Transportation Technologies Reports Results for Q4 and Full Year 1999
26 January 2000
Transportation Technologies Reports Results for Fourth Quarter and Full Year 1999
CHICAGO--Jan. 26, 2000--Transportation Technologies Industries, Inc. announced today that revenues for the year ended December 31, 1999 were $541.5 million, compared to $433.6 million in 1998. The increase in revenues was due to businesses acquired in 1999, and a 24 percent increase in revenues at Bostrom Seating, partially offset by a 6 percent reduction in revenues at Brillion Iron Works. Income from continuing operations, before extraordinary items, more than doubled in 1999 from the prior year, to $17.2 million, or $1.67 per diluted share, compared to $8.2 million, or $0.81 per diluted share in 1998. The higher income resulted from the increased revenues and lower interest expense due to lower debt levels.Net income for 1999 was $67.3 million, or $6.50 per diluted share, up from $37.9 million, or $3.74 per diluted share a year ago. Net income for 1999 included after-tax income of $22.7 million from the divested freight car operations; a $29.8 million after-tax gain on the sale of the freight car operations; and after-tax extraordinary charges of $2.5 million from the non-cash write-off of deferred financing costs in connection with prepayments of senior debt. Net income for 1998 included after-tax income of $30.8 million from the divested freight car operations; a one-time after-tax gain of $1.0 million from the settlement of a former pension plan; and an after-tax extraordinary charge of $1.1 million from the non-cash write-off of deferred financing costs in connection with the prepayment of senior debt. In addition, 1999 and 1998 were impacted by two separate unrelated labor strikes at Gunite with after-tax costs of $1.4 million and $1.0 million, respectively.
Revenues for the fourth quarter of 1999 were $148.8 million, up from $105.0 million in the year-earlier period due primarily to the businesses acquired during 1999. Net income in the fourth quarter of 1999 was $5.2 million, or $0.50 per diluted share, compared to $9.8 million, or $0.97 per diluted share in the same period of 1998. Fourth quarter 1998 net income included after-tax income of $7.8 million from discontinued operations.
Excluding extraordinary and non-recurring items and income from discontinued operations, earnings before interest, taxes, depreciation and amortization (EBITDA) were $21.0 million in the fourth quarter of 1999, compared to $14.2 million a year earlier. For 1999 and 1998, EBITDA were $81.5 million and $64.5 million, respectively.
During 1999, the company completed three strategic acquisitions of heavy-duty truck component businesses, the acquisition of an additional foundry to supplement its wheel-end component capacity and the sale of its freight car operations.
At December 31, 1999, the company had $8.8 million of cash on hand compared to $13.5 million at September 30, 1999. During the quarter the company used $11.1 million of cash to acquire BMC of Virginia and $0.5 million of cash to reduce outstanding debt. Debt to total capitalization stood at 53 percent at quarter-end versus 70 percent a year ago.
Transportation Technologies Industries, Inc. is a leading manufacturer of components for heavy-duty and medium-duty trucks and buses and the truck parts aftermarket. Product lines include: Gunite wheel-end components; Brillion custom iron castings; Imperial body and chassis components; Bostrom truck and bus seating systems; and Fabco steerable drive axles and gearboxes. The company is headquartered in Chicago, Illinois and has manufacturing operations in Alabama, California, Illinois, Indiana, Pennsylvania, Tennessee, Texas, Virginia, Washington and Wisconsin.
The statements herein which are not historical facts, including statements about future expectations, are "forward-looking statements" that involve certain risks and uncertainties that could cause actual future results to differ materially from those stated. These risks are spelled out more fully in the company's SEC filings. The company assumes no obligation to update its forward-looking statements.
--TABLES FOLLOW--
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
Condensed Consolidated Statements of Income
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
--------------------- ---------------------
1999 1998 (A) 1999 (A) 1998 (A)
---------- ---------- ---------- ----------
Net sales $148,815 $105,038 $541,543 $433,563
Cost of sales 116,403 82,861 429,711 343,852
---------- ---------- ---------- ----------
Gross profit 32,412 22,177 111,832 89,711
Operating expense
(income):
Selling, general &
administrative 14,796 9,905 47,104 38,434
Amortization 2,162 1,693 7,792 6,773
Pension termination gain - - - (1,688)
---------- ---------- ---------- ----------
Operating income 15,454 10,579 56,936 46,192
Interest expense, net 5,863 6,340 25,251 27,146
---------- ---------- ---------- ----------
Income before income
taxes, extraordinary
items and discontinued
operations 9,591 4,239 31,685 19,046
Income taxes 4,348 2,226 14,449 10,853
---------- ---------- ---------- ----------
Income before
extraordinary
items and discontinued
operations 5,243 2,013 17,236 8,193
Extraordinary items,
net of taxes - - (2,505) (1,146)
Discontinued operations:
Income, net of taxes - 7,827 22,728 30,808
Gain on sale, net of taxes - - 29,817 -
---------- ---------- ---------- ----------
Net Income and
comprehensive income $ 5,243 $ 9,840 $ 67,276 $ 37,855
========== ========== ========== ==========
Diluted weighted average
equivalent shares
outstanding 10,451 10,187 10,348 10,122
========== ========== ========== ==========
Diluted earnings per share
before extraordinary items
and discontinued
operations $ 0.50 $ 0.20 $ 1.67 $ 0.81
========== ========== ========== ==========
Diluted earnings
per share $ 0.50 $ 0.97 $ 6.50 $ 3.74
========== ========== ========== ==========
(A) Restated to reflect discontinued operations
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
Condensed Consolidated Balance Sheets
(In thousands)
December 31, December 31,
1999 1998(A)
------------- -------------
Assets:
Cash and cash equivalents $ 8,799 $ 33,382
Accounts receivable, net 61,053 55,550
Inventories 44,930 29,566
Prepaid expenses and other 19,908 16,331
Net assets of discontinued operations - 37,555
--------- ---------
134,690 172,384
Property, plant and equipment, net 129,999 82,402
Excess costs over assets acquired and
other intangible assets, net and other 270,692 238,217
--------- ---------
$ 535,381 $ 493,003
========= =========
Liabilities and Shareholders' Equity:
Accounts payable $ 26,574 $ 19,601
Accrued expenses and other payables 53,461 51,662
Current maturities of long-term debt and
capital lease 1,936 9,039
--------- ---------
81,971 80,302
Long term debt and capital lease 21,695 49,186
Senior subordinated notes 180,735 182,338
Deferred income tax liabilities 34,677 34,571
Other long-term liabilities 33,628 35,889
--------- ---------
270,735 301,984
182,675 110,717
--------- ---------
Shareholders' equity $ 535,381 $ 493,003
========= =========
(A) Restated to reflect discontinued operations
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
Twelve Months Ended
December 31, (A)
---------------------
1999 1998
------- -------
Cash Flows from Operating Activities:
Net income $67,276 $37,855
Deduct income from discontinued operations 22,728 30,808
------- -------
Income from continuing operations 44,548 7,047
Net gain on sale of the discontinued operations (29,817) -
Depreciation 13,609 10,579
Amortization 9,229 9,032
Deferred income taxes (753) 3,023
Pension termination gain - (1,688)
Extraordinary items, net of taxes 2,505 1,146
Accrued post retirement benefits 1,594 1,558
------- -------
40,915 30,697
Change in operating assets and liabilities (5,120) 1,906
------- -------
Net cash provided by operating activities 35,795 32,603
------- -------
Cash Flows from Investing Activities:
Proceeds from the sale of the rail car
businesses 101,348 -
Cash paid for acquisitions (97,383) -
Capital expenditures (16,447) (8,941)
------- -------
Net cash used by investing activities (12,482) (8,941)
------- -------
Cash Flows from Financing Activities:
Proceeds from the issuance of long-term debt 103,100 -
Payments of term loans and capital leases (137,694) (36,899)
Retirement of subordinated notes (1,250) -
Deferred financing costs (2,059) 521
Other 1,255 141
------- -------
Net cash used by financing activities (36,648) (36,237)
------- -------
Net decrease in cash from continuing operations (13,335) (12,575)
Cash (used) provided by discontinued operations (11,248) 18,073
Cash and cash equivalents, beginning of period 33,382 27,884
------- -------
Cash and cash equivalents, end of period $ 8,799 $33,382
======= =======
(A) Restated to reflect discontinued operations