Collins & Aikman Announces Third Quarter 2001 Results
TROY, Mich., Nov. 7 -- Collins & Aikman Corporation reported sales of $430.4 million, and excluding a $1.1 million loss ($0.8 million, net of tax) from the sale of a metal stamping operation, operating income of $12.6 million, EBITDA of $34.5 million, and a net loss of $11.6 million, or ($.11) per share.
Recent Highlights Include:
- Completed acquisition of Joan Automotive Fabrics -- Continuing to build ``Mega Tier 2'' platform.
- Year-to-date, after fully funding acquisitions, net debt was reduced by over $100 million -- Continuing to provide liquidity for growth.
- Established new organization with broad based global manufacturing oversight for Carpet, Acoustics and Fabric Manufacturing Operations -- Leveraging global product manufacturing capabilities.
- Received Kia Valued Partner Status (3rd consecutive year) and Subaru- Isuzu Quality Achievement Award -- Demonstrating success and leadership in the area of product quality.
Commenting on the Company's third quarter results and recent accomplishments, Collins & Aikman's Chairman and Chief Executive Officer, Thomas E. Evans stated, ``In spite of the tragic events of September 11th, we are gratified by the solid year-over-year improvement experienced in our core North American operations in the third quarter. While our European operations were negatively impacted by customer pricing and certain non-recurring items, overall, Collins & Aikman continues to make solid progress in strengthening its long-term earnings and cash generating power. Specifically, during the quarter we: i) closed both the Becker and Joan Automotive Fabrics acquisitions, ii) reduced our investment in working capital by 14 percent, and iii) organizationally strengthened our global carpet, acoustics and fabric manufacturing operations.''
Third Quarter Performance Highlights
For the third quarter 2001, the Company reported a net loss of $12.4 million, or ($.12) per share, reflecting a loss from continuing operations of $13.8 million, or ($.13) per share, and income from discontinued operations of $1.4 million, or $.01 per share, relating to a payment on certain prior claims. These results include the previously mentioned $1.1 million loss from the sale of a metal stamping operation. For the third quarter of 2000, the Company reported a net loss of $4.8 million, or ($.08) per share, reflecting a loss from continuing operations of $4.1 million, or ($.07) per share, and an extraordinary charge of $0.7 million, or ($.01) per share related to the early retirement of JPS bonds.
Sales, operating income and EBITDA for the current quarter were $430.4 million, $11.5 million and $33.4 million, respectively, as compared to $423.0 million, $19.0 million and $36.5 million, respectively, for the third quarter of 2000. Slightly higher sales in the current quarter reflect increased business associated with the Company's recent acquisitions, partially offset by a seven percent reduction in North American production volume. This reduction, together with launch costs, customer price reductions and a non- recurring loss due to the sale of a European metal stamping operation, negatively impacted both operating income and EBITDA in the current quarter. For the third quarter 2001, the Company had approximately 106.3 million weighted average shares outstanding, as compared to 61.9 million shares outstanding 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 and operating income of $285.3 million and $20.9 million, respectively, versus $266.5 million and $17.0 million, respectively, in the year ago period. The increase in sales primarily reflects benefits from the Company's Becker acquisition, partially offset by the previously mentioned reduction in North American production. The increase in operating income was driven by operating improvements in nearly all of the Company's North American business units, purchasing savings from recent acquisitions, the favorable resolution of certain commercial issues and benefits realized from earlier restructuring programs.
European Automotive Interior Systems
The Company's European Automotive Interiors Systems (EAIS) Division reported third quarter 2001 sales of $56.7 million versus sales of $55.8 million in the year ago period, and an operating loss of $4.7 million versus operating income of $1.5 million in the year ago period. Sales reflect relatively flat production volume in Europe, while operating income primarily reflects the adverse impact of customer pricing reductions and launch costs, in addition to the previously mentioned loss on sale of a metal stamping operation.
Specialty Automotive Products
The Company's Specialty Automotive Products Division reported current quarter sales of $88.4 million versus sales of $100.7 million in the year ago period, and an operating loss of $1.8 million, versus a loss of $0.5 million in the year ago period. Higher convertible sales driven by new convertible programs were more than offset by the impact of lower volume in the Company's fabrics business. Although the Fabric Group's performance improved versus the prior year's third quarter, overall, the Specialty Group's operating results were negatively impacted by the previously mentioned production decline and launch costs incurred at the Company's convertible operations.
Year-to-date Performance Highlights
Year-to-date, the Company reported a net loss of $10.6 million, or ($.12) per share. In addition to an extraordinary after-tax charge of ($0.3) million for early debt retirement, net income reflects continuing operating losses of $19.1 million, or ($.22) per share, and net income from discontinued operations of $8.8 million, or $.10 per share. Results from continuing operations include a restructuring charge of $9.2 million ($.05 per share after-tax) recorded in the first quarter of 2001.
For the nine months ended September 30, 2000, the Company reported net income of $19.9 million, or $.32 per diluted share. In addition to an extraordinary after-tax charge of ($0.7) million, or ($.01) per diluted share for early debt retirement, net income for the nine months ended September 30, 2000, reflects income from continuing operations of $14.0 million, or $.22 per diluted share, and net income from discontinued operations of $6.6 million, or $.11 per diluted share.
Year-to-date, sales, operating income and EBITDA, excluding the previously mentioned restructuring charge, were $1.3 billion, $58.3 million and $120.2 million, respectively, versus $1.5 billion, $105.3 million and $160.0 million, respectively, in the year ago period. The declines in the 2001 time period primarily reflect an eleven percent decline in North America production volume, certain non-recurring items and the impact of customer price reductions, which in combination, more than offset the increased sales associated with recently acquired businesses. During the first nine months of the year, the Company had approximately 88.4 million weighted average shares outstanding, versus 62.5 million weighted average diluted shares during the first nine months of 2000.
Evans continued, ``Despite the current challenges facing the industry, we continue to position Collins & Aikman for a bright future. As demonstrated by our recent acquisitions, we're strengthening both our product offerings and technical capabilities, which creates an enormous asset for both Collins & Aikman and its customers. This is the basis of our 'Mega Tier 2 strategy' and the foundation for enhancing value for our customers, shareholders, employees and the communities within which we operate.''
Collins & Aikman Corporation, with annualized sales exceeding $2 billion, is the global leader in automotive floor and acoustic systems and is a leading supplier of automotive fabric, interior trim and convertible top systems. The Company's operations span the globe through 13 countries, over 70 facilities, and more than 14,000 employees who are committed to achieving total excellence. Collins & Aikman's high-quality products combine extensive design, styling and manufacturing capabilities with NVH ``quiet'' technologies that are among the most effective in the automotive industry. Information about Collins & Aikman is available on the Internet at www.collinsaikman.com .
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 anticipated results because of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which Collins & Aikman operates, fluctuations in the production of vehicles for which the Company is a supplier, changes in the popularity of particular car models or particular interior trim packages, the loss of programs on particular car models, labor disputes involving the Company or its significant customers, changes in consumer preferences, dependence on significant automotive customers, the level of competition in the automotive supply industry, pricing pressure from automotive customers, changes in labor costs, the substantial leverage of the Company and its subsidiaries, limitations imposed by the Company's debt facilities, risks associated with the Company's acquisition strategy and reorganization plans of the Company, charges made in connection with the integration of operations acquired by the Company, risks associated with conducting business in foreign countries and other risks detailed from time-to-time in the Company's Securities and Exchange Commission filings including without limitation, items 1, 7, 7a and 8 of the Company's Annual Report on Form 10-K for the year-ended December 31, 2000 and part 1 in the Company's Quarterly Report on Form 10-Q for the periods ended March 31, 2001 and June 30, 2001.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
Quarter Ended
September 30, 2001 September 30, 2000
(13 weeks) (13 weeks)
Net sales $ 430,430 $ 423,001
Cost of goods sold 377,061 369,806
Gross profit 53,369 53,195
Selling, general and administrative
expenses 41,830 34,177
Operating Income 11,539 19,018
Interest expense, net 20,437 23,208
Loss on sale of receivables 1,039 1,697
Other expense (income) 892 (550)
Loss before income taxes (10,829) (5,337)
Income tax expense (benefit) 2,931 (1,235)
Loss from continuing operations
before extraordinary charge (13,760) (4,102)
Income from discontinued operations,
net of income taxes of $951 in 2001 1,397 -
Loss before extraordinary charge (12,363) (4,102)
Extraordinary charge, net of income
taxes of $457 in 2000 - (686)
Net loss $ (12,363) $ (4,788)
Net income (loss) per basic
and diluted common share:
Continuing operations $ (0.13) $ (0.07)
Discontinued operations 0.01 -
Extraordinary charge - (0.01)
Net loss $ (0.12) $ (0.08)
Average common shares outstanding:
Basic 106,310 61,895
Diluted 106,310 61,895
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
Nine Months Ended
Adjusted (1)
September 30, September 30, September 30,
2001 2001 2000
(39 weeks) (39 weeks) (40 weeks)
Net sales $ 1,341,148 $ 1,341,148 $ 1,464,971
Cost of goods sold 1,164,681 1,164,681 1,243,928
Gross profit 176,467 176,467 221,043
Selling, general and
administrative expenses 118,188 118,188 115,713
Restructuring charge 9,200 - -
Operating income 49,079 58,279 105,330
Interest expense, net 64,325 64,325 72,699
Loss on sale of receivables 4,719 4,719 7,503
Other expense 6,735 6,735 897
Income (loss) before
income taxes (26,700) (17,500) 24,231
Income tax expense
(benefit) (7,623) (3,012) 10,214
Income (loss) from
continuing operations
before extraordinary
charge (19,077) (14,488) 14,017
Income from discontinued
operations, net of
income taxes
of $5,731 in 2001
and $4,400
in 2000 8,817 8,817 6,600
Income (loss) before
extraordinary charge (10,260) (5,671) 20,617
Extraordinary charge,
net of income taxes
of $227 in 2001
and $457 in 2000 (340) (340) (686)
Net income (loss) $ (10,600) $ (6,011) $ 19,931
Net income (loss)
per basic and
diluted common share:
Continuing operations $ (0.22) $ (0.17) $ 0.22
Discontinued operations 0.10 0.10 0.11
Extraordinary charge - - (0.01)
Net income (loss) $ (0.12) $ (0.07) $ 0.32
Average common
shares outstanding:
Basic 88,351 88,351 61,888
Diluted 88,351 88,351 62,457
(1) Excludes restructuring charge.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
ASSETS September 30, 2001 December 31, 2000
Current Assets:
Cash and cash equivalents $ 58,166 $ 20,862
Accounts and other
receivables, net 182,778 196,451
Inventories 115,485 131,720
Other current assets 72,462 75,852
Total current assets 428,891 424,885
Property, plant and equipment, net 416,013 434,147
Deferred tax assets 94,342 97,314
Goodwill, net 500,693 245,509
Other assets 100,200 78,435
TOTAL ASSETS $ 1,540,139 $ 1,280,290
LIABILITIES AND COMMON
STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $ 2,801 $ 3,835
Current maturities of
long-term debt 40,811 84,302
Accounts payable 220,645 178,483
Accrued expenses 148,826 123,109
Total current liabilities 413,083 389,729
Long-term debt 778,667 799,677
Other, including postretirement
benefit obligations 238,983 245,870
Commitments & contingencies - -
Common stock
(At September 30, 2001,
300,000 shares authorized,
117,882 shares issued,
and 117,880 shares outstanding.
At December 31, 2000, 150,000
shares authorized,
70,521 shares issued and
62,024 shares outstanding.) 1,178 705
Other paid-in capital 802,754 585,481
Accumulated deficit (647,240) (636,640)
Accumulated other comprehensive loss (47,274) (42,924)
Treasury stock, at cost (2 shares at
September 30, 2001 and 8,497 shares
at December 31, 2000) (12) (61,608)
Total common stockholders'
equity (deficit) 109,406 (154,986)
TOTAL LIABILITIES
AND COMMON
STOCKHOLDERS' EQUITY $ 1,540,139 $ 1,280,290
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Quarter Ended Nine Months Ended
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
(13 weeks) (13 weeks) (39 weeks) (40 weeks)
OPERATING ACTIVITIES
Income (loss) from continuing
operations $ (13,760) $ (4,102) $ (19,077) $ 14,017
Adjustments to derive
cash flow from
continuing operating
activities:
Deferred income tax expense
(benefit) (4,879) (3,484) (18,169) 1,853
Depreciation and
amortization 21,847 17,438 61,944 54,692
Loss on sale of
property, plant
and equipment 841 - 4,337 -
Decrease in accounts
and other
receivables 25,656 11,639 21,018 38,105
Decrease (increase) in
inventories 13,117 (6,977) 37,038 (6,655)
Increase (decrease)
in accounts
payable (6,362) 5,994 (11,837) (23,705)
Increase in interest
payable 12,344 14,744 11,830 16,246
Other, net (13,358) (6,686) 4,306 10,158
Net cash provided by
continuing operating
activities 35,446 28,566 91,390 104,711
Net cash provided by (used in)
discontinued
operations (58) (2,017) 14,393 2,229
INVESTING ACTIVITIES
Additions to property,
plant and
equipment (13,279) (19,713) (37,640) (50,285)
Sales of property, plant
and equipment 23,490 1,258 39,468 1,832
Acquisition of businesses,
net of cash
acquired (163,818) - (171,159) -
Disposition of business - - 3,520 -
Net cash used in
investing
activities (153,607) (18,455) (165,811) (48,453)
FINANCING ACTIVITIES
Issuance of long-term
debt - - 50,000 -
Debt issuance costs - - (10,747) -
Repayment of
long-term debt (1,648) (38,592) (73,565) (60,045)
Proceeds from (reduction of)
participating interests
in accounts
receivable 14,668 8,250 63,533 (1,570)
Net borrowings (repayments) on
revolving credit
facilities 104,988 (10,606) (42,345) 15,599
Increase in
short-term borrowings 649 1,643 2,071 5,917
Reissuance (purchase) of
treasury stock, net - 18 61,313 (83)
Proceeds from issuance
of stock 471 - 47,412 -
Early extinguishment of
debt, net of income
taxes - (686) (340) (686)
Net cash provided by (used in)
financing
activities 119,128 (39,973) 97,332 (40,868)
Net increase (decrease)
in cash and cash
equivalents 909 (31,879) 37,304 17,619
Cash and cash equivalents
at beginning
of period 57,257 63,478 20,862 13,980
Cash and cash equivalents
at end
of period $ 58,166 $ 31,599 $ 58,166 $ 31,599
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
THIRD QUARTER 2001 - SUPPLEMENTAL SCHEDULE
(Unaudited - in millions, except CPV)
SALES DATA:
Quarter Ended Year-to-Date
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
(13 weeks) (13 weeks) (39 weeks) (40 weeks)
DIVISION:
North American Automotive
Interior Systems $285 $266 $840 $909
European Automotive
Interior Systems 57 56 191 219
Specialty Automotive
Products 88 101 310 337
Total $430 $423 $1,341 $1,465
OPERATING INCOME (LOSS)(a):
Quarter Ended Year-to-Date
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
(13 weeks) (13 weeks) (39 weeks) (40 weeks)
DIVISION:
North American Automotive
Interior Systems $21 $17 $61 $77
European Automotive
Interior Systems (5) 2 (10) 8
Specialty Automotive
Products (2) (1) 13 20
Other (2) 1 (6) -
Total $12 $19 $58 $105
STATISTICAL DATA:
Quarter Ended Year-to-Date
September 30, September 30, September 30, September 30,
2001 2000 2001 2000
(13 weeks) (13 weeks) (39 weeks) (40 weeks)
EUROPEAN CPV $13 $13 $13 $15
N. AMERICAN CPV $99 $86 $91 $89
EBITDA (a)(b) $33 $37 $120 $160
CAPITAL EXPENDITURES $14 $20 $38 $50
FREE CASH FLOW (c) $53 $28 $129 $118
(a) Excludes restructuring charge of $9.2 million in the YTD September
30, 2001 period.
(b) EBITDA equals operating income (excluding restructuring charge) plus
depreciation and amortization.
(c) Free Cash Flow equals EBITDA, as defined, less capital expenditures,
plus/minus the change in accounts receivable, accounts payable and
inventory.