fees
 associated with the amendment to its credit agreement.  The after-tax impact
 of these two transactions was $2.4 million, or $.04 per share.  In connection
 with Lear's financings, Standard & Poor's and Moody's reaffirmed the Company's
 senior credit ratings at BB+ and Ba1, respectively.
     Net sales for the quarter fell 8 percent to $3.5 billion from $3.8 billion
 in last year's first quarter.  The decrease was attributable to lower customer
 requirements, foreign exchange and non-core divestitures.
     Net sales in the U.S. and Canada decreased 15 percent from $2.343 billion
 in the first quarter of 2000, to $1.990 billion in the first quarter of 2001,
 due primarily to 19 percent lower industry production.  In Europe, revenues
 were essentially flat at $1.170 billion, as new programs offset the negative
 impact of 4 percent lower industry production and weaker European currencies.
 Rest of World net sales increased $49 million to $344 million due to new
 programs.
     For 2001, the Company currently anticipates second-quarter net sales to be
 approximately 6 to 7 percent lower than the second quarter of a year ago and
 earnings of $.75 to $.85 per share.  For the full year, net sales are
 currently anticipated to be down 5 to 7 percent versus 2000 and earnings are
 anticipated to be between $3.10 and $3.40 per share.
     Lear Corporation, a Fortune 150 Company headquartered in Southfield,
 Mich., USA, focuses on automotive interiors and electronics and is the world's
 fifth-largest automotive supplier.  Sales in 2000 were $14.1 billion.  The
 Company's world-class products are designed, engineered and manufactured by
 over 100,000 employees in more than 300 facilities located in 32 countries.
 Information about Lear and its products is available on the internet at
 www.lear.com .
 
     This news release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995, including statements
 regarding anticipated financial results.  Actual results may differ materially
 from anticipated results as a result of certain risks and uncertainties,
 including but not limited to general economic conditions in the markets in
 which Lear operates, fluctuations in the production of vehicles for which the
 Company is a supplier, our success in achieving cost reductions that offset or
 exceed customer selling price reductions, labor disputes involving the Company
 or its significant customers, risks associated with conducting business in
 foreign countries, increases in product warranty costs, raw material shortages
 and other risks detailed from time to time in the Company's Securities and
 Exchange Commission filings.  These forward-looking statements are made as of
 the date hereof and Lear does not assume any obligation to update them.
 
                       Lear Corporation and Subsidiaries
                       Consolidated Statements of Income
               (Unaudited, in millions, except per share amounts)
 
                                                  First Quarter Ended
                                             March 31, 2001      April 1, 2000
                                       Reported     Adjusted(e)    Reported
 
     Net sales                         $3,503.6     $3,503.6       $3,805.1
 
     Cost of goods sold                 3,238.6(a)   3,236.2        3,448.1
     Selling, general & administrative
      expenses                            130.4(a)     128.6          141.1
     Amortization of goodwill              22.4         22.4           22.2
     Interest expense                      76.5(b)      73.5           78.8
     Other expense, net                     5.7(c)      15.0            9.8
 
     Pretax income before provision for
      income taxes and extraordinary
      item                                $30.0        $27.9         $105.1
     Provision for income taxes            14.9(a,b,c)  11.0           43.1
 
     Income before extraordinary item     $15.1        $16.9          $62.0
 
     Extraordinary item, net of tax         0.6(d)         -              -
 
     Net income                           $14.5        $16.9          $62.0
 
 
     Diluted net income per share         $0.22        $0.26          $0.93
 
 
     Weighted average number of shares
      outstanding - diluted                64.7         64.7           67.0
 
      (a), (b), (c), (d), (e) See Additional Disclosures
 
                             ADDITIONAL DISCLOSURES
 
     (a)  During the first quarter of 2001, the Company completed actions to
 reduce its cost base.  The non-recurring costs, comprised of severance costs
 less the associated savings, were recorded in cost of goods sold and selling,
 general and administrative expenses in the amounts of $2.4 million and $1.8
 million, respectively.  The net after-tax impact of these severance actions
 was $2.5 million or $.04 per share.
 
     (b)  During the first quarter of 2001, the Company made the initial draws
 under an asset-backed securitization.  Approximately $3.0 million in non-
 recurring expenses were incurred as a result of the transaction.  The after-
 tax impact of these expenses was $1.8 million or $.03 per share.
 
     (c)  In March 2001, the Company completed the sale of our Spanish wire
 business for $35.5 million, resulting in a gain of $12.4 million pre-tax ($5.6
 million after-tax).  This gain was offset by a $3.1 million pre-tax charge
 recorded to write-down certain long-term assets to net realizable value.  The
 net result of these transactions was a $9.3 million pre-tax gain ($2.5 million
 after-tax or $.04 per share).
 
     (d)  In March 2001, the Company amended and restated its $2.1 billion
 credit agreement.  The write-off of deferred financing fees of $1.0 million
 pre-tax ($0.6 million after-tax or $.01 per share) is presented as an
 extraordinary item.
 
     (e)  Excludes the impact from the items included in (a), (b), (c) and (d)
 above.
 
                       Lear Corporation and Subsidiaries
                          Consolidated Balance Sheets
                                 (In millions)
 
                                                   March 31,    December 31,
                                                     2001          2000
                                                 (Unaudited)     (Audited)
         ASSETS
         Current:
             Cash and cash equivalents             $155.8          $98.8
             Accounts receivable, net             1,601.1        1,639.0
             Inventories                            450.6          538.8
             Recoverable customer engineering
              and tooling                           291.8          273.2
             Other                                  279.5          278.2
                                                  2,778.8        2,828.0
         Long-Term:
             PP&E, net                            1,822.4        1,891.3
             Goodwill, net                        3,213.7        3,266.6
             Other                                  371.7          389.6
                                                  5,407.8        5,547.5
 
             Total Assets                        $8,186.6       $8,375.5
 
 
         LIABILITIES AND STOCKHOLDERS' EQUITY
         Current:
             Short-term borrowings                   $3.6          $72.4
             Accounts payable and drafts          2,264.8        2,174.0
             Accrued liabilities                    982.4          969.6
             Current portion of long-term debt      291.6          155.6
                                                  3,542.4        3,371.6
         Long-Term:
             Long-term debt                       2,444.2        2,852.1
             Other                                  637.6          551.0
                                                  3,081.8        3,403.1
 
         Stockholders' Equity:                    1,562.4        1,600.8
 
             Total Liabilities and
              Stockholders' Equity               $8,186.6       $8,375.5
 
 
                       Lear Corporation and Subsidiaries
                               Supplemental Data
 
           (Unaudited, in millions, except content per vehicle data)
 
                                              First Quarter Ended
                                     March 31, 2001         April 1, 2000
     Net sales
     U.S. and Canada                    $1,990.2               $2,343.4
     Europe                             $1,169.8               $1,166.6
     Rest of World                        $343.6                 $295.1
     Total                              $3,503.6               $3,805.1
 
     Reported
     Operating income                     $134.6                 $215.9
     Goodwill amortization                $(22.4)                $(22.2)
     Operating income after amortization  $112.2                 $193.7
 
     Adjusted
     Operating income                     $138.8                 $215.9
     Goodwill amortization                $(22.4)                $(22.2)
     Operating income after amortization  $116.4                 $193.7
 
     Content per vehicle - North America    $571                   $547
     Content per vehicle - Western Europe   $257                   $253
     Content per vehicle - South America    $116                   $102
 
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SOURCE Lear Corporation
    SOUTHFIELD, Mich., April 23 /PRNewswire Interactive News Release/ -- Lear
 Corporation (NYSE:   LEA), the world's fifth-largest automotive supplier, today
 reported its financial results for the first quarter of 2001.  For the
 quarter, Lear posted net sales of $3.5 billion, operating income of $134.6
 million and net income of $14.5 million, or $.22 per share.  Excluding non-
 recurring items, Lear had net income of $16.9 million, or $.26 per share.
     "Our first quarter results were affected by the tough market conditions as
 our customers significantly reduced their first quarter production," stated
 Bob Rossiter, President and Chief Executive Officer of Lear Corporation.
 "Production decreases of 17 percent in North America and 4 percent in Europe,
 coupled with weaker European currencies, made the quarter particularly
 challenging."
     Rossiter continued, "We remain focused on working with our customers,
 improving returns to our shareholders and continuing to run a lean and
 efficient company.  During the quarter, we took steps to further align our
 business for the competitive marketplace.  Additionally, we are pleased with
 the successful completion of our Eurobond offering and the extension of our
 revolving credit facility, each closing during the quarter."
     Earnings per share in the quarter, excluding non-recurring items, were
 $.26 versus $.93 in the first quarter of 2000, as the negative impact of lower
 production levels, weaker European currencies and divestitures was partially
 offset by aggressive cost actions and fewer shares outstanding.
     In March 2001, the Company completed the sale of a non-core Spanish wire
 business for $35.5 million and recorded a $3.1 million pre-tax charge for the
 write-down of certain long-term assets to net realizable value.  The net
 result of these transactions was a pre-tax gain of $9.3 million and an after-
 tax gain of $2.5 million or $.04 per share.
     During the quarter, the Company reduced its hourly and salaried workforce.
 These workforce reductions took place in North America and Europe and were
 primarily hourly employees.  The net cost of these severance actions for the
 quarter was $4.2 million pre-tax and $2.5 million after-tax, or $.04 per
 share.
     The Company completed several financing transactions during the quarter,
 which had the effect of extending maturities of the Company's credit
 facilities and diversifying its capital base.  The Company's $2.1 billion
 revolving credit facility was amended to extend its maturity to March 2006 and
 reduce commitments to $1.7 billion.  During the quarter, Lear also drew $300
 million under a recently established 364-day asset-backed securitization
 financing program and issued 250 million euro of 8.125%, 7-year senior notes.
 The Company incurred $3.0 million in non-recurring expenses related to the
 securitization and wrote off $1.0 million of deferred financing fees
 associated with the amendment to its credit agreement.  The after-tax impact
 of these two transactions was $2.4 million, or $.04 per share.  In connection
 with Lear's financings, Standard & Poor's and Moody's reaffirmed the Company's
 senior credit ratings at BB+ and Ba1, respectively.
     Net sales for the quarter fell 8 percent to $3.5 billion from $3.8 billion
 in last year's first quarter.  The decrease was attributable to lower customer
 requirements, foreign exchange and non-core divestitures.
     Net sales in the U.S. and Canada decreased 15 percent from $2.343 billion
 in the first quarter of 2000, to $1.990 billion in the first quarter of 2001,
 due primarily to 19 percent lower industry production.  In Europe, revenues
 were essentially flat at $1.170 billion, as new programs offset the negative
 impact of 4 percent lower industry production and weaker European currencies.
 Rest of World net sales increased $49 million to $344 million due to new
 programs.
     For 2001, the Company currently anticipates second-quarter net sales to be
 approximately 6 to 7 percent lower than the second quarter of a year ago and
 earnings of $.75 to $.85 per share.  For the full year, net sales are
 currently anticipated to be down 5 to 7 percent versus 2000 and earnings are
 anticipated to be between $3.10 and $3.40 per share.
     Lear Corporation, a Fortune 150 Company headquartered in Southfield,
 Mich., USA, focuses on automotive interiors and electronics and is the world's
 fifth-largest automotive supplier.  Sales in 2000 were $14.1 billion.  The
 Company's world-class products are designed, engineered and manufactured by
 over 100,000 employees in more than 300 facilities located in 32 countries.
 Information about Lear and its products is available on the internet at
 www.lear.com .
 
     This news release contains forward-looking statements within the meaning
 of the Private Securities Litigation Reform Act of 1995, including statements
 regarding anticipated financial results.  Actual results may differ materially
 from anticipated results as a result of certain risks and uncertainties,
 including but not limited to general economic conditions in the markets in
 which Lear operates, fluctuations in the production of vehicles for which the
 Company is a supplier, our success in achieving cost reductions that offset or
 exceed customer selling price reductions, labor disputes involving the Company
 or its significant customers, risks associated with conducting business in
 foreign countries, increases in product warranty costs, raw material shortages
 and other risks detailed from time to time in the Company's Securities and
 Exchange Commission filings.  These forward-looking statements are made as of
 the date hereof and Lear does not assume any obligation to update them.
 
                       Lear Corporation and Subsidiaries
                       Consolidated Statements of Income
               (Unaudited, in millions, except per share amounts)
 
                                                  First Quarter Ended
                                             March 31, 2001      April 1, 2000
                                       Reported     Adjusted(e)    Reported
 
     Net sales                         $3,503.6     $3,503.6       $3,805.1
 
     Cost of goods sold                 3,238.6(a)   3,236.2        3,448.1
     Selling, general & administrative
      expenses                            130.4(a)     128.6          141.1
     Amortization of goodwill              22.4         22.4           22.2
     Interest expense                      76.5(b)      73.5           78.8
     Other expense, net                     5.7(c)      15.0            9.8
 
     Pretax income before provision for
      income taxes and extraordinary
      item                                $30.0        $27.9         $105.1
     Provision for income taxes            14.9(a,b,c)  11.0           43.1
 
     Income before extraordinary item     $15.1        $16.9          $62.0
 
     Extraordinary item, net of tax         0.6(d)         -              -
 
     Net income                           $14.5        $16.9          $62.0
 
 
     Diluted net income per share         $0.22        $0.26          $0.93
 
 
     Weighted average number of shares
      outstanding - diluted                64.7         64.7           67.0
 
      (a), (b), (c), (d), (e) See Additional Disclosures
 
                             ADDITIONAL DISCLOSURES
 
     (a)  During the first quarter of 2001, the Company completed actions to
 reduce its cost base.  The non-recurring costs, comprised of severance costs
 less the associated savings, were recorded in cost of goods sold and selling,
 general and administrative expenses in the amounts of $2.4 million and $1.8
 million, respectively.  The net after-tax impact of these severance actions
 was $2.5 million or $.04 per share.
 
     (b)  During the first quarter of 2001, the Company made the initial draws
 under an asset-backed securitization.  Approximately $3.0 million in non-
 recurring expenses were incurred as a result of the transaction.  The after-
 tax impact of these expenses was $1.8 million or $.03 per share.
 
     (c)  In March 2001, the Company completed the sale of our Spanish wire
 business for $35.5 million, resulting in a gain of $12.4 million pre-tax ($5.6
 million after-tax).  This gain was offset by a $3.1 million pre-tax charge
 recorded to write-down certain long-term assets to net realizable value.  The
 net result of these transactions was a $9.3 million pre-tax gain ($2.5 million
 after-tax or $.04 per share).
 
     (d)  In March 2001, the Company amended and restated its $2.1 billion
 credit agreement.  The write-off of deferred financing fees of $1.0 million
 pre-tax ($0.6 million after-tax or $.01 per share) is presented as an
 extraordinary item.
 
     (e)  Excludes the impact from the items included in (a), (b), (c) and (d)
 above.
 
                       Lear Corporation and Subsidiaries
                          Consolidated Balance Sheets
                                 (In millions)
 
                                                   March 31,    December 31,
                                                     2001          2000
                                                 (Unaudited)     (Audited)
         ASSETS
         Current:
             Cash and cash equivalents             $155.8          $98.8
             Accounts receivable, net             1,601.1        1,639.0
             Inventories                            450.6          538.8
             Recoverable customer engineering
              and tooling                           291.8          273.2
             Other                                  279.5          278.2
                                                  2,778.8        2,828.0
         Long-Term:
             PP&E, net                            1,822.4        1,891.3
             Goodwill, net                        3,213.7        3,266.6
             Other                                  371.7          389.6
                                                  5,407.8        5,547.5
 
             Total Assets                        $8,186.6       $8,375.5
 
 
         LIABILITIES AND STOCKHOLDERS' EQUITY
         Current:
             Short-term borrowings                   $3.6          $72.4
             Accounts payable and drafts          2,264.8        2,174.0
             Accrued liabilities                    982.4          969.6
             Current portion of long-term debt      291.6          155.6
                                                  3,542.4        3,371.6
         Long-Term:
             Long-term debt                       2,444.2        2,852.1
             Other                                  637.6          551.0
                                                  3,081.8        3,403.1
 
         Stockholders' Equity:                    1,562.4        1,600.8
 
             Total Liabilities and
              Stockholders' Equity               $8,186.6       $8,375.5
 
 
                       Lear Corporation and Subsidiaries
                               Supplemental Data
 
           (Unaudited, in millions, except content per vehicle data)
 
                                              First Quarter Ended
                                     March 31, 2001         April 1, 2000
     Net sales
     U.S. and Canada                    $1,990.2               $2,343.4
     Europe                             $1,169.8               $1,166.6
     Rest of World                        $343.6                 $295.1
     Total                              $3,503.6               $3,805.1
 
     Reported
     Operating income                     $134.6                 $215.9
     Goodwill amortization                $(22.4)                $(22.2)
     Operating income after amortization  $112.2                 $193.7
 
     Adjusted
     Operating income                     $138.8                 $215.9
     Goodwill amortization                $(22.4)                $(22.2)
     Operating income after amortization  $116.4                 $193.7
 
     Content per vehicle - North America    $571                   $547
     Content per vehicle - Western Europe   $257                   $253
     Content per vehicle - South America    $116                   $102
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X61434241
 
 SOURCE  Lear Corporation