Collins & Aikman Reports 78 Percent Increase In Operating Income for Fourth Quarter 1997
10 February 1998
Collins & Aikman Reports 78 Percent Increase In Operating Income for Fourth Quarter 1997
CHARLOTTE, N.C., Feb. 10 -- Collins & Aikman Corporation
announced today that its sales from continuing operations were
$430 million for the quarter ended December 27, 1997, up 37 percent, or
$117 million, compared to the fourth quarter of 1996.
Operating income from continuing operations increased 78 percent to
$42 million from $24 million for the fourth quarter ended December 28, 1996.
EBITDA from continuing operations was $57 million versus $38 million in the
1996 comparable period, a 50 percent increase.
"Fourth quarter revenues benefited from our acquisitions of JPS Automotive
and Perstorp Components and the continued strength of the North American and
European auto builds," said Thomas Hannah, Chief Executive Officer of Collins
& Aikman.
"With the year 2000 fast approaching, we believe our acquisitions have
helped to prepare us for the next century of automobile interior trim
requirements," said Hannah. "We have added substantially to our product
offering and systems capabilities with the acquisitions, increasing our North
American product share of molded floor carpet and automotive bodycloth.
"Throughout 1997 we implemented changes to boost quality, increase
operating efficiencies, expand our product line, grow our worldwide presence
and most importantly to become exclusively an automotive interior systems
supplier.
"In keeping with our automotive interiors strategy, we completed several
strategic corporate development projects in the fourth quarter including a
joint venture with Courtaulds Textiles (Holdings) Limited in the United
Kingdom to produce automotive bodycloth. We also acquired the remaining
equity interests of Perstorp Components in the automotive acoustics joint
venture in Sweden and Belgium. And thirdly, we entered into an agreement to
sell our last non-automotive subsidiary, Imperial Wallcoverings."
For 1997, Collins & Aikman's content per build was $17 in Europe.
Approximately 35 percent of the Company's revenues in 1997, including the
European joint venture, were generated outside the United States.
"Operating profit improvements at automotive acoustics and convertible top
systems added to our fourth quarter performance," said Hannah. Income from
continuing operations for the fourth quarter was $9 million, or $.14 per share
compared to $.06 per share earned in the 1996 quarter.
"We made significant progress in 1997 on another of our primary goals --
reduction of long-term debt. Total borrowings as of the fiscal year end were
down over $400 million compared to the previous year," Hannah said.
Other Fourth Quarter 1997 Highlights
The Automotive Carpet and Acoustics Group's revenues increased by
74 percent to $196 million for the fourth quarter of 1997, as compared to the
same period in 1996, primarily due to the acquisitions of JPS Automotive and
Perstorp Components. The launch and ramp-up of molded carpet and luggage
compartment trim for the new Dodge Durango, plus strength in floor and trunk
shipments for the new Camry were very positive for the Group for the quarter.
Automotive bodycloth revenues were up substantially, increasing 19
percent to $89 million during the fourth quarter. Strong demand for the
Nissan Altima and the Toyota Camry offset reductions for the Ford Explorer and
Chrysler LH.
Akro accessory floor mat revenues were up $4 million compared to the 1996
quarter, or 10 percent, on strong demand for several General Motors models,
including certain Pontiac, Oldsmobile and Chevrolet vehicles.
Sales of convertible top systems were down for the quarter due mostly to
lower build for the Chrysler Sebring Convertible, compared to the car's high
demand in 1996. Dura Convertible Systems reported revenues of $20 million for
the 1997 fourth quarter, compared to $23 million in 1996.
C&A Plastics reported a revenue increase of 29 percent or $18 million for
the quarter compared to the 1996 period. Increased shipments for the Buick
Century/Regal, Chevrolet Caprice and Cadillac Concours/Deville enhanced
revenue during the period.
"We announced the implementation of several changes in the third quarter
for our plastics operations, and as a result we are already seeing signs of
improvement. Efficiency is up at several of the plants, while another plant
received QS 9000 certification. In addition, C&A Plastics was named a Full
Service Supplier at Ford Motor Company," Hannah said.
All earnings per share data have been restated to conform to the
requirements of Financial Accounting Statement 128, which became effective for
interim and annual financial statements ending after December 15, 1997.
This press release, other than historical financial information, contains
forward-looking statements that involve a number of risks and uncertainties.
Important factors that could cause actual results to vary materially from
those anticipated in the forward-looking statements are set forth in Collins &
Aikman's Securities and Exchange filings, including, without limitation, in
Items 1 and 7 of the Company's Transition Report on Form 10-K for the
transition period from January 28, 1996 to December 28, 1996 and in Item 2 of
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 27, 1997.
Collins & Aikman Corporation is a global supplier of automotive interior
systems, including textile and plastic trim, acoustics and convertible top
systems. Headquartered in Charlotte, NC, the Company's recent acquisitions
have significantly expanded Collins & Aikman's product offering and
international presence. The Company employs 16,500 employees and operates
58 manufacturing facilities in ten countries.
Attached to this release are the following financial statements:
-- Consolidated Statements of Operations for the quarters and years ending
December 27, 1997 and December 28, 1996.
-- Consolidated Balance Sheets as of December 27, 1997 and December 28,
1996.
-- Consolidated Statements of Cash Flows for the quarters and years ending
December 27, 1997 and December 28, 1996.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(in thousands, except for per share data)
Quarter Ended
December 27, December 28,
1997 1996
Net sales $ 429,746 $ 312,616
Cost of goods sold 356,922 261,065
Selling, general and
administrative expenses 30,643 27,874
Impairment of long lived
assets -- --
387,565 288,939
Operating income 42,181 23,677
Interest expense, net 19,690 14,885
Loss on sale of receivables 1,405 1,369
Other (income) loss 619 515
Income from continuing
operations before income
taxes 20,467 6,908
Income tax expense 11,421 2,947
Income (loss) from continuing
operations 9,046 3,961
Income from discontinued
operations, net of income
taxes -- 5,519
Gain on sale of discontinued
operations, net of income
taxes -- --
Income before extraordinary
loss 9,046 9,480
Extraordinary loss, net of
income taxes -- --
Net income $ 9,046 $ 9,480
Net income per basic common share:
Continuing operations $ 0.14 $ 0.06
Income from discontinued
operations -- 0.08
Gain on sale of discontinued
operations -- --
Extraordinary loss -- --
Net income $ 0.14 $ 0.14
Net income per diluted common share:
Continuing operations $ 0.14 $ 0.06
Income from discontinued
operations -- 0.08
Gain on sale of discontinued
operations -- --
Extraordinary loss -- --
Net income $ 0.14 $ 0.14
Average common shares outstanding:
Basic 66,006 68,886
Diluted 66,994 69,690
EBITDA $ 57,079 $ 38,057
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
(in thousands, except for per share data)
Year Ended
December 27, December 28,
1997 1996
Net sales $ 1,629,332 $ 1,140,027
Cost of goods sold 1,397,121 935,105
Selling, general and
administrative expenses 125,101 96,126
Impairment of long lived
assets 22,600 --
1,544,822 1,031,231
Operating income 84,510 108,796
Interest expense, net 77,581 43,402
Loss on sale of receivables 4,700 5,037
Other (income) loss (678) 113
Income from continuing operations
before income taxes 2,907 60,244
Income tax expense (benefit) 12,998 (124,764)
Income (loss) from continuing
operations (10,091) 185,008
Income from discontinued
operations, net of income
taxes 4,306 (6,752)
Gain on sale of discontinued
operations, net of income
taxes 161,741 --
Income before extraordinary
loss 155,956 178,256
Extraordinary loss, net of
income taxes (721) (6,610)
Net income $ 155,235 $ 171,646
Net income per basic common share:
Continuing operations $ (0.15) $ 2.68
Income from discontinued
operations 0.06 (0.10)
Gain on sale of discontinued
operations 2.44 --
Extraordinary loss (0.01) (0.10)
Net income $ 2.34 $ 2.48
Net income per diluted common share:
Continuing operations $ (0.15) $ 2.65
Income from discontinued
operations 0.06 (0.10)
Gain on sale of discontinued
operations 2.44 --
Extraordinary loss (0.01) (0.10)
Net income $ 2.34 $ 2.45
Average common shares outstanding:
Basic 66,337 69,027
Diluted 66,337 69,943
EBITDA $ 165,950 $ 147,581
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
(Unaudited)
ASSETS December 27, December 28,
1997 1996
Current Assets:
Cash and cash
equivalents $ 24,004 $ 14,314
Accounts and other
receivables, net 198,125 200,763
Inventories 142,042 121,971
Net assets of discontinued
operations 53,004 263,523
Other 92,116 128,762
Total current assets 509,291 729,333
Property, plant and equipment,
net 388,087 351,282
Deferred tax assets 59,293 91,690
Goodwill, net 263,007 283,271
Other assets 82,714 74,713
$ 1,302,392 $ 1,530,289
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Current Liabilities:
Notes payable $ 1,314 $ 1,920
Current maturities of
long-term debt 17,820 37,565
Accounts payable 135,468 123,899
Accrued expenses 148,201 176,147
Total current liabilities 302,803 339,531
Long-term debt 764,857 1,138,029
Other, including postretirement
benefit obligation 301,582 247,307
Commitments and contingencies
Common stock (150,000 shares
authorized, 70,521 shares
issued and 65,851 shares
outstanding at December 27, 1997
and 70,521 shares issued
and 67,723 shares outstanding
at December 28, 1996) 705 705
Other paid-in capital 585,890 585,207
Accumulated deficit (576,851) (729,315)
Foreign currency translation
adjustments (29,123) (20,798)
Pension equity adjustment (10,700) (10,165)
Treasury stock, at cost
(4,670 shares at December 27,
1997 and 2,798 shares at
December 28, 1996) (36,771) (20,212)
Total common stockholders'
deficit (66,850) (194,578)
$ 1,302,392 $ 1,530,289
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Quarter Ended
December 27, December 28,
1997 1996
OPERATING ACTIVITIES
Income (loss) from
continuing operations $ 9,046 $ 3,961
Adjustments to derive
cash flow from
continuing operating
activities:
Impairment of long
lived assets -- --
Deferred income tax expense
(benefit) 2,322 (81)
Depreciation and
leasehold
amortization 10,708 8,244
Amortization of
goodwill 1,530 1,187
Amortization of other
assets 2,332 4,014
Decrease (increase) in
accounts and other
receivables (5,276) 13,826
Decrease (increase) in
inventories 6,414 2,044
Decrease in accounts
payable (4,379) (19,345)
Increase (decrease) in
interest payable (13,641) (1,193)
Other, net 2,335 (14,362)
Net cash provided by
(used in) continuing
operating
activities 11,391 (1,705)
Cash used in Wallcoverings,
Floorcoverings,
Airbag and the Mastercraft
Group discontinued
operations (6,204) (29,098)
Cash used in other
discontinued operations (5,316) (4,151)
Net cash used in
discontinued
operations (11,520) (33,249)
INVESTING ACTIVITIES
Additions to property, plant
and equipment (20,772) (20,829)
Sales of property, plant
and equipment 4,703 1,635
Proceeds from disposition
of discontinued operations -- --
Acquisition of businesses,
net of cash acquired 17,001 (217,249)
Proceeds from sale leaseback -- --
Other, net 2,908 48,721
Net cash provided by
(used in) investing
activities 3,840 (187,722)
FINANCING ACTIVITIES
Issuance of long-term debt 7,740 51,012
Repayment of long-term
debt (126,511) (10,753)
Proceeds from (reduction
of) participating
interests in accounts
receivable, net of
redemptions 42,000 10,000
Net borrowings (repayments)
on revolving credit
facilities 10,000 185,804
Net repayments on notes
payable (7) 1,377
Purchase of treasury stock (1,805) (9,103)
Proceeds from exercise of
stock options 57 190
Other, net (550) (279)
Net cash provided by
(used in) financing
activities (69,076) 228,248
Net increase (decrease) in
cash and cash
equivalents (65,365) 5,572
Cash and cash equivalents
at beginning of period 89,369 8,744
Cash and cash equivalents
at end of period $ 24,004 $ 14,316
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
(in thousands)
Year Ended
December 27, December 28,
1997 1996
OPERATING ACTIVITIES
Income (loss) from continuing
operations $ (10,091) $ 185,008
Adjustments to derive cash
flow from continuing
operating activities:
Impairment of long
lived assets 22,600 --
Deferred income tax expense
(benefit) 4,252 (137,772)
Depreciation and leasehold
amortization 42,712 27,431
Amortization of goodwill 6,669 4,134
Amortization of other
assets 7,592 9,045
Decrease (increase) in
accounts and other
receivables 35,819 (25,021)
Decrease (increase) in
inventories (8,078) 1,883
Decrease in accounts
payable (4,126) (354)
Increase (decrease) in
interest payable (520) 13,192
Other, net 2,052 (16,113)
Net cash provided by
(used in) continuing
operating activities 98,881 61,433
Cash provided by (used in)
Wallcoverings, Floorcoverings,
Airbag and the Mastercraft
Group discontinued
operations (4,719) (6,301)
Cash used in other discontinued
operations (12,252) (3,599)
Net cash provided by
discontinued
operations (16,971) (9,900)
INVESTING ACTIVITIES
Additions to property, plant
and equipment (71,775) (88,142)
Sales of property, plant and
equipment 5,879 4,722
Proceeds from disposition of
discontinued operations 562,100 --
Acquisition of businesses, net
of cash acquired 3,447 (408,355)
Proceeds from sale leaseback -- 7,404
Other, net (92,534) 796
Net cash provided by
(used in) investing
activities 407,117 (483,575)
FINANCING ACTIVITIES
Issuance of long-term debt 12,235 650,939
Repayment of long-term debt (261,416) (293,788)
Proceeds from (reduction of)
participating interests in
accounts receivable, net of
redemptions (13,000) 1,000
Net borrowings (repayments)
on revolving credit
facilities (194,000) 115,804
Net repayments on notes payable (506) (163)
Purchase of treasury stock (19,715) (11,543)
Proceeds from exercise of stock
options 385 596
Other, net (3,320) (17,448)
Net cash provided by
(used in) financing
activities (479,337) 445,397
Net increase (decrease) in cash
and cash equivalents 9,690 13,355
Cash and cash equivalents
at beginning of period 14,314 961
Cash and cash equivalents
at end of period $ 24,004 $ 14,316
SOURCE Collins & Aikman Corporation