Cooper Tire & Rubber Company Third Quarter Sales and EPS Set Record
18 October 1999
Cooper Tire & Rubber Company Third Quarter Sales and EPS Set Record
FINDLAY, Ohio--Oct. 18, 1999--THIRD QUARTER HIGHLIGHTS:
| -- | Record third quarter sales and earnings per share |
| -- | New product acceptance bolsters tire sales |
| -- | Automotive group outpaces prior year in sales |
COOPER TIRE & RUBBER COMPANY reported earnings per share of 46 cents, an increase of 17.9 percent over the same period in 1998. Sales for the period ended September 30, 1999 were $531.9 million compared to $480.6 million in the third quarter 1998, a 10.7 percent gain. Both sales and EPS were an all-time record high for Cooper's third quarter results. Earnings for the quarter were $34.6 million, an increase of 15.2 percent, compared to $30.0 million a year earlier.
This record achievement was a result of excellent operations in both company segments. Tire operations reported sales of $424.3 million, an increase of 9 percent over the 1998 period. For the automotive group, sales were $107.6 million, an increase of 17.7 percent over the third quarter 1998 period. Segment profits were $45.3 million for tires, an increase of 14.6 percent over 1998's third quarter. The automotive products group provided segment profits of $8.2 million, an increase of 35.5 percent compared to the same period in 1998 when shipments were limited due to a labor strike at General Motors.
For the nine month period, 1999 sales were $1.5 billion, a gain of 8.3 percent compared to the same period in 1998. Earnings were $103.9 million, up 16.9 percent, while earnings per share reached $1.37, a gain of 20.2 percent over 1998's nine month period. Sales for the tire operation were $1.1 billion, an increase of 7.3 percent while the automotive product sales reached $350.3 million, an increase of 12.0 percent over the 1998 period.
In announcing these results, Cooper president and COO Thomas A. Dattilo said, "Sales were exceptionally strong for the company's products during the third quarter. We are extremely pleased with the Cooper team's performance from both company operating groups. In our automotive products area, sales were strong despite the typical industry pattern of shutdowns during the model changeover periods, surpassing 1998 third quarter sales which reflected a strike at General Motors. Many of the vehicles important to us in the light vehicle market maintained strong consumer demand.
"In our tire group, global sales were extremely good for winter tires and many of our passenger premium lines. Dealer orders were strong for the two new light truck radial lines introduced during mid-year. The new sales group organized to market Cooper-produced products to regional retailers was successful in building momentum especially in sales of our Avon lines. The record sales for our tire group reflect the outstanding efforts by the Cooper team during the quarter," he concluded.
"This has been an active quarter for the company with our announcement in late July of the acquisition of The Standard Products Company and the ongoing integration of the Pirelli alliance which began earlier in the year," said Patrick W. Rooney, Cooper's chairman and CEO. "Despite the activities which are necessary to successfully integrate the operations of two large companies and the alliance details, our team remained focused on our business imperatives. The results show the determination and continuing excellence in satisfying our customers' needs in both tires and automotive products."
COMPANY DESCRIPTION
Founded in 1914, Cooper Tire & Rubber Company is a leading manufacturer of tires and engineered rubber products widely recognized for its strong customer service commitment. In tires, the company exclusively targets the larger replacement market, with a mix divided between proprietary house brand and private label customers. Cooper markets its tires in more than 100 countries around the world. In engineered rubber products, the company serves virtually every light vehicle manufacturer in the U.S. and Canada, as well as an expanding number of European-based original equipment manufacturers. For more information on Cooper Tire & Rubber Company, visit the company's web site at www.coopertire.com.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements regarding expectations for future financial performance which involve uncertainty and risk. It is possible the company's future financial performance may differ from expectations due to a variety of factors including, but not limited to: changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, fluctuations in raw material and energy prices, changes in interest and foreign exchange rates, regulatory and other approvals, the cyclical nature of the automotive industry, risks associated with integrating the operations of The Standard Products Company and the failure to achieve synergies or savings anticipated in the merger, failure to satisfy the closing conditions of the pending merger and the failure to complete the merger, and other unanticipated events and conditions.
It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on certain assumptions and analysis made by the company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The company makes no commitment to update any forward-looking statement included herein, or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.
(Statements of income and balance sheets follow...)
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands;
per share amounts Quarter Ended Nine Months Ended
in dollars) September 30 September 30
--------------------- ----------------------
1999 1998 1999 1998
Revenues: ---------- ---------- ---------- ----------
Net sales $ 531,883 $ 480,616 $1,495,122 $1,379,914
Other income 376 522 1,525 1,771
--------- --------- --------- ---------
532,259 481,138 1,496,647 1,381,685
Costs and expenses:
Cost of products sold 440,524 400,670 1,222,304 1,142,607
Selling, general,
administrative 34,156 30,631 100,044 87,595
Interest 3,710 3,745 11,209 11,358
--------- --------- --------- ---------
478,390 435,046 1,333,557 1,241,560
--------- --------- --------- ---------
Income before income taxes 53,869 46,092 163,090 140,125
Provision for
income taxes 19,269 16,063 59,143 51,235
--------- --------- --------- ---------
Net income $ 34,600 $ 30,029 $ 103,947 $ 88,890
--------- --------- --------- ---------
--------- --------- --------- ---------
Basic and diluted
earnings per share $ .46 $ .39 $1.37 $1.14
Weighted average
shares outstanding 75,895 77,103 75,895 78,267
Depreciation $ 27,143 $ 25,655 $ 79,570 $ 75,120
Capital expenditures $ 33,378 $ 30,549 $ 103,918 $ 88,756
Segment information:
Net Sales:
Tires $ 424,310 $ 389,237 $1,144,782 $1,067,107
Engineered
products 107,573 91,379 350,340 312,807
Segment profit (a):
Tires 45,260 39,492 121,087 102,445
Engineered
products 8,233 6,078 40,478 35,909
CONSOLIDATED BALANCE SHEETS
September 30
--------------------
Assets 1999 1998
------ --------- ---------
Current assets:
Cash and cash equivalents $ 40,302 $ 22,822
Accounts receivable 412,548 337,682
Inventories 167,811 191,078
Prepaid expenses and deferred
income taxes 23,349 21,396
--------- ---------
Total current assets 644,010 572,978
Property, plant and equipment - net 908,597 874,905
Intangibles and other assets 100,190 87,321
--------- ---------
$1,652,797 $1,535,204
--------- ---------
--------- ---------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 11,289 $ 12,201
Trade payables and accrued liabilities 201,950 204,477
Income taxes 3,473 83
Current portion of debt 212 279
--------- ---------
Total current liabilities 216,924 217,040
Long-term debt 205,119 205,209
Postretirement benefits other than pensions 155,985 150,499
Other long-term liabilities 50,287 38,521
Deferred income taxes 76,977 77,250
Stockholders' equity 947,505 846,685
--------- ---------
$1,652,797 $1,535,204
--------- ---------
--------- ---------
(a) Segment profit is defined as income before income taxes and other
income and includes allocation of corporate interest expense. These
interim statements are subject to year-end adjustments.