Lear Corp. swung into the black during the third quarter -- a quarter dominated by the company's rapid trip through the Chapter 11 bankruptcy process.
Lear posted net income of $24.6 million on revenue of $2.5 billion. Though revenue dropped 19 percent from $3.1 billion in the same period last year, the company swung from a net loss of $98.2 million.
Lear's four-month trip through bankruptcy, which concluded Monday, removed about $2.8 billion of debt from its balance sheet. Lear estimates it has about $1 billion in debt with its first maturities coming in 2012 and about $1 billion in cash.
“We have the financial resources to invest in new products, technologies, as well as grow in emerging markets,” CEO Robert Rossiter said in a conference call today.
Rossiter said the company “did not miss a beat” operationally in serving its customers. Lear also paid its suppliers in full for what they were owed prior to bankruptcy, as well as its employee benefits and continued to fund its pension plan.
The company posted a $413.8 million net loss during the first nine months of 2009. Revenue was dragged down to about $7 billion in the period from $11 billion last year.
During the first half of the year, car and production volumes were halved in North American and dropped by nearly a third in Europe compared with the 2008 period.
Lear forecasts about $1.4 billion in new business over the next three years, with sales of electronics and electrical equipment accounting for the bulk of the backlog.
“We have been very successful in signing new business in every region of the world, despite lower industry volumes and program cancellations and deferrals by our customers,” CFO Matt Simoncini said in the conference call.
“This new business represents further diversification in our sales, as 40 percent is in seating and 60 percent is in our growing electrical distribution business.”
About $650 million of the backlog is from North America, with $150 million in Europe and $600 million in Asia.
Lear has only $100 million booked for 2012, but Rossiter says focusing on Asia will be the key for company growth over the longer-term.
“I think the philosophy that we have here and the way we conduct and run our business and the team we have, I believe that we're going to, longer term, pick up some significant shares,” he said in the conference call today.
Acquiring distressed companies is unlikely to be a major part of Lear's future growth strategy.
“I haven't been a big proponent of acquisitions,” he said. “It's a quick and easy way to do things, but it's difficult.”
But Rossiter didn't rule out M&A deals altogether.
“We're always open to opportunities, and with equity and the right partners, we'd look at things, but I don't want to see the company get into a highly-leveraged position of the past,” he said.
Lear, based in suburban Detroit, ranks No. 11 on the Automotive News list of the top 100 global suppliers, with sales to automakers of $13.6 billion in 2008.