DURA Automotive Reports Third Quarter 2003 Results
ROCHESTER HILLS, Mich.--Oct. 2, 20033, 2003--DURA Automotive Systems, Inc. , today reported revenues of $554.4 million for the third quarter ended September 30, 2003, compared to $561.5 million recorded in the prior-year period. Net income for the quarter was $5.2 million, or $0.28 per diluted share, compared to $4.0 million, or $0.23 per diluted share, in the prior-year quarter.Included in net income for the quarter are a pretax facility consolidation gain of $4.0 million and a gain of $0.3 million from discontinued operations. The facility consolidation gain includes the reversal of an $8.5 million facility consolidation charge that was originally established in the fourth quarter of 2002 to close a European facility. This reversal is partially offset by $4.5 million of additional facility consolidation charges relating principally to the previously announced closure and consolidation into other DURA operations of the Fulton, Ky., and Mt. Carroll, Ill., facilities. Although DURA was unable to close the European facility, it did incur significant severance costs during the third quarter. As a result, included in cost of sales is approximately $2.9 million of severance charges, reducing the facility's workforce to a level appropriate for the current level of operations.
"The third quarter is always a challenging one in the automotive industry," said Larry Denton, president and chief executive officer of DURA Automotive. "As we expected, the industry remains somewhat soft. However, we are pleased that DURA continues to perform as planned. We already have begun to see benefits from our third-quarter acquisition of the Creation Group. Going forward, we will continue to relentlessly execute our strategy to enhance DURA's competitive position, in order to grow sales and earnings."
Revenue for the quarter as compared to the prior year was positively impacted by approximately $30.0 million due to the strengthening of foreign currencies versus the U.S. dollar and an additional $27.3 million for the partial quarter effect of the Creation Group acquisition, which supplies the North American recreation and specialty vehicle markets. As anticipated, based on the company's previously disclosed forecast, revenue and operating income for the quarter were negatively affected by the weakening of automotive production volumes and the run-out of the company's conventional window regulator business. Operating income totaled $27.7 million, a 27 percent decrease from $38.0 million in the third quarter of 2002. DURA's adjusted income from continuing operations for the quarter, which excludes the severance charges and facility consolidation charges, totaled $2.2 million, or $0.12 per diluted share, compared to the company's previously announced guidance of $0.10 per diluted share.
A conference call to review the third-quarter results is scheduled today at 11 a.m. ET. Interested participants may listen to the live conference call or replay over the Internet by logging onto the investor relations section of the company's Web site, www.duraauto.com. A recording of this call also will be available until 6 p.m. ET on Thursday, October 30, 2003, by dialing (303) 590-3000, passcode 554527.
About DURA Automotive Systems, Inc.
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 and specialty vehicle markets. 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.
Use of Non-GAAP Financial Information
In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this news release, the Company has provided information regarding "adjusted income from continuing operations" (a non-GAAP financial measure). Adjusted income from continuing operations represents income from continuing operations adjusted for severance charges, facility consolidation and other charges, net and loss on early extinguishment of debt, net. Management believes that adjusted income from continuing operations is useful to both management and investors in their analysis of the Company's ability to analyze operational performance. Adjusted income from continuing operations should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. Also, adjusted income from continuing operations, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies.
Forward-Looking Statements
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,
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
Revenues $554,398 $561,540 $1,753,633 $1,783,781
Cost of sales 493,300 487,252 1,537,848 1,536,571
--------- --------- ----------- -----------
Gross profit 61,098 74,288 215,785 247,210
Selling, general and
administrative expenses 37,370 35,175 114,805 102,550
Facility consolidation and
other charges (4,040) 917 (2,016) 2,780
Amortization expense 71 214 212 757
--------- --------- ----------- -----------
Operating income 27,697 37,982 102,784 141,123
Interest expense, net 20,253 20,995 61,627 64,415
Loss on early
extinguishment of debt - - - 5,520
--------- --------- ----------- -----------
Income from continuing
operations before
provision for income
taxes and minority
interest 7,444 16,987 41,157 71,188
Provision for income taxes 1,871 3,712 13,994 23,013
Minority interest -
dividends on trust
preferred securities, net 725 622 2,051 1,865
--------- --------- ----------- -----------
Income from continuing
operations 4,848 12,653 25,112 46,310
Gain (loss) from
discontinued operations,
net 348 (8,701) 81 (39,124)
--------- --------- ----------- -----------
Income before accounting
change 5,196 3,952 25,193 7,186
Cumulative effect of
change in accounting, net - - - (205,192)
--------- --------- ----------- -----------
Net income (loss) $5,196 $3,952 $25,193 $(198,006)
========= ========= =========== ===========
Basic earnings (loss) per
share:
Income (loss) from
continuing operations $0.26 $0.69 $1.38 $2.57
Discontinued operations 0.02 (0.47) - (2.17)
Cumulative effect of
change in accounting - - - (11.40)
--------- --------- ----------- -----------
Net income (loss) $0.28 $0.22 $1.38 $(11.00)
========= ========= =========== ===========
Basic shares outstanding 18,335 18,257 18,295 18,002
========= ========= =========== ===========
Diluted earnings (loss)
per share:
Income (loss) from
continuing operations $0.26 $0.67 $1.36 $2.43
Discontinued operations 0.02 (0.44) - (1.97)
Cumulative effect of
change in accounting - - - (10.37)
--------- --------- ----------- -----------
Net income (loss) $0.28 $0.23 $1.36 $(9.91)
========= ========= =========== ===========
Diluted shares outstanding 18,711 19,948 18,494 19,787
========= ========= =========== ===========
Capital expenditures $26,355 $14,267 $46,217 $38,878
Depreciation $18,553 $17,993 $55,955 $52,456
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
ADJUSTED INCOME FROM CONTINUING OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Nine Months
Ended Ended
September 30, September 30,
------------- -------------
2003 2002 2003 2002
---- ---- ---- ----
Income from continuing operations $4,848 $12,653 $25,112 $46,310
Facility consolidation and other
charges, net (5,552) 550 (4,257) 1,668
Cost of sales - severance cost, net 2,884 - 2,884 -
Loss on early extinguishment of
debt, net - - - 3,422
-------- -------- -------- --------
Adjusted income from continuing
operations $2,180 $13,203 $23,739 $51,400
======== ======== ======== ========
Basic earnings per share:
Adjusted income from continuing
operations $0.12 $0.72 $1.30 $2.86
======== ======== ======== ========
Basic shares outstanding 18,335 18,257 18,295 18,002
======== ======== ======== ========
Diluted earnings per share:
Adjusted income from continuing
operations $0.12 $0.69 $1.28 $2.69
======== ======== ======== ========
Diluted shares outstanding 18,711 19,948 18,494 19,787
======== ======== ======== ========
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
September 30, December 31,
Assets 2003 2002
------ ---- ----
(unaudited)
Current assets:
Cash and cash equivalents $77,355 $143,237
Accounts receivable, net 334,622 245,615
Inventories 127,170 114,573
Current portion of derivative instruments 15,070 (a) 15,825 (a)
Other current assets 102,574 103,875
Current assets of discontinued operations - 32,041
----------- -----------
Total current assets 656,791 655,166
----------- -----------
Property, plant and equipment, net 472,710 444,479
Goodwill, net 835,418 774,983
Noncurrent portion of derivative
instruments 16,066 (a) 14,698 (a)
Deferred income taxes and other assets,
net 44,068 47,607
----------- -----------
$2,025,053 $1,936,933
=========== ===========
Liabilities and Stockholders' Investment
----------------------------------------
Current liabilities:
Accounts payable $241,652 $216,045
Accrued liabilities 206,614 193,973
Current maturities of long-term debt 5,338 7,154
Current liabilities of discontinued
operations - 25,931
----------- -----------
Total current liabilities 453,604 443,103
----------- -----------
Long-term debt, net of current maturities 160,678 162,422
Senior notes 350,000 350,000
Subordinated notes 567,403 556,632
Senior notes - derivative instrument
adjustment 31,136 (a) 30,523 (a)
Other noncurrent liabilities 127,289 134,201
Mandatorily redeemable convertible trust
preferred securities 55,250 55,250
----------- -----------
Stockholders' investment:
Common stock - Class A 167 165
Common stock - Class B 17 17
Additional paid-in capital 348,067 347,065
Treasury stock (2,452) (1,974)
Retained deficit (102,209) (127,403)
Accumulated other comprehensive income
(loss) 36,103 (13,068)
----------- -----------
Total stockholders' investment 279,693 204,802
----------- -----------
$2,025,053 $1,936,933
=========== ===========
(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.