Tower Automotive Announces Operating Results for the Q3 and Nine Months
GRAND RAPIDS, Mich.--Oct. 18, 2001--Tower Automotive, Inc. , today announced operating results for the third quarter and nine months ended September 30, 2001.For the third quarter of 2001, revenues were $558 million, a 4 percent increase, compared with $536 million in the 2000 period. Revenues for the third quarter of 2001 included revenues for our Asia operations of $104 million, which were not consolidated in the 2000 period. Operating income declined 43 percent to $16 million from $28 million reported last year. Net loss for the third quarter of 2001 was $1 million, or 3 cents per diluted share outstanding, versus net income of $10 million, or .21 cents per diluted share, before extraordinary loss, in the comparable 2000 period.
For the nine months ended September 30, 2001, revenues were $1.8 billion, a 5 percent decrease, compared with $1.9 billion in the same period for 2000. Revenues for the nine months ended September 30, 2001 included revenues for Asia operations of $270 million, which were not included in the same period for 2000. Operating income declined 44 percent to $98 million from $175 million reported last year. Net income for the nine months ended September 30, 2001 was $28 million, or 63 cents per diluted share outstanding, versus $86 million, or $1.54 per diluted share, before extraordinary loss, in the comparable 2000 period.
In commenting on third-quarter and nine-month results, Dug Campbell, president and chief executive officer of Tower Automotive, said, "This year has continued to prove to be the most difficult year in Tower Automotive's history. Our third quarter results were impacted by unplanned volume declines in our U.S. and Canada region and continued new product launch costs during the quarter. Third quarter performance has further contributed to weak performance year-to-date when compared to the 2000 period. Excluding our Asia operations in Korea and China, which were not consolidated in 2000, sales for the third quarter 2001 and the nine-month period ended September 30, 2001, as compared to the same corresponding periods in 2000, were both down by approximately 15 percent.
"Despite the sales and earnings shortfall relative to 2000, we have continued to reduce debt through effective management of working capital and the successful completion of the $40 million private placement of our common stock and the $126 million operating lease financing for the Dodge Ram frame assembly completed during the quarter. Debt reduction during the third quarter and nine months of 2001 was $106 million and $270 million, respectively. We continue to remain in compliance with all debt covenants and will work to ensure that no debt covenant relief will be required."
The company also announced that it will be relocating stamping and assembly operations currently performed at its Sebewaing, Mich., facility to other Tower Automotive locations, resulting in the closing of the Sebewaing facility by March 2002. This restructuring activity will result in a fourth-quarter pre-tax charge of approximately $95 million, which includes a cash portion of approximately $23 million and a non-cash portion of approximately $72 million. Based on prevailing economic conditions, the company will continue its evaluation for potential additional fourth-quarter restructuring activities and asset valuation issues.
"The closing of our Sebewaing facility is the result of a slowdown in sales volumes throughout the company. In consolidating our stamping operations, we can utilize our existing capacity more efficiently to enhance the value of the operations," said Campbell. "Although this is a necessary move for the company, it is a very difficult decision."
Tower Automotive, Inc., produces a broad range of assemblies and modules for vehicle structures and suspension systems for the automotive manufacturers, including Ford, DaimlerChrysler, GM, Honda, Toyota, Nissan, Auto Alliance, Fiat, Kia, Hyundai, BMW and Volkswagen. Products include body structural assemblies such as pillars and package trays, control arms, suspension links, engine cradles and full frame assemblies. The company is based in Grand Rapids, Mich., and has its corporate office in Minneapolis, Minn.
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the anticipated results as a consequence of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which Tower Automotive operates, and other risks detailed from time to time in the company's Securities and Exchange Commission filings.
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- ------------------------
2001 2000 2001 2000
---------- --------- ------------ -----------
Revenues $557,785 $536,210 $1,828,568 $1,902,594
Cost of sales 502,366 471,482 1,608,617 1,611,773
---------- --------- ------------ -----------
Gross profit 55,419 64,728 219,951 290,821
Selling, general
and administrative
expenses 33,002 31,535 103,321 99,622
Amortization expense 6,232 5,576 18,440 15,793
---------- --------- ------------ -----------
Operating income 16,185 27,617 98,190 175,406
Interest expense, net 19,082 16,405 58,925 43,136
---------- --------- ------------ -----------
Income (loss) before
provision for
income taxes (2,897) 11,212 39,265 132,270
Provision for income
taxes (2,771) 4,484 13,701 52,908
---------- --------- ------------ -----------
Income (loss) before
equity in earnings
of joint ventures
and minority interest (126) 6,728 25,564 79,362
Equity in earnings of
joint ventures 3,120 5,844 12,291 14,864
Minority interest (4,358) (2,619) (9,686) (7,857)
---------- --------- ------------ -----------
Income (loss) before
extraordinary item (1,364) 9,953 28,169 86,369
Extraordinary loss on
early extinguishments
of debt, net -- 2,988 -- 2,988
---------- --------- ------------ -----------
Net income (loss) $(1,364) $6,965 $28,169 $83,381
========== ========= ============ ===========
Basic earnings (loss) per
common share:
Income before
extraordinary loss $(0.03) $0.21 $0.63 $1.81
Extraordinary loss -- (0.06) -- (0.06)
---------- --------- ------------ -----------
Net income (loss) $(0.03) $0.15 $0.63 $1.75
========== ========= ============ ===========
Basic shares outstanding 45,784 47,986 44,770 47,649
========== ========= ============ ===========
Diluted earnings (loss)
per common share:
Income before
extraordinary loss $(0.03) $0.21 $0.63 $1.54
Extraordinary loss -- (0.06) -- (0.05)
---------- --------- ------------ -----------
Net income (loss) $(0.03) $0.15 $0.63 $1.49
========== ========= ============ ===========
Diluted shares
outstanding 45,784 48,411 45,044 64,284
========== ========= ============ ===========
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 30, December 31,
Assets 2001 2000
-------------------------------------- -------------- --------------
(unaudited)
Current assets:
Cash and cash equivalents $ 15,960 $ 3,373
Accounts receivable 274,628 278,707
Subordinated interest in
accounts receivable -- --
Inventories 115,445 132,478
Prepaid tooling and other 116,632 222,119
-------------- --------------
Total current assets 522,665 636,677
-------------- --------------
Property, plant and equipment, net 1,190,306 1,111,780
Investments in joint ventures 287,331 267,217
Goodwill and other assets, net 881,944 877,073
-------------- --------------
2,882,246 2,892,747
============== ==============
Liabilities and Stockholders' Investment
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations $ 165,548 $ 149,066
Accounts payable 352,476 248,389
Accrued liabilities 253,272 175,219
-------------- --------------
Total current liabilities 771,296 572,674
-------------- --------------
Long-term debt, net of current
maturities 650,836 933,442
Obligations under capital leases,
net of current maturities 5,325 8,458
Convertible subordinated notes 200,000 200,000
Deferred income taxes 37,052 33,884
Other noncurrent liabilities 202,011 185,444
-------------- --------------
Total noncurrent liabilities 1,095,224 1,361,228
-------------- --------------
Mandatorily redeemable trust
convertible preferred securities 258,750 258,750
Stockholders' investment:
Preferred stock -- --
Common stock 480 476
Additional paid-in capital 456,615 450,455
Retained earnings 336,125 307,956
Deferred compensation plans (15,571) (8,942)
Accumulated other comprehensive loss (20,673) (9,672)
Treasury stock, at cost -- (40,178)
-------------- --------------
Total stockholders' investment 756,976 700,095
-------------- --------------
$ 2,882,246 $ 2,892,747
============== ==============