-- Sales of $9.3 billion decreased 3%, compared to global light vehicle production down 3% º Labour strike at General Motors (“GM strike”) reduced third quarter sales -- Excluding foreign currency translation and divestitures net of acquisitions, sales up 2% -- Returned $451 million to shareholders through share repurchases and dividends -- 2019 Outlook reduced largely to reflect estimated impact of GM strike and higher launch costs -- Recorded non-cash impairment charges of $537 million after income taxes and loss attributable to non-controlling interests related to investment in Getrag’s equity accounted joint ventures

AURORA, Ontario, Nov. 08, 2019 (GLOBE NEWSWIRE) -- Magna International Inc. (TSX: MG; NYSE: MGA) today reported financial results for the third quarter ended September 30, 2019. Please click HERE for full third quarter Financial Statements and MD&A.

THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------ ------------------ 2019 2018 2019 2018 --------- ------- -------- -------- Reported Sales $ 9,319 $ 9,618 $ 30,036 $ 30,690 (Loss) income from operations before (319 ) 674 1,644 2,344 income taxes $ $ $ $ Net (loss) income attributable to (233 ) 554 1,325 1,840 Magna International Inc. $ $ $ $ Diluted (loss) earnings per share $ (0.75 ) $ 1.62 $ 4.15 $ 5.22 Non-GAAP Financial Measures(1) Adjusted EBIT $ 558 $ 699 $ 1,955 $ 2,377 Adjusted diluted earnings per share $ 1.41 $ 1.56 $ 4.63 $ 5.08 All results are reported in millions of U.S. dollars, except per share figures, which are in U.S. dollars. (1)Adjusted EBIT, Adjusted diluted earnings per share and Adjusted EBIT as a percentage of sales are Non-GAAP financial measures that have no standardized meaning under U.S. GAAP, and as a result may not be comparable to the calculation of similar measures by other companies. A reconciliation of these Non-GAAP financial measures is included in the back of this press release.

THREE MONTHS ENDED SEPTEMBER 30, 2019

Overall, our Adjusted EBIT came in slightly below our expectations in the third quarter of 2019, as we were negatively impacted by the GM strike. Excluding the impact of the strike, our consolidated Adjusted EBIT was relatively in line with our expectations, with higher than expected launch and warranty costs being largely offset by favourable commercial settlements.

On a consolidated basis, we posted sales of $9.32 billion for the third quarter of 2019, a decrease of 3% from the third quarter of 2018, compared to global light vehicle production that also decreased 3%. Excluding the impact of foreign currency translation and divestitures net of acquisitions, sales increased 2%, and by segment: Complete Vehicles, Power & Vision and Seating increased 14%, 4% and 3%, respectively, while Body Exteriors & Structures decreased 3%. The GM strike reduced our third quarter sales.

Adjusted EBIT decreased 20% to $558 million in the third quarter of 2019 resulting in an adjusted EBIT as a percentage of sales of 6.0% compared to 7.3% last year. Excluding the impact of the GM strike, the lower Adjusted EBIT as a percentage of sales is mainly due to lower margins in our:

-- Power & Vision segment, largely driven by higher engineering and other costs in our ADAS business, and lower equity income, partially offset by the disposition of our Fluid Pressures & Controls business; and -- Seating segment, primarily as a result of lower sales at a number of facilities, higher commodity costs, launch costs and operational inefficiencies at a new facility, partially offset by favourable commercial settlements.

(Loss) income from operations before income taxes was $(319) million for the third quarter of 2019 compared to $674 million in the third quarter of 2018. Included in loss from operations before income taxes in the third quarter of 2019 were Other expense, net items totaling $859 million substantially comprised of non-cash impairment of assets and net losses on the revaluation of our investments. Income from operations before income taxes in the third quarter of 2018 included Other expense of $2 million. Excluding Other expense, net from both periods, income from operations before income taxes decreased $136 million in the third quarter of 2019 compared to the third quarter of 2018.

Net (loss) income attributable to Magna International Inc. was $(233) million for the third quarter of 2019 compared to $554 million in the third quarter of 2018. Included in net loss attributable to Magna International Inc. in the third quarter of 2019 were Other expense, net items totaling $671 million after tax. Net income attributable to Magna International Inc. in the third quarter of 2018 included Other income, net items totaling $19 million after tax. Excluding Other expense (income), net from both periods, net income attributable to Magna International Inc. decreased $97 million in the third quarter of 2019 compared to the third quarter of 2018.

Diluted (loss) earnings per share decreased to $(0.75) in the third quarter of 2019, compared to $1.62 in the comparable period. Adjusted diluted earnings per share decreased 10% to $1.41 compared to $1.56 for the third quarter of 2018.

In the third quarter of 2019, we generated cash from operations before changes in operating assets and liabilities of $846 million and invested $96 million in operating assets and liabilities. Investment activities for the third quarter of 2019 were $432 million, including $349 million in fixed asset additions and an $83 million increase in investments, other assets and intangible assets.

NINE MONTHS ENDED SEPTEMBER 30, 2019

We posted sales of $30.04 billion for the nine months ended September 30, 2019, a decrease of 2% from the nine months ended September 30, 2018, which compares favourably with global light vehicle production which decreased 5% in the first nine months of 2019 compared to the first nine months of 2018. Excluding the impact of foreign currency translation and divestitures net of acquisitions, sales increased 3% and by segment: Complete Vehicles increased 29%, Seating increased 3%, Power & Vision increased 1% and Body Exteriors & Structures decreased 3%, in each case compared to the nine months ended June 30, 2018.

Income from operations before income taxes for the nine months ended September 30, 2019 was $1.64 billion compared to $2.34 billion in the comparable nine months of 2018. Included in income from operations before income taxes in the nine months ended September 30, 2019 were Other expense, net items totaling $248 million mainly comprised of non-cash impairment of assets partially offset by a gain on the sale of our Fluid Pressure & Controls business. Income from operations before income taxes in the nine months ended September 30, 2018 included Other income, net items totaling $34 million. Excluding Other expense (income), net from both periods, income from operations before income taxes decreased $418 million in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.

Net income attributable to Magna International Inc. was $1.33 billion for the nine months ended September 30, 2019 compared to $1.84 billion in the comparable nine months of 2018. Included in net income attributable to Magna International Inc. in the nine months ended September 30, 2019 were Other expense, net items totaling $153 million after tax. Net income attributable to Magna International Inc. in the nine months ended September 30, 2018 included Other income, net items totaling $52 million after tax. Excluding Other expense (income), net from both periods, net income attributable to Magna International Inc. decreased $310 million in the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.

During the nine months ended September 30, 2019, Adjusted EBIT decreased 18% to $1.96 billion, and Adjusted diluted earnings per share decreased 9% to $4.63, each compared to the nine months ended September 30, 2018.

During the nine months ended September 30, 2019, we generated cash from operations before changes in operating assets and liabilities of $2.66 billion, and invested $390 million in operating assets and liabilities. Total investment activities for the first nine months of 2019 were $1.35 billion, including $928 million in fixed asset additions, $152 million in acquisitions, and $272 million in investments, other assets and intangible assets.

RETURN OF CAPITAL TO SHAREHOLDERS

During the three and nine months ended September 30, 2019, we paid dividends of $109 million and $338 million, respectively. In addition, we repurchased 6.8 million shares for $342 million and 21 million shares for $1.04 billion, respectively, for the three and nine months ended September 30, 2019.

Our Board of Directors declared a quarterly dividend of $0.365 with respect to our outstanding Common Shares for the quarter ended September 30, 2019. This dividend is payable on December 6, 2019 to shareholders of record on November 22, 2019.

OTHER MATTERS

Subject to the approval by the Toronto Stock Exchange and the New York Stock Exchange, our Board of Directors approved a new Normal Course Issuer Bid ("NCIB") to purchase up to 30.3 million of our Common Shares, representing approximately 10% of our public float of Common Shares. This NCIB is expected to commence on or about November 15, 2019 and will terminate one year later.

SEGMENT SUMMARY

For the three months ended September 30, ($Millions unless otherwise noted) ---------------------------------------------------- Sales Adjusted EBIT ---------------------------- ---------------------- 2019 2018 Change 2019 2018 Change Body Exteriors & Structures $ 3,984 $ 4,180 $ (196 ) $ 306 $ 326 $ (20 ) Power & Vision 2,696 2,947 (251 ) 167 259 (92 ) Seating Systems 1,266 1,219 47 56 69 (13 ) Complete Vehicles 1,516 1,391 125 29 24 5 Corporate and Other (143 ) (119 ) (24 ) — 21 (21 ) ---------------------------------- - ----- - - ----- - - ---- - - ---- - ---- - ---- - Total Reportable Segments $ 9,319 $ 9,618 $ (299 ) $ 558 $ 699 $ (141 ) ---------------------------------- - ----- - - ----- - - ---- - - ---- - ---- - ---- -

For the three months ended September 30, ------------------------------------------------------------- Adjusted EBIT as a percentage of sales ------------------------------ ----------------------------- 2019 2018 Change Body Exteriors & Structures 7.7 % 7.8 % (0.1 )% Power & Vision 6.2 % 8.8 % (2.6 )% Seating Systems 4.4 % 5.7 % (1.3 )% Complete Vehicles 1.9 % 1.7 % 0.2 % ---------------------------------- ---------- ---------- -------- - ----- - - ----- - - ---- -- Consolidated Average 6.0 % 7.3 % (1.3 )% ---------------------------------- ---------- ---------- -------- - ----- - - ----- - - ---- -- For the nine months ended September 30, ($Millions unless otherwise noted) ------------------------------------------------------------- Sales Adjusted EBIT ------------------------------ ----------------------------- 2019 2018 Change 2019 2018 Change Body Exteriors & Structures $ 12,535 $ 13,350 $ (815 ) $ 1,010 $ 1,057 $ (47 ) Power & Vision 8,587 9,334 (747 ) 584 917 (333 ) Seating Systems 4,151 4,113 38 233 316 (83 ) Complete Vehicles 5,246 4,331 915 100 44 56 Corporate and Other (483 ) (438 ) (45 ) 28 43 (15 ) ---------------------------------- - ------ - - ------ - - ---- - - ----- - - ----- - - ---- -- Total Reportable Segments $ 30,036 $ 30,690 $ (654 ) $ 1,955 $ 2,377 $ (422 ) ---------------------------------- - ------ - - ------ - - ---- - - ----- - - ----- - - ---- --

For the nine months ended September 30, ----------------------- Adjusted EBIT as a percentage of sales ----------------------- 2019 2018 Change Body Exteriors & Structures 8.1 % 7.9 % 0.2 % Power & Vision 6.8 % 9.8 % (3.0 )% Seating Systems 5.6 % 7.7 % (2.1 )% Complete Vehicles 1.9 % 1.0 % 0.9 % Consolidated Average 6.5 % 7.7 % (1.2 )% --------------------------- ---- - ---- - ------ --

For further details on our segment results, please see our Management’s Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements.

UPDATED 2019 OUTLOOK

Current Previous Light Vehicle Production (Units) North America 16.3 million 16.6 million Europe 21.4 million 21.4 million Segment Sales Body Exteriors & Structures $16.2 - $16.6 billion $16.3 - $17.1 billion Power & Vision $11.1 - $11.4 billion $11.0 - $11.6 billion Seating Systems $5.4 - $5.6 billion $5.4 - $5.8 billion Complete Vehicles $6.6 - $6.8 billion $6.8 - $7.2 billion Total Sales $38.7 - $39.8 billion $38.9 - $41.1 billion Adjusted EBIT Margin(2) 6.3% - 6.5% 6.6% - 6.9% Equity Income (included in EBIT) $145 - $175 million $150 - $195 million Interest Expense, net Approximately $85 million Approximately $90 million Income Tax Rate(3) Approximately 23% Approximately 24% Net Income attributable to Magna $1.8 - $1.9 billion $1.9 - $2.1 billion Capital Spending Approximately $1.6 billion Approximately $1.6 billion (2)Adjusted EBIT Margin is the ratio of Adjusted EBIT to Total Sales (3)The Income Tax Rate has been calculated using Adjusted EBIT and is based on current tax legislation

In this 2019 outlook, we have assumed:

-- 2019 light vehicle production volumes (as set out above); -- no material unannounced acquisitions or divestitures; and -- foreign exchange rates for the most common currencies in which we conduct business relative to our U.S. dollar reporting currency as follows: - 1 Canadian dollar equals U.S. dollars 0.754 - 1 euro equals U.S. dollars 1.120

Our updated 2019 outlook reflects our estimate of the impact of the GM strike for the third and fourth quarters.

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Adjusted EBIT The following table reconciles net income to Adjusted EBIT: For the three months ended September 30, -------------------- 2019 2018 ---------------------------------------------------------------------------------------- - ----- - - ----- - Net (loss) Income $ (364 ) $ 560 Add: Interest expense, net 18 23 Other expense, net 859 2 Income taxes 45 114 Adjusted EBIT $ 558 $ 699 ---------------------------------------------------------------------------------------- - ----- - - ----- - Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”) Adjusted EBIT as a percentage of sales is calculated in the table below: For the three months ended September 30, -------------------- 2019 2018 ---------------------------------------------------------------------------------------- - ----- - - ----- - Sales $ 9,319 $ 9,618 ---------------------------------------------------------------------------------------- - ----- - - ----- - Adjusted EBIT $ 558 $ 699 ---------------------------------------------------------------------------------------- - ----- - - ----- - Adjusted EBIT as a percentage of sales 6.0 % 7.3 % ---------------------------------------------------------------------------------------- - ----- - - ----- - Adjusted diluted earnings per share The following table reconciles net income attributable to Magna International Inc. to Adjusted diluted earnings per share: For the three months ended September 30, -------------------- 2019 2018 ---------------------------------------------------------------------------------------- - ----- - - ----- - Net (loss) income attributable to Magna International Inc. $ (233 ) $ 554 Add: Other expense, net 859 2 Tax effect on Other expense, net (61 ) — Loss attributable to non-controlling interests related to Other expense, net (127 ) — Reassessment of deferred tax balances — (21 ) Adjusted net income attributable to Magna International Inc. $ 438 $ 535 Diluted weighted average number of Common Shares outstanding during the year (millions): 310.7 343.0 ---------------------------------------------------------------------------------------- - ----- - - ----- - Adjusted diluted earnings per share $ 1.41 $ 1.56 ---------------------------------------------------------------------------------------- - ----- - - ----- -

NON-GAAP FINANCIAL MEASURES RECONCILIATION

Adjusted EBIT The following table reconciles net income to Adjusted EBIT: For the nine months ended September 30, ---------------------- 2019 2018 ---------------------------------------------------------------------------- - ------ - - ------ - Net Income $ 1,187 $ 1,865 Add: Interest expense, net 63 67 Other expense (income), net 248 (34 ) Income taxes 457 479 ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted EBIT $ 1,955 $ 2,377 ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted EBIT as a percentage of sales (“Adjusted EBIT margin”) Adjusted EBIT as a percentage of sales is calculated in the table below: For the nine months ended September 30, ---------------------- 2019 2018 ---------------------------------------------------------------------------- - ------ - - ------ - Sales $ 30,036 $ 30,690 ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted EBIT $ 1,955 $ 2,377 ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted EBIT as a percentage of sales 6.5 % 7.7 % ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted diluted earnings per share The following table reconciles net income attributable to Magna International Inc. to Adjusted diluted earnings per share: For the nine months ended September 30, ---------------------- 2019 2018 ---------------------------------------------------------------------------- - ------ - - ------ - Net income attributable to Magna International Inc. $ 1,325 $ 1,840 Add: Other expense (income), net 248 (34 ) Tax effect on Other expense (income), net 32 3 Loss attributable to non-controlling interests related — to Other expense (income), net (127 ) — Reassessment of deferred tax balances — (21 ) Adjusted net income attributable to Magna International Inc. $ 1,478 $ 1,788 Diluted weighted average number of Common Shares outstanding during the year 319.1 352.3 (millions): ---------------------------------------------------------------------------- - ------ - - ------ - Adjusted diluted earnings per share $ 4.63 $ 5.08 ---------------------------------------------------------------------------- - ------ - - ------ -

Certain of the forward-looking financial measures above are provided on a Non-GAAP basis. We do not provide a reconciliation of such forward-looking measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. To do so would be potentially misleading and not practical given the difficulty of projecting items that are not reflective of on-going operations in any future period. The magnitude of these items, however, may be significant.

This press release together with our Management’s Discussion and Analysis of Results of Operations and Financial Position and our Interim Financial Statements are available in the Investor Relations section of our website at www.magna.com/company/investors and filed electronically through the System for Electronic Document Analysis and Retrieval (SEDAR) which can be accessed at www.sedar.com as well as on the United States Securities and Exchange Commission’s Electronic Data Gathering, Analysis and Retrieval System (EDGAR), which can be accessed at www.sec.gov.

We will hold a conference call for interested analysts and shareholders to discuss our third quarter ended September 30, 2019 results on Friday, November 8, 2019 at 8:00 a.m. ET. The conference call will be chaired by Don Walker, Chief Executive Officer. The number to use for this call from North America is 1-800-920-3395. International callers should use 1-416-981-9005. Please call in at least 10 minutes prior to the call start time. We will also webcast the conference call at www.magna.com. The slide presentation accompanying the conference call will be available on our website Friday prior to the call.

TAGSQuarterly earnings, financial results

INVESTOR CONTACTLouis Tonelli, Vice-President, Investor Relations louis.tonelli@magna.com │ 905.726.7035

MEDIA CONTACT Tracy Fuerst, Director of Corporate Communications & PR tracy.fuerst@magna.com │ 248.631.5396

OUR BUSINESS (4)We are a mobility technology company. We have over 166,000 entrepreneurial-minded employees and 346 manufacturing operations and 92 product development, engineering and sales centres in 28 countries. We have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities which include body, chassis, exterior, seating, powertrain, active driver assistance, electronics, mechatronics, mirrors, lighting and roof systems. Magna also has electronic and software capabilities across many of these areas. Our common shares trade on the Toronto Stock Exchange (MG) and the New York Stock Exchange (MGA).

(4) Manufacturing operations, product development, engineering and sales centres and employee figures include certain equity-accounted operations.

FORWARD-LOOKING STATEMENTSCertain statements in this press release constitute "forward-looking information" or "forward-looking statements" (collectively, "forward-looking statements") and are intended to provide information about management's current expectations and plans. Such forward-looking statements may not be appropriate for other purposes. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, strategic objectives or economic performance, or the assumptions underlying any of the foregoing, and other statements that are not recitations of historical fact. We use words such as "may", "would", "could", "should", "will", "likely", "expect", "anticipate", "believe", "intend", "plan", "aim", "forecast", "outlook", "project", "estimate", "target" and similar expressions suggesting future outcomes or events to identify forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements relating to:

-- Expected growth in our Getrag operations; -- Equity income; -- Magna’s forecast of light vehicle production in -- Interest expense, net; North America and Europe; -- Income tax rate; -- Expected total sales, based on such light -- Net income attributable to Magna; vehicle production, including expected split by -- Capital spending; and reporting segment; -- Future returns of capital to our shareholders, -- Adjusted EBIT margin; including through dividends and share -- Free cash flow expectations; repurchases.

Our forward-looking statements are based on information currently available to us, and are based on assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate in the circumstances. While we believe we have a reasonable basis for making such forward-looking statements, they are not a guarantee of future performance or outcomes. Whether actual results and developments conform to our expectations and predictions is subject to a number of risks, assumptions and uncertainties, many of which are beyond our control, and the effects of which can be difficult to predict, including, without limitation:

Risks Related to the Automotive Industry -- economic cyclicality; Warranty / Recall Risks -- regional production volume declines; -- intense competition; -- costs related to repair or replacement of -- potential restrictions on free trade; defective products, including due to a recall; -- trade disputes/tariffs; -- warranty or recall costs that exceed warranty provision or insurance coverage limits; Customer and Supplier Related Risks Acquisition Risks -- concentration of sales with six customers; -- shifts in market shares among vehicles or -- inherent merger and acquisition risks; vehicle segments; -- acquisition integration risk; -- shifts in consumer "take rates" for products we sell; Other Business Risks -- quarterly sales fluctuations; -- potential loss of any material purchase -- risks related to conducting business through orders; joint ventures; -- a deterioration in the financial condition of -- our ability to consistently develop and our supply base; commercialize innovative products or processes; -- OEM consolidation; -- our changing business risk profile as a result of increased investment in electrification and Manufacturing Operational Risks autonomous driving, including: higher R&D and engineering costs, and challenges in quoting -- product and new facility launch risks; for profitable returns on products for which we -- operational underperformance; may not have significant quoting experience; -- restructuring costs; -- risks of conducting business in foreign -- impairment charges; markets; -- labour disruptions; -- fluctuations in relative currency values; -- supply disruptions; -- tax risks; -- climate change risks; -- reduced financial flexibility as a result of an -- attraction/retention of skilled labour; economic shock; -- changes in credit ratings assigned to us; IT Security Risk Legal, Regulatory and Other Risks -- IT/Cybersecurity breach; -- antitrust risk; Pricing Risks -- legal claims and/or regulatory actions against us; and -- pricing risks between time of quote and start -- changes in laws and regulations, including of production; those related to vehicle emissions. -- price concessions; -- commodity costs; -- declines in scrap steel prices;

In evaluating forward-looking statements or forward-looking information, we caution readers not to place undue reliance on any forward-looking statement, and readers should specifically consider the various factors which could cause actual events or results to differ materially from those indicated by such forward-looking statements, including the risks, assumptions and uncertainties above which are discussed in greater detail in this document under the section titled "Industry Trends and Risks" and set out in our Annual Information Form filed with securities commissions in Canada and our annual report on Form 40-F filed with the United States Securities and Exchange Commission, and subsequent filings.

Get the latest development, jobs and retail news, delivered straight to your inbox every day.

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Copyright 2019 GlobeNewswire, Inc.

© 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Commenting is limited to Omaha World-Herald subscribers. To sign up, click here.

If you're already a subscriber and need to activate your access or log in, click here.

Load comments

You must be a full digital subscriber to read this article You must be a digital subscriber to view this article.