EXHIBIT 99.1
EIMO CORPORATION STOCK EXCHANGE RELEASE 7.8.2002 AT 8.30 1 (10)
INTERIM REPORT JANUARY-JUNE 2002
Figures are not audited
Second quarter 2002
- - Net sales EUR 53.6 million
- - Sales growth 145%
- - Operating loss EUR 5.9 million
January-June 2002
- - Net sales EUR 120.3 million
- - Sales growth 146%, which includes internal growth of 15%
- - Operating loss EUR 1.8 million
- - EPS, diluted EUR -0.02
Prospects
- - Operating performance to improve during second half of 2002
- - Efficiency program continues
Developments in the second quarter
Eimo's second quarter net sales were EUR 53.6 million (EUR 21.9 million in the
corresponding period in the previous year), and the operating loss EUR 5.9
(profit of EUR 0.4) million. The period's cash used in operations was EUR 2.1
million and cash used in operations after capital expenditures was EUR 8.7
million. The geographical distribution of sales as a percentage of total sales
for the quarter, based on the geographic location of Eimo's customers, was 43%
to Europe, 56% to the Americas and 1% to Asia. Customers in the
telecommunications and other electronics industries represented 77% (82% in
Q1/2002)of net sales during the quarter.
During the second quarter of the year Eimo failed badly to meet its original
quarterly sales targets. Net sales exceeded the figure for the corresponding
period last year by 145% mainly due to the inclusion of revenues from Eimo's
operations in the Americas. However, the company recorded a significant
operating loss, primarily due to low sales volumes relative to capacity,
especially in Europe. The overall size of the operating loss was aggravated by
the fact that such reduced sales came at very short notice, which led at times
to very low capacity utilization. In the Americas, second quarter sales were
only slightly below first quarter's level.
Performance in January-June
In January-June 2002 Eimo recorded net sales of EUR 120.3 (48.9) million, which
represents growth of 146%. The operating loss was EUR 1.75 (profit of 0.9)
million and loss before extraordinary items was EUR 2.3 (profit of 0.1) million.
The operating loss for the period includes EUR 1.7 million of amortization of
negative goodwill,
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and EUR 0.3 million of amortization of normal goodwill. The non-diluted and
diluted earnings per share were both EUR -0.02 (-0.01).
The geographical distribution of sales as a percentage of total sales for the
period, based on the geographic location of Eimo's customers, was 47% to Europe,
51% to the Americas and 2% to Asia. Customers in the telecommunications and
other electronics industries represented 80% (82% in Q1/2002)of net sales during
the period.
Compared to the same period in 2001, Eimo's net sales in the first half of 2002
grew significantly. Such growth was primarily due to the inclusion of sales from
Eimo's Eimo Americas (previously Triple S Plastics) subsidiary, but also
reflected increased sales to Eimo's customer base. Internal sales growth, that
is growth in sales of Eimo excluding sales by its Eimo Americas subsidiary, was
15%.
During the period, Eimo solidified its market position in its core
telecommunications market, while at the same time seeing growth in its
non-telecom sales compared to their level immediately after the acquisition of
Eimo Americas operations.
During the period, profitability was hampered by excessive costs of some new
programs, and surprisingly low volumes for some programs leading to at times
very low capacity utilization at some facilities.
The recent depreciation of the U.S. dollar against Eimo's reporting currency the
euro did not significantly affect earnings, although it did have a minor
dampening effect on reported sales.
Gross investments during January to June totaled EUR 13.5 (7.1) million. The
largest cash investments were made in the Americas to introduce new production
technology and to increase capacity. Cash flow from operations was EUR 8.8
million, and cash flow after investments was EUR 2.2 million. The relatively
high capital expenditures reflect some changes in the composition of Eimo's
offering to its customers, which now in some cases includes automated assembly
equipment owned by Eimo. Full year capital expenditures are estimated to reach
EUR 20-21 million.
The negative cash flow for the second quarter somewhat affected the company's
financial position. On June 30, Eimo's cash and committed unused credit
facilities totaled EUR 16.1 million. The equity ratio was 47.9% (49.5%) and the
current ratio was 1.37 (1.83). Consolidated interest bearing net debt was EUR
46.2 million, and the balance sheet total at the end of June was EUR 157.4
(103.7) million.
Eimo employed on average 1887 (910) people during the first half of 2002. On
June 30, the company had 2024 employees, including summer help (appr. 100
persons).
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Efficiency program and other news from production operations
In order to improve capacity utilization and to achieve additional efficiencies
Eimo continues to review its global production set-up and organization. As part
of this exercise, in the Americas the company's Georgetown, Texas molding
operations will be closed in September. The business will be moved into the Fort
Worth, Texas operations. The small tooling operation in Denton, Texas has
already been merged with Fort Worth operations. In Michigan, the Battle Creek
facility is a main target of an efficiency drive. In Vicksburg, due to high
demand and the need to arrange space for additional telecoms related work, the
company's old Vicksburg 2 building returned to service in May and has since
expanded operations under common management and as an integral part of Vicksburg
operations.
In Europe Eimo is uniting its Lahti and Hollola molding operations under one
management, and merging its Lahti and Hollola tooling operations. In Asia,
painting and improved mold maintenance have been installed to Shenzhen, and mass
production of parts for mobile phones is expanding rapidly.
The costs of the efficiency program have been, and are being, expensed as they
occur, and such costs, so far, have been relatively small. Eimo is currently
aware of approximately EUR 2 million worth of costs related to expenses and
writedowns expected in the course of the program during third quarter. The
described steps are estimated to lead to yearly savings exceeding EUR 10 million
per year, while the number of personnel is expected to fall by nearly 150
people, with little loss of production capacity.
Changes in management
The company's chief financial officer, Mr. Timo Harju, has been appointed deputy
CEO. Americas CEO Mr. A. Christian Schauer has resigned, effective immediately,
from Eimo's global management team and from his position as CEO Americas. His
service to the company will be completed by October 31. Mr. Niilo Oksa,
previously Executive Vice President at Eimo Americas, has been appointed CEO
Americas. In this role he will be supported by Mr. Douglas Bergmoser, head of
business unit Michigan, and Mr. Michael Zaagman, head of business unit Texas and
Brazil. Mr. Gary Eglen is General Manager for Brazil. In Europe, effective July
1, Mr. Timo Seppa has been appointed CEO Europe and Mr. Markus Pulkki Manager of
tooling operations. In Asia, Mr. Daniel B. Canavan continues as Managing
Director, and Mr. David Tang has been appointed General Manager.
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Shares and shareholders
The daily closing price for Eimo's shares in the Helsinki Exchanges in the
period January to June ranged between EUR 1.16 and EUR 2.39. The closing price
on June 28, 2002 was EUR 1.23. On June 28, 2002 Eimo had 65,432,300 shares
outstanding. On July 30 Eimo received notice from Mr. Victor V. Valentine, Jr.
that his shareholding had fallen below 5% of all shares outstanding. Mr.
Valentine was a significant owner of Triple S Plastics. He is not, and has not
been, an employee or a director of Eimo. On July 4, Eimo announced that it will
terminate the listing of its ADRs on the Nasdaq National Market on August 30,
2002.
Business prospects
Many recent unit volume forecasts for the global mobile phone market in 2002
have been in the range of 400 million units, with most recent estimates
forecasting lower volumes when compared with estimates made earlier in the year.
Eimo continues to operate in an environment of little overall growth in its core
market.
Taking into account the sales disappointments of the second quarter, some of
which had some limited effect in the third quarter as well, Eimo has revised its
full year sales estimate to EUR 245-255 million. This estimate assumes a global
market of some 400 million mobile phone units and a relatively stable market
share for Eimo. These lower sales weigh on profitability. Barring additional
writedowns, full year pre-tax profit is expected to be broadly at last year's
level. The above estimates include a forecast strong fourth quarter, as Eimo's
third quarter net sales are expected only to match or slightly exceed second
quarter sales, with a reduced quarterly loss.
The interim report for January - September 2002 will be published on 31 October
2002.
Lahti, 7 August 2002
Eimo Corporation
Board of Directors
Further information:
Elmar Paananen, Vice Chairman, IR +358-500-503 865
Eimo is a leading global manufacturer of precision plastic components, whose
main customers are companies in the mobile communications industry. With
operations on four continents, the Company's worldwide operations include eleven
injection molding plants located close to the production units of the Company's
key customers. In 2001 Eimo's net sales totaled EUR 166 million.
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This press release includes statements that constitute forward-looking
statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. This information involves risks and uncertainties
that could cause actual results to differ materially from the forward-looking
statements. For certain information regarding these risks and uncertainties,
reference is made to Eimo's Annual Report on Form 20-F filed with the United
States Securities and Exchange Commission on June 27, 2002 (an extract of the
Risk Factors from such Form 20-F is available at www.eimo.com / Investor
relations / Form 20-F Risk Factors).
DISTRIBUTION:
HEX Helsinki Exchange
Press
ENCLS.
Consolidated income statements
Cash flow statement
Consolidated balance sheet
Financial ratios
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APPENDIX 1
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CONSOLIDATED INCOME STATEMENT 4-6/2002 4-6/2001
APRIL-JUNE 2002
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1 000 EUR 1 000 EUR Change %
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NET SALES 53 557 21 903 144.5
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Other operating income 560 289 93.8
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Operating expenses 56 111 20 361 175.6
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Depreciation and write-downs 3 942 2 202 79.0
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OPERATING PROFIT - 5 936 - 371 1 500.0
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% of net sales - 11.1 - 1.7
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Financial income and expenses - 144 - 513 - 71.9
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PROFIT BEFORE EXTRAORDINARY ITEMS - 6 080 - 884 - 587.8
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% of net sales - 11.4 - 4.0
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Extraordinary items - - 59
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PROFIT BEFORE TAXES - 6 080 - 943 - 544.8
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% of net sales - 11.4 - 4.3
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Income tax on ordinary activities 1 675 - 248
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Income tax on extraordinary items - 17
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Minority interest 50 227
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CONSOLIDATED PROFIT FOR THE REVIEW PERIOD - 4 355 - 947 - 359.9
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APPENDIX 2
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CONSOLIDATED INCOME STATEMENT JANUARY-JUNE 2002 1-6/2002 1-6/2001 1-12/2001
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1 000 EUR 1 000 EUR Change % 1 000 EUR
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NET SALES 120 293 48 857 146.2 165 837
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Other operating income 962 507 89.7 963
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Operating expenses 116 832 44 235 164.1 147 312
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Depreciation and write-downs 6 173 4 223 46.2 9 872
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OPERATING PROFIT - 1 750 906 - 293.2 9 616
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% of net sales - 1.5 1.9 5.8
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Financial income and expenses - 513 - 799 - 35.8 - 1 808
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PROFIT BEFORE EXTRAORDINARY ITEMS - 2 263 107 - 2 215.0 7 808
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% of net sales - 1.9 0.2 4.7
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Extraordinary items - - 1 420 - 1 237
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PROFIT BEFORE TAXES - 2 263 - 1 313 - 72.4 6 571
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% of net sales - 1.9 - 2.7 4.0
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Income tax on ordinary activities 879 - 685 - 2 480
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Income tax on extraordinary items - 412 359
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Minority interest 50 287 744
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CONSOLIDATED PROFIT FOR THE REVIEW PERIOD - 1 334 - 1 299 - 2.7 5 194
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APPENDIX 3
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CASH FLOW STATEMENT 1-6/2002 1-6/2001 1-12/2001
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1 000 EUR 1 000 EUR 1 000 EUR
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CASH FLOW FROM OPERATING ACTIVITIES
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Operating profit - 1 750 906 9 616
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Adjustments 4 608 4 418 9 837
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Change in net working capital 4 509 - 1 656 - 1 607
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CASH FLOW GENERATED BY OPERATIONS 7 367 3 668 17 846
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Interest received 159 89 151
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Interest and other financial expenses - 527 - 869 - 1 966
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Income taxes paid - 508 - 1 683 - 2 189
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Extraordinary income and expenses - - 1 421 - 1 237
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NET CASH PROVIDED BY OPERATING ACTIVITIES 6 491 - 216 12 605
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CASH FLOW FROM INVESTING ACTIVITIES
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Acquisition of group companies - 23 - 2 831 - 661
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Other investments - - - 33
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Capital expenditures - 12 352 - 3 959 - 17 211
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Proceeds from sales of fixed assets 239 - 1 281
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NET CASH USED IN INVESTING ACTIVITIES - 12 136 - 6 790 - 16 624
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OPERATING CASH FLOW ./. INVESTMENTS - 5 645 - 7 006 - 4 019
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CASH FLOW FROM FINANCING ACTIVITIES
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Proceed from (payments of) long-term liabilities, net 4 985 12 971 5 294
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Proceed from (payments of) short-term borrowings, net 669 655 6 256
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Dividends paid - 2 610 - 3 248 - 3 649
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Proceeds from issuance of share capital 270 - 304
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NET CASH USED IN (PROVIDED BY) FINANCING ACTIVITIES 3 314 10 378 8 205
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Net increase in cash and cash equivalents - 2 331 3 372 4 186
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Cash and cash equivalents at the beginning of the period 5 851 1 728 1 665
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Cash and cash equivalents at the end of the period 3 520 5 100 5 851
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APPENDIX 4
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CONSOLIDATED BALANCE SHEET 30.6.2002 30.6.2001 31.12.2001
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1 000 EUR 1 000 EUR Change % 1 000 EUR
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ASSETS
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NON-CURRENT ASSETS
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Intangible assets 2 251 3 295 - 31.7 2 550
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Tangible assets 93 670 56 152 66.8 93 685
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Investments 601 2 258 - 73.4 650
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CURRENT ASSETS
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Inventories 19 166 14 003 36.9 23 010
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Long-term receivables - 48 -
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Deferred tax receivable 2 099 1 361 1 127
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Short-term receivables 36 134 21 468 68.3 47 124
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Cash and cash equivalents 3 520 5 100 - 31.0 5 851
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TOTAL ASSETS 157 441 103 685 51.8 173 997
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SHAREHOLDERS' EQUITY AND LIABILITIES
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SHAREHOLDERS' EQUITY
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Share capital 16 358 11 600 41.0 16 170
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Share premium account 39 899 18 124 120.1 38 655
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Translation difference - 4 163 97 876
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Retained earnings 22 440 19 168 17.1 26 246
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MINORITY INTEREST - 1 535 1 009
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NEGATIVE GOODWILL - - 1 686
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LIABILITIES
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Deferred tax liability 3 146 3 101 1.5 3 272
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Long-term liabilities
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Interest bearing liabilities 35 367 27 464 28.8 29 392
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Current liabilities
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Interest bearing liabilities 14 351 6 151 133.3 17 568
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Other non-interest bearing liabilities 18 989 12 102 56.9 29 921
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Accruals and deferred income 11 054 4 343 154.5 9 202
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TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 157 441 103 685 51.8 173 997
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APPENDIX 5
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KEY FIGURES 30.6.2002 30.6.2001 Change % 31.12.2001
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Return on equity (ROE), % - 3.5 - 2.3 7.7
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Return on investment (ROI), % - 2.6 2.5 9.5
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Equity ratio, % 47.9 49.5 48.0
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Net Gearing, % 62.0 56.4 49.6
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Current Ratio 1.37 1.83 1.36
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Capital expenditure, 1 000 EUR 13 537 7 059 91.8 44 936
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% of net sales 11.3 14.4 27.1
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Average number of personnel 1 887 910 107.4 1 229
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PER SHARE RATIOS
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Earnings per share (EPS), diluted, EUR - 0.020 - 0.006 0.113
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Shareholders equity per share, EUR 1.139 1.056 7.9 1.267
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SECURITIES AND GUARANTEES, 1 000 EUR
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Securities for own liabilities 69 813 57 264 63 511
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Other own liabilities - 77 3 579
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Nominal value of derivative contracts 9 807 - 20 186
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Fair value of derivative contracts 77 - - 93
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