Tower Automotive Announces Profit for the Third Quarter
GRAND RAPIDS, Mich.--Oct. 18, 2002--Tower Automotive, Inc. today announced its operating results for the third quarter and nine months ended September 30, 2002. For the third quarter of 2002, revenues were $654 million, compared with $558 million in the 2001 period. Net income for the third quarter of 2002, was $10 million, or $0.15 per diluted share. This compares with a net loss of $1 million, or of $0.03 per diluted share, in the third quarter of 2001.For the nine months ended September 30, 2002, revenues were $2.1 billion, compared with $1.8 billion in the 2001 period. Net income for the nine months ended September 30, 2002, adjusted for the one-time items described below, was $46 million, or $.79 per diluted share. Including the after-tax effect of these one-time items, the reported net loss was $115 million for the nine months ended September 30, 2002, or a loss of $2.01 per diluted share. This compares with reported net income of $28 million, or earnings of $0.63 per diluted share, in the same period for 2001.
In commenting on third quarter and nine month results, Dug Campbell, president and chief executive officer of Tower Automotive, said, "We are pleased to report record third quarter sales and a significant improvement in earnings per share compared to last year. Year to date, operations have generated $114 million in cash earnings over our capital requirements. Our operating performance and contribution margin for the quarter met our expectations, however our earnings per share were negatively impacted by higher than expected interest charges caused by lower than anticipated capitalization of interest costs. Further, the expected fourth quarter launch of the VW/Porsche SUV in Europe is the first significant launch from our $1.4 billion backlog."
The company also announced that the resumption of its stock repurchase program has resulted in the purchase of approximately 6 million shares to date, at an average price of $6.63 per share.
In conjunction with adopting the requirements of Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets" as of January 1, 2002, the company no longer records amortization expense of its goodwill. Net income during the third quarter of 2001 and nine months ended September 30, 2001 included an after-tax charge of $3.2 million and $9.6 million, respectively, related to goodwill amortization expense.
One-time items, net of tax, totaling $161 million included in the adjusted net income for the nine month period ended September 30, 2002, include first quarter 2002 items of restructuring and asset impairment charges of $49 million, SFAS No. 142 transitional goodwill impairment charges of $113 million and a $3 million gain on the sale of a plant, in addition to second quarter 2002 non-cash charges related to the write-off of deferred financing costs and joint venture investment totaling $2 million.
Accessing the Conference Call Webcast and PowerPoint Presentation - A conference call of the third quarter results is scheduled today at 11 a.m. ET (10 a.m. CT). Individual investors may listen to the conference call and view a PowerPoint presentation over the Internet by logging onto www.companyboardroom.com and searching for Tower Automotive. Institutional Investors may access the Webcast and presentation by logging onto www.streetevents.com.
Tower Automotive, Inc., is a global designer and producer of vehicle structural components and assemblies used by every major automotive original equipment manufacturer, including Ford, DaimlerChrysler, GM, Honda, Toyota, Nissan, Fiat, Hyundai/Kia, BMW, and Volkswagen Group. Products include body structures and assemblies, lower vehicle frames and structures, chassis modules and systems, and suspension components. The company is based in Grand Rapids, Mich. Additional company information is available at www.towerautomotive.com.
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,
------------------- -----------------------
2002 2001 2002 2001
--------- --------- ----------- -----------
Revenues $653,841 $557,785 $2,072,820 $1,828,568
Cost of sales 587,218 502,366 1,844,272 1,608,617
--------- --------- ----------- -----------
Gross profit 66,623 55,419 228,548 219,951
Selling, general and
administrative
expenses 35,347 33,002 105,621 103,321
Amortization expense 1,022 6,232 3,121 18,440
Restructuring and asset
impairment charge -- -- 75,407 --
--------- --------- ----------- -----------
Operating income 30,254 16,185 44,399 98,190
Interest expense, net 16,593 19,082 50,011 58,925
Other expense -- -- 2,939 --
Gain on sale of plant -- -- (3,839) --
--------- --------- ----------- -----------
Income (loss) before
provision for income
taxes, equity in
earnings of joint
ventures and minority
interest 13,661 (2,897) (4,712) 39,265
Provision (benefit) for
income taxes 4,797 (2,771) (1,635) 13,701
--------- --------- ----------- -----------
Income (loss) before
equity in earnings of
joint ventures and
minority interest 8,864 (126) (3,077) 25,564
Equity in earnings of
joint ventures, net 4,061 3,120 12,723 12,291
Minority interest, net (3,380) (4,358) (11,727) (9,686)
--------- --------- ----------- -----------
Income (loss) before
cumulative effect of
change in accounting
principle 9,545 (1,364) (2,081) 28,169
Cumulative effect of
change in accounting
principle -- -- 112,786 --
--------- --------- ----------- -----------
Net income (loss) $9,545 $(1,364) $(114,867) $28,169
========= ========= =========== ===========
Basic earnings (loss) per
common share:
Income (loss) before
cumulative effect $0.15 $(0.03) $(0.04) $0.63
Cumulative effect of
change in accounting
principle -- -- (1.97) --
--------- --------- ----------- -----------
Net income (loss) $0.15 $(0.03) $(2.01) $0.63
========= ========= =========== ===========
Basic shares outstanding 65,525 45,784 57,206 44,770
========= ========= =========== ===========
Diluted earnings (loss)
per common share:
Income (loss) before
cumulative effect $0.15 $(0.03) $(0.04) $0.63
Cumulative effect of
change in accounting
principle -- -- (1.97) --
--------- --------- ----------- -----------
Net income (loss) $0.15 $(0.03) $(2.01) $0.63
========= ========= =========== ===========
Diluted shares outstanding 65,612 45,784 57,206 45,044
========= ========= =========== ===========
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September December
30, 31,
Assets 2002 2001
---------------------------------------------- ----------- -----------
(unaudited)
Current assets:
Cash and cash equivalents $25,924 $21,767
Accounts receivable 273,386 216,638
Inventories 116,960 112,536
Prepaid tooling and other 130,188 89,229
----------- -----------
Total current assets 546,458 440,170
----------- -----------
Property, plant and equipment, net 1,000,494 1,120,259
Investments in joint ventures 255,880 243,198
Deferred income taxes 76,696 61,461
Goodwill and other assets, net 581,713 668,348
----------- -----------
$2,461,241 $2,533,436
=========== ===========
Liabilities and Stockholders' Investment
----------------------------------------------
Current liabilities:
Current maturities of long-term debt and
capital lease obligations $114,275 $ 172,083
Accounts payable 402,913 368,910
Accrued liabilities 230,812 278,962
----------- -----------
Total current liabilities 748,000 819,955
----------- -----------
Long-term debt, net of current maturities 511,196 601,084
Obligations under capital leases, net of
current maturities 12,004 4,620
Convertible subordinated notes 199,984 199,984
Other noncurrent liabilities 184,429 201,635
----------- -----------
Total noncurrent liabilities 907,613 1,007,323
----------- -----------
Mandatorily redeemable trust convertible
preferred securities 258,750 258,750
Stockholders' investment:
Preferred stock -- --
Common stock 629 481
Additional paid-in capital 680,887 456,627
Retained earnings (74,435) 40,432
Deferred compensation plans (13,479) (15,571)
Accumulated other comprehensive loss (25,606) (34,561)
Treasury stock, at cost (21,118) --
----------- -----------
Total stockholders' investment 546,878 447,408
----------- -----------
$2,461,241 $2,533,436
=========== ===========
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands - unaudited)
Nine Months Ended
September 30,
-----------------------
2002 2001
----------- -----------
OPERATING ACTIVITIES:
Net (loss) income $(114,867) $28,169
Adjustments required to reconcile net (loss)
income to net cash provided by (used in)
operating activities -
Depreciation and amortization 102,208 120,980
Deferred income tax (benefit) provision (12,661) 9,371
Deferred compensation plans 1,631 --
Gain on sale of plant (3,839) --
Equity in earnings of joint ventures, net (12,723) (12,291)
Restructuring and asset impairment charge 75,407 --
Cumulative effect of change in accounting
principle 112,786 --
Change in working capital and other
operating items (128,837) 267,990
----------- -----------
Net cash provided by operating activities 19,105 414,219
----------- -----------
INVESTING ACTIVITIES:
Acquisitions, divestitures and investment in
joint ventures (35,888) (1,812)
Capital expenditures, net (108,364) (147,583)
Proceeds from sale of fixed assets 50,313 --
----------- -----------
Net cash used in investing activities (93,939) (149,395)
----------- -----------
FINANCING ACTIVITIES:
Proceeds from borrowings 1,585,606 2,018,950
Repayments of debt (1,713,995) (2,310,067)
Net proceeds from issuance of stock 224,751 38,880
Payments for repurchase of common shares (17,371) --
----------- -----------
Net cash provided by (used for) financing
activities 78,991 (252,237)
----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 4,157 12,587
CASH AND CASH EQUIVALENTS:
Beginning of period 21,767 3,373
----------- -----------
End of period $25,924 $15,960
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