Carclo Regulatory News (CAR)

Carclo plc

("Carclo" or the "Group")

Half year results for the six months ended 30 September 2018

Carclo plc announces its interim results for the six months ended 30 September 2018.

* underlying is defined as before all exceptional items. See below for a reconciliation to statutory figures.

· As previously highlighted, while the business made progress in a number of areas during the first half, trading results were below Board expectations, largely due to underperformance at Technical Plastics. This, together with production inefficiencies incurred on new production programmes in the LED division, resulted in the first half underlying operating profit being lower year on year.

· Revenue decreased by 1% despite growth in LED production revenues mainly due to negative currency impacts. At constant currency revenue increased by 0.3%.

· Underlying profit before tax decreased by 22% (14% at constant currency). We expect a greater than usual second half weighting in FY19 reflecting the phasing of new programmes in both the Technical Plastics and LED divisions.

· In the Technical Plastics division, three new medical programmes were delayed by customers in the period but all entered production successfully towards the end of the first half of the year and this, together with planned new tooling programmes, supports the expected stronger second half performance.

· In the LED Technologies division, Wipac has continued to be successful in winning new programmes, including nomination for two mid-volume electric vehicles, leading to a healthy level of design and development contract revenues. Production demand has been solid. All of the current year's planned new vehicle production programmes launched in the first half and this resulted in higher than anticipated manufacturing costs being incurred. Margins are expected to improve in the second half as production accelerates and initial start-up inefficiencies are eliminated.

· The Aerospace division performed well against the prior year as a result of a more profitable mix and tight control over costs.

· As anticipated, net debt rose to £35.9m at the half year (31 March 2018: £31.5m), reflecting the timing of capital investment and the payment profile of ongoing design, development and tooling programmes. The Group's financing remains well within banking covenants.

· The Board anticipates full year trading will be in line with its expectations and the Group remains on track to grow substantially over the medium term.

Commenting on the results, Chris Malley, Chief Executive said:

"Operating margins in Technical Plastics are expected to improve in the second half as volumes in the new contracts ramp up and commercial and operational improvements are delivered. We have implemented a number of price increases, efficiency improvements and cost savings across the division, the benefit of which will positively impact margins in the second half of the year and beyond.

In LED Technologies, Wipac's success in securing new customer programmes, including in the strategically important mid volume sector, together with the new vehicle production programme launches has ensured we have a healthy production pipeline in this division for the medium term. The rate of growth has led to an increase in funding requirements and some short term operational growing pains which are being addressed through increased manufacturing capacity and strengthening of the management team.

Technical Plastics and LED Technologies are set to have a stronger second half performance based on the full effect of the new programmes, planned customer timings on projects and the expected improvement in margins. The Board anticipates that the Group will trade in line with its expectations for the full year, and that it remains on track to grow substantially over the medium term."

(*) Reconciliation of underlying earnings to statutory results

The Directors believe that adjusted measures provide a more useful comparison of business trends and performance. Adjusted results exclude exceptional items. The term adjusted is not defined under IFRS and may not be comparable with similarly-titled measures used by other companies.

All profit and earnings per share figures in these interim results relate to adjusted business performance (as defined above) unless otherwise stated. A reconciliation of adjusted measures to non-adjusted measures is provided below:

Enquiries

Carclo plc 020 7067 0700 (today)

Chris Malley, Chief Executive 01924 268040 (thereafter)

Sarah Matthews-DeMers, Group Finance Director

Weber Shandwick Financial 020 7067 0700

Nick Oborne

A presentation for analysts will be held at 9.30 a.m. on 13 November 2018 at the offices of Weber Shandwick Financial, 2 Waterhouse Square, 140 Holborn, London EC1N 2AE.

Notes to editors

About Carclo

Carclo plc is a public company whose shares are quoted on the Main Market of the London Stock Exchange.

Carclo's strategy is to develop and expand its key manufacturing assets in markets where there remain significant further opportunities to drive shareholder value. To enhance profit margins and support its customers, the Group has been investing across its global footprint.

Approximately three fifths of Group revenues are generated from the supply of fine tolerance, injection moulded plastic components, mainly for medical products. The balance of Group revenue is derived mainly from the design and supply of specialised injection moulded LED based lighting systems to the premium automotive industry.

Forward looking statements

Certain statements made in this announcement are forward looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events to differ materially from any expected future events or results referred to in these forward looking statements.

Overview of results

As previously highlighted, while the business made progress in a number of areas during the first half, trading results were below the Board's expectations largely due to underperformance at Technical Plastics. This, together with production inefficiencies in LED Technologies, resulted in the first half underlying operating profit being lower year on year.

Group revenues decreased by 1% to £71.5m (2017: £72.2m). On a constant currency basis revenues increased by 0.3%. Group underlying operating profits of £4.5m were 17% lower than for the comparative period last year (2017: £5.4m) due to the phasing of new programmes in both the Technical Plastics and LED divisions and the resultant impact on margins; on a constant currency basis underlying operating profits decreased by 14%.

Unallocated costs were marginally higher than the comparative period last year at £1.7m (2017: £1.6m). The IAS 19 pension finance charge at £0.4m (2017: £0.4m) was broadly in line with the comparative period last year. Underlying profit before tax decreased 22% to £3.6m (2017: £4.6m).

The Group generated profit before tax in the six months to 30 September 2018 of £3.4m (2017: £4.6m).

The underlying effective tax rate for the period is 24% (30 September 2017: 27.5%, 31 March 2018: 20.6%). The tax rate reflects the anticipated geographic split of taxable profits for the full year.

Underlying earnings per share for the six months to 30 September 2018 was 3.7p (2017: 4.5p).

Board and management changes

After serving on the Board for over 12 years, 6 of those as Chairman, Michael Derbyshire stood down at the AGM in July 2018. Mark Rollins, who joined the Board in January 2018 became Chairman. The Board would like to thank Michael for his service and his substantial contribution to the strategic direction of the Group.

Sarah Matthews-DeMers was appointed as Group Finance Director on 18 July 2018, joining from Rotork plc where she was Director of Strategy and Investor Relations. Joe Oatley was appointed as a Non-Executive Director and the Chairman of the Remuneration Committee with effect from 20 July 2018. Joe is also a Non-Executive Director at Wates Group Limited and Redhall plc and was previously Group Chief Executive of Cape plc.

The operational management teams in Technical Plastics and Wipac have also been strengthened to help drive improvement in our results.

Outlook

The Board expects the Group to report a stronger performance in the second half of the financial year. This reflects the full effect of the new programmes, improved operational performance and expected higher design and tooling profits at Technical Plastics, along with the benefit from the ramp up in production volumes and anticipated improvement in production efficiencies within Wipac.

As is normal within the Group's business, the achievement of its anticipated performance for the full year is dependent on key customers, particularly in Wipac, awarding new programmes in line with planned timescales in the second half.

Medium term prospects continue to be encouraging with robust demand from the medical sector and the opportunity for strong growth from the automotive sector as recently won automotive lighting programmes go into production.

The Board anticipates that the Group will trade in line with its expectations for the full year, and that it remains on track to grow substantially over the medium term.

Operating review

The Group's Technical Plastics business reported revenues of £42.8m (2017: £43.7m), a decrease of 2% on the comparative period last year. On a constant currency basis the division's revenues decreased by 0.2%. Divisional operating profits were £2.5m (2017: £3.2m) and the divisional operating margin was 5.9% (2017: 7.4%). This margin is expected to improve in the second half of the year due to the impact of the ramp up of new programmes and as benefits are realised from the operational improvements programme launched in January.

Our US business continued to experience operational challenges due to direct labour shortages. A significant investment in employee welfare was made during the period but labour turnover and scarcity has continued. Changes to shift patterns adopted in the first half along with new recruitment procedures are expected to mitigate the problem in the second half. We have appointed a new US Operations Director and Plant Manager at our main Pennsylvania operation and this new management team is focused on operational and other efficiency improvements under our previously highlighted operational improvements programme.

In the UK, margins have improved as new production programmes have commenced, using the additional capacity from the Mitcham facility expansion last year.

In India, the mainly non-medical business has stabilised and customer production schedules support our forecasts with a better mix of higher margin products.

Our facility in China experienced some issues with de-stocking in the local market; however, overall margins have been maintained through efficiency and commercial efforts.

Our Czech business has addressed the labour shortages experienced in the prior year and is expected to benefit from a new production programme which commenced shortly before the period end. As one of our non-medical programmes is scheduled to come to an end shortly after the end of the financial year, in October we announced a rationalisation of this facility. We expect to generate annual cost savings of £0.4m, with a payback of c.2.5 years on restructuring costs of c.£1.0m, the majority of which will be incurred during the second half. This supports our strategy of increasing our focus on medical work within the division.

As normal with this division, we have several new and replacement tooling and automation programmes anticipated to be awarded towards the end of the financial year and these will, once awarded and commenced, contribute to current year profitability.

Outlook

Operating margins in CTP are expected to improve in the second half as volumes in the new contracts ramp up and commercial and operational improvements are delivered. We have implemented a number of price increases, efficiency improvements and cost savings across the division, the benefit of which will positively impact margins in the second half of the year and beyond.

The Group's LED Technologies division is made up of the Wipac premium automotive lighting business, based in Buckingham, UK and the LED Optics and aftermarket business, based in Aylesbury, UK.

Overall, revenue was flat at £25.6m (2017: £25.6m). Production revenues increased as further programmes moved into the manufacturing phase, while, as expected, project revenues decreased due to a change in the profile of the contract portfolio. Divisional operating profit reduced by 10% to £3.0m (2017: £3.4m) due to the previously highlighted initial start-up inefficiencies and increased investment in overheads necessary to deliver the increased production volumes.

Design, development and sub contract tooling revenues, which in aggregate made up over half of Wipac's sales, were ahead of our expectations and all projects are on target. The recently announced nomination to supply lighting for two new mid-volume electric vehicles supports the Group's strategy of expansion into this area and provides good visibility over production volumes for the medium term. The market for automotive lighting projects remains strong and we continue to be confident that Wipac is well placed to deliver significant growth into the future.

Automotive lighting product sales for the period were ahead of the prior year although, with an unprecedented number of new product launches, margins were below the prior year due to higher manufacturing costs incurred during the start-up phase. All of the current year's planned new vehicle programmes have now launched. Given manufacturing output is still ramping up, we anticipate several more months of improving efficiencies prior to production settling to a steady state. We have enhanced our senior operations team to bring in leaders with extensive experience of managing higher volume automotive production.

In the medium term, as the new mid-volume contracts come into production, we expect production revenues to become a larger proportion of Wipac's sales, thereby improving the predictability and stability of revenues and profits.

In order to deliver this growth, additional warehousing and office space has been secured close to our Buckingham facility. A new North American production facility is likely to be required in the short to medium term to deliver one of the new mid-volume contracts.

The Aylesbury based LED Optics business continued to generate stable sales against a market backdrop of increasing product commoditisation.

Outlook

In LED Technologies, Wipac's success in securing new customer programmes, including in the strategically important mid volume sector, together with the new vehicle production programme launches, has ensured we have a healthy production pipeline in this division for the medium term. The rate of growth has led to an increase in funding requirements and some short term operational growing pains which are being addressed through increased manufacturing capacity and strengthening of the management team.

The Group's Aerospace business had a solid first half performance, with revenues 9% higher at £3.1m (2017: £2.9m) and underlying operating profits 69% higher at £0.6m (2017: £0.4m). Spares demand has stabilised and a number of new programmes have moved into production since the prior period.

This business continues to be both profitable and cash generative for the Group.

Outlook

The prospects for the business remain encouraging.

Financial position

The Group generated cash from operations of £1.6m (2017: £3.5m) with working capital increasing by £5.3m (2017: £4.4 million) due mainly to increased sub contract tooling activity. Capital expenditure in the six months to 30 September 2018 on a cash basis was £3.1m (2017: £5.7m), the majority of which relates to investment in production machinery in Wipac and our UK Technical Plastics business to support new business.

As anticipated, net debt has risen since the last financial year-end to £35.9m (31 March 2018: £31.5m), reflecting the timing of capital investment and an increase in working capital due to the investment and payment profile of ongoing design, development and tooling programmes. In addition, net debt reflects the continuing weakness of sterling on the translation of the Group's foreign currency denominated borrowings.

The Group's pension deficit, net of applicable deferred tax, decreased to £24.5m as at 30 September 2018 (31 March 2018: £24.7m). This was mainly due to a slightly higher discount rate based on increased corporate bond yields. The cash cost of the pension scheme has remained at similar levels with the annual recovery plan payment of £1.2m made subsequent to the 30 September 2018 period end. The Group's next triennial valuation as at 31 March 2018 is underway.

On 26 October 2018, a High Court judgement was made involving the Lloyds Banking Group's defined benefit pension schemes. The judgment concluded the schemes should be amended to equalise pension benefits for men and women in relation to guaranteed minimum pension benefits, an issue which affects many other defined benefit pension schemes. We are working with the trustees of our scheme and our actuarial advisers to understand the impact on the scheme liabilities, but estimate that an adjustment of c£3m is likely to be recognised in the second half.

Risks and uncertainties

In the Annual Report for the year ended 31 March 2018 we provided a detailed review of the risks faced by the Group and how these risks are managed. We continue to face, and proactively manage, the risks and uncertainties in our business and, while recognising the economic uncertainty around Brexit, the Board does not consider that the principal risks and uncertainties have changed since the publication of the 2018 Annual Report.

Condensed consolidated income statement 

Condensed consolidated statement of comprehensive income

Condensed consolidated statement of financial position

Condensed consolidated statement of changes in equity

Attributable to equity holders of the company

Condensed consolidated statement of cash flows

1. Basis of preparation

Except as outlined below, the condensed consolidated half year report for Carclo plc ("Carclo" or "the Group") for the six months ended 30 September 2018 has been prepared on the basis of the accounting policies set out in the audited accounts for the year ended 31 March 2018 and in accordance with the Disclosure and Transparency Rules of the UK Financial Conduct Authority and the requirements of IAS 34 "Interim Financial Reporting" as adopted by the EU.

The financial information is unaudited, but has been reviewed by the auditors and their report to the company is set out below.

The half year report does not constitute financial statements and does not include all of the information and disclosures required for full annual statements. It should be read in conjunction with the annual report and financial statements for the year ended 31 March 2018 which is available either on request from the Company's registered office, Springstone House, PO Box 88, 27 Dewsbury Road, Ossett, WF5 9WS, or can be downloaded from the corporate website - www.carclo-plc.com.

The comparative figures for the financial year ended 31 March 2018 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain statements under Section 498 (2) of the Companies Act 2006.

The half year report was approved by the Board of directors on 13 November 2018 and is being sent to shareholders on 23 November 2018. Copies are available from the Company's registered office and can also be downloaded from the corporate website.

The Group financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").

Going Concern

In determining the appropriate basis of preparation of the financial statements, the Directors are required to consider whether the Group can continue in operational existence for the foreseeable future.

Net debt at 30 September 2018 was £35.9m, rising from £31.5m at 31 March 2018 and is forecast to peak in the third quarter of the financial year. The increase was driven by capital investment and timing of payment profile for ongoing design, development and tooling programmes. The quantum and timing of certain cash flows in the twelve month forecast period for ongoing design, development and tooling programmes is inherently uncertain. Accordingly, the Directors have prepared base and sensitised cash flow forecasts for a period in excess of twelve months from the date of their approval of these condensed interim financial statements. The Directors have also considered the debt facilities available to the Group which are disclosed in note 16 to the condensed interim financial statements. The Group's financing remains within banking covenants at 30 September 2018 and is forecast to remain within the available facilities and covenants for at least the twelve month forecast period.

Based on their assessment, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis in preparing its condensed interim financial statements.

2. Accounting policies

Except as described below, the accounting policies applied in these interim financial statements are the same as those applied in the Group's consolidated financial statements as at and for the year ended 31 March 2018. The changes in accounting policies are also expected to be reflected in the Group's consolidated financial statements as at and for the year ending 31 March 2019. The Group has initially adopted IFRS 15 Revenue from Contracts with Customers (see A) and IFRS 9 Financial Instruments (see B) from 1 April 2018. A number of other new standards are effective from 1 April 2018 but they do not have a material effect on the Group's financial statements.

A. IFRS 15 Revenue from Contracts with Customers

The Group has adopted IFRS 15, 'Revenue from Contracts with Customers', for the year ending 31 March 2019. This establishes a comprehensive framework for determining whether, how much and when revenue is recognised. The majority of the Group's transactions are unaffected by IFRS 15, however when the standard is applied to customer contracts for design, development and tooling projects in both the Technical Plastics and LED Technologies divisions this leads to a difference in the timing of recognising revenue. The impact of the timing difference varies from contract to contract.

As permitted by the standard, the Group has taken advantage of the modified transitional provisions and the results for the year ended 31 March 2018 remain as previously reported. Under the modified approach the cumulative approach of initially applying the standard is recognised at 1 April 2018 with no restatement of prior periods.

The following adjustment has been made to brought forward retained earnings and recognised in the Condensed Consolidated Statement of Changes in Equity:

The impact of adoption in the period to 30 September 2018 can be seen below and arises primarily from timing differences due to measuring the progress of LED premium automotive lighting contracts using an output method of measuring progress towards complete satisfaction of performance obligations, based on milestones reached under IFRS 15 rather than the cost to cost ("percentage completion") method used under IAS 18 and IAS 11.

The details of the new significant accounting policies and the nature of the changes to previous accounting policies in relation to the Group's goods and services are set out below.

Under IFRS 15, revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control whether at a point in time or over time requires judgement.

i) Technical plastics

The Technical Plastics segment supplies fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products. Technical plastics revenues comprise two typical project types; manufacturing and tooling projects.

Manufacturing

The majority of Technical Plastics' business is in product manufacturing.

Control of manufactured finished goods transfers to customers on delivery. Therefore revenue is recognised at a point in time, at the same time as individual manufactured products are delivered to customers. There is no significant impact on revenue recognition resulting from the move from IAS 18 to IFRS 15.

Tooling

The Technical Plastics business also produces injection moulding tools for the customer.

Under IAS 18 tooling contract revenue was attached to a single performance obligation and was recognised over time using a cost to cost approach (i.e. the "percentage of completion method".) Under IFRS 15, an input method of measuring progress toward complete satisfaction of the performance obligation is used based on costs incurred. Accordingly, there is no significant impact on revenue recognition resulting from the move from IAS 18 to IFRS 15 in relation to tooling revenues within Technical Plastics.

ii) LED Technologies

The LED Technologies segment designs and supplies specialised injection moulded LED based lighting systems for the premium automotive industry and supplies LED optics for various industries.

Premium Automotive Lighting

Manufacturing

Control of manufactured finished goods transfers to customers on delivery. Therefore revenue is recognised at a point in time, at the same time as individual manufactured products are delivered to customers. There is no significant impact on revenue recognition resulting from the move from IAS 18 to IFRS 15.

Tooling

Premium Automotive Lighting contracts are complex and vary in scope and detail.

The transaction price typically comprises the total design, development and tooling value as specified in the contract

For design, development and tooling, revenue is recognised over time using an output measure of value delivered to the customer for tooling design, development and production based on milestones reached.

Under IAS 18 design, development and tooling was typically accounted for as a single performance obligation under IAS 11 Construction Contracts; revenue was recognised over time using a cost to cost approach (i.e. the "percentage of completion method".) Because of the nature of design, development and tooling contracts within Premium Automotive Lighting, where contracts are complex and vary in scope and detail, an output method of measuring progress more accurately depicts the transfer of control of design, development and tooling to the customer than a cost to cost approach. The timing of revenue recognition for output based milestones may differ under IFRS 15 depending on the specific requirements of the contract compared to input costs in determining revenue recognition.

Payments to secure new supply contracts

Payments to secure new supply contracts are common business practice in the medium-volume automotive market. Such payments are accrued in full and without discounting at the point that they become committed with a corresponding asset being recognised for the cost of obtaining the contract. This asset is amortised over the life of the contract and in line with the recognition of the contract revenues as a proportion of the total contract revenue.

Such payments were not common in the low-volume automotive market and so there is no according adjustment on transition to IFRS 15.

iii) Aerospace

The Aerospace segment manufactures components for the aerospace industry.

Control of manufactured finished goods transfers to customers on delivery. Therefore revenue is recognised at a point in time, at the same time as individual manufactured products are delivered to customers. There is no significant impact on revenue recognition resulting from the move from IAS 18 to IFRS 15.

B. IFRS 9 Financial Instruments

IFRS 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement. The adoption of IFRS 9 Financial Instruments from 1 April 2018 resulted in changes in accounting policies and adjustments to the amounts recognised in the financial statements, however the overall impact on the interim financial information is not material. In accordance with the transitional provisions in IFRS 9, comparative figures have not been restated.

Trade receivables, contract assets and cash and cash equivalents will now be classified as amortised cost, rather than loans and receivables, however as these assets were accounted for at amortised cost under IAS 39, there is no change in the carrying amount.

Trade payables and bank loans and overdrafts continue to be classified as other financial liabilities and accounted for at amortised cost.

Regarding impairment, the Group has applied the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all assets held at amortised cost. The impact of the change in impairment methodology was not material.

3. Accounting estimates

The preparation of the half year financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In preparing these half year financial statements, the significant judgements made by management in applying the Group's accounting policies and the key source of estimation uncertainty were the same as those applied to the audited consolidated financial statements as at, and for the year ended, 31 March 2018.

4. Segment reporting

The Group is organised into three, separately managed, business segments - Technical Plastics, LED Technologies and Aerospace. These are the segments for which summarised management information is presented to the Group's chief operating decision maker (comprising the main Board and Group steering committee).

The Technical Plastics segment supplies fine tolerance, injection moulded plastic components, which are used in medical, optical and electronics products. This business operates internationally in a fast growing and dynamic market underpinned by rapid technological development.

The LED Technologies segment develops innovative solutions in LED lighting, and is a leader in the development of high power LED lighting for the premium automotive industry.

The Aerospace segment supplies systems to the manufacturing and aerospace industries.

Transfer pricing between business segments is set on an arm's length basis. Segmental revenues and results include transfers between business segments. Those transfers are eliminated on consolidation.

The segment results for the six months ended 30 September 2018 were as follows -

The segment results for the six months ended 30 September 2017 were as follows -

The segment results for the year ended 31 March 2018 were as follows -

5. Exceptional items

£0.215 million of rationalisation and restructuring costs relate to the Group's UK operations.

6. Net finance expense

7. Income tax expense

The half year accounts include an underlying tax charge of 24.0% of profit before tax (2017 - 27.5%) based on the estimated average effective income tax rate on ordinary activities for the full year. The Group's effective tax rate on ordinary activities is at a higher level than the underlying UK tax rate of 19.0% (2017 - 19.0%) as the Group is earning a higher proportion of its profits in higher tax jurisdictions.

During the six months ended 30 September 2018 a £0.080 million debit was recognised in other comprehensive income in respect of deferred tax arising on remeasurement gains on the defined benefit obligations.

Deferred tax assets and liabilities at 30 September 2018 have been calculated on the rates substantively enacted at the balance sheet date. The UK Finance Bill 2016 provides for a reduction in the UK corporation tax rate from 19% to 17% from 1 April 2020. This rate became substantively enacted on 6 September 2016. This will reduce the UK companies' future current tax charge accordingly. The deferred tax asset at 30 September 2018 has been calculated based on the rate of 17% substantively enacted at the balance sheet date.

8. Earnings per share

The calculation of basic earnings per share is based on the profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares outstanding during the period.

The calculation of diluted earnings per share is based on profit attributable to equity holders of the parent divided by the weighted average number of ordinary shares outstanding during the period (adjusted for dilutive options).

The following details the profit and average number of shares used in calculating the basic and diluted earnings per share -