Donnelly announces improved results

On 21 February Donnelly Corporation announced fourth quarter 2001 net income of US$ 3.9 million, or US$ 0.38 per share, on sales of US$ 209 million as compared to fourth quarter 2000 net income of US$…

On 21 February Donnelly Corporation announced fourth quarter 2001 net income of US$ 3.9 million, or US$ 0.38 per share, on sales of US$ 209 million as compared to fourth quarter 2000 net income of US$ 1.7 million, or US$ 0.17 per share, on sales of US$ 200 million. Operating earnings (net income excluding restructuring and other non-recurring charges) for the fourth quarter of 2001 were US$ 5.2 million, or US$ 0.50 per share, compared with US$ 2.2 million, or US$ 0.21 per share, in the same period of the prior year. Restructuring charges in the fourth quarter of 2001 were US$ 1.3 million after-tax, or US$ 0.12 per share, and resulted from the continuing overhead reduction actions in the United States and Europe. Restructuring and other non-recurring charges for the fourth quarter of 2000 totaled US$ 0.5 million after-tax, or US$ 0.05 per share, for the period and included: i) a US$ 0.22 per share write-down of German deferred tax assets associated with the reduction of the German corporate tax rates, ii) a US$ 0.15 per share return-to-income from a reduction of the European restructuring reserve in accordance with Generally Accepted Accounting Principles, and iii) a US$ 0.02 per share gain on the sale of Donnelly“s 17.1% interest in KAM Truck Components, Inc. A significant factor in the increase in operating earnings was the improved performance of Donnelly Electronics, acquired during February 2001. Prior to February 2001, Donnelly Electronics“ earnings (losses) were included in equity earnings (losses) of affiliated companies. Net income for the year ended 31 December 2001 was US$ 2.6 million, or US$ 0.25 per share, on sales of US$ 848 million as compared to net income of US$ 11.1 million, or US$ 1.09 per share, on sales of US$ 857 million for 2000. Operating earnings (net income excluding restructuring and other non-recurring charges) for 2001 were US$ 6.7 million, or US$ 0.65 per share, compared to US$ 11.6 million, or US$ 1.14 per share, for 2000. Restructuring charges of US$ 4.1 million, or US$ 0.40 per share, in 2001 resulted from overhead reduction actions in the third and fourth quarters. Non-recurring charges in 2000 of US$ 0.5 million after-tax, or US$ 0.05 per share, are as described above. Net income for 2001 benefited from research and development tax credits and export-related tax incentives. The impact on the tax rate was magnified in 2001 because the credits represent a much higher proportion of the 2001 taxes due to the lower overall level of earnings and taxes otherwise payable. The 2000 tax rate was higher than usual due to the write-down of German deferred tax assets. Sales for the fourth quarter were US$ 209 million, approximately 5 percent higher than sales for the year earlier period. Total 2001 sales of US$ 848 million were down slightly from the prior year sales of US$ 857 million due to foreign exchange rate fluctuations. “The fourth quarter“s performance was a result of our continued focus on operations and aggressive cost-cutting,” said Chairman and Chief Executive Officer Dwane Baumgardner. “This represents a strong response to the economic difficulties experienced in the third quarter of 2001 and demonstrates our commitment to be successful, even in the uncertain times ahead. Donnelly has a strong global presence supplying products to every major auto manufacturer in the world through its worldwide manufacturing and distribution system. The Company has a full pipeline of new products in areas such as integrated electronic mirror systems, electrochromic mirrors, electronic sensors, engineered window systems and child safety systems,” said Baumgardner. Donnelly is a technology-driven, customer-focused, automotive supplier that has been based in Holland, Michigan since 1905. Through its various product lines, Donnelly serves every major automotive manufacturer in the world. The company has more than 6,000 employees in 14 countries worldwide.