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
============= ===========