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 HOLLAND, Mich., Jan. 13 /PRNewswire/ -- Donnelly Corporation (AMEX: DON) today reported second quarter financial results for the 1994 fiscal year.
 Net sales for the second quarter of fiscal 1994 were $80,070,000, up 13% compared to $70,659,000 for the same period last year. Net income for the second quarter was $675,000, compared to $2,089,000 for the second quarter of fiscal 1993. Earnings per share for the second quarter were $.09 compared to $.27 in the same period last year.
 Net sales for the first half of fiscal 1994 were $148,325,000 compared to $138,510,000 for the first half of fiscal 1993, an increase of 7%. Net income and earnings per share for the first half were $1,547,000 and $.20, respectively, compared to $3,635,000 and $.47 for the first half of fiscal 1993.
 Sales for the second quarter and first half are up compared to the same period in fiscal 1993, primarily due to strong overall industry production levels. Car makers produced 9% more new cars and light trucks during the second quarter of this year than the same quarter last year. Higher sales have helped offset higher expenses currently being incurred to support numerous growth programs in fiscal 1994 and 1995.
 Earnings for the second quarter and first half are down for fiscal 1994, compared to the same period in fiscal 1993. This is due to various factors including: 1) An ongoing severe recession in Europe is the single largest negative factor for earnings this year because of its impact on Donnelly Mirrors, Ltd (a wholly-owned European subsidiary); 2) Continued start-up costs associated with opening a new production facility in Kentucky; 3) Start-up costs at Donnelly Applied Films (a joint venture) and a moderate slowdown in the coated glass market served by this venture; and 4) Making significant investments in five major new projects which are expected to contribute strongly to both sales and earnings growth beginning in fiscal 1996.
 Full year earnings expectations for fiscal 1994 & 1995 are for only modest increases. Start-up costs associated with Kentucky and Donnelly Applied Films are expected to be reduced in a matter of months however, a number of other new program start-ups are planned over the next 18 months. Donnelly is funding five major new programs during fiscal 1994 and 1995 to support new business commitments and efficiency improvements. These programs include redesign of existing manufacturing areas, construction of new facilities to consolidate operations and replace older facilities, and some construction of new manufacturing capacity. Donnelly's capital spending programs for fiscal 1994 and 1995 are expected to more than double 1993 levels to over $40 million annually. In addition, it is uncertain when market conditions will improve in Europe. Most analysts do not foresee a major improvement in the European economy until late 1995.
 Both sales and earnings are expected to increase significantly, beginning in fiscal 1996. Donnelly has been sourced with major new business programs at Chrysler, Ford, and Mazda and commitments on other new programs are expected. The full impact of these programs, in terms of new sales and higher production levels, will not be felt until fiscal 1996 and the full impact on earnings will not be felt until 1997.
 Dwane Baumgardner, Chairman of the Board for Donnelly Corporation, stated:
 "Donnelly is at a unique crossroad in the history of our company. We have selected a path which could nearly double the size of our company over the next five years, however, it is also a path that will require us to make major investments over the next two years. The programs that we are funding during fiscal 1994 and 1995 will position our company for strong growth which, we believe, will begin in fiscal 1996.
 "We believe that the new business commitments that have been made by our customers warrant the unprecedented level of investment being made now. These commitments enhance Donnelly's already strong market position and are expected to provide financial growth and security for our investors, our employees, and our suppliers."
 Donnelly Corporation is an international company dedicated to serving customers around the world with high-quality fabricated, molded and coated glass products for the automotive and electronics industries. The company has been based in Holland, Michigan since 1905 and today operates from 20 facilities around the world. Donnelly is also recognized as a leader in the application of participative management practices and was recently named as one of the "Top 10" in the new book entitled, The 100 Best Companies to Work for in America.
 (in thousands, except Three Months Ended
 per share data) January 1, 1994 January 2, 1993
 Net Sales $ 80,070 $ 70,659
 Gross profit 16,626 15,561
 Operating income 2,494 3,483
 Interest expense 828 812
 Income before taxes on income 1,751 3,032
 Net income 675 2,089
 Income per share of common stock .09 .27
 Dividends Declared per share of
 common stock .08 .07
 Weighted average number of
 common shares outstanding 7,715 7,679
 (in thousands, except Six Months Ended
 per share data) January 1, 1994 January 2, 1993
 Net Sales $148,325 $138,510
 Gross Profit 30,762 30,815
 Operating income 3,326 6,117
 Interest expense 1,593 1,657
 Income before taxes on income 2,131 5,129
 Net income 1,547 3,635
 Income per share of common stock .20 .47
 Dividends Declared per share of
 common stock .16 .14
 Weighted average number of
 common shares outstanding 7,713 7,675
 (in thousands) January 1, 1994 July 3, 1993
 Current Assets:
 Cash & Equivalents $ 844 $ 1,214
 Accounts Receivable 43,511 39,226
 Inventories 14,832 15,049
 Other Current Assets 11,653 12,050
 Total Current Assets 70,840 67,539
 Net Property, Plant and Equipment 73,919 65,919
 Other Assets 5,155 6,382
 $149,914 $139,840
 Current Liabilities:
 Accounts Payable $ 18,979 $ 22,819
 Accruals 15,123 10,811
 Current Maturities of
 Long-Term Debt 77 77
 Total Current Liabilities 34,179 33,707
 Long-Term Debt 42,081 33,688
 Deferred Income Taxes & Other Liab. 6,711 6,210
 Total Liabilities 82,971 73,605
 Minority Interest 1,194 689
 Shareholders' Equity 65,749 65,546
 $149,914 $139,840
 -0- 1/13/94
 /CONTACT: Maryam Komejan of Donnelly, 616-786-6022/

CO: Donnelly Corporation ST: Michigan IN: AUT SU: ERN

TO -- DE021 -- 1809 01/13/94 14:58 EST
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Publication:PR Newswire
Date:Jan 13, 1994

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