Collins & Aikman Announces First Quarter 2001 Results
TROY, Mich.--May 8, 2001--Collins & Aikman Corporation today reported results for its first quarter ended March 31, 2001. For the current fiscal quarter, the Company reported sales of $453.1 million, and excluding special charges, operating income was $20.6 million, resulting in a net loss of ($3.0) million, or ($0.04) per share.Special charges incurred for the quarter included $9.2 million ($4.1 million net of tax) for restructuring costs and an extraordinary after-tax charge of $0.3 million for the early redemption of $48 million in JPS Automotive 11-1/8% Senior Notes.
Recent Highlights Include:
-- | Heartland acquired 60% of Collins & Aikman common stock through its $260 million investment -- Strong partner for growth capital. |
-- | Early redemption of remaining JPS Automotive Senior Notes -- Favorable interest rate arbitrage and improvement in liquidity. |
-- | Announced Letter of Intent to acquire Becker Group -- Continuing transformation into a world-class "Mega Tier 2" automotive supplier. |
-- | Announced Letter of Intent to acquire the automotive operations of Joan Fabrics -- Creating the "best-of-the-best" in terms of automotive textile people, plants and equipment. |
-- | Announced summer release of new COMET(TM) Version 5.0 Software |
-- | Further enabling global automotive manufacturers to develop industry-leading quiet vehicles. |
Commenting on the Company's first quarter results, Collins & Aikman's Chairman and Chief Executive Officer, Thomas E. Evans stated, "Although Collins & Aikman's core operating performance exceeded external expectations, from my vantage point, we're still not where we need to be. This is the primary driver for our $9.2 million restructuring program, which we anticipate will generate annual savings of at least $10 to $12 million by 2002. Accordingly, in spite of the ongoing challenges presented by the current industry operating environment, Collins & Aikman continues to do what it takes in order to become leaner and more efficient."
First Quarter Performance Highlights
For the first quarter 2001, the Company reported a net loss of ($7.4) million, or ($0.10) per common share, versus net income of $7.0 million, or $0.11 per common share in the first quarter of 2000. Excluding the previously mentioned special charges, the Company would have reported a net loss in the current quarter of $3.0 million, or ($0.04) per share. Operating income for the current quarter was $11.4 million, and excluding restructuring costs, would have been $20.6 million, as compared to $40.2 million for the first quarter of 2000. Sales for the current quarter were $453.1 million versus $534.8 million in the year ago period. The decline in both sales and operating income is primarily attributable to a 15 percent decline in North American production volumes.
As part of the change in control of the Company during the current quarter, 25 million shares of Collins & Aikman common stock were issued to Heartland Industrial Partners, L.P., resulting in total outstanding shares increasing to 87 million. On a weighted average basis, the Company had approximately 71.3 million shares outstanding in the 2001 first quarter versus 61.9 million shares in the year ago period.
North American Automotive Interior Systems
For the current quarter, the Company's North American Automotive Interiors Systems (NAAIS) Division reported sales of $272.6 million versus sales of $326.6 million in the year ago period, while operating income for NAAIS in the current quarter was $16.2 million, as compared to $28.3 million in the year ago period. The declines in both sales and operating income were primarily due to the previously mentioned North American industry production decline.
European Automotive Interior Systems
The Company's European Automotive Interiors Systems (EAIS) Division reported first quarter 2001 sales and operating income of $71.2 million and $0.5 million, respectively, versus $86.2 million and $2.4 million in the first quarter of fiscal 2000. The decline in sales and operating income primarily reflects the impact of a four percent decrease in European production build and the negative impact of foreign currency translation, which reduced sales by approximately $7.0 million.
Specialty Automotive Products
The Company's Specialty Automotive Products Division reported sales and operating income for the first quarter 2001 of $109.3 million and $5.2 million, respectively, versus $121.9 million and $10.9 million in the first quarter of fiscal 2000. In addition to the previously mentioned North American production effect, operating margins in the current quarter were negatively impacted by launch costs for new convertible programs.
Evans continued, "As we move forward in 2001, we remain committed to improving and strengthening the long-term earnings power of Collins & Aikman. By continuing to implement aggressive cost reductions, developing new products and capitalizing on the potential benefits of our recently announced acquisition plans for the Becker Group and Joan Automotive, we should be able to achieve this goal and simultaneously enhance our "Mega Tier 2" position. With this strategy, and the support of all our global associates, I believe that we will be able to grow our business, lower our cost structure and return increased value to all of Collins & Aikman's stakeholders."
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (in thousands, except for per share data) Three Months Ended ---------------------------------- Adjusted (1) March 31, March 31, April 1, 2001 2001 2000 (13 weeks) (13 weeks) (14 weeks) ---------- ---------- ---------- Net sales $ 453,097 $ 453,097 $ 534,761 Cost of goods sold 394,341 394,341 451,046 ---------- ---------- ---------- Gross profit 58,756 58,756 83,715 Selling, general and administrative expenses 38,162 38,162 43,553 Restructuring charge 9,200 -- -- ---------- ---------- ---------- Operating income 11,394 20,594 40,162 Interest expense, net 23,269 23,269 25,062 Loss on sale of receivables 1,393 1,393 3,818 Other expense (income) 1,722 1,722 (1,079) ---------- ---------- ---------- Income (loss) before income taxes (14,990) (5,790) 12,361 Income tax expense (benefit) (7,886) (2,750) 5,347 ---------- ---------- ---------- Income (loss) before extraordinary charge (7,104) (3,040) 7,014 Extraordinary charge, net of income taxes of $227 (340) -- -- ---------- ---------- ---------- Net income (loss) $ (7,444) $ (3,040) $ 7,014 ========== ========== ========== Net income (loss) per basic and diluted common share: Continuing operations (0.10) (0.04) $ 0.11 Extraordinary charge -- -- -- ---------- ---------- ---------- Net income (loss) $ (0.10) (0.04) $ 0.11 ========== ========== ========== Average common shares outstanding: Basic 71,328 71,328 61,889 ========== ========== ========== Diluted 71,328 71,328 62,365 ========== ========== ========== (1) Excludes restructuring charge and extraordinary charge for debt retirement. COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands) (Unaudited) March 31, December 31, ASSETS 2001 2000 ----------- ----------- Current Assets: Cash and cash equivalents $ 23,375 $ 20,862 Accounts and other receivables, net 201,936 196,451 Inventories 125,504 131,720 Other 74,742 75,852 ----------- ----------- Total current assets 425,557 424,885 Property, plant and equipment, net 423,770 434,147 Deferred tax assets 102,555 97,314 Goodwill, net 247,503 245,509 Other assets 81,792 78,435 ----------- ----------- $ 1,281,177 $ 1,280,290 =========== =========== LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT Current Liabilities: Short-term borrowings $ 3,467 $ 3,835 Current maturities of long-term debt 38,005 84,302 Accounts payable 150,456 178,483 Accrued expenses 137,675 123,109 ----------- ----------- Total current liabilities 329,603 389,729 Long-term debt 783,211 799,677 Other, including post-retirement benefit obligation 233,002 245,870 Commitments and contingencies Common stock (300,000 shares authorized, 87,099 shares issued and 87,097 shares outstanding at March 31, 2001 and 70,521 shares issued and 62,024 shares outstanding at 871 705 December 31, 2000) Other paid-in capital 629,545 585,481 Accumulated deficit (644,084) (636,640) Accumulated other comprehensive loss (50,959) (42,924) Treasury stock, at cost (2 shares at March 31, 2001 and 8,497 shares at December 31, 2000) (12) (61,608) ----------- ----------- Total common stockholders' deficit (64,639) (154,986) ----------- ----------- $ 1,281,177 $ 1,280,290 =========== =========== COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Quarter Ended --------------------- March 31, April 1, 2001 2000 (13 weeks) (14 weeks) ---------- --------- OPERATING ACTIVITIES Income (loss) from continuing operations $ (7,104) $ 7,014 Adjustments to derive cash flow from continuing operating activities: Deferred income tax expense (benefit) (5,468) 2,143 Depreciation and amortization 20,093 18,761 Decrease (increase) in accounts and other receivables (12,223) 9,392 Decrease (increase) in inventories 7,789 (4,909) Decrease in accounts payable (30,014) (10,325) Increase in interest payable 10,292 14,910 Other, net (2,676) 31,969 ---------- --------- Net cash provided by (used in) continuing operating activities (19,311) 68,955 ---------- --------- Net cash used in discontinued operations (3,335) (3,188) ---------- --------- INVESTING ACTIVITIES Additions to property, plant and equipment (10,629) (15,095) Sales of property, plant and equipment -- 74 Acquisitions, net of cash acquired (7,341) -- ---------- --------- Net cash used in investing activities (17,970) (15,021) ---------- --------- FINANCING ACTIVITIES Issuance of long-term debt 50,000 -- Debt issuance costs (10,747) -- Repayment of long-term debt (55,743) (13,676) Proceeds from (reduction of) participating interests in accounts receivable 8,864 (4,651) Repayments on revolving credit facilities (55,244) (10,463) Increase in short-term borrowings 392 5,678 Purchase of treasury stock, net -- (136) Proceeds from issuance of stock 105,323 -- Other, net 284 -- ---------- --------- Net cash provided by (used in) financing activities 43,129 (23,248) ---------- --------- Net increase in cash and cash equivalents 2,513 27,498 Cash and cash equivalents at beginning of period 20,862 13,980 ---------- --------- Cash and cash equivalents at end of period $ 23,375 $ 41,478 ========== ========= COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES FIRST QUARTER 2001 - SUPPLEMENTAL SCHEDULE (Unaudited - in millions, except CPV) SALES DATA: ----------- Quarter Ended ----------------------------------- DIVISION: March 31, 2001 April 1, 2000 (13 weeks) (14 weeks) --------------- --------------- North American Automotive Interior Systems $273 $327 European Automotive Interior Systems 71 86 Specialty Automotive Products 109 122 --------------- --------------- Total $453 $535 =============== =============== OPERATING INCOME (LOSS)(a): --------------------------- Quarter Ended ----------------------------------- DIVISION: March 31, 2001 April 1, 2000 (13 weeks) (14 weeks) --------------- --------------- North American Automotive Interior Systems $16 $28 European Automotive Interior Systems 1 2 Specialty Automotive Products 5 11 Other (1) (1) --------------- --------------- Total $ 21 $40 =============== =============== STATISTICAL DATA: ----------------- Quarter Ended ----------------------------------- March 31, 2001 April 1, 2000 (13 weeks) (14 weeks) --------------- --------------- EUROPEAN CPV $14 $17 N. AMERICAN CPV $91 $91 EBITDA (a) $41 $59 CAPITAL EXPENDITURES $11 $15 (a) 2001 Excludes restructuring charge of $9.2 million, $4.1 million or $0.06 per share after-tax.