DURA Automotive Reports Third-Quarter and Nine-Month 2002 Results
ROCHESTER HILLS, Mich.--Oct. 22, 2002--DURA Automotive Systems, Inc. , today reported financial results for the third quarter and nine-months ended September 30, 2002. Third quarter results include revenues of $586.8 million and EPS of $0.35 per diluted share before the effects of facility consolidation and other charges. This result compares to a consensus estimate of $0.31 per diluted share. Other highlights for the quarter include the reduction of net debt by an additional $4.8 million bringing the year-to-date reduction to more than $100 million and the continuation of a strategic plan designed to focus on core businesses.DURA's revenue of $586.8 million for the third quarter of 2002 was slightly ahead of the $568.9 million reported in the third quarter of 2001 even after adjusting for 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 facility consolidation and other charges for the quarter was $33.1 million as compared to $27.8 million in the third quarter of 2001. Facility consolidation and other charges for the quarter were $4.2 million. These charges consist of severance and asset write-down costs related to exiting a product line in Europe and costs related to consolidating two facilities in North America. Net income before facility consolidation and other charges for the quarter was $6.6 million, or $0.35 per diluted share, as compared to $1.4 million, or $0.08 per diluted share, in the third quarter of 2001.
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 third quarter and the first nine months of 2001 included after-tax charges of $5.9 million and $17.9 million, respectively, related to goodwill amortization expense.
For the nine months ended September 30, 2002, revenues decreased by $26.8 million to $1,870.3 million compared to 2001. This decrease in revenue was primarily a result of the company's divestiture of non-core businesses. Operating income, excluding facility consolidation and other charges, for the first nine months of 2002 increased $7.5 million to $128.8 million compared to the same period of 2001 and net income, excluding these one-time charges and extraordinary items, increased $10.5 million to $35.7 million. Also during the first nine months of 2002, cash generation allowed for a net debt reduction of $100.8 million from the December 31, 2001 level. This performance, together with the notes offering in May 2002, significantly improved DURA's liquidity position.
"By focusing on the fundamentals, we continue to improve our quality ratings, customer relationships and financial position. We have also launched a number of new products this year that will have long-term benefits to DURA including the electric park brake in North America and the aluminum door structure in Europe," said Karl Storrie, president and chief executive officer of DURA Automotive. "In this uncertain economy, we believe we are well positioned operationally and financially to continue our focus on our core products while providing benefits to our customers and shareholders."
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 recreation 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 Nine Months Ended
September 30, September 30,
------------------ ----------------------
2002 2001 2002 2001
-------- -------- ---------- ----------
Revenues $586,797 $568,890 $1,870,261 $1,897,064
Cost of sales 517,075 500,723 1,634,220 1,647,979
-------- -------- ---------- ----------
Gross profit 69,722 68,167 236,041 249,085
Selling, general and
administrative expenses 36,352 33,494 106,256 107,226
Facility consolidation and
other charges 4,225 7,685 25,313 10,314
Amortization expense 283 6,833 968 20,527
-------- -------- ---------- ----------
Operating income 28,862 20,155 103,504 111,018
Interest expense, net 21,110 24,603 64,628 77,752
-------- -------- ---------- ----------
Income (loss) before
provision for income
taxes and minority
interest 7,752 (4,448) 38,876 33,266
Provision (benefit) for
income taxes 3,177 (1,704) 26,402 12,641
Minority interest -
dividends on trust
preferred securities, net 622 642 1,865 1,927
-------- -------- ---------- ----------
Income (loss) before
extraordinary item 3,953 (3,386) 10,609 18,698
Extraordinary item -- -- (3,422) --
-------- -------- ---------- ----------
Net income (loss) $ 3,953 $ (3,386) $ 7,187 $ 18,698
======== ======== ========== ==========
Basic earnings (loss) per
share:
Income (loss) before
extraordinary item $ 0.22 $ (0.19) $ 0.59 $ 1.05
Extraordinary item -- -- (0.19) --
-------- -------- ---------- ----------
Net income (loss) $ 0.22 $ (0.19) $ 0.40 $ 1.05
======== ======== ========== ==========
Basic shares outstanding 18,257 17,768 18,002 17,747
======== ======== ========== ==========
Diluted earnings (loss) per
share:
Income (loss) before
extraordinary item $ 0.21 $ (0.19) $ 0.57 $ 1.04
Extraordinary item -- -- (0.18) --
-------- -------- ---------- ----------
Net income (loss) $ 0.21 $ (0.19) $ 0.39 $ 1.04
======== ======== ========== ==========
Diluted shares outstanding 18,660 17,768 18,498 18,022
======== ======== ========== ==========
Capital expenditures $ 14,487 $ 16,847 $ 40,422 $ 46,486
Depreciation $ 19,042 $ 17,211 $ 55,680 $ 51,509
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Nine Months Ended
September 30, 2002 September 30, 2002
------------------- -----------------------
Reported Adjusted Reported Adjusted
-------- -------- ---------- ----------
Revenues $586,797 $586,797 $1,870,261 $1,870,261
Cost of sales 517,075 517,075 1,634,220 1,634,220
-------- -------- ---------- ----------
Gross profit 69,722 69,722 236,041 236,041
Selling, general and
administrative
expenses 36,352 36,352 106,256 106,256
Facility consolidation
and other charges 4,225 -- (a) 25,313 -- (a)
Amortization expense 283 283 968 968
-------- -------- ---------- ----------
Operating income 28,862 33,087 103,504 128,817
Interest expense, net 21,110 21,110 64,628 64,628
-------- -------- ---------- ----------
Income before
provision for income
taxes and minority
interest 7,752 11,977 38,876 64,189
Provision for income
taxes 3,177 4,731(b) 26,402 26,592(c)
Minority interest -
dividends on trust
preferred securities,
net 622 622 1,865 1,865
-------- -------- ---------- ----------
Income (loss) before
extraordinary item 3,953 6,624 10,609 35,732
Extraordinary item -- -- (3,422) -- (d)
-------- -------- ---------- ----------
Net income (loss) $ 3,953 $ 6,624 $ 7,187 $ 35,732
======== ======== ========== ==========
Basic earnings (loss)
per share:
Income (loss) before
extraordinary item $ 0.22 $ 0.36 $ 0.59 $ 1.98
Extraordinary item -- -- (0.19) -- (d)
-------- -------- ---------- ----------
Net income (loss) $ 0.22 $ 0.36 $ 0.40 $ 1.98
======== ======== ========== ==========
Basic shares
outstanding 18,257 18,257 18,002 18,002
======== ======== ========== ==========
Diluted earnings (loss)
per share:
Income (loss) before
extraordinary item $ 0.21 $ 0.35 $ 0.57 $ 1.90
Extraordinary item -- -- (0.18) -- (d)
-------- -------- ---------- ----------
Net income (loss) $ 0.21 $ 0.35 $ 0.39 $ 1.90
======== ======== ========== ==========
Diluted shares
outstanding 18,660 18,660 18,498 19,787
======== ======== ========== ==========
(a) The "Adjusted" three months ended September 30, 2002 facility
consolidation and other charges excludes one-time charges of
$3,308 relating to the exiting of a product-line in Europe, $1,185
relating to the rationalization of our Benton Harbor facility, and
$(268) of adjustments. For the nine months ended September 30,
2002, the "Adjusted" facility consolidation and other charges also
excludes $19,225 relating to the divestiture of our Steering Gear
business and $1,863 of loss on the divestiture of our Plastic
Products business.
(b) The "Adjusted" three months ended September 30, 2002 tax provision
is calculated using a 39.5% tax rate versus the "Reported" tax
rate of 41.0%. The decrease is due to the impact of the European
product line exit charge on the overall tax rate.
(c) The "Adjusted" nine months ended September 30, 2002 tax provision
is calculated using a 41.4% tax rate versus the "Reported" tax
rate of 67.9%. The decrease in the overall tax rate is due to both
the impact of the Steering Gear divestiture and the European
product line exit charge.
(d) The "Adjusted" nine months ended September 30, 2002 results
exclude the $3,422 extraordinary item related to the second
quarter write-off of debt issuance costs due to the early pay-off
of certain bank debt.
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 30, December 31,
Assets 2002 2001
------ ---- ----
(unaudited)
Current assets:
Cash and cash equivalents $ 123,284 $ 32,289
Accounts receivable, net 331,809 293,476
Inventories 120,179 116,508
Other current assets 127,872 126,367
---------- ----------
Total current assets 703,144 568,640
---------- ----------
Property, plant and equipment, net 479,747 516,517
Goodwill, net 970,798 962,467
Fair value of derivative instruments 32,598(a) --
Deferred income taxes and other assets, net 79,636 73,980
---------- ----------
$2,265,923 $2,121,604
========== ==========
Liabilities and Stockholders' Investment
----------------------------------------
Current liabilities:
Accounts payable $ 271,358 $ 249,824
Accrued liabilities 235,812 177,327
Current maturities of long-term debt 4,646 60,847
---------- ----------
Total current liabilities 511,816 487,998
---------- ----------
Long-term debt, net of current maturities 162,950 475,879
Senior notes 350,000 --
Subordinated notes 549,029 539,700
Senior notes - derivative instrument
adjustment 32,598(a) --
Other noncurrent liabilities 125,329 120,380
Mandatorily redeemable convertible trust
preferred securities 55,250 55,250
---------- ----------
Stockholders' investment:
Common stock - Class A 165 147
Common stock - Class B 17 31
Additional paid-in capital 346,913 342,694
Treasury stock (1,974) (1,891)
Retained earnings 168,455 161,268
Accumulated other comprehensive loss (34,625) (59,852)
---------- ----------
Total stockholders' investment 478,951 442,397
---------- ----------
$2,265,923 $2,121,604
========== ==========
(a) As required by SFAS 133, reflects fair value of interest rate swap
contracts entered into in connection with the April 2002 Senior
Notes offering.