Dura Automotive Reports Second-Quarter 2002 Results
ROCHESTER HILLS, Mich.--July 23, 2002--DURA Automotive Systems, Inc. , today reported financial results for the second quarter of 2002 which includes revenues of $667.3 million and EPS of $0.93 per diluted share before the effects of divestiture and extraordinary items. This result is significantly better than the consensus estimate of $0.81 per diluted share. Other highlights for the quarter include the reduction of net debt by an additional $12.7 million, the issuance of a $350 million senior note offering and the continuation of a strategic plan designed to focus on core businesses.DURA's revenue of $667.3 million was slightly ahead of the $666.3 million reported in the second quarter of 2001 even with the divestiture of four non-core businesses since the prior-year period. The strong revenue performance reflects increased volumes in North America in the automotive and RV markets, new business in North America and Europe and favorable foreign exchange. In addition to the effects of the company's divestiture program, the increases in revenue were also offset by a weakness in the European automotive industry. Operating income before divestiture costs for the quarter was $54.0 million as compared to $46.2 million in the second quarter of 2001. Divestiture costs for the quarter were $21.1 million, consisting primarily of asset write-downs and contractual commitments associated with the divestiture of the Steering Gear Business. Net income before divestiture and extraordinary items for the quarter was $17.9 million, or $0.93 per diluted share, as compared to $12.9 million, or $0.70 per diluted share, in the second quarter of 2001. The extraordinary item consisted of the write-off of debt issuance costs due to the early pay-off of bank debt made possible by DURA's senior note offering in April 2002.
In the first quarter of 2002, DURA adopted Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets", and as a result no longer records amortization expense related to its goodwill. The second quarter and the first six months of 2001 included an after-tax charge of $5.9 million and $11.9 million, respectively, related to goodwill amortization expense.
For the six months ended June 30, 2002, revenues decreased by $44.7 million to $1,283.5 million compared to 2001. Operating income excluding divestiture costs for the first half of 2002 increased $2.2 million to $95.7 million compared to the first half of 2001 and net income excluding divestiture and extraordinary items increased $5.4 million to $29.1 million. Also during the first six months of 2002, cash generation allowed for a net debt reduction of $96.0 million from the December 31, 2001 level. This performance, together with the note offering, significantly improved DURA's liquidity position.
"We are very pleased with our performance so far in 2002 as we continue to benefit from our diverse customer and product base. We are maintaining a sharp focus on the fundamentals of our business as we strive to provide outstanding products to our customers and superior returns to our shareholders," said Karl Storrie, president and chief executive officer of DURA Automotive. "Our focus on cash management has resulted in a reduction in net debt by $247 million over the last eighteen months. Debt pay-down, together with the improvements that we have made to our capital structure, has provided us with the financial flexibility to execute our strategic plan to focus on our core products."
DURA Automotive Systems, Inc., is the world's largest independent designer and manufacturer of driver control systems and a leading global supplier of seating control systems, engineered assemblies, structural door modules and integrated glass systems for the global automotive industry. The company is also a leading supplier of similar products to the North American recreational vehicle and mass transit market. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer (OEM) and many leading Tier 1 automotive suppliers. DURA's operating headquarters is in Rochester Hills, Mich., and its corporate offices are in Minneapolis, Minn. Information about DURA and its products is available on the Internet at www.duraauto.com.
This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe," "expect," "anticipate," "intend," "plan," "estimate," or similar expressions. These statements are based on certain assumptions that the company has made in light of its experience in the industry as well as its perspective of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to (i) expected synergies, economies of scale and cost savings from the company's acquisitions not being fully realized or realized within the expected times frames; (ii) unanticipated difficulties servicing the indebtedness of the company; (iii) costs or operational difficulties related to integrating the operations of the acquired entities with those of the company being greater than expected; (iv) labor disputes involving the company or its significant customers; (v) risks associated with conducting business in foreign countries, and (vi) general economic or business conditions affecting the automotive industry, either nationally or regionally, being less favorable than expected.
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------------
2002 2001 2002 2001
---- ---- ---- ----
Revenues $667,283 $666,321 $1,283,464 $1,328,174
Cost of sales 577,312 577,310 1,117,145 1,147,256
-------- -------- ---------- ----------
Gross profit 89,971 89,011 166,319 180,918
Selling, general and
administrative expenses 35,637 36,099 69,904 73,732
Facility consolidation and
other charges 21,088 -- 21,088 2,629
Amortization expense 289 6,695 685 13,694
-------- -------- ---------- ----------
Operating income 32,957 46,217 74,642 90,863
Interest expense, net 20,972 24,616 43,518 53,149
-------- -------- ---------- ----------
Income before provision
for income taxes, equity
in losses of affiliates
and minority interest 11,985 21,601 31,124 37,714
Provision for income taxes 15,952 8,061 23,225 14,345
Minority interest -
dividends on trust
preferred securities, net 601 674 1,243 1,285
-------- -------- ---------- ----------
Income (loss) before
extraordinary item $(4,568) $12,866 $6,656 $22,084
Extraordinary item (3,422) -- (3,422) --
Net income (loss) $(7,990) $12,866 $3,234 $22,084
======== ======== ========== ==========
Basic earnings (loss) per
common share:
Income (loss) before
extraordinary item $(0.26) $0.72 $0.37 $1.25
Extraordinary item (0.19) -- (0.19) --
Net income (loss) $(0.45) $0.72 $0.18 $1.25
======== ======== ========== ==========
Basic shares outstanding 17,935 17,757 17,875 17,736
======== ======== ========== ==========
Diluted earnings (loss) per
common share: (A)
Income (loss) before
extraordinary item $(0.26) $0.70 $0.36 $1.22
Extraordinary item (0.19) -- (0.18) --
Net income (loss) $(0.45) $0.70 $0.18 $1.22
======== ======== ========== ==========
Diluted shares outstanding 17,935 19,353 18,417 19,214
======== ======== ========== ==========
Capital expenditures $11,872 $14,463 $25,908 $29,639
Depreciation $18,594 $17,603 $36,638 $34,298
(A) Diluted EPS before the effects of divestiture and extraordinary
item of $0.93 is calculated using the following:
- Diluted EPS before the effect of divestiture and
extraordinary item is calculated based on operating income
of $54,045 and a provision for income taxes of $14,588.
- Diluted EPS before the effect of divestiture and
extraordinary item is calculated using 19,913 diluted
shares outstanding.
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
Assets 2002 2001
------ ---- ----
(unaudited)
Current assets:
Cash and cash equivalents $124,179 $32,289
Accounts receivable, net 332,664 293,476
Inventories 119,187 116,508
Other current assets 135,892 126,367
---------- ----------
Total current assets 711,922 568,640
---------- ----------
Property, plant and equipment, net 493,557 516,517
Goodwill, net 976,525 962,467
Deferred income taxes and other assets, net 84,164 73,980
---------- ----------
$2,266,168 $2,121,604
========== ==========
Liabilities and Stockholders' Investment
----------------------------------------
Current liabilities:
Accounts payable $282,798 $249,824
Accrued liabilities 236,296 177,327
Current maturities of long-term debt 5,276 60,847
---------- ----------
Total current liabilities 524,370 487,998
---------- ----------
Long-term bank debt, net of current
maturities 163,721 475,879
Senior notes 353,346 --
Subordinated notes 549,936 539,700
Other noncurrent liabilities 131,591 120,380
Mandatorily redeemable convertible trust
preferred securities 55,250 55,250
---------- ----------
Stockholders' investment:
Common stock - Class A 163 147
Common stock - Class B 19 31
Additional paid-in capital 346,394 342,694
Treasury stock (1,652) (1,891)
Retained earnings 164,502 161,268
Accumulated other comprehensive loss (21,472) (59,852)
---------- ----------
Total stockholders' investment 487,954 442,397
---------- ----------
$2,266,168 $2,121,604
========== ==========