DURA Automotive Reports Fourth-Quarter and Year-End Results
ROCHESTER HILLS, Mich.--Feb. 13, 2003--Fourth-quarter revenues rise 5 percent; Strong cash flow results in $16 million net debt reduction in quarter
DURA Automotive Systems, Inc. , today reported revenues of $576.5 million for the fourth quarter ended December 31, 2002, up 5 percent over the $547.6 million recorded in the prior-year period. Operating income totaled $31.5 million, a 105 percent increase versus $15.4 million in the 2001 fourth quarter. These results reflect the effects of the previously announced planned divestiture of the European Mechanical Assemblies business as a discontinued operation and the charges associated with the closure of two facilities. Consistent with the January 22, 2003 announcement, the total loss from discontinued operations reported in the quarter was $87.5 million and the pretax charge from facility closures was $13.3 million.
DURA's adjusted fourth-quarter revenue was $601.9 million and operating income was $41.1 million, as reflected in the accompanying adjusted consolidated statements of operations. Adjusted net income was $12.2 million, or $0.65 per diluted share, versus $1.2 million, or $0.07 per diluted share, in the year-ago quarter. Adjusted results for fourth quarter 2002 of $0.65 per diluted share compared to a consensus estimate of $0.60 per diluted share.
Including the $87.5 million loss from discontinued operations and the $13.3 million facility consolidation charge, the net loss for the quarter was $90.7 million, or $4.97 per diluted share.
"Fiscal 2002 was a transition year for DURA," said Larry Denton, the newly appointed president and chief executive officer of DURA Automotive. "We successfully shed several non-core businesses and substantially reduced our debt level, positioning the company for improved results. DURA's balance sheet continues to improve, and we are focused on achieving further debt reduction."
Strong cash generation enabled the company to reduce net debt by $16 million in the fourth quarter, bringing the year-to-date debt reduction to $125.5 million before the impact of foreign exchange.
"Today, DURA has a solid core business with an exciting future," Denton said. "I look forward to leading DURA by growing our customer base and increasing shareholder value."
Full-Year Results
Revenues of $2.36 billion for the year ended 2002 compared to $2.33 billion in 2001. Operating income for the year ended 2002 increased 28 percent to $172.6 million versus $134.9 million in 2001. Including the full-year impact of the discontinued operations of $126.6 million, facility closure charges of $16.1 million, one-time charges associated with the early extinguishment of debt of $3.4 million and the cumulative effect of a change in accounting for goodwill of $205.2 million, the net loss was $288.7 million, or $14.48 per diluted share, compared to prior-year net income of $11.2 million, or $0.62 per diluted share.
DURA's adjusted revenue for the year ended 2002 was $2.47 billion and operating income was $169.9 million, as reflected in the accompanying adjusted consolidated statements of operations. Adjusted net income was $48.0 million, or $2.55 per diluted share.
On January 1, 2002, DURA adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill and Other Intangible Assets," and as a result no longer records amortization expense related to its goodwill. The fourth quarter and year ended 2001 included after-tax charges of $5.8 million and $23.6 million, respectively, related to goodwill amortization expense.
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 is headquartered in Rochester Hills, Mich. 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 Twelve Months Ended
December 31, December 31,
---------------------- -----------------------
2002 2001 2002 2001
----------- ---------- ----------- -----------
Revenues $576,542 $547,575 $2,360,323 $2,333,705
Cost of sales 498,450 480,967 2,035,021 2,013,585
----------- ---------- ----------- -----------
Gross profit 78,092 66,608 325,302 320,120
Selling, general and
administrative expenses 33,021 30,891 135,571 134,380
Facility consolidation
and other charges 13,341 13,840 16,121 24,119
Amortization expense 232 6,455 989 26,725
----------- ---------- ----------- -----------
Operating income 31,498 15,422 172,621 134,896
Interest expense, net 19,493 23,001 83,908 100,514
----------- ---------- ----------- -----------
Income (loss) from
continuing operations
before provision for
income taxes and
minority interest 12,005 (7,579) 88,713 34,382
Provision (benefit) for
income taxes 14,592 (1,959) 39,703 13,888
Minority interest -
dividends on trust
preferred securities,
net 621 642 2,486 2,569
----------- ---------- ----------- -----------
Income (loss) from
continuing operations (3,208) (6,262) 46,524 17,925
Income (loss) from
discontinued operations,
including loss on
planned disposal of
$68,322 (87,457) (1,217) (126,581) (6,706)
----------- ---------- ----------- -----------
Income (loss) before
extraordinary item
and accounting change (90,665) (7,479) (80,057) 11,219
Extraordinary item -
loss on early
extinguishment of debt,
net - - (3,422) -
Cumulative effect of
change in accounting,
net - - (205,192) -
----------- ---------- ----------- -----------
Net income (loss) $(90,665) $(7,479) $(288,671) $11,219
=========== ========== =========== ===========
Basic earnings (loss)
per share:
Income (loss) from
continuing operations $(0.18) $(0.35) $2.58 $1.01
Discontinued operations (4.79) (0.07) (7.01) (0.38)
Extraordinary item - - (0.19) -
Cumulative effect of
change in accounting - - (11.36) -
----------- ---------- ----------- -----------
Net income (loss) $(4.97) $(0.42) $(15.98) $0.63
=========== ========== =========== ===========
Basic shares outstanding 18,241 17,786 18,062 17,757
=========== ========== =========== ===========
Diluted earnings (loss)
per share:
Income (loss) from
continuing operations $(0.18) $(0.35) $2.48 $0.99
Discontinued operations (4.79) (0.07) (6.41) (0.37)
Extraordinary item - - (0.17) -
Cumulative effect of
change in accounting - - (10.38) -
----------- ---------- ----------- -----------
Net income (loss) $(4.97) $(0.42) $(14.48) $0.62
=========== ========== =========== ===========
Diluted shares
outstanding 18,241 17,786 19,759 18,003
=========== ========== =========== ===========
Capital expenditures $15,435 $23,250 $54,312 $67,108
Depreciation $15,876 $15,043 $68,332 $62,909
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Twelve Months Ended
December 31, 2002 December 31, 2002
---------------------- --------------------------
Reported Adjusted Reported Adjusted
--------- --------- ----------- -----------
Revenues $576,542 $601,936 (a) $2,360,323 $2,472,197 (a)
Cost of sales 498,450 526,418 (a) 2,035,021 2,160,638 (a)
--------- --------- ----------- -----------
Gross profit 78,092 75,518 325,302 311,559
Selling,
general and
administrative
expenses 33,021 34,123 (a) 135,571 140,379 (a)
Facility
consolidation
and other
charges 13,341 - (b) 16,121 - (c)
Amortization
expense 232 304 (a) 989 1,272 (a)
--------- --------- ----------- -----------
Operating
income 31,498 41,091 172,621 169,908
Interest
expense, net 19,493 19,529 (a) 83,908 84,157 (a)
--------- --------- ----------- -----------
Income (loss)
from
continuing
operations
before
provision for
income taxes
and minority
interest 12,005 21,562 88,713 85,751
Provision
(benefit) for
income taxes 14,592 8,692 (d) 39,703 35,284 (e)
Minority
interest -
dividends on
trust
preferred
securities, net 621 621 2,486 2,486
--------- --------- ----------- -----------
Income (loss)
from
continuing
operations (3,208) 12,249 46,524 47,981
Income (loss)
from
discontinued
operations,
including loss
on planned
disposal of
$68,322 (87,457) - (a) (126,581) - (a)
--------- --------- ----------- -----------
Income (loss)
before
extraordinary
item and
accounting
change (90,665) 12,249 (80,057) 47,981
Extraordinary
item - loss on
early
extinguishment
of debt, net - - (3,422) - (f)
Cumulative
effect of
change in
accounting,
net - - (205,192) - (g)
--------- --------- ----------- -----------
Net income
(loss) $(90,665) $12,249 $(288,671) $47,981
========= ========= =========== ===========
Basic earnings
(loss) per
share:
Income (loss)
from
continuing
operations $(0.18) $0.67 $2.58 $2.66
Discontinued
operations (4.79) - (a) (7.01) - (a)
Extraordinary
item - - (0.19) - (f)
Cumulative
effect of
change in
accounting - - (11.36) - (g)
--------- --------- ----------- -----------
Net income
(loss) $(4.97) $0.67 $(15.98) $2.66
========= ========= =========== ===========
Basic shares
outstanding 18,241 18,241 18,062 18,062
========= ========= =========== ===========
Diluted
earnings
(loss) per
share:
Income (loss)
from
continuing
operations $(0.18) $0.65 $2.48 $2.55
Discontinued
operations (4.79) - (a) (6.41) - (a)
Extraordinary
item - - (0.17) - (f)
Cumulative
effect of
change in
accounting - - (10.38) - (g)
--------- --------- ----------- -----------
Net income
(loss) $(4.97)(h) $0.65 (i) $(14.48)(j) $2.55 (k)
========= ========= =========== ===========
Diluted shares
outstanding 18,241 19,674 19,759 19,759
========= ========= =========== ===========
(a) - (k) see Additional Disclosures
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
ADDITIONAL DISCLOSURES
(Amounts in thousands)
Dura has included Adjusted financial information because management
believes that the information may be useful to investors in assessing
Dura's operating performance on a comparable basis between operations
before the impact of discontinued operations and after. Dura also uses
this information for this purpose. However, the Adjusted financial
information should not be viewed as a substitute for financial
measures determined under generally accepted accounting principles.
(a) The "Adjusted" three months and twelve months ended December 31,
2002 results are before the impact of the discontinued operations
related to the planned divestiture of the Mechanical Assemblies
Europe business.
(b) The "Adjusted" three months ended December 31, 2002 facility
consolidation and other charges excludes one-time charges of
$8,927 relating to the planned closure of our Cauvigny, France
facility, $3,968 relating to the planned closure of our Livonia,
Michigan facility and $446 of adjustments.
(c) For the twelve months ended December 31, 2002, the "Adjusted"
facility consolidation and other charges, in addition to the
charges noted in (b) above, also excludes $1,863 of loss on the
divestiture of our Plastic Products business, $1,185 relating to
the rationalization of our Benton Harbor facility and $(268) of
adjustments.
(d) The "Adjusted" three months ended December 31, 2002 tax provision
is calculated using a 40.3% tax rate versus the "Reported" tax
rate of 121.5%. The decrease on the overall tax rate is due to
the impact of the decision to divest the Mechanical Assemblies
Europe business, not benefiting the facility consolidation charge
related to Cauvigny and other one-time items.
(e) The "Adjusted" twelve months ended December 31, 2002 tax
provision is calculated using a 41.1% tax rate versus the
"Reported" tax rate of 44.8%. The decrease on the overall tax
rate is due to the impact of the decision to divest the
Mechanical Assemblies Europe business, not benefiting the
facility consolidation charge related to Cauvigny and other
one-time items.
(f) The "Adjusted" twelve months ended December 31, 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.
(g) The "Adjusted" twelve months ended December 31, 2002 results
exclude the $205,192 cumulative effect of change in accounting
related to the adoption of SFAS No. 142, effective January 1,
2002.
(h) The "Reported" three months ended December 31, 2002 diluted
earnings per share excludes potential common shares of 1,289
related to Dura's Preferred Securities as well as outstanding
stock options of 144, as inclusion of these shares and options
would have been anti-dilutive.
(i) The "Adjusted" three months ended December 31, 2002 diluted
earnings per shares includes potential common shares of 1,289
related to Dura's Preferred Securities as well as outstanding
stock options of 144, as inclusion of these shares and options is
dilutive.
(j) In accordance with SFAS No. 128, an entity that reports a
discontinued operation, an extraordinary item, or the cumulative
effect of an accounting change in a period shall use income from
continuing operations, adjusted for preferred dividends, as the
control number in determining whether those potential common
shares are dilutive or antidilutive. Thus, the "Reported" twelve
months ended December 31, 2002 diluted earnings per share
includes potential common shares of 1,289 related to Dura's
Preferred Securities as well as outstanding stock options of 408.
(k) The "Adjusted" twelve months ended December 31, 2002 diluted
earnings per share includes potential common shares of 1,289
related to Dura's Preferred Securities as well as outstanding
stock options of 408, as inclusion of these shares and options is
dilutive.
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
December 31, December 31,
Assets 2002 2001
------ ------------- -------------
Current assets:
Cash and cash equivalents $143,237 $32,289
Accounts receivable, net 245,615 263,580
Inventories 114,573 105,261
Current portion of derivative
instruments 15,825 (a) -
Other current assets 103,875 119,694
Current assets of discontinued
operations 32,041 47,816
------------- -------------
Total current assets 655,166 568,640
------------- -------------
Property, plant and equipment, net 444,479 476,972
Goodwill, net 774,983 962,467
Noncurrent portion of derivative
instruments 14,698 (a) -
Deferred income taxes and other assets,
net 47,607 40,105
Noncurrent assets of discontinued
operations - 73,420
------------- -------------
$1,936,933 $2,121,604
============= =============
Liabilities and Stockholders' Investment
----------------------------------------
Current liabilities:
Accounts payable $216,045 $225,347
Accrued liabilities 193,973 166,823
Current maturities of long-term debt 7,154 60,442
Current liabilities of discontinued
operations 25,931 35,386
------------- -------------
Total current liabilities 443,103 487,998
------------- -------------
Long-term debt, net of current
maturities 162,422 472,427
Senior notes 350,000 -
Subordinated notes 556,632 539,700
Senior notes - derivative instrument
adjustment 30,523 (a) -
Other noncurrent liabilities 134,201 117,477
Noncurrent liabilities of discontinued
operations - 6,355
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 347,065 342,694
Treasury stock (1,974) (1,891)
Retained earnings (127,403) 161,268
Accumulated other comprehensive loss (13,068) (59,852)
------------- -------------
Total stockholders' investment 204,802 442,397
------------- -------------
$1,936,933 $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.