Tower Automotive, Inc. Announces Q3 Increases
15 October 1998
Tower Automotive, Inc. Announces Increased Revenues, Operating Income and Net Income for the Third Quarter
MINNEAPOLIS, Oct. 14 -- Tower Automotive, Inc. ,
today announced increased operating results for the third quarter and nine
months ended September 30, 1998. Earnings per share for the quarter and nine
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 third quarter of 1998, revenues were $445 million, a 27 percent
increase compared with $350 million in the 1997 period. Operating income rose
44 percent to $40 million from $27 million reported last year. Net income for
the third quarter of 1998 was $18 million, or 36 cents per diluted share
outstanding, versus $12 million, or 25 cents per diluted share, in the
comparable 1997 period.
For the nine months ended September 30, 1998, revenues were $1.4 billion
compared with $802 million in the year-ago period. Operating income rose to
$125 million from $69 million reported last year. Net income for the nine
months ended September 30, 1998 was $61 million, or $1.18 per diluted share
outstanding, versus $29 million, or 73 cents per diluted share, in 1997.
In commenting on third quarter results, Dugald K. Campbell, president and
chief executive officer of Tower Automotive, said, "We are very pleased with
our third quarter operating results. The strength in our core business fueled
by production volumes on models served outside of General Motors, combined
with continued cost reduction efforts and new business led to significant year
over year gains in revenues and earnings. Furthermore, we were able to exceed
earnings expectations despite the impact of the General Motors strike which
reduced both revenues and earnings in the third quarter."
As previously announced, the company acquired IMAR, s.r.l. ("IMAR") and
OSLAMT S.p.A. ("OSLAMT"), on July 6, 1998. 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, Auto Alliance, 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 STATEMENT OF OPERATIONS
(Amounts in Thousands Except Per Share Amounts -- Unaudited)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
1998 1997 1998 1997
Revenues $444,851 $349,507 $1,367,854 $801,896
Cost of sales 377,862 302,318 1,166,822 689,566
Gross profit 66,989 47,189 201,032 112,330
Selling, general and
administrative expenses 24,003 17,190 65,968 38,364
Amortization expense 3,461 2,583 10,034 5,247
Operating income 39,525 27,416 125,030 68,719
Interest expense, net 8,620 7,706 33,230 15,852
Income before provision
for income taxes 30,905 19,710 91,800 52,867
Provision for income taxes 12,362 7,882 36,722 21,140
Income before equity in
earnings of joint
ventures and minority
interest 18,543 11,828 55,078 31,727
Equity in earnings of
joint ventures 2,342 -- 9,013 --
Minority interest --
dividends on trust
preferred securities (2,619) -- (3,259) --
Income before
extraordinary item 18,266 11,828 60,832 31,727
Extraordinary loss on
early extinguishment
of debt, net of tax -- -- -- 2,434
Net income $18,266 $11,828 $60,832 $29,293
Basic earnings per common
share:
Income before
extraordinary item $0.40 $0.26 $1.32 $0.81
Extraordinary item -- -- -- (0.06)
Net income $0.40 $0.26 $1.32 $0.75
Basic shares outstanding 46,236 45,724 46,174 38,974
Diluted earnings per
common share:
Income before
extraordinary item $0.36 $0.25 $1.18 $0.78
Extraordinary item -- -- -- (0.05)
Net income $0.36 $0.25 $1.18 $0.73
Diluted shares
outstanding 63,355 52,192 58,445 42,028
TOWER AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
September 30, December 31,
Assets 1998 1997
(unaudited)
Current assets:
Cash and cash equivalents $163 $ --
Accounts receivable 287,206 219,256
Inventories 84,119 73,809
Prepaid tooling and other 105,615 78,217
Total current assets 477,103 371,282
Property, plant and equipment, net 778,052 698,511
Restricted cash 2,648 7,902
Deferred income taxes 12,253 14,108
Investments in joint ventures 205,772 147,188
Goodwill and other assets, net 473,468 441,097
$1,949,296 $1,680,088
Liabilities and
Stockholders' Investment
Current liabilities:
Current maturities of long-term
debt and capital lease obligations $7,209 $5,004
Accounts payable 216,018 143,902
Accrued liabilities 132,625 81,784
Total current liabilities 355,852 230,690
Long-term debt, net of current
maturities 351,047 513,653
Obligations under capital leases,
net of current maturities 26,891 30,281
Convertible subordinated notes 200,000 200,000
Other noncurrent liabilities 178,088 190,185
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 425,980 423,425
Retained earnings 150,226 89,394
Total stockholders' investment 578,668 515,279
$1,949,296 $1,680,088