Strong North American Market Drives Increased Sales Revenue As Delphi Posts Solid Third-Quarter Results
Cash Generation Remains Strong - Supporting $300 Million Voluntary Pension Fund Contribution
Sales up 18 Percent Over Strike-Depressed Q3 1998 - Non-GM Sales Climb
TROY, Mich., Oct. 13 /PRNewswire/ -- Propelled by strong North American volumes and continued increases in sales to customers other than General Motors, Delphi Automotive Systems (NYSE: DPH - news) today reported earnings of $136 million, or $0.24 per share on a diluted basis.
''The third quarter is typically a challenging period for us,'' said Delphi Chairman, Chief Executive Officer and President J.T. Battenberg III. ''This year, despite the usual production changes for the new model year and the seasonality of OEM schedules, we were able to post very solid results. These results reflect the continued strong North American vehicle market as well as increases in sales to customers other than GM.''
The $136 million in third-quarter net income compares to a pro forma, strike-impacted third quarter 1998 loss of $214 million*, or ($0.38) per share on a diluted basis.
Sales revenue of $6.8 billion was up 18 percent over strike-impacted 1998 levels after adjusting for the impact of businesses divested in late 1998. Sales to customers other than GM totaled $1.7 billion for the quarter, climbing 16 percent on a comparable basis.
The increased sales revenue is largely the result of new Delphi content on several vehicle models that went into production this quarter. Importantly, the third quarter marked the start of production of the 2000 Fiat Punto featuring Delphi's E-STEER(TM) Electric Power Steering system, several Volkswagen models featuring Delphi's Monsoon(TM) audio system, the 2000 Land Rover Discovery featuring Delphi's Dynamic Body Control system, and the 2000 Jaguar XKR sports coupe featuring Delphi's FOREWARN(TM) Adaptive Cruise Control system.
• See attached highlights for description of 1998 pro forma net loss and 1998 shares outstanding calculations.
Balance Sheet/Cash Generation
Delphi generated $484 million in operating cash flow during the quarter, primarily driven by improvements in working capital and the high cash content of earnings. This continued strong cash generation allowed Delphi to make a pension contribution of $300 million, bringing the total voluntary pension contributions for the year to $900 million.
''The pension contributions strengthen our balance sheet and demonstrate our commitment to fund employee pension plans,'' said Delphi's Chief Financial Officer Alan Dawes. ''This action delivers value to our shareholders by positively influencing our earnings in 2000 and beyond.''
The Delphi Board of Directors also announced a regular quarterly dividend of $0.07 per share on Delphi $0.01 par value common stock. The dividend is payable October 18, 1999, to shareholders of record as of September 17, 1999.
New Business Bookings
In line with the company's objective of diversifying its customer base, Delphi booked new business totaling $2 billion with customers other than GM. In addition, the company booked $8 billion of new business with its largest customer, GM. The impact of this new business will be reflected in Delphi's revenues in the years 2001 and beyond, over an average five-year contract life.
In addition, Delphi yesterday announced it signed a significant contract with Caterpillar Inc., the world's leading manufacturer of construction and mining equipment, diesel and natural gas engines, and industrial gas turbines. Delphi Delco Electronics Systems, a division of Delphi, will co-develop engine controllers for all of Caterpillar's diesel engines and many Caterpillar machines starting in mid-2001. In addition, Delphi Delco will partner with Delphi Energy & Engine Management Systems, also a Delphi division, to develop a new line of hydraulic control modules for Caterpillar.
Other contracts* announced during the quarter include:
•PSA Peugeot Citroen -- wiring harnesses for a 2001 model year vehicle•Volkswagen -- airbags for a future global program•Opel -- driver and passenger airbags for a program on a global basis•DaimlerChrysler -- Level 3 Modular Door Systems for the Mercedes-Benz
Actros
• DaimlerChrysler -- modular cockpits for the M-Class through a four-year contract with Mercedes-Benz U.S. International in Graz, Austria
Aftermarket
Separately, Delphi today announced the creation of a new division, Delphi Aftermarket, to bolster its brand support and sales in the aftermarket. The announcement was made at Equip 'Auto, a vehicle and aftermarket show in Paris.** |
