Tower Automotive Announces Operating Results
GRAND RAPIDS, Mich.--July 22, 2003--Tower Automotive, Inc. , today announced second quarter revenues of $743 million, compared with $751 million in the second quarter of 2002. The company reported a net loss of $2 million, or $0.04 per diluted share, for the quarter versus net income for the second quarter of 2002 of $23 million, or $0.37 per diluted share. As summarized in the table below, several significant items occurred in the second quarters of 2003 and 2002 that reduced reported results by $0.29 and $0.03 per diluted share, respectively.For the six months ended June 30, 2003, revenues were $1.5 billion, compared with $1.4 billion in the 2002 period. Reported net income for the six months ended June 30, 2003 was $9 million, or $0.16 per diluted share. The company reported a net loss of $124 million for the six months ended June 30, 2002, or $2.35 per diluted share. As summarized in the table below, several significant items occurred in the six months ended June 30, 2003 and 2002 that reduced reported results by $0.30 and $3.01 per diluted share, respectively.
"For the quarter, we converted well on higher than expected sales," stated Dug Campbell, president and chief executive officer of Tower Automotive. "We also generated $112 million of cash from operations, which exceeded our capital spending of $58 million for the quarter. Our recent debt restructuring has improved the financial flexibility of our enterprise and our launch activity is on track."
During the second quarter of 2003, the company completed a $258 million senior note offering and also amended its senior credit facility, reducing the borrowing capacity but providing for less stringent financial covenants in order to enhance overall liquidity. The combination of the senior notes offering and amended senior credit facility will also provide flexibility for the company to redeem its $200 million convertible subordinated notes.
The company previously announced that it is relocating the production of high-volume frame assemblies for the Ford Ranger currently performed at its Milwaukee facility to its Bellevue, Ohio, business unit. The relocation of the Ranger production line will be completed by June of 2004. Tower Automotive expects to realize annual cash savings, primarily from reduced labor costs, of approximately $10 million following full completion of the move. During the second quarter of 2003 the company recorded a $23.1 million pre-tax restructuring and asset impairment charge ($0.27 per share effect) comprised of cash charges of $2.8 million, pension and other post-retirement benefit plan curtailment costs of $7.7 million and non-cash asset impairment charges of $12.6 million related to restructuring activities.
As indicated above, the periods presented include several significant items that reduced reported results. The following summarizes the impact of these items on diluted EPS:
Three Months Ended June 30, 2003 June 30, 2002 ------------- ------------- ($ in thousands, except per share amounts) Net of tax Per share Net of tax Per share ---------- --------- ---------- --------- Restructuring and asset impairment charges $15,224 $0.27 -- -- Production interruption costs 769 0.01 -- -- Lawsuit settlement at equity joint venture 660 0.01 -- -- Write-off of debt issuance costs 292 0.01 $1,296 $0.02 Write-off of assets at equity joint venture -- -- 443 0.01 Dilution effect -- (0.01) -- -- --------- --------- Total impact per diluted share $0.29 $0.03 ========= ========= Six Months Ended June 30, 2003 June 30, 2002 ------------- ------------- ($ in thousands, except per share amounts) Net of tax Per share Net of tax Per share ---------- --------- ---------- --------- Restructuring and asset impairment charges $15,224 $0.27 $49,015 $0.92 Production interruption costs 769 0.01 -- -- Lawsuit settlement at equity joint venture 660 0.01 -- -- Write-off of debt issuance costs 292 0.01 1,296 0.02 Write-off of assets at equity joint venture -- -- 443 0.01 Cumulative effect of SFAS 142 adoption -- -- 112,786 2.13 Gain on sale of plant -- -- (2,495) (0.05) Dilution effect -- -- -- (0.02) --------- --------- Total impact per diluted share $0.30 $3.01 ========= =========
Accessing the Conference Call Website and PowerPoint Presentation - A conference call of the second quarter and six month results is scheduled today at 11 a.m. ET. Investors may access the Webcast and online presentation by logging onto www.towerautomotive.com, selecting "Investors" and clicking on the Webcast icon.
Tower Automotive, Inc., is a global designer and producer of vehicle structural components and assemblies used by every major automotive original 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 Six Months Ended June 30, June 30, ------------------- ----------------------- 2003 2002 2003 2002 --------- --------- ----------- ----------- Revenues $743,179 $750,872 $1,475,757 $1,418,979 Cost of sales 664,731 658,178 1,322,785 1,257,276 --------- --------- ----------- ----------- Gross profit 78,448 92,694 152,972 161,703 Selling, general and administrative expenses 39,135 37,367 73,811 70,362 Restructuring and asset impairment charge 23,066 -- 23,066 75,407 --------- --------- ----------- ----------- Operating income 16,247 55,327 56,095 15,934 Interest expense, net 18,083 17,176 34,852 35,207 Other expense (income) -- 2,939 -- (900) --------- --------- ----------- ----------- Income (loss) before provision for income taxes (1,836) 35,212 21,243 (18,373) Provision (benefit) for income taxes (625) 12,324 7,222 (6,432) --------- --------- ----------- ----------- Income (loss) before equity in earnings of joint ventures and minority interest (1,211) 22,888 14,021 (11,941) Equity in earnings of joint ventures, net 3,144 4,277 3,788 8,662 Minority interest, net (4,356) (4,274) (8,660) (8,347) --------- --------- ----------- ----------- Income (loss) before cumulative effect of change in accounting principle (2,423) 22,891 9,149 (11,626) Cumulative effect of change in accounting principle -- -- -- (112,786) --------- --------- ----------- ----------- Net income (loss) $(2,423) $22,891 $9,149 $(124,412) ========= ========= =========== =========== Basic earnings (loss) per common share: Income (loss) before cumulative effect of change in accounting principle $ (0.04) $ 0.40 $ 0.16 $ (0.22) Cumulative effect of change in accounting principle -- -- -- (2.13) --------- --------- ----------- ----------- Net income (loss) $(0.04) $0.40 $0.16 $(2.35) ========= ========= =========== =========== Weighted average basic shares outstanding 56,556 57,841 56,375 53,047 ========= ========= =========== =========== Diluted earnings (loss) per common share: Income (loss) before cumulative effect of change in accounting principle $ (0.04) $ 0.37 $ 0.16 $ (0.22) Cumulative effect of change in accounting principle -- -- -- (2.13) --------- --------- ----------- ----------- Net income (loss) $(0.04) $0.37 $0.16 $(2.35) ========= ========= =========== =========== Weighted average diluted shares outstanding 56,556 74,130 56,632 53,047 ========= ========= =========== =========== TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) June 30, December 31, Assets 2003 2002 --------------------------------------------- ----------- ------------ (unaudited) Current assets: Cash and cash equivalents $205,283 $13,699 Accounts receivable 371,930 249,341 Inventories 113,193 133,074 Deferred income taxes, net 16,163 20,634 Prepaid tooling and other 152,650 100,433 ----------- ------------ Total current assets 859,219 517,181 ----------- ------------ Property, plant and equipment, net 1,057,073 1,073,619 Investments in joint ventures 260,840 260,898 Deferred income taxes 117,477 105,699 Goodwill 486,611 472,967 Other assets, net 159,805 127,521 ----------- ------------ $2,941,025 $2,557,885 =========== ============ Liabilities and Stockholders' Investment --------------------------------------------- Current liabilities: Current maturities of long-term debt and capital lease Obligations $95,420 $ 120,470 Accounts payable 572,041 417,727 Accrued liabilities 273,543 284,450 ----------- ------------ Total current liabilities 941,004 822,647 ----------- ------------ Long-term debt, net of current maturities 757,883 535,220 Obligations under capital leases, net of current maturities 32,747 29,731 Convertible subordinated notes 199,984 199,984 Other noncurrent liabilities 226,984 199,477 ----------- ------------ Total noncurrent liabilities 1,217,598 964,412 ----------- ------------ Mandatorily redeemable trust convertible preferred securities 258,750 258,750 Stockholders' investment: Preferred stock -- -- Common stock 660 659 Additional paid-in capital 684,919 683,072 Retained deficit (48,025) (57,174) Deferred compensation plans (9,618) (10,746) Accumulated other comprehensive loss (44,403) (43,875) Treasury stock (59,860) (59,860) ----------- ------------ Total stockholders' investment 523,673 512,076 ----------- ------------ $2,941,025 $2,557,885 =========== ============ TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Amounts in thousands - unaudited) Six Months Ended June 30, ------------------------- 2003 2002 ------------- ----------- OPERATING ACTIVITIES: Net income (loss) $9,149 $(124,412) Adjustments required to reconcile net income (loss) to net cash provided by operating activities - Cumulative effect of change in accounting principle -- 112,786 Restructuring and asset impairment charge 23,066 75,407 Customer recovery related to program cancellation 15,600 -- Depreciation 79,106 65,373 Deferred income tax benefit (1,808) (15,090) Deferred compensation plans 460 1,223 Gain on sale of plant -- (3,839) Equity in earnings of joint ventures, net (3,788) (8,662) Change in working capital and other operating items (8,709) (83,478) ------------- ----------- Net cash provided by operating activities 113,076 19,308 ------------- ----------- INVESTING ACTIVITIES: Capital expenditures, net (98,726) (69,042) Acquisitions, including joint venture interests, earnout payments and dividends 3,506 (38,039) Proceeds from sale of fixed assets -- 50,313 ------------- ----------- Net cash used in investing activities (95,220) (56,768) ------------- ----------- FINANCING ACTIVITIES: Proceeds from borrowings 1,487,428 986,256 Repayments of debt (1,314,182) (1,166,819) Net proceeds from issuance of stock 482 224,903 ------------- ----------- Net cash provided by financing activities 173,728 44,340 ------------- ----------- NET CHANGE IN CASH AND CASH EQUIVALENTS 191,584 6,880 CASH AND CASH EQUIVALENTS: Beginning of period 13,699 21,767 ------------- ----------- End of period $205,283 $28,647 ============= ===========