Collins & Aikman Announces Financial Results
TROY, Mich., Feb. 21 Collins & Aikman Corporation today reported fourth quarter and annual results for its fiscal period ended December 31, 2001. For the fourth quarter, the Company reported net sales of $482.1 million and a net loss of $35.6 million, or ($.29) per diluted share. Excluding transaction financing impacts, an acquisition restructuring charge and integration costs, as well as costs associated with 11 days of ownership of Textron's automotive trim division (TAC-Trim) during an industry shut-down period, the Company estimates that it would have reported fourth quarter net sales of $476.4 million and a net loss of $14.7 million, or ($.13) per diluted share.
Recent Highlights Include:
* Completed acquisition of TAC-Trim - Significantly enhancing Collins &
Aikman's product capabilities, global presence, manufacturing scale and
earnings power.
* Completed $500 Million 10 3/4 percent Senior Notes Offering - Increased
offering size from $325 million due to strong demand; proceeds used to
fund TAC-Trim acquisition.
* Key supplier to Motor Trend's "2002 Car of the Year", the Ford
Thunderbird - Continuing leadership in convertible roof systems.
* Received Toyota's "Recognition of Achievement" Award - Validates Collins
& Aikman's strong commitment to providing excellent service, quality,
value and delivery.
Commenting on the Company's recent highlights and fourth quarter performance, Collins & Aikman's Chairman and Chief Executive Officer, Thomas E. Evans, stated, ``While our quarterly results were significantly impacted by financing, restructuring and integration costs associated with our recent acquisitions, I believe this was a small price to pay for how we have positioned Collins & Aikman for the future. Specifically, through the acquisitions of Becker, Joan and TAC-Trim, we have increased our global work force from 14,000 to over 25,000, established operations in Eastern Europe and South America, nearly doubled our revenue base and significantly enhanced our fundamental earnings power. These accomplishments, above all else, are why I believe fiscal 2001 was a powerful year of strategic growth for Collins & Aikman Corporation.''
Fourth Quarter Performance Highlights
For the fourth quarter of 2001, the Company reported net sales of $482.1 million and a net loss of $35.6 million, or ($.29) per diluted share. Eliminating the costs associated with transaction financing, a $9.6 million restructuring charge, acquisition integration and the timing of the TAC-Trim transaction, the Company estimates that it would have reported fourth quarter net sales of $476.4 million and a net loss of $14.7 million, or ($.13) per diluted share. For the quarter ended December 31, 2001, the Company had approximately 123.9 million shares outstanding on a weighted average diluted basis, versus 62.0 million in the year ago period.
In the fourth quarter of 2000, the Company reported net sales of $436.8 million and a net loss of $15.5 million, or ($.25) per diluted share.
Compared to the fourth quarter of fiscal 2000, net sales in the current quarter rose approximately $45 million. This increase was primarily driven by $79 million in additional sales realized from the Company's recent acquisitions, partially offset by light vehicle production declines of approximately three percent in both North America and Europe.
Year-To-Date Performance Highlights
For the twelve months ended December 31, 2001, the Company reported net sales of $1.8 billion and a net loss of $46.2 million, or ($.47) per diluted share. Eliminating the costs associated with transaction financing, $18.8 million in restructuring charges, acquisition integration, the timing of the TAC-Trim transaction and certain other non-recurring items, the Company estimates that it would have reported a net loss of $26.0 million, or ($.27) per diluted share. For the year ended December 31, 2001, the Company had approximately 97.2 million shares outstanding on a weighted average diluted basis, versus 61.9 million in the year ago period.
In fiscal year 2000, the Company reported net sales of $1.9 billion and net income of $4.5 million, or $.07 per diluted share. Excluding certain non-recurring items the Company estimates that it would have reported a net loss of $0.4 million, or ($.01) per diluted share.
As compared to the prior year, net sales declined $79 million. This decline was primarily driven by a 10 percent reduction in North American light vehicle production and $24 million in foreign currency translation, partially offset by benefits from the Company's recent acquisitions, which contributed $127 million in revenue.
Evans continued, ``Although 2001 was a challenging year for Collins & Aikman, it was also a year of tremendous transformation. This transformation, which dramatically increased our manufacturing scale, product capabilities, global footprint and forward book of business, forms the foundation for my confidence in our ability to be the premier global 'Mega Tier 2' supplier to both OEMs and Tier 1 interior integrators.''
EBITDA
In connection with financing the TAC-Trim acquisition we entered into new credit facilities and issued new high yield debt securities. Copies of these debt instruments have been filed with the SEC. Due to interest in our EBITDA after giving effect to our Becker, Joan and TAC-Trim acquisitions for the year ended December 31, 2001, and to avoid selective disclosure to our debt investors and lenders, we are reporting our EBITDA as defined under our senior credit facility. This definition includes stipulated amounts for the first three quarters of 2001 that were based upon actual historical results for Collins & Aikman and the acquired entities, and allows for certain adjustments for matters such as restructuring charges, integration expenses, fees associated with our acquisitions, management fees payable to our largest shareholder and a variety of non-cash charges. Reference is made to our senior credit facility on file with the SEC for the complete definition of EBITDA. The information is not presented in accordance with generally accepted accounting principles and is not intended to be equivalent to the other pro forma EBITDA information that we previously filed with the SEC for Regulation FD purposes in connection with the TAC-Trim acquisition.
The following table shows our calculation of EBITDA in accordance with our senior credit facility:
- Fourth Quarter 2001
- Reported operating loss $(13.5)
- Depreciation and amortization 20.2
- EBITDA of TAC-Trim prior to closing
as reported by predecessor 26.7
Restructuring charge (1) 9.6
Restructuring and acquisition
integration costs 2.5
Write-offs of obsolete and
unrecoverable assets 8.7
Other allowable cash charges,
including Heartland monitoring fee 1.2
Fourth quarter 2001 EBITDA as per
Credit Agreement $55.4
Stipulated EBITDA for nine months
ended September 30, 2001
as per Credit Agreement $305.5
Fiscal year 2001 EBITDA as per Credit
Agreement $360.9
(1) Restructuring charge includes $2.8 million in severance costs and
$6.8 million in asset impairment charges.
Our actual historical EBITDA for 2001 was approximately $118 million, and is not indicative of our future results since our acquisitions were completed late in July (Becker Group L.L.C.), September (Joan Automotive Fabrics) and December (TAC-Trim) of 2001.
Outlook
For fiscal 2002, the Company currently anticipates production in North America and Europe of 15.0 million units and 15.5 million units, respectively. For the first quarter of fiscal 2002, the Company currently anticipates sales in the range of $800 million to $850 million. Prior to the end of the first quarter, the Company expects to provide a more detailed first quarter outlook.
Collins & Aikman Corporation is a global leader in cockpit modules and automotive floor and acoustic systems and a leading supplier of instrument panels, automotive fabric, plastic-based trim, and convertible top systems. The Company's current operations span the globe through 15 countries, more than 120 facilities and over 25,000 employees who are committed to achieving total excellence. Collins & Aikman's high-quality products combine superior design, styling and manufacturing capabilities with NVH ``quiet'' technologies that are among the most effective in the 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 the 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, the substantial leverage of the Company and its subsidiaries, limitations imposed by the Company's debt facilities, charges made in connection with the integration of operations acquired by the Company, the implementation of the reorganization plan, 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, in Items 1 and 7 of the Company's Annual Report on Form 10-K for the year-ended December 31, 2000, and Item 1 in the Company's Quarterly Reports on Form 10-Q for the periods ended March 31, 2001, June 30, 2001 and September 30, 2001.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in millions)
Quarter Ended
December 31, 2001 December 31, 2000
(13 weeks) (13 weeks)
Net sales (a) $482.1 $436.8
Cost of goods sold (a,g) 439.8 391.2
Gross profit 42.3 45.6
Selling, general and
administrative expenses (a) 46.2 42.9
Restructuring charge (b) 9.6 --
Operating income (loss) (13.5) 2.7
Interest expense, net (a) 19.9 23.9
Loss on sale of receivables (h) 6.1 1.7
Accretion of preferred stock (a) 2.4 --
Other (income) expense, net (a,d,f) (0.3) 0.6
Loss before income taxes (41.6) (23.5)
Income tax benefit (a-d, f-h) (11.0) (8.0)
Loss from continuing operations
before extraordinary charge (30.6) (15.5)
Loss before extraordinary charge (30.6) (15.5)
Extraordinary (loss) (c) (5.0) --
Net loss $(35.6) $(15.5)
Net loss per basic and diluted common
share:
Continuing operations $(0.25) $(0.25)
Extraordinary charge (0.04) --
Net loss $(0.29) $(0.25)
Weighted average common shares
outstanding:
Basic & diluted 123.9 62.0
Adjusted Net Income (Loss) Reconciliation:
Reported net loss $(35.6) $(15.5)
Adjustment (a) 8.0
Adjustment (b) 9.6
Adjustment (c) 5.0
Adjustment (d) 5.1
Adjustment (e) --
Adjustment (f) (6.2)
Adjustment (g) 2.5
Adjustment (h) 5.6
Tax effect on the forgoing items (8.7)
Adjusted net loss $(14.7) $(15.5)
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in millions)
Twelve Months Ended
December 31, 2001 December 31, 2000
(52 weeks) (53 weeks)
Net sales (a) $1,823.3 $1,901.8
Cost of goods sold (a,g) 1,604.5 1,635.2
Gross profit 218.8 266.6
Selling, general and
administrative expenses (a) 164.4 158.5
Restructuring charge (b) 18.8 --
Operating income 35.6 108.1
Interest expense, net (a) 84.3 96.6
Loss on sale of receivables (h,i) 10.8 9.2
Accretion of preferred stock (a) 2.4 --
Other expense, net (a,d,f) 6.4 1.5
Income (loss) before income taxes (68.3) 0.8
Income tax (benefit) expense (a-k) (18.6) 2.2
Loss from continuing operations
before extraordinary charge and
discontinued operations (49.7) (1.4)
Discontinued operations (e,j) 8.8 6.6
Income (loss) before
extraordinary charge (40.9) 5.2
Extraordinary (loss) (c,k) (5.3) (0.7)
Net income (loss) $(46.2) $4.5
Net income (loss) per basic and
diluted common share:
Continuing operations $(0.51) $(0.03)
Discontinued operations 0.09 0.11
Extraordinary charge (0.05) (0.01)
Net income (loss) $(0.47) $0.07
Weighted average common shares
outstanding:
Basic & diluted 97.2 61.9
Adjusted Net Income (Loss) Reconciliation:
Reported net income (loss) $(46.2) $4.5
Adjustment (a) 8.0
Adjustment (b) 18.8
Adjustment (c,k) 5.3 0.7
Adjustment (d) 9.0
Adjustment (e,j) (8.8) (6.6)
Adjustment (f) (6.2)
Adjustment (g) 2.5
Adjustment (h,i) 5.6 1.6
Tax effect on the forgoing items (14.0) (0.6)
Adjusted net income (loss) $(26.0) $(0.4)
Collins & Aikman Corporation and Subsidiaries
Financial Disclosures
(Figures are pre-tax unless otherwise stated)
(in millions)
2001
(a) On December 20, 2001, the Company acquired Textron's automotive trim
division (TAC-Trim). The timing of this transaction resulted in one
day of revenue and eleven days of expense. Additionally, financing
and other costs were incurred to support this acquisition. A breakout
of the financial impact is as follows:
Sales $5.7
COGS 9.9
SG&A .3
Interest Exp 1.7
Accretion of preferred stock 2.4
Other Exp (.6)
(b) During the first quarter, the Company undertook a restructuring
program to de-layer management in the North American, European and
Specialty operations resulting in a charge of $9.2 million. The
charge included $8.4 million of severance cost and $.8 million of
asset impairment.
During the fourth quarter, the Company undertook a restructuring
program to rationalize operations in the North American, European and
Specialty operations resulting in a charge of $9.6 million. The
charge included $2.8 million of severance costs and $6.8 million of
asset impairment.
(c) During the year, the Company incurred extraordinary losses from the
early extinguishment of debt. In first quarter an after-tax charge of
$.3 million resulted from the repurchase of JPS Automotive Senior
Notes at prices in excess of carrying values and in the fourth quarter
an after-tax charge of $5.0 million was incurred in connection with
the financing for the Company's TAC-Trim transaction.
(d) During the year, the Company entered into sale and leaseback
transactions for certain properties resulting in a second quarter
charge of $3.9 million and a fourth quarter charge of $5.1 million.
(e) During the year, the Company received payments on environmental claims
related to discontinued operations of $8.8 million after-tax.
(f) During the fourth quarter, the Company recorded a $6.2 million gain on
shares of Prudential stock related to the recognition of the fair
market value of shares received when Prudential demutualized and
converted to a stock enterprise.
(g) During the fourth quarter, the Company incurred costs of $2.5 million
related to acquisition integration and facility rationalization.
These costs include charges for inventory and machinery relocation,
facility installation and preparation and product recertification.
(h) During the fourth quarter, the Company incurred fees of $5.6 million
resulting from the establishment of a new Accounts Receivable
Securitization Facility in association with financing for the
Company's TAC-Trim transaction.
2000
(i) During the first quarter, the Company incurred fees of $1.6 million
resulting from the establishment of a new Accounts Receivable
Securitization Facility.
(j) During the second quarter, the Company settled environmental matters
related to discontinued operations of $6.6 million after-tax.
(k) During the third quarter, the Company incurred an extraordinary after-
tax loss of $.7 from the repurchase of JPS Automotive Senior Notes at
prices in excess of carrying values.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(in millions)
December 31, 2001 December 31, 2000
ASSETS (Unaudited) (Audited)
Current Assets:
Cash and cash equivalents $73.9 $20.9
Accounts and other receivables, net 406.1 196.5
Inventories 132.6 131.7
Other current assets 125.1 75.9
Total current assets 737.7 425.0
Property, plant and equipment, net 618.1 434.1
Deferred tax assets 136.5 97.3
Goodwill, net 1,253.8 245.5
Other assets 256.1 78.4
$3,002.2 $1,280.3
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
Current Liabilities:
Short-term borrowings $35.7 $3.8
Current maturities of long-term debt 19.5 84.3
Accounts payable 468.7 178.5
Accrued expenses 319.7 123.1
Total current liabilities 843.6 389.7
Long-term debt 1,282.4 799.7
Preferred stock of subsidiary 147.7 --
Other, including post retirement
benefit obligation 353.8 245.9
Common stock (300.0 shares authorized,
168.0 shares issued and outstanding
at December 31, 2001 and 70.5 shares
issued and outstanding at
December 31, 2000) 1.7 0.7
Other paid-in capital 1,123.1 585.4
Accumulated deficit (682.8) (636.6)
Accumulated other comprehensive loss (67.3) (42.9)
Treasury stock, at cost (8.5 shares
at December 31, 2000) -- (61.6)
Total common stockholders' equity
(deficit) 374.7 (155.1)
$3,002.2 $1,280.2