Tenneco Automotive Reports 2001 First Quarter Earnings
- Company reports net loss of $16 million, or 44 cents per diluted share,
before restructuring and other unusual charges;
- Revenue declines two percent year-over-year to $864 million;
- Working capital, as a percent of sales, improves from 16.7% to 13.7%
($100 million improvement);
- SGA&E, as a percent of sales, decreases from 13.8% to 11.9% ($18 million
improvement).
LAKE FOREST, Ill., April 24 Tenneco Automotive reported a net loss of $31 million, or 84 cents
per diluted share, for the first quarter of 2001. These results include
pre-tax restructuring charges of $12 million (23 cents per share), pre-tax
environmental charges of $6 million (12 cents per share), and pre-tax charges
associated with the company's re-negotiation of its senior debt agreements of
$2 million (5 cents per share).
The company reported a net loss of $16 million, or 44 cents per diluted
share, for the first quarter of 2001, before restructuring charges and other
unusual charges, compared to net income of $1 million, or 3 cents per diluted
share, for the first quarter of 2000.
The company's revenue and profitability continue to be impacted by
downturns in North American light vehicle and heavy-duty truck production as
well as the depressed global aftermarket, despite strong performances during
the quarter by its European original equipment and rest of world operations.
Revenue for the quarter was $864 million versus $878 million in the first
quarter of 2000. EBITDA for the quarter, excluding restructuring and other
unusual charges, was $63 million compared with $86 million the previous year,
a 27 percent decline.
The company reported that cash flow from operations during the quarter,
while negative, did not decline as much as the decline in EBITDA. At quarter
end, working capital, before factored receivables, improved by $100 million
compared to the first quarter 2000, as the company enhanced its receivables
performance by three days and shrunk inventory levels by six days. A
$9 million decrease in capital spending and lower taxes also contributed to
this cash flow improvement. Additionally, the company reduced its SGA&E
expense by $18 million year-over-year, as a result of previously announced
restructuring initiatives.
"We continue to focus on the key areas that we can control --
manufacturing costs, SGA&E, discretionary spending, and working capital -- in
order to meet the immediate challenges caused by the difficult industry
conditions," said Mark P. Frissora, chairman and CEO, Tenneco Automotive.
The company reported the following geographical results before
restructuring and other unusual charges:
NORTH AMERICA
North American original equipment revenue declined 15 percent during the
quarter to $324 million versus $382 million in the first quarter of 2000.
North American aftermarket revenue decreased 13 percent to $111 million from
$128 million in the previous year.
North American EBIT declined to $6 million versus $34 million in the first
quarter of 2000. EBIT was primarily impacted by lower revenues, including a
significant downturn in the high margin heavy-duty elastomer business.
Operating inefficiencies and aftermarket bad debt expense also contributed to
the decline.
EUROPE
Driven by increased original equipment exhaust volumes, European original
equipment revenue increased 36 percent to $275 million compared to
$202 million in the previous year. European aftermarket revenue declined 20
percent to $74 million versus $92 million in first quarter of 2000.
European EBIT increased 33 percent to $16 million for the quarter. This
increase was driven primarily by operational improvements in the European
original equipment exhaust business.
REST OF WORLD
The company's Australian operations reported a 10 percent revenue decline
from $29 million to $26 million; however, revenue would have increased 5
percent if currency exchange rates had been the same in the first quarter of
2000 as in the first quarter of 2001.
The launch of new original equipment programs in South America fueled a 9
percent increase in revenue to $36 million, from $33 million in 2000.
Revenue from Asian operations grew 64 percent to $18 million from
$11 million in the first quarter of 2000, driven by production from the
company's new facility in Shanghai and aftermarket volumes.
Combined EBIT for South America, Australia, and Asia was $4 million
compared to $2 million in the previous year, primarily the result of volume
increases.
"We are by no means satisfied with our results," Frissora said. "However,
we are encouraged by progress we've made in reducing our overhead costs and
spending, and our entire organization is determined to make additional
improvement in these areas in the second quarter and throughout 2001."
The attached exhibits provide additional information on Tenneco
Automotive's first quarter 2001 operating results.
TENNECO AUTOMOTIVE INC CONSOLIDATED EARNINGS RESULTS
Unaudited
THREE MONTHS ENDED MARCH 31,
2001 2000
Net sales and operating revenues: $864 $878(d)
Costs and Expenses
Cost of Sales (exclusive of depreciation
shown below) 706(a)(b) 672
Engineering, Research and Development 13 15
Selling, General and Administrative 101(a)(c) 106(d)
Depreciation and Amortization 37 39
Total Costs and Expenses 857 832
Other Income (Expense) (1) 1
Operating Income (Loss)
North America (3)(a)(b)(c) 34
Europe 8(a)(b)(c) 12
Rest of World 1(a)(b) 1
6 47
Less.
Interest expense (net of interest capitalized) 47 45
Income tax expense (benefit) (10) (1)
Minority interest - 2
Net income (loss) $(31) $1
Average common shares outstanding
Basic 36.6 33.7
Diluted 36.8 33.9
Earnings (loss) per share of common stock:
Basic- $ (0.84) $0.03
Diluted- $ (0.84) $0.03
(a) Includes restructuring and other charges of $12 million pre-tax,
$9 million after-tax or $0.23 per share. Of the charge, $10 million is
recorded in SG&A and the remaining $2 million is in cost of sales.
Geographically, $8 million is recorded in North America, $2 million in
Europe and $2 million in Rest of World.
(b) Includes environmental charges of $6 million pre-tax, $5 million
after-tax or $0.12 per share. The entire charge is recorded in cost
of sales. Geographically, $5 million is recorded in Europe and $1
million is in North America.
(c) Includes costs associated with the renegotiation of senior debt of
$2 million pre-tax, $2 million after-tax or $0.05 per share. The
entire charge is recorded in SG&A. Geographically, $1 million is
recorded in both North America and Europe.
(d) Pursuant To EITF Issue No. 00-14. Accounting for Certain Sales
Incentives, some incentives that were previously recorded in SG&A are
now classified as a reduction in revenues. Results for 2000 were
reclassified accordingly, with net sales and SG&A each reduced by
$4 million with no impact on income.
Tenneco Automotive Inc. and Consolidated Subsidiaries
Balance Sheet
(unaudited)
(Millions)
March 31, December 31,
2001 2000
Actual Actual
ASSETS
CASH 56 35
RECEIVABLES, Net 499 487
INVENTORIES 409 422
OTHER CURRENT ASSETS 163 165
TOTAL CURRENT ASSETS 1,127 1,109
INVESTMENTS AND OTHER ASSETS 778 772
PLANT, PROPERTY, AND EQUIPMENT, NET 964 1,005
TOTAL ASSETS $2,869 $2,886
LIABILITIES AND SHAREOWNERS' EQUITY
SHORT-TERM DEBT 188 92
ACCOUNTS PAYABLE 465 464
OTHER CURRENT LIABILITIES 187 202
ACCRUED TAXES 17 16
ACCRUED INTEREST 47 35
LONG-TERM DEBT 1,409 1,435
DEFERRED INCOME TAXES 136 144
DEFERRED CREDITS AND OTHER LIABILITIES 158 154
MINORITY INTEREST 15 14
TOTAL SHAREHOLDERS' EQUITY 247 330
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,869 $2,886
Tenneco Automotive Inc. and Consolidated Subsidiaries
Statement of Cash Flows
(Millions)
Three Months Ended
March 31,
2001 2000
Operating activities:
Income (loss) from continuing operations $(31) $1
Adjustments to reconcile income (loss) from
continuing operations to net cash provided
(used) by operating activities --
Depreciation and amortization 37 39
Deferred income taxes (18) --
(Gain)/loss on sale of businesses and
assets, net 2 --
Changes in components of working capital --
(Inc)/dec in receivables (35) (71)
(Inc)/dec in inventories (4) (13)
(Inc)/dec in prepayments and other current
assets (5) (4)
Inc./(dec) in payables 16 50
Inc./(dec) in taxes accrued -- (11)
Inc./(dec) in interest accrued 13 17
Inc./(dec) in other current liabilities (6) (13)
Other 2 1
Net cash provided (used) by operating activities (29) (4)
Investing activities:
Net proceeds from sale of assets -- 2
Expenditures for plant, property & equipment (25) (34)
Acquisition of businesses - -
Investments and other (5) (4)
Net cash provided (used) by investing activities (3O) (36)
Net Cash provided (used) before financing activities
- continuing operations (59) (40)
Financing activities:
Issuance of common and treasury shares 3 --
Proceeds from subsidiary equity issuance -- --
Purchase of common stock -- --
Issuance of equity securities by a subsidiaries -- --
Issuance of long-term debt -- --
Retirement of long-term debt (5) -
Net inc./(dec.) in Short-term debt excluding
current maturities an long-term debt 78 13
Dividends (common) -- (2)
Other -- --
Net cash provided (used) by financing activities 76 11
Effect of foreign exchange rate changes on cash and
temporary cash investments 4 (2)
Inc./(dec.) in cash and temporary cash investments 21 (31)
Cash and temporary cash investments, January 1 35 84
Cash and temporary cash investments, March 31 $56 $53
Cash paid during the period for interest $34 $29
Cash paid during the period for income taxes $8 $15
