Tower Automotive Reports First Quarter 2004 Results
NOVI, Mich.--April 29, 2004--Tower Automotive, Inc. today announced financial results for the first quarter of 2004 and updated 2004 earnings guidance.First Quarter Highlights:
-- Exceeded first quarter earnings guidance
-- Revenues of $781 million, up 6.6% from prior year
-- Launches challenging, but on-track
-- Earnings still bear costs of launching new business backlog
Tower Automotive announced first quarter revenues of $781 million, compared to $733 million in the first quarter of 2003. The company reported net income of $12.0 million, or $0.21 per diluted share, for the quarter versus net income for the first quarter of 2003 of $11.6 million, or $0.21 per diluted share. Earnings in the first quarter of 2004 were increased approximately $13.4 million, or $0.23 per share, by certain items including divestiture gains of $9.7 million, after tax, and net restructuring income of $3.7 million, after tax. Compared to the first quarter of 2003, first quarter 2004 earnings bear the launch costs for several significant new business awards, which will benefit the company in the future.
"Our first quarter results demonstrate our dedication to launching our new business awards successfully, while driving fundamental operational improvements across the company," stated Kathleen Ligocki, President and CEO of Tower Automotive. "We are pleased we were able to exceed our earnings goals in the face of challenging market conditions."
Tower Automotive generated EBITDA (a non-GAAP financial measure the company defines as earnings before interest, taxes, depreciation and amortization, non-cash restructuring and asset impairment charges/income and divestiture gains) of approximately $66 million in the first quarter of 2004 (a reconciliation of EBITDA to net income is attached in Table B). The company incurred net capital expenditures of $53.2 million in the quarter, and had cash on hand of $78.3 million at March 31, 2004.
Refinancing Plan
Tower Automotive also announced today that it is pursuing a refinancing plan with financial institutions that, if consummated, would improve the company's financial flexibility by extending debt maturities and increasing available liquidity. As currently envisioned by the company, the refinancing plan would include a new senior secured credit facility as well as a capital markets transaction which, when taken together, would provide sufficient proceeds to repay the company's existing credit facilities; refinance the company's 5% Convertible Subordinated Notes due August 1, 2004; and build additional liquidity for the company. The company expects the refinancing to be completed prior to the end of the second quarter. There are no assurances that the refinancing plan will be consummated.
"The refinancing, if consummated, will give Tower Automotive a much more workable debt structure and will provide the financial flexibility appropriate for not only the upcoming period of launch activity, but also for the significant free cash flow we expect to generate in the second half of 2004 and beyond," commented Ligocki.
Updated Full Year 2004 and Second Quarter Guidance
The company expects full year 2004 revenues of approximately $3.2 billion, up from $2.8 billion in 2003, reflecting the launch of several new programs. As a result of the recent divestiture of the company's investment in Yorozu, earnings per share are now expected to be in the range of $0.25 to $0.30 per share for 2004. Second quarter 2004 revenues are expected to be between $770 million and $790 million, and earnings are expected to be between break-even and $0.06 per share for the quarter.
The company continues to anticipate EBITDA for the full year 2004 of between $270 million and $285 million, including EBITDA of approximately $65 million to $75 million in the second quarter of 2004. Capital expenditures continue to be expected to total approximately $240 million for the full year 2004.
The company's estimates for earnings per share and EBITDA exclude restructuring charges and divestiture gains. Cash restructuring charges are expected to be approximately $0.01 to $0.02 per share per quarter for the remainder of 2004, based on previously announced restructuring activities.
Accessing the Conference Call Webcast and PowerPoint Presentation
A conference call to discuss first quarter results is scheduled today at 10 a.m. Eastern Time. 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 equipment 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 Novi, Mich. Additional company information is available at www.towerautomotive.com.
Forward-Looking Statements
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended
March 31,
-------------------
2004 2003
--------- ---------
Revenues $781,236 $732,578
Cost of sales 720,591 658,054
--------- ---------
Gross profit 60,645 74,524
Selling, general and administrative expenses 34,154 34,676
Restructuring charge reversal, net (5,607) --
--------- ---------
Operating income 32,098 39,848
Interest expense, net 31,470 16,769
--------- ---------
Income before provision for income taxes 628 23,079
Provision for income taxes 478 7,847
--------- ---------
Income before equity in earnings of
joint ventures and minority interest 150 15,232
Equity in earnings of joint ventures, net 3,447 644
Gain on sale of joint venture investment, net 9,732 --
Minority interest, net (1,311) (4,304)
--------- ---------
Net income $12,018 $11,572
========= =========
Basic earnings per common share:
Net income $0.21 $0.21
========= =========
Weighted average basic shares outstanding 57,342 56,194
========= =========
Diluted earnings per common share:
Net income $0.21 $0.21
========= =========
Weighted average diluted shares outstanding 58,110 56,210
========= =========
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
March 31, December 31,
Assets 2004 2003
--------------------------------------------- ----------- ------------
(unaudited)
Current assets:
Cash and cash equivalents $78,346 $160,899
Accounts receivable 374,089 325,599
Inventories 127,089 130,004
Deferred income taxes, net 15,295 20,116
Prepaid tooling and other 160,110 91,662
----------- ------------
Total current assets 754,929 728,280
----------- ------------
Property, plant and equipment, net 1,117,322 1,055,873
Investments in joint ventures 204,257 248,133
Deferred income taxes, net 144,512 146,944
Goodwill 495,209 498,663
Other assets, net 151,086 168,516
----------- ------------
$2,867,315 $2,846,409
=========== ============
Liabilities and Stockholders' Investment
---------------------------------------------
Current liabilities:
Current maturities of long-term debt and
capital lease obligations $120,595 $99,597
Convertible Subordinated Notes 199,984 199,984
Accounts payable 579,311 556,036
Accrued liabilities 243,996 249,984
----------- ------------
Total current liabilities 1,143,886 1,105,601
----------- ------------
Long-term debt, net of current maturities 1,042,570 1,060,859
Obligations under capital leases, net of
current maturities 39,551 42,798
Other noncurrent liabilities 220,979 223,641
----------- ------------
Total noncurrent liabilities 1,303,100 1,327,298
----------- ------------
Stockholders' investment:
Preferred stock -- --
Common stock 661 661
Additional paid-in capital 680,759 680,608
Retained deficit (169,831) (181,849)
Deferred compensation plans (8,027) (9,609)
Accumulated other comprehensive loss (29,683) (22,751)
Treasury stock, at cost (53,550) (53,550)
----------- ------------
Total stockholders' investment 420,329 413,510
----------- ------------
$2,867,315 $2,846,409
=========== ============
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands - unaudited)
Three Months Ended
March 31,
------------------
2004 2003
-------- ---------
OPERATING ACTIVITIES:
Net income $12,018 $11,572
Adjustments required to reconcile net income to
net cash provided by (used in) operating
activities -
Non-cash restructuring charge reversal (6,276) --
Depreciation 38,357 39,051
Deferred income tax provision (benefit) (4,104) 8,274
Gain on sale of joint venture investment (9,732) --
Equity in earnings of joint ventures, net (3,447) (644)
Change in working capital and other operating
items (89,700) (57,030)
-------- ---------
Net cash provided by (used in) operating
activities (62,884) 1,223
-------- ---------
INVESTING ACTIVITIES:
Acquisitions, divestitures and investment in joint
ventures 33,296 3,232
Capital expenditures, net (53,186) (41,200)
-------- ---------
Net cash used in investing activities (19,890) (37,968)
-------- ---------
FINANCING ACTIVITIES:
Proceeds from borrowings 14,630 699,646
Repayments of debt (14,409) (658,131)
Net proceeds from issuance of stock -- 303
-------- ---------
Net cash provided by financing activities 221 41,818
-------- ---------
NET CHANGE IN CASH AND CASH EQUIVALENTS (82,553) 5,073
CASH AND CASH EQUIVALENTS:
Beginning of period 160,899 13,699
-------- ---------
End of period $78,346 $18,772
======== =========
TABLE A
----------------------------------------------------------------------
Items impacting the First Quarter of 2004
----------------------------------------------------------------------
----------------------------------------------------------------------
Per
($ in thousands, except per share amounts) share
----------------------------------------------------------------------
Reversal of Ranger curtailment loss originally recorded
in 2003, net of tax $4,142 $0.07
----------------------------------------------------------------------
Restructuring charges for previously announced actions,
net of tax $(441)$(0.01)
----------------------------------------------------------------------
Gain on sale of investment in Yorozu $9,732 $0.17
----------------------------------------------------------------------
Per share impact $0.23
----------------------------------------------------------------------
TABLE B
----------------------------------------------------------------------
Reconciliation of EBITDA to Net Income
----------------------------------------------------------------------
Actual Actual
----------------------------------------------------------------------
($ in thousands) Q1 2004 Q1 2003
----------------------------------------------------------------------
----------------------------------------------------------------------
EBITDA $66,315 $75,239
----------------------------------------------------------------------
Less: Interest expense 31,470 16,769
----------------------------------------------------------------------
Less: Provision for income taxes 478 7,847
----------------------------------------------------------------------
Less: Depreciation expense 38,357 39,051
----------------------------------------------------------------------
Plus: Non-cash restructuring charge reversal 6,276 --
----------------------------------------------------------------------
Plus: Divestiture gains 9,732 --
----------------------------------------------------------------------
Net income $12,018 $11,572
----------------------------------------------------------------------
----------------------------------------------------------------------
Reconciliation of EBITDA to Net Income
----------------------------------------------------------------------
Forecast Forecast
----------------------------------------------------------------------
($ in thousands) Q2 2004 2004
----------------------------------------------------------------------
----------------------------------------------------------------------
EBITDA $75,000 $285,000
----------------------------------------------------------------------
Less: Interest expense 32,000 120,000
----------------------------------------------------------------------
Less: Provision for income taxes 500 1,000
----------------------------------------------------------------------
Less: Depreciation expense 39,000 147,000
----------------------------------------------------------------------
Plus: Non-cash restructuring charge reversal -- 6,000
----------------------------------------------------------------------
Plus: Divestiture gains -- 10,000
----------------------------------------------------------------------
Net income $3,500 $33,000
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