Cooper Tire & Rubber Company Reports Record Sales, 2000 Fourth Quarter and Year-End Results
FINDLAY, Ohio--Feb. 9, 2001--Cooper Tire & Rubber CompanyFourth Quarter Highlights
| -- | Earnings per share of 41 cents excluding non-recurring charges |
| -- | Tire unit sales increased 8.9 percent |
| -- | $92 million in net new automotive business awarded |
| -- | Restructuring activities progressing as planned |
Cooper Tire & Rubber Company today reported fourth quarter net income of $29 million and earnings per share of 41 cents, excluding restructuring and non-recurring charges associated with the shutdown and consolidation of operations as announced in October of 2000.
This compares to earnings per share of 42 cents from the same period in 1999. Fourth quarter sales of $820 million represent a 17 percent increase over the $701 million sales figure a year earlier while operating profit, excluding non-recurring charges, was $74 million or 14 percent higher than last year.
Including restructuring and other non-recurring charges of $37 million, operating profit for the fourth quarter was $37 million, net income was $6.3 million and earnings per share were 9 cents.
For the year ended December 31, 2000, the Company achieved a record $3.5 billion in net sales, an increase of 58 percent over the 1999 mark of $2.2 billion. Excluding restructuring and other non-recurring charges, operating profit for the year was $310 million compared to $239 million last year, a 30 percent increase, while net income for 2000 was $133 million, a 1.6 percent decrease from the record levels of 1999. Earnings per share on this basis were $1.81.
During the year the Company incurred nearly $19 million or 17 cents per share in non-recurring charges related to losses from operations of a plant within the Plastics Division of Cooper-Standard Automotive prior to its sale and other plant closures or downsizing. Restructuring charges, incurred mostly in the fourth quarter, totaled an additional $39 million ($25 million after tax). Including these charges, operating profit for 2000 was $252 million, net income was $97 million and earnings per share were $1.31.
Reflecting on the results for the year, Cooper chairman, president and chief executive officer Thomas A. Dattilo commented, "The year 2000 was a bit of a roller coaster for us in both our business segments. With record automobile build rates, climbing raw material costs and a major tire recall by one of our competitors, we had to work extremely hard and maximize our efficiency to meet strong market demand for all our products while still controlling costs. Later in the year, when the economy softened and automotive build rates slowed dramatically, we had to show our flexibility and ingenuity to quickly cut costs and adjust to the changing needs in the marketplace. When taken in the context of our industries, our fourth quarter results are outstanding."
Cooper's tire operations ended the year with total sales of $1.8 billion, up $245 million or 16 percent over 1999. This is largely attributable to a $121 million increase in sales in the North American Tire Division and $133 million from the addition of Oliver Rubber. 1999 results included only two months of Oliver sales and earnings. Operating profit for the Tire Group reached $190 million before restructuring and non-recurring charges, or 8 percent higher than in 1999. Including the charges, operating profit was $184 million, or 4 percent higher than last year.
In the fourth quarter, the Tire Group's net sales increased $52 million or 13 percent from $412 million to $465 million. Oliver Rubber accounted for $10 million of the increase. Operating profit for the quarter reached $48 million before restructuring and other non-recurring charges, an increase of 6 percent, due largely to growth in North America.
At Cooper-Standard Automotive, the Company's automotive components operations achieved sales of $1.7 billion for the year, an increase of over $1 billion from 1999, mostly attributable to acquired operations. Operating profit for Cooper-Standard in 2000, excluding restructuring and other non-recurring charges, was $121 million compared to $63 million last year, a 92 percent increase. Including those charges, operating profit was $69 million or nearly 10 percent higher than last year.
In the fourth quarter, automotive group sales increased 23 percent to $361 million compared to $293 million in the same period last year. Operating profit excluding restructuring and non-recurring charges was $26 million, 31 percent higher than a year ago. Including these charges, Cooper-Standard incurred an operating loss of $8 million.
Regarding the Company's operations, Dattilo said, "The Cooper Tire sales team was outstanding again this year. Tire unit sales were up over 4 percent for the year and nearly 9 percent for the quarter and we once again increased market share significantly in the light truck market. We were proud to be named number one in customer service again this year by Tire Review magazine and our people have truly earned it.
"At Cooper-Standard, in the midst of all the restructuring activity and with the market difficulties, we still found ways to win new business and delight our customers on current products and platforms. In total, the Cooper-Standard team was awarded over $350 million in new business this year that will phase in primarily in 2003 - 2005. $92 million of that was awarded in the fourth quarter. We have convinced our customers that the acquisitions and the current restructuring make sense for us and for them. They confirm that to us with every new contract."
In October 2000 the Company announced a comprehensive restructuring plan. Those planned activities are progressing on schedule. While most of the restructuring will take place in 2001 as previously discussed, since the announcement 3 facilities have been closed and 200 positions have been eliminated. Significant downsizing will occur in various locations during the first quarter, and 2 facilities are planned for closure in the second quarter. In total, 22 facilities are planned to be closed or downsized by the end of 2001. Annual cost savings are expected to approximate $30 million once the restructuring is complete.
Company Description
Cooper Tire & Rubber Company is headquartered in Findlay, Ohio and specializes in the manufacture and marketing of automotive products. Products for Cooper's Tire Group include automotive, motorcycle and truck tires, inner tubes, tread rubber and equipment. In the Automotive Group, Cooper is an original equipment supplier of sealing, trim, NVH control systems and fluid handling systems for the automotive industry in North America, Europe, Australia and South America. Cooper has more than 20,000 employees and 57 manufacturing facilities in 13 countries. For more information, visit the Company's web site at: www.coopertire.com.
Forward-Looking Statements
This report contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding expectations for future financial performance, which involve uncertainty and risk. It is possible the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to: changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among the Company's competitors and customers, technology advancements, unexpected costs and charges, fluctuations in raw material and energy prices, changes in interest and foreign exchange rates, regulatory and other approvals, the cyclical nature of the automotive industry, the loss of a major customer, litigation brought against the Company, risks associated with integrating the operations of The Standard Products Company and Siebe Automotive, and the failure to achieve synergies or savings anticipated in both acquisitions and the restructuring plan, and other unanticipated events and conditions.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.
Further information covering issues that could materially affect financial performance is contained in the Company's periodic filings with the U.S. Securities and Exchange Commission.
(Statements of income and balance sheets follow ... )
Cooper Tire & Rubber Company
Consolidated Statements of Income
(Dollar amounts in thousands
except per share amounts)
Quarter Ended Twelve Months Ended
Dec. 31 Dec. 31
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1999 2000 1999 2000
---- ---- ---- ----
Net sales $701,221 $819,848 $2,196,343 $3,472,372
Cost of products sold 589,669 690,137 1,810,524 2,939,815
---------- ---------- ---------- ----------
Gross profit 111,552 129,711 385,819 532,557
Restructuring charges - 33,205 - 38,699
Amortization of goodwill 2,550 2,699 2,550 15,553
Selling, general and
administrative 44,145 56,769 144,189 225,824
---------- ---------- ---------- ----------
Operating profit 64,857 37,038 239,080 252,481
Interest expense 13,236 24,574 24,445 97,461
Other - net (786) 500 (862) (5,136)
---------- ---------- ---------- ----------
Income before taxes 52,407 11,964 215,497 160,156
Provision for taxes 20,880 5,627 80,023 63,422
---------- ---------- ---------- ----------
Net Income $31,527 $6,337 $135,474 $96,734
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic and diluted
earnings per share $0.42 $0.09 $1.79 $1.31
Weighted average shares
outstanding 75,870 72,606 75,889 73,653
Depreciation $41,407 $40,279 $120,977 $167,787
Amortization of goodwill
and other intangibles $3,328 $6,104 $4,600 $20,994
Capital expenditures $45,899 $42,981 $149,817 $201,366
Segment information
Net Sales
Tire $412,329 $464,804 $1,557,111 $1,802,607
Automotive 293,302 360,684 643,642 1,698,519
Eliminations (4,409) (5,640) (4,409) (28,754)
Segment profit
Tire 45,108 45,184 176,389 183,865
Automotive 19,749 (8,146) 62,691 68,616
CONSOLIDATED BALANCE SHEETS
Dec. 31
---------------------
1999 2000
Assets ---- ----
------
Current assets:
Cash and cash equivalents $71,127 $45,795
Accounts receivable 545,155 596,670
Inventories 273,963 296,460
Prepaid expenses, deferred income
taxes and other 55,183 100,129
---------- ----------
Total current assets 945,428 1,039,054
Property, plant and equipment 1,227,069 1,285,397
Goodwill - net 433,312 439,443
Intangibles and other assets 151,836 264,296
---------- ----------
$2,757,645 $3,028,190
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $13,148 $154,997
Trade payables and accrued liabilities 363,724 406,732
Income taxes 5,100 29,585
Current portion of debt 13,893 13,530
---------- ----------
Total current liabilities 395,865 604,844
Long-term debt 1,046,463 1,038,623
Postretirement benefits other than
pensions 181,267 187,748
Other long-term liabilities 61,409 75,791
Deferred income taxes 97,007 168,628
Stockholders' equity 975,634 952,556
---------- ----------
$2,757,645 $3,028,190
---------- ----------
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