Canadian supplier Linamar Corp. reported steep drops in first-quarter sales and net earnings as a result of the COVID-19 pandemic, the company said Wednesday evening.
Linamar, based in Guelph, Ontario, said its first-quarter net earnings fell 40.7 percent to $55.7 million (all figures in U.S. dollars).
Several global auto suppliers have reported quarterly earnings this month, many of whom have cited hits to revenue and profits amid the coronavirus crisis.
The supplier of transmission gears, all-wheel-drive systems and e-axles said Wednesday overall sales decreased nearly 22 percent to $1.09 billion in the first quarter.
Industrial-segment product sales dropped almost 36 percent to $212 million, while transportation-segment sales fell 17 percent.
The company said sales declines primarily resulted from the COVID-19 pandemic, reduced access equipment volumes from key customers that experienced decreases greater than the market and lower agricultural sales.
Earnings before interest, taxes, depreciation and amortization fell nearly 21 percent to $161.7 million.
Free cash flow was approximately $104.3 million in the first quarter.
"We are laser-focused on cost reduction, cash generation, finding new business opportunities and supporting our global team and communities and delivering on every one of these counts," CEO Linda Hasenfratz said in a statement Wednesday evening.
The company said in March the COVID-19 outbreak would have the single largest impact on the first quarter, with an estimated hit of $14.5 million to $21.7 million on operating earnings. The supplier said the coronavirus could also impact the second quarter, but to a lesser extent, and that impacts from the outbreak were not fully determinable as of March.
As of April 20, Linamar said all of its manufacturing sites in China were back up and running with 95 percent of employees having returned to work. In Europe, nearly all manufacturing sites were shut down for several weeks in line with government orders but have been back on line since May 4.
In North America, most of Linamar's operations across industries were deemed essential per provincial and state guidelines and were not mandated to shut down, but the majority of its transportation and industrial segments sites were shuttered in alignment with customer demand, the company said. Linamar's North American operations will start back up Monday, May 18.
The company last month also withdrew its outlook on 2020 segmented financial expectations.
Linamar said Wednesday it is "conserving cash by swiftly implementing cost reductions, making necessary work force adjustments, implementing our highest-level payment controls and creating a global team to pursue additional cost- and waste-reduction initiatives."
The company's COVID-19 task force was formed in March and has been gathering best practices and safe work protocols.
"Our focus right now is very much on recovery," Hasenfratz told investors Wednesday night. "We need to shift from fear to hope."
Linamar Corp. ranked No. 57 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $4.07 billion in 2018.