Cooper Tire & Rubber Company Reports First
Quarter 2001 Results
FINDLAY, Ohio, April 19 Cooper Tire & Rubber Company
today reported first quarter operating profit of $25 million
despite some of the most difficult industry and market conditions experienced
in many years. Sales for the quarter reached $758 million but were down nearly
18 percent compared to $922 million achieved a year earlier when both tire and
automotive component sales reached record levels. Net income for the quarter
was $3.6 million and earnings per share were 5 cents.
(Photo: http://www.newscom.com/cgi-bin/prnh/20010404/COOPERLOGO )
Both operating groups of the Company saw significant declines in sales
compared to the first quarter of last year. Cooper Tire sales were $388
million for the quarter, down $57 million or 13 percent. Tire unit sales
declined 18 percent. These declines were due primarily to the soft
replacement tire market in North America this year and the difficult
comparison to the exceptional volumes Cooper achieved last year. In 2000,
Cooper Tire's first quarter passenger tire sales increased at nearly twice the
rate of the industry and light truck tire sales growth was nearly four times
industry levels. In addition, original equipment tire manufacturers
reallocated original equipment production capacity to the replacement market
during the first quarter of 2001 because of slow automotive production which
created excess inventories and additional downward pressure on sales.
At Cooper-Standard Automotive, sales were $377 million for the quarter,
down $108 million or 22 percent compared to the first quarter of 2000.
$48 million of this decline was the result of the sale of Holm Industries and
the Winnsboro operations of the Plastics Division during the second quarter of
2000. The decline in sales of ongoing operations was $60 million or 14
percent and was due to the curtailments in automobile production in North
America.
In addition to lower sales volumes, operating profits for the quarter were
adversely impacted by higher raw material costs, higher energy costs and
charges for litigation and product liability provisions which totaled
approximately $19 million or 16 cents per share.
Regarding the first quarter results, Cooper chairman, president and chief
executive officer Thomas A. Dattilo said, "This has been a very difficult
quarter, especially in contrast to the record breaking first quarter of last
year. Our team worked extremely hard to make the most of the difficult
conditions in the marketplace and in our industries. We are by no means
pleased by our first quarter results but we continue to execute our plans and
strategy which have been and will continue to be successful for us."
Because of significant recent growth, Cooper was included in the Fortune
500 and Forbes 500 lists of America's largest companies during the quarter.
The Company was also honored to be named again among the group of companies
that make up the S&P 500 index.
"Through the implementation of our strategic plans, Cooper is growing and
we are now among the top 500 companies in the country. We are on track with
our plans to integrate and rationalize our operations. We will be more
productive, more efficient and more competitive in the future as a result,"
Dattilo continued. "In spite of the anomaly that was the first quarter, there
are many reasons to be optimistic as we look to the months ahead. Tire price
increases implemented in North America appear to be holding. During the
quarter Cooper-Standard Automotive won over $80 million in net new business
awards that will come on stream in the next few years. Light vehicle
inventory has come down dramatically and should lead to more stable production
patterns during the rest of the year. We anticipate a much improved selling
environment for both sides of our business throughout the rest of the year and
we are well positioned to take advantage of it."
Company Description
Cooper Tire & Rubber Company is headquartered in Findlay, Ohio and
specializes in the manufacture and marketing of automotive products. Products
for Cooper Tire include automotive, motorcycle and truck tires, inner tubes,
tread rubber and equipment. Cooper-Standard Automotive 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: http://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 that 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, failure to achieve expected sales levels,
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 or program, 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, risks associated with
the restructuring plan and the failure to achieve the saving anticipated from
the restructuring, litigation brought against the Company, including the class
action lawsuits previously described in the Company's periodic filings with
the U.S. Securities and Exchange Commission 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)
Three Months Ended
March 31
2000 2001
Net sales $922,265 $757,614
Cost of products sold 787,339 663,866
Gross profit 134,926 93,748
Restructuring charges 245 922
Amortization of goodwill 4,212 3,850
Selling, general and administrative 58,264 63,983
Operating profit 72,205 24,993
Interest expense 23,922 23,290
Other - net (3,359) (4,115)
Income before taxes 51,642 5,818
Provision for taxes 20,140 2,170
Net Income $31,502 $3,648
Basic and diluted earnings per share $0.42 $0.05
Weighted average shares outstanding 75,728 72,617
Depreciation $43,280 $41,805
Amortization of goodwill and other
intangibles $4,888 $5,305
Capital expenditures $48,700 $37,724
Segment information
Net Sales
Tire $445,344 $388,235
Automotive 484,679 376,788
Eliminations (7,758) (7,409)
Segment profit
Tire 45,109 16,204
Automotive 27,096 10,271
Unallocated corporate charges and
eliminations 0 (1,482)
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CONSOLIDATED BALANCE SHEETS
March 31
2000 2001
Assets
Current assets:
Cash and cash equivalents $47,990 $24,881
Accounts receivable 678,172 592,650
Inventories 300,492 347,660
Prepaid expenses, deferred income
taxes and other 75,864 97,456
Total current assets 1,102,518 1,062,647
Property, plant and equipment 1,340,932 1,261,934
Goodwill - net 534,811 434,521
Intangibles and other assets 164,363 168,959
$3,142,624 $2,928,061
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable $260,428 $158,471
Accounts payables and accrued
liabilities 457,345 446,909
Income taxes 26,951 22,674
Current portion of debt 14,308 14,332
Total current liabilities 759,032 642,386
Long-term debt 1,046,515 1,036,960
Postretirement benefits other than
pensions 184,253 190,636
Other long-term liabilities 56,641 68,874
Deferred income taxes 112,410 59,186
Stockholders' equity 983,773 930,019
$3,142,624 $2,928,061
These interim statements are subject to year-end adjustments.
Certain amounts for 2000 have been restated to conform with 2001
presentations.
