Tower Automotive, Inc. Announces Increased Q2
16 July 1998
Tower Automotive, Inc. Announces Increased Revenues, Operating Income and Net Income for the Second Quarter
MINNEAPOLIS, July 16 -- Tower Automotive, Inc.
today announced increased operating results for the second quarter and
six months ended June 30, 1998. Earnings per share for the quarter and
six months of the prior-year periods have been restated to reflect the
company's adoption of a new accounting pronouncement that requires disclosure
of basic and diluted earnings per share.
On May 19, 1998, the company's board of directors approved a two-for-one
stock split, which was effected as a stock dividend. On July 15, 1998,
stockholders were issued one additional share of common stock for each share
of common stock held on the record date of June 30, 1998. All references to
the number of common shares and per share amounts have been adjusted to
reflect the stock split on a retroactive basis.
For the second quarter of 1998, revenues were $466 million, a substantial
increase compared with $327 million in the 1997 period. Operating income rose
to $47 million from $29 million reported last year. Net income for the second
quarter of 1998 was $24 million, or 46 cents per diluted share outstanding,
versus $11 million, or 25 cents per diluted share, in the comparable 1997
period.
For the six months ended June 30, 1998, revenues were $923 million
compared with $452 million in the year-ago period. Operating income rose to
$86 million from $41 million reported last year. Net income for the
six months ended June 30, 1998 was $43 million, or 83 cents per diluted share
outstanding, versus $17 million, or 47 cents per diluted share, in 1997.
In commenting on second quarter results, Dugald K. Campbell, president and
chief executive officer of Tower Automotive, said, "We are extremely pleased
with our operating results for the second quarter. Both gross and operating
margins increased substantially as a direct result of continued productivity
initiatives, particularly at certain of our business units acquired from A.O.
Smith Corporation in 1997. Furthermore, we were able to meet earnings
expectations despite the impact of the General Motors strike which reduced
both revenues and earnings in the second quarter."
On June 3, 1998, Tower Automotive completed the offering of 5.2 million
shares of the 6+% Trust Convertible Preferred Securities resulting in net
proceeds of approximately $251.3 million. The net proceeds of the offering
were used to repay outstanding indebtedness.
On July 6, 1998, the company acquired IMAR, s.r.l. ("IMAR") and OSLAMT
S.p.A. ("OSLAMT"). IMAR designs and manufactures structural parts and
assemblies from two facilities in Italy, primarily for Fiat. OSLAMT designs
and manufactures tools and assemblies for the automotive market from its
facility in Turin, Italy. The purchase price consisted of approximately
$32.5 million in cash plus the assumption of approximately $17 million of
indebtedness with an additional amount of up to $15 million payable if IMAR
achieves certain operating targets following the acquisition.
Tower Automotive, Inc., produces a broad range of assemblies and modules
for vehicle body structures and suspension systems for the automotive
manufacturers, including Ford, Chrysler, General Motors, Honda, Toyota,
Nissan, Mazda, Fiat, BMW, Volkswagen and Mercedes. Products include body
structural assemblies such as pillars and package trays, control arms,
suspension links, engine cradles and full frame assemblies. The company has
its operating headquarters in Grand Rapids, Mich., and a corporate office in
Minneapolis, Minn.
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,
1998 1997 1998 1997
Revenues $ 465,874 $ 327,272 $ 923,003 $ 452,389
Cost of sales 395,020 281,143 788,960 387,248
Gross profit 70,854 46,129 134,043 65,141
Selling, general and
administrative expenses 20,825 15,362 41,965 21,174
Amortization expense 3,309 2,004 6,573 2,664
Operating income 46,720 28,763 85,505 41,303
Interest expense, net 12,695 6,605 24,610 7,953
Income before provision
for income taxes 34,025 22,158 60,895 33,350
Provision for income taxes 13,612 8,977 24,360 13,451
Income before equity in
earnings of joint
ventures and minority
interest 20,413 13,181 36,535 19,899
Equity in earnings of
joint ventures 3,973 -- 6,671 --
Minority interest (640) -- (640) --
Income before
extraordinary item 23,746 13,181 42,566 19,899
Extraordinary loss on
early extinguishment
of debt, net of tax -- 2,434 -- 2,434
Net income $ 23,746 $ 10,747 $ 42,566 $ 17,465
Basic earnings per common share:
Income before
extraordinary item $ 0.51 $ 0.31 $ 0.92 $ 0.56
Extraordinary item -- (0.06) -- (0.07)
Net income $ 0.51 $ 0.25 $ 0.92 $ 0.49
Basic shares outstanding 46,204 42,520 46,142 35,598
Diluted earnings per common share:
Income before
extraordinary item $ 0.46 $ 0.30 $ 0.83 $ 0.54
Extraordinary item -- (0.05) -- (0.07)
Net income $ 0.46 $ 0.25 $ 0.83 $ 0.47
Diluted shares
outstanding 57,133 43,884 55,995 36,919
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 30, December 31,
Assets 1998 1997
(unaudited)
Current assets:
Cash and cash equivalents $ 49,537 $ --
Accounts receivable 254,581 219,256
Inventories 77,406 73,809
Prepaid tooling and other 93,728 78,217
Total current assets 475,252 371,282
Property, plant and equipment, net 733,811 698,511
Restricted cash 2,618 7,902
Deferred income taxes 14,108 14,108
Investments in joint ventures 203,290 147,188
Goodwill and other assets, net 477,562 441,097
$1,906,641 $1,680,088
Liabilities and Stockholders' Investment
Current liabilities:
Current maturities of long-term
debt and capital lease
obligations $ 5,113 $ 5,004
Accounts payable 188,560 143,902
Accrued liabilities 117,869 81,784
Total current liabilities 311,542 230,690
Long-term debt, net of current
maturities 368,702 513,653
Obligations under capital leases,
net of current maturities 27,344 30,281
Convertible subordinated notes 200,000 200,000
Other noncurrent liabilities 180,336 190,185
Mandatorily redeemable trust
convertible preferred securities 258,750 --
Stockholders' investment:
Preferred stock -- --
Common stock 462 460
Warrants to acquire common stock 2,000 2,000
Additional paid-in capital 425,545 423,425
Retained earnings 131,960 89,394
Total stockholders' investment 559,967 515,279
$1,906,641 $1,680,088