Tenneco Automotive Announces Fourth Quarter and Full-Year
2000 Results
LAKE FOREST, Ill., Feb. 6 Tenneco Automotive
today reported a fourth quarter 2000 loss from continuing operations of
$63 million, or $1.74 per diluted share, which includes restructuring and
other charges of $42 million after-tax, or $1.18 per share. The company had a
loss from continuing operations of $143 million, or $4.25 per diluted share,
for the same period in 1999.
Before charges, the company reported a loss from continuing operations of
$21 million, or 56 cents per diluted share, compared with income of
$1 million, or 5 cents per diluted share in the fourth quarter of 1999.
"Obviously, we are disappointed with our fourth quarter results. Tough
industry conditions in the auto parts sector, coupled with our highly
leveraged position, had a significant impact on our performance," said Mark P.
Frissora, chairman and CEO, Tenneco Automotive. "We have responded
aggressively by implementing global cost reduction initiatives, sharply
reducing spending and improving productivity in the face of this industry
downturn. We will focus intensely on these efforts as we confront an equally
challenging year in 2001."
For the full year 2000, Tenneco Automotive reported a loss from continuing
operations of $41 million, or $1.18 per diluted share, compared with a loss
from continuing operations of $63 million, or $1.87 per diluted share in 1999.
Included in these results are one-time non-operational items taken in the
third quarter of 2000, and fourth quarter charges in both years related to
restructuring, as well as transaction expenses. Excluding one-time items,
income from continuing operations in 2000 was $4 million, or 10 cents per
diluted share. Excluding one-time items and assuming the company had incurred
the same level of stand-alone and interest costs in 1999 as it did in 2000,
income from continuing operations in 1999 would have been $24 million, or
74 cents per share.
"Despite this very difficult operating environment, we reduced working
capital and capital spending, and initiated a securitization program for
receivables to bring our senior debt level down by $107 million in 2000," said
Frissora. "We also generated a $23 million improvement in EVA last year, and
improved net cash flow before financing and factoring activities by
$61 million."
FOURTH QUARTER RESULTS
Tenneco Automotive reported revenue of $849 million for the fourth quarter
2000, which includes $56 million in pass-through sales for catalytic
converters. Excluding the pass- through sales, revenue was slightly down
compared with fourth quarter 1999 revenue of $806 million.
Reported EBITDA for the quarter was a loss of $7 million, compared with a
loss of $37 million in fourth quarter 1999. Excluding the $61 million in
pre-tax charges, EBITDA was $54 million in the quarter compared with $77
million for the same period last year. The company also reported EBIT as a
loss of $42 million, compared with a loss of $71 million in fourth quarter
1999. Without charges, EBIT was
$19 million compared with $43 million the previous year.
North America
Revenue from the company's North American original equipment business
declined, primarily due to light vehicle production cutbacks, and continuing
lower heavy-duty ride control and elastomer volumes. North American original
equipment revenue was $322 million, including $56 million in pass-through
revenue from catalytic converter sales, compared with $301 million in revenue
for the fourth quarter of 1999, which did not include passed-through revenue
for catalytic converter sales.
Fourth quarter revenue for the North American aftermarket was
$123 million, compared with fourth quarter 1999 revenue of $138 million.
Revenues were down as a result of further deterioration in the replacement
parts market.
Fourth quarter EBIT, before charges, for North American operations was
$9 million, compared with $33 million, before charges, the previous year. In
the original equipment business, the decrease was largely due to light vehicle
production cutbacks, especially in December, and continued depressed
heavy-duty ride control and elastomer volumes. On the aftermarket side,
depressed industry conditions and higher promotional expenses impacted
profitability.
Europe
The company reported fourth quarter 2000 revenue for the European original
equipment business of $249 million, a 22 percent increase compared with fourth
quarter 1999 revenue of $204 million. Revenue would have increased by
28 percent if exchange rates had been the same in the fourth quarter 2000 as
in the fourth quarter of 1999. The increase in revenue was the result of very
strong exhaust volumes.
Continued weakness in both ride control and exhaust product lines
continued to affect revenue from the European aftermarket business. Revenue
for the fourth quarter 2000 was $71 million, a 17 percent decline compared
with $86 million in the fourth quarter of 1999. Excluding the currency
impact, revenue would have declined by 13 percent.
European EBIT, before charges, for the fourth quarter was $5 million, even
with the previous year. The erosion in the aftermarket was offset by strong
volumes on the exhaust original equipment side of the business.
Tenneco Automotive reported fourth quarter results in other geographical
areas as follows:
Region Revenue Growth (Decline) year over year
South America $37 million 12 percent
Australia $29 million (12 percent)
Asia $18 million 64 percent
Combined EBIT, before charges, for South America, Australia, and Asia in
the fourth quarter was $5 million, even with EBIT before charges in fourth
quarter 1999. Unit volume growth in Brazil, India, and China offset the
currency impact and original equipment production cutbacks in Australia.
FULL YEAR RESULTS
For full-year 2000, the company reported an 8 percent increase in revenue
to $3.55 billion from $3.28 billion in 1999. Excluding $206 million in
pass-through sales for catalytic converters, revenue would have increased by
2 percent.
The company reported EBITDA of $271 million for 2000, compared with
$292 million in 1999. Excluding one-time items, EBITDA was $336 in 2000.
Excluding one-time items and assuming the company had incurred the same level
of stand-alone costs in 1999, EBITDA for 1999 would have been $374 million.
Full-year EBIT was $120 million compared with $148 million in 1999. Excluding
one-time items, 2000 EBIT was $185 million. EBIT would have been $230 million
in 1999 excluding one-time items and assuming the company had incurred the
same level of stand-alone costs.
"We are pleased with stronger performances in our European original
equipment and emerging markets businesses. Combined, we saw a 72 percent
earnings (before-interest and tax) improvement year-over-year," said Frissora.
The attached exhibits provide additional information on Tenneco
Automotive's 2000 and 1999 operating results.
Tenneco Automotive Inc. and Consolidated Subsidiaries
Income Statement
Three Months Ended December 31,
Unaudited
2000 1999
Net sales and operating revenues: $849 $806
Costs and Expenses
Cost of Sales (exclusive of depreciation
shown below) $704 $615
Engineering, Research and Development 14 13
Selling, General and Administrative 143 218
Depreciation and Amortization 35 34
Total Costs and Expenses 896 880
Other Income (expense) 5 3
Operating income (loss) -
North America (35) 23
Europe (8) (30)
Rest of World 1 3
Other - (67)
(42) (71)
Less:
Interest expense (net of interest
capitalized) 47 48
Income tax expense (benefit) (26) 22
Minority interest - 2
Income (loss) from continuing operations (63) (143)
Income (loss) from discontinued operations,
net of income tax - (109)
Extraordinary loss, net of income tax - (11)
Net income (loss) $(63) $(263)
Average common shares outstanding:
Basic 35.7 33.6
Diluted 35.9 33.8
Earnings (loss) per share of common stock
Basic-
Continuing operations $(1.74) $(4.25)
Discontinued operations - (3.24)
Extraordinary loss - (0.34)
$(1.74) $(7.83)
Diluted-
Continuing operations $(1.74) $(4.25)
Discontinued operations - (3.24)
Extraordinary loss - (0.34)
$(1.74) $(7.83)
Tenneco Automotive Inc. and Consolidated Subsidiaries
Income Statement
Twelve Months Ended December 31,
Unaudited
2000 1999
Net sales and operating revenues: $3,549 $3,279
Costs and Expenses
Cost of Sales (exclusive of
depreciation shown below) 2,766 2,427
Engineering, Research and
Development 58 52
Selling, General and
Administrative 459 521
Depreciation and Amortization 151 144
Total Costs and Expenses 3,434 3,144
Other Income (expense) 5 13
Operating income (loss) -
North America 68 166
Europe 40 44
Rest of World 16 9
Other (4) (71)
120 148
Less:
Interest expense (net of interest
capitalized) 186 106
Income tax expense (benefit) (27) 82
Minority interest 2 23
Income (loss) from continuing
operations (41) (63)
Income (loss) from discontinued
operations, net of income tax - (208)
Extraordinary loss, net of income tax (1)(a) (18)(a)
Cumulative effect of changes in
accounting principle, net of income
tax - (134)(b)
Net income (loss) $(42) $(423)
Average common shares outstanding:
Basic 34.7 33.5
Diluted 34.9 33.7
Earnings (loss) per share of common
stock
Basic-
Continuing operations $(1.18) $(1.87)
Discontinued operations - (6.23)
Extraordinary loss (0.02) (a) (0.55)(a)
Cumulative effect of changes in
accounting principle - (3.99)(b)
$(1.20) $(12.64)
Diluted-
Continuing operations $(1.18) $(1.87)
Discontinued operations - (6.23)
Extraordinary loss (0.02) (a) (0.55)(a)
Cumulative effect of changes in
accounting principle - (3.99)(b)
$(1.20) $(12.64)
(a) Loss on early retirement of debt.
(b) Change in accounting principle related to costs of start-up
activities of $102 million or $3.04 per share pursuant to AICPA
Statement of Position 98-05 and change in accounting principle
related to costs to acquire new aftermarket customer contracts of
$32 million or $0.95 per share.
External Basis
Tenneco Automotive Inc. and Consolidated Subsidiaries
Statement of Cash Flows
Unaudited
(Millions)
Twelve Months Ended
December 31,
2000 1999
Operating activities:
Income (loss) from continuing operations $(41) $(63)
Adjustments to reconcile income (loss)
from continuing operations to net cash
provided (used) by operating activities -
Depreciation and amortization 151 144
Deferred income taxes (43) 97
(Gain)/loss on sale of businesses and
assets, net (2) 6
Changes in components of working capital -
(Inc.)/dec. in receivables 61 (151)
(Inc.)/dec. in inventories (29) (23)
(Inc.)/dec. in prepayments and other
current assets (14) 14
Inc./(dec.) in payables 141 46
Inc./(dec.) in taxes accrued (4) (43)
Inc./(dec.) in interest accrued 5 (7)
Inc./(dec.) in other current liabilities (4) (11)
Other 13 (10)
Cash provided (used) by continuing operations 234 (1)
Cash provided (used) by discontinued operations - (253)
Net cash provided (used) by operating
activities 234 (254)
Investing activities:
Net proceeds from sale of discontinued
operations - 303
Net proceeds from sale of assets 26 8
Expenditures for plant, property & equipment (146) (154)
Acquisition of businesses (5) (36)
Expenditures for plant, property & equipment
-discontinued operations - (1,264)
Investments and other (32) (45)
Net cash provided (used) by investing
activities (157) (1,188)
Net Cash provided (used) before financing
activities - continuing operations 77 (228)
Financing activities:
Issuance of common and treasury shares 17 41
Proceeds from subsidiary equity issuance 1 -
Purchase of common stock - (4)
Issuance of equity securities by subsidiaries - (408)
Issuance of long-term debt 1 3,721
Retirement of long-term debt (107) (1,410)
Net inc./(dec.) in short-term debt excluding
current maturities on long-term debt (16) (294)
Dividends (common) (7) (151)
Other (12) -
Net cash provided (used) by financing
activities (123) 1,495
Effect of foreign exchange rate changes on
cash and temporary cash investments (3) 2
Inc./(dec.) in cash and temporary cash
investments (49) 55
Cash and temporary cash investments, January 1 $84 $29
Cash and temporary cash investments,
December 31 $35 $84
Tenneco Automotive Inc. and Consolidated Subsidiaries
Balance Sheets
(Unaudited)
(Millions)
December 2000 December 1999
Actual Actual
ASSETS
RECEIVABLES, Net $487 $571
INVENTORIES 422 412
OTHER CURRENT ASSETS 200 218
INVESTMENTS AND OTHER ASSETS 772 705
PLANT, PROPERTY, AND EQUIPMENT, NET 1,005 1,037
TOTAL ASSETS $2,886 $2,943
LIABILITIES AND SHAREOWNERS' EQUITY
SHORT-TERM DEBT $92 $56
ACCOUNTS PAYABLE 464 348
OTHER CURRENT LIABILITIES 253 259
LONG-TERM DEBT 1,435 1,578
DEFERRED INCOME TAXES 144 108
DEFERRED CREDITS AND OTHER
LIABILITIES 154 156
MINORITY INTEREST 14 16
TOTAL SHAREOWNERS' EQUITY 330 422
TOTAL LIABILITIES AND SHAREOWNERS'
EQUITY $2,886 $2,943
DEBT TO CAPITALIZATION RATIO 81.6% 78.9%
