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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 9, 2003
LEAR CORPORATION
(Exact name of Registrant as specified in its charter)
| Delaware | 1-11311 | 13-3386776 | ||
| (State or other | (Commission File Number) | (IRS Employer | ||
| jurisdiction of | Identification | |||
| incorporation) | Number) | |||
| 21557 Telegraph Road, Southfield, Michigan | 48034 | |||
| (Address of principal executive offices) | (Zip Code) |
(248) 447-1500
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
| Signature | ||||||||
| Press Release issued 1/9/03 | ||||||||
| Visual Slides from Presentation | ||||||||
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Item 7. Financial Statements and Exhibits
| (c) | Exhibits |
| 99.1 | Press release issued January 9, 2003, filed herewith. | |
| 99.2 | Visual slides from the presentation to be made by certain officers of Lear Corporation to the New York Society of Automotive Analysts on January 9, 2003, filed herewith. |
Item 9. Regulation FD Disclosure
On January 9, 2003, Lear Corporation issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated by reference herein.
On January 9, 2003, certain officers of Lear Corporation will make a presentation to the New York Society of Automotive Analysts. The visual slides from the presentation are attached hereto as Exhibit 99.2 and incorporated by reference herein.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| LEAR CORPORATION, a Delaware corporation |
||||||
| Date: January 9, 2003 | By: | /s/ | David C. Wajsgras | |||
| Name: David C. Wajsgras | ||||||
Title: Senior Vice President and
Chief Financial Officer |
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Exhibit Index
| Number | Description | |
| 99.1 | Press release issued January 9, 2003, filed herewith. | |
| 99.2 | Visual slides from the presentation to be made by certain officers of Lear Corporation to the New York Society of Automotive Analysts on January 9, 2003, filed herewith. |
Exhibit 99.1
Lear Corporation Increases Sales Backlog to $4 Billion
SOUTHFIELD, Mich., January 9, 2003 — Lear Corporation (NYSE: LEA) today announced that it has increased its five-year sales backlog of new business from $3.6 billion for the 2002 through 2006 period to $4 billion for 2003 through 2007.
Major areas of growth include a recently awarded Total Interior program from a major OEM, cockpit and instrument panel programs, electrical and electronics systems and new business with Asian OEMs.
“The total interior capability that Lear has developed in recent years coupled with our reputation for excellence in quality and delivery has recently led to several significant new business awards,” said Bob Rossiter, chairman and chief executive officer of Lear Corporation.
He continued, “The increase in the sales backlog illustrates that our strategy to achieve sales growth by leveraging our global product portfolio is working.”
For further information on Lear, you are invited to join a Live Audio Webcast of the company’s latest presentation to automotive analysts at the 2003 Detroit Automotive Conference in Dearborn on Thursday, January 9, 2003 at 5:15 p.m. EST. This call is being webcast by CCBN and can be accessed at the corporate website at www.lear.com.
Lear Corporation, a Fortune 150 company headquartered in Southfield, Mich., USA, focuses on integrating complete automotive interiors, including seat systems, interior trim and electrical systems. With annual net sales of $13.6 billion in 2001, Lear ranks as the world’s largest automotive interior supplier and the world’s fifth-largest automotive supplier. The company’s world-class products are designed, engineered and manufactured by over 115,000 employees in more than 300 facilities located in 33 countries. Information about Lear and its products is available on the Internet at www.lear.com.
# # #
Exhibit 99.2
| NYSAA Conference Dearborn, Michigan a d v a n c e r e l e n t l e s s l y January 9, 2003 "fast forward" |
| Lear Total Interior Capabilities Opening Video |
| Agenda I. Strategic Overview Bob Rossiter, Chairman & CEO II. Customer Focus Jim Vandenberghe, Vice Chairman III. Shareholder Value Dave Wajsgras, SVP & CFO |
| Lear Profile and Strategic Overview |
| Lear Profile Founded in 1917; LBO in 1988; Public in 1994 17 Major Acquisitions Since 1994 Last Major Acquisition: UTA Automotive (5/99) Fortune 150 Company World's Leading Automotive Interior Supplier 120,000 Employees In 33 Countries 300+ Facilities Over 85 Years of Automotive History |
| 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 $ In Billions 3.1 4.7 6.2 7.3 9.1 12.4 14.1 13.6 Seating Overheads Door Panels Floor and Acoustics Instrument Panels Electronics We've Steadily Increased our Automotive Interior Capabilities Transformation from Seat Manufacturer to Integrator of Complete Automotive Interiors |
| "To work relentlessly as a team to maximize shareholder value by consistently delivering the highest quality innovative products and services; to conduct our business with integrity; and to work in partnership with our customers to make them successful." Lear's Business Model Customer Focus Service Quality Innovation Cost Fair Price Dedicated Team Integrity Shareholder Value |
| Global Business Strategy North America - Leverage our leadership position in total interiors Europe - Improve our business structure and grow our market share Rest of World - Aggressively expand our presence with Asian OEMs Pursue Profitable Growth Worldwide |
| Customer Focus Driving Growth |
| Lear Strategic Roadmap - - Advance Relentlessly Revenue and Earnings Growth Seats Total Interior Capabilities Interior Integration Lear Operating Strengths Leading Global Market Position Diversified Customer Base Solid Reputation for Quality Outstanding Customer Relationships Premier Automotive Supplier Lear Financial Strengths Strong Sales Backlog Revenue and Earnings Growth Strong Free Cash Flow Lear Financial Strengths Strong Sales Backlog Revenue and Earnings Growth Strong Free Cash Flow |
| Global Positions In: Seat Systems #1 Floor & Acoustic #2 Door & Panels #2 Headliners #3 Electronics #3 Instrument Panels #6 Disciplined Focus on Integrated Automotive Interiors No Strategic "Hole" In Product Portfolio Unique, Value-Added Electrical And Electronics Capabilities Lear Has Complete Automotive Interior Capabilities |
| Lear Has A Diversified Customer Base Lear Content on Over 300 Nameplates Worldwide |
| Continuous Quality Improvement 5% improvement in 2002 3rd consecutive year of improvement in TGW Highest quality seat manufacturer that supplies multiple OEMs Independent J.D. Power Survey Shows Continuous Improvement in Lear's TGW J.D. Power Seat Survey Lear's Results 1998 1999 2000 2001 2002 TGR 12.4 10.3 9.5 8.3 7.9 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 Things Gone Wrong (TGW) per 100 vehicles 23% Improvement |
| "Supplier of the Year" Three World Excellence Awards Interior Excellence Award, 5 Lear plants received Gold Awards "Supplier of the Year" Green Partner Award Quality, Cost, Value Awards Quality Master Awards News Articles: Newsweek Named Lear as a "Company of the Future" Auto Interiors Ranked the Ford Thunderbird and Chevy Avalanche 2002 "Interiors of the Year" Recent Industry Awards Received by Lear |
| 2003 Lear Product Highlights At North American International Auto Show General Motors Cadillac SRX Seats, trim, flooring, lift-gate Cadillac XLR Seats, electronics Chevrolet Malibu Electronics GMC Envoy XUV Door panels, mid-gate, console Chevrolet Corvette Seats Pontiac Grand Prix Seats, electronics Buick Ranier Door panels, console Ford Ford F-Series Seats, cockpit assembly, flooring, door panels Ford Freestyle Seats, trim, flooring, O/H and DVD system Lincoln Aviator Climate-controlled seats Ford Mustang Seats Ford 500 Sedan (Concept) Seats, trim, flooring, O/H Ford Model U (Concept) Lear Night Vision DaimlerChrysler Chrysler Pacifica Door panels, trim Dodge Durango Seats, flooring, O/H, electronics European OEMs Opel Vectra Seats, trim, electronics Saab 9-3 Seats, I/P, trim, electronics Fiat Punto Seats, trim Citroen C2 Seats Volvo XC 90 Seats, I/P, electronics Asian OEMs Toyota Sienna Seats, door panels Nissan Maxima Interior trim Mazda RX-8 Total interior (Systems Integrator) |
| Backlog Improves to $4 Billion Total interior program New business with Asian OEMs Growing electronics New IP and cockpit programs 1998 1999 2000 2002 Status 2003 Status TGR 12.4 11.8 10.5 3.6 4 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 5-Year Sales Backlog Major Areas of Growth 2002 - 2006 Status 2003 - 2007 Status |
| Lear Progressing from Systems Integrator to Total Interior Integrator Total Interior Integrator Systems Integrator Design OEM Lead Supplier Lead Engineering Shared Supplier Lead Sourcing OEM Directed Supplier Directed Manufacturing Supplier Supplier Sub-Assembly Supplier Supplier Sequencing Supplier Supplier Lear Examples Chrysler Minivans First Total Interior Ford Thunderbird program ever Mazda RX-8 awarded by a Mahindra Scorpio major OEM |
| Delivering Shareholder Value |
| Lear Strategic Roadmap - - Advance Relentlessly Revenue and Earnings Growth Seats Total Interior Capabilities Interior Integration Lear Operating Strengths Leading Global Market Position Diversified Customer Base Solid Reputation for Quality Outstanding Customer Relationships Premier Automotive Supplier Lear Financial Strengths Strong Sales Backlog Revenue and Earnings Growth Strong Free Cash Flow Lear Operating Strengths Leading Global Market Position Diversified Customer Base Solid Reputation for Quality Outstanding Customer Relationships |
| Financial Priorities We are keenly focused on: Growing our business profitably Improving our margins Generating cash Reducing debt Improving ROIC Transparency Meeting Our Commitments and Delivering Shareholder Value |
| Focused Strategy has Led to Profitable Growth for Lear Net Sales Earnings 0.29 0.29 29% 28% 10 Years of Growth Net sales increased from $1 billion to $14 billion 17 major acquisitions during this period 60% acquisition growth 40% organic growth Lear now ranks 150 among the Fortune 500 Lear Ranks 10th in the Fortune 500 - 10 Year Sales Growth Rankings Average Annual Increase |
| Sales Backlog Prior Backlog + New / Replacement Programs - Roll-off / Lost Programs -/+ Projected Pricing / Additional Content +/- Foreign Exchange = New Backlog How we Define it... Realistic Proxy for Forecasting our "Top Line" Growth |
| Sales Backlog - Macro Assumptions North America - 16 million No Change Western Europe - 16 million No Change South America - 1.9 million No Change Asia Pacific - Program Specific No Change Currency - Euro / US Dollar Parity Stronger Euro Change from Prior Industry Production* * Assumes J.D. Power and Associates market share projections |
| Sales Backlog Grows to $4.0 Billion 2002 - 2006 Backlog $ 3.6 Roll-off of 2002 ( 0.8 ) 2003 - 2006 0.6 Add-on 2007 0.5 Foreign Exchange 0.1 2003 - 2007 Backlog $ 4.0 Amount (Bils) Growing electronics New IP and cockpit programs Total interior program New business with Asian OEMs |
| Present Backlog (millions) 2003 $ 900 2003 - 2005 $ 2,500 2003 - 2007 $ 4,000 Customer, Geographic and Product Diversification Improves Backlog By Customer Big 3 45 % European 30 % Asian 25 % Backlog By Region North America 40 % Europe 45 % Rest of World 15 % Backlog By Product Seats 35 % Electronics 25 % Interiors 40 % |
| Backlog Highlights Customer diversification improves Asian OEMs and transplants now 25% IP's and cockpits now represent 25% Growth in higher margin segments, primarily electrical and electronics systems Includes first-ever Total Interior program Backlog now stands at the highest-ever absolute level and percent of annual sales |
| Lear Continues to Improve Margins & ROIC Improving Operating Margins & ROIC Up from 2001 Up from 2002 Operating Margin 2001 2002 2003 0.035 0.04 0.045 ROIC |
| Lear has Generated Over $1 Billion in Free Cash Flow Since 1999 Cumulative Free Cash Flow Since 1999 Free Cash Flow* ($ Millions) * Operating cash flow less capital expenditures 1999 2000 2001 2002 East 179 600 900 1200 West 30.6 38.6 34.6 31.6 North 45.9 46.9 45 43.9 |
| 2002 2003 16.5 15 2 North America (in millions) 2002 Forecast 2003 Outlook 16.0 16.4 Preliminary 2003 Outlook Vehicle Production Assumptions 2002 2003 15 15 2 2002 Forecast 2003 Outlook 16.0 16.0 Western Europe (in millions) 2003 Production Down in North America; Flat in Western Europe |
| Preliminary 2003 Outlook Net Sales and Earnings Growth 2002 2003 6 12.5 2 4% - 6% Net Sales EPS 10% - 15% Operating Margins & ROIC to Improve Another Solid Year of Sales and Earnings Growth |
| Capital Expenditures (in millions) 2002 2003 300 300 2 2002 2003 $300 $300 2002 2003 300 400 2 Free Cash Flow (in millions) 2002 2003 $400 $300 - $350 Interest Expense: ? $215 M $200 M $300 M $300 M Depreciation: Preliminary 2003 Outlook Capital Spending and Free Cash Flow 2003 Capital Spending Flat; Free Cash Flow Increases to $400 Million Range |
| Why Invest in Lear? Lear is well positioned for growth with total interiors; backlog at highest level ever Operating margins improving Double-digit earnings per share growth Continuing strong free cash flow and debt reduction Solid and improving capital structure Operational excellence -- quality, cost, speed, innovation and customer satisfaction Customer-Focused and Shareholder-Driven A Leading Position in the Fastest Growing Segment in the Automotive Industry |
| ADVANCE RELENTLESSLY(tm) NYSE: LEA www.lear.com |
| This presentation 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 we operate, including changes in interest rates and fuel prices, fluctuations in the production of vehicles for which we are a supplier, labor disputes involving us or our significant customers, our success in achieving cost reductions that offset or exceed customer- mandated selling price reductions, increases in our warranty costs, risks associated with conducting business in foreign countries, fluctuations in currency exchange rates, adverse changes in economic conditions or political instability in the jurisdictions in which we operate, raw material shortages, unanticipated changes in free cash flow and other risks detailed from time to time in our Securities and Exchange Commission filings. These forward-looking statements are made as of the date hereof, and we do not assume any obligation to update them. Forward Looking Statement |