Auto Market Hikes Collins & Aikman Profit - Lose 29 cents Per Share -HUH?

TROY, Mich. Reuters reported that automotive parts maker Collins & Aikman Corp.on Monday reported a higher quarterly net profit, helped by the strong North American automotive market.

But on a per share basis, the company reported a net loss of 29 cents in the second quarter due to a preferred stock repurchase that resulted in a noncash charge of $36.3 million. That compared with a net profit of 26 cents per share in the same period a year ago.

The Troy, Michigan-based manufacturer, which makes convertible tops, floors, acoustics, and fabric and plastic trim, said it earned $16 million in the second quarter, up from a profit of $9.2 million a year earlier. After the charge, the company had a loss of $20.3 million available to common shareholders in the current-year period.

Net sales rose to $1.09 billion from $457.6 million a year before, largely due to acquisitions.

For the full year 2002, Collins & Aikman said it expects to report net income of $15 million to $20 million, or 20 cents a share to 26 cents a share, on net sales of about $3.85 billion to $3.95 billion. Operating income was projected at $270 million to $280 million.

Collins & Aikman said its repurchase of $133 million in preferred stock resulted in a noncash charge to per-share earnings of 52 cents in the second quarter that was partially offset by a $9.5 million benefit, equal to 13 cents a share, from discontinued operations.

The preferred shares were issued to Textron Inc. in connection with the purchase of Textron's auto-trim business.

Excluding the impact of these items, Collins & Aikman said it would have reported income of $6.5 million, or 9 cents a share.

In the year-earlier quarter, the company estimated it would have reported net income of $3.4 million, or 10 cents a share, excluding proceeds from discontinued operations and goodwill amortization.

Per-share amounts were adjusted to reflect a 1-for-2.5 reverse stock split on May 28.

Collins & Aikman said it had about 70.4 million shares outstanding at the end of the quarter, compared with 35 million in the year-earlier period on a post-split basis.

Shares of Collins & Aikman closed Friday at $5.52, near an all-time low. The company last week named industry veteran Jerry Mosingo as chief executive officer and former Reagan administration budget director David Stockman as nonexecutive chairman, replacing Thomas Evans, who retired.

Collins & Aikman in June restated its first-quarter earnings, resulting in a wider loss, after it wrote off $40 million it paid for intellectual property when it acquired Textron's trim unit, known as TAC-Trim, in December.