Federal-Mogul Announces First Quarter
Results
SOUTHFIELD, Mich., April 19 Federal-Mogul Corporation
today announced first quarter 2001 sales of $1,451 million
compared to $1,644 million in 2000. In line with expectations announced on
March 28, Federal-Mogul reported a first quarter loss of $(.60) per share from
operations versus earnings of $.86 per share from operations in 2000.
Excluded from earnings from operations were charges for restructuring and
impairment. Including these items, Federal-Mogul reported a first quarter
loss of $(.89) per share compared to net earnings of $.18 in 2000. Cash flow
from operations which includes capital expenditures, restructuring, and
asbestos payments was a usage of $146 million.
(Photo: http://www.newscom.com/cgi-bin/prnh/20000525/DETH025LOGO )
By region, the Americas and Asia reported first quarter sales of $937
million compared to $1,102 million in 2000. Europe and Africa reported sales
of $514 million compared to $542 million in 2000. The original equipment
market represented 58% of the company's global sales with the replacement
market accounting for 42% of first quarter sales. Excluding exchange impacts,
original equipment sales were down by 10% and aftermarket sales were down 7%
compared to first quarter 2000.
"North American demand from both our aftermarket and original equipment
customers was significantly lower. Although we intensified efforts to reduce
our cost structure, we were not able to match the pace and degree of our
customer's volume declines. A bright spot this quarter was our cash usage,
which historically has run much higher in the first quarter than it did this
year," said Frank Macher, chief executive officer. "We are making progress on
our efforts to run lean and competitive. Our drive to be low cost, as
evidenced by our announced agreement to acquire WSK Gorzyce to expand our
piston manufacturing into Poland, reflects our company's global commitment to
operate more efficiently."
Federal-Mogul's asbestos liability payments were on track as planned at
$88 million, down from fourth quarter 2000 levels.
"As promised, we have changed our asbestos management strategy and are
actively pursuing some form of legislative relief," said Macher. "Our outlook
for estimated asbestos claim payments remains $350 million in 2001."
Federal-Mogul Hosts First Quarter Conference Call
Federal-Mogul will be hosting a conference call at 2 p.m. EDT today,
Thursday, April 19, to discuss the company's first quarter 2001 earnings
release. The conference call will feature Frank Macher, chief executive
officer; Chip McClure, president and chief operating officer; and Mike Lynch,
executive vice president and chief financial officer. To receive the dial-in
number, participants should call 800-289-0579 for domestic callers and
719-457-2550 for international callers, and give 505925 as the Federal-Mogul
RSVP confirmation code when requested. Participants should dial into the
conference 10 minutes prior to 2 p.m. A recording of this call will be
available from 5 p.m. EDT on April 19 through Tuesday, April 24, 2001. To
access this recording, dial 719-457-0820 and then enter 505925 for the
confirmation code.
Headquartered in Southfield, Michigan, Federal-Mogul is an automotive
parts manufacturer providing innovative solutions and systems to global
customers in the automotive, light truck, heavy-duty, railroad, farm and
industrial markets. The company was founded in 1899. Visit the company's web
site at http://www.federal-mogul.com for more information. Federal-Mogul's
press releases are available by fax through Company News On-Call, call
800-758-5804, ext. 306225.
Information in this press release contains forward-looking statements,
which are not historical facts and involve risks and uncertainties. Actual
results, events and performance could differ materially from those
contemplated by these forward-looking statements including, without
limitation, the ability to implement and achieve the intended results of the
strategic initiatives, the cost and timing of implementing restructuring
actions, conditions in the automotive components industry, certain global and
regional economic conditions and other factors detailed from time to time in
the company's filings with the Securities and Exchange Commission. Federal-
Mogul undertakes no obligation to update any forward-looking statement to
reflect events or circumstances after the date of this press release.
F E D E R A L - M O G U L C O R P O R A T I O N
S T A T E M E N T S O F O P E R A T I O N S
(Millions of Dollars, Except Per Share Data)
(Unaudited)
Three Months Ended
March 31
2001 2000
Net sales $1,450.7 $1,643.7
Cost of products sold 1,145.4 1,210.4
Gross margin 305.3 433.3
Selling, general and administrative
expenses 229.6 211.0
Amortization of goodwill and other
intangible assets 30.4 31.2
Restructuring charge 29.8 68.7
Adjustment of assets held for sale
and other long-lived
assets to fair value 0.6 10.0
Interest expense 83.8 71.0
Interest income (1.2) (1.3)
International currency exchange
losses 0.7 0.6
Other expense, net 5.8 7.6
Earnings (Loss) Before Income
Taxes (74.2) 34.5
Income tax expense (benefit) (12.0) 20.6
Net Earnings (Loss) $(62.2) $13.9
Earnings (Loss) Per Common Share:
Basic $(0.89) $0.19
Diluted $(0.89) $0.18
Weighted Average Shares (Thousands)
Basic 70,583 70,263
Diluted 70,583 72,926
F E D E R A L - M O G U L C O R P O R A T I O N
N E T E A R N I N G S R E C O N C I L A T I O N
(Millions of Dollars, Except Per Share Data)
(Unaudited)
Three Months Ended March 31, 2001
Adjustments
Restruct- Impair-
As uring ment From
Reported Charge Charge Operations
Net sales $1,450.7 $ - $ - $1,450.7
Cost of products sold 1,145.4 - - 1,145.4
Gross margin 305.3 - - 305.3
Selling, general and
administrative expenses 229.6 - - 229.6
Amortization of goodwill and
other intangible assets 30.4 - - 30.4
Restructuring charges 29.8 (29.8) - -
Adjustment of assets held for
sale and other long-lived
assets to fair value 0.6 - (0.6) -
Interest expense 83.8 - - 83.8
Interest income (1.2) - - (1.2)
International currency exchange
losses 0.7 - - 0.7
Other expense, net 5.8 - - 5.8
Earnings (Loss) Before Income
Taxes (74.2) 29.8 0.6 (43.8)
Income tax expense (benefit) (12.0) 10.1 0.2 (1.7)
Net Earnings (Loss) $(62.2) $19.7 $0.4 $(42.1)
Diluted Earnings (Loss) Per
Common Share $(0.89) $0.28 $0.01 $(0.60)
F E D E R A L - M O G U L C O R P O R A T I O N
C A S H F L O W S
(Millions of Dollars)
(Unaudited)
Three Months Ended
March 31
2001 2000
Cash Provided From (Used By)
Operating Activities
Net earnings (loss) $(62.2) $13.9
Adjustments to reconcile net
earnings (loss) to net cash
provided from (used by)
operating activities:
Depreciation and amortization 97.8 99.1
Restructuring charge 29.8 68.7
Adjustment of assets held for
sale and other
long-lived assets to fair value 0.6 10.0
Postemployment benefits 3.5 1.2
Increase in accounts
receivable (38.3) (84.8)
Decrease (increase) in
inventories 9.1 (31.3)
Increase (decrease) in
accounts payable 21.9 (99.6)
Change in current liabilities
and other (38.8) (25.5)
Payments against
restructuring and
rationalization reserves (16.0) (14.7)
Payments against asbestos
liability (88.3) (75.4)
Net Cash Used By Operating
Activities (80.9) (138.4)
Cash Provided From (Used By)
Investing Activities
Expenditures for property, plant
and equipment and
other long-term assets, net (65.0) (72.8)
Proceeds from the sales of
businesses - 4.7
Net Cash Used By Investing
Activities (65.0) (68.1)
Cash Provided From (Used By)
Financing Activities
Proceeds from the issuance of
long-term debt 236.0 285.0
Principle payments on long-term debt (22.1) (17.2)
Increase (decrease) in short-term debt (32.1) (23.8)
Fees paid for debt issuance and
other securities (14.2) -
Investment in accounts receivable
securitization (48.2) (31.0)
Dividends (0.7) (1.0)
Other 3.0 2.1
Net Cash Provided From
Financing Activities 121.7 214.1
Increase (Decrease) in Cash and
Equivalents (24.2) 7.6
Cash and equivalents at beginning
of period 107.2 64.5
Cash and Equivalents at End of
Period $83.0 $72.1
F E D E R A L - M O G U L C O R P O R A T I O N
B A L A N C E S H E E T S
(Millions of Dollars)
(Unaudited)
March 31 December 31
2001 2000
Assets
Cash and equivalents $83.0 $107.2
Accounts receivable 517.6 512.8
Investment in accounts receivable
securitization 293.7 229.1
Inventories 785.9 808.6
Deferred taxes 232.0 235.5
Prepaid expenses and income tax
benefits 191.2 195.1
Total current assets 2,103.4 2,088.3
Property, plant and equipment, net 2,342.2 2,388.8
Goodwill 3,220.9 3,303.1
Other intangible assets 727.3 746.4
Asbestos-related insurance recoverable 745.3 771.1
Other noncurrent assets 1,167.1 1,155.7
Total Assets $10,306.2
Liabilities and Shareholders' Equity
Short-term debt, including current
portion of long-term debt $113.9 $147.8
Accounts payable 446.6 431.9
Accrued compensation 183.9 157.8
Restructuring and rationalization
reserves 120.3 107.9
Current portion of asbestos liability 350.0 350.0
Income taxes payable 63.6 94.4
Other accrued liabilities 395.3 439.3
Total current liabilities 1,673.6 1,729.1
Long-term debt 3,773.2 3,559.7
Long-term portion of asbestos liability 1,363.4 1,461.9
Postemployment benefits 635.1 637.6
Other accrued liabilities 861.2 882.4
Minority interest in consolidated
subsidiaries 57.0 57.5
Company-obligated mandatorily
redeemable preferred securities
of subsidiary trust holding solely
convertible subordinated
debentures of the Company 575.0 575.0
Shareholders' equity:
Series C ESOP preferred stock 37.3 38.1
Common stock 353.1 352.5
Additional paid-in capital 1,778.2 1,778.6
Accumulated deficit (172.4) (113.5)
Accumulated other comprehensive loss (627.8) (504.7)
Other (0.7) (0.8)
Total Shareholders' Equity 1,367.7 1,550.2
Total Liabilities and Shareholders'
Equity $10,306.2 $10,453.4
