Cooper Tire & Rubber Company Reports Record 1999 Sales and Earnings
9 February 2000
Cooper Tire & Rubber Company Reports Record 1999 Sales and Earnings
FINDLAY, Ohio--Feb. 8, 2000--Cooper Tire & Rubber CompanyFOURTH QUARTER HIGHLIGHTS
| -- | Acquisition finalized for The Standard Products Company (Standard) |
| -- | Integration activity on target |
| -- | Announcement of Siebe Automotive purchase |
| -- | Strong sales for Cooper and Mastercraft tire brands |
Cooper Tire & Rubber Company today reported record sales and earnings for 1999. Net sales for the year reached $2.2 billion, an increase of 17.1 percent over 1998 sales. Net income for 1999 was $135.5 million, an increase of 6.7 percent over 1998. Earnings per share set a company record at $1.79 per share versus $1.64 per share for the 1998 period, an increase of 9.2%.
Sales for the quarter were $701 million, including $188 million contributed by Standard after the October 27 acquisition, compared to $496 in the prior year, an increase of 41 percent. Net income for the fourth quarter was $31.5 million versus $38.1 million for the 1998 fourth quarter. Earnings per share for the quarter of 42 cents were lower than the previous year's quarter of 50 cents primarily due to transition costs (about 3 cents) associated with the conversion of the Texarkana, Arkansas tire plant to continuous operations and the acquisition of The Standard Products Company in October (about 5 cents). Earnings for the 1998 quarter had included approximately 3 cents per share relating to an adjustment to the annual tax rate and the sale of a warehouse.
Reflecting on the activities for 1999, Cooper chairman and CEO, Patrick W. Rooney said, "This was a landmark year for Cooper Tire & Rubber Company. We began the year with the acquisition of Dean Tire, adding a seventh brand to the company's proprietary lines. In February, we entered into a strategic alliance with Pirelli Tire to become the exclusive aftermarket sales agent for Pirelli in the North American market. In October, we completed our acquisition of The Standard Products Company and in November we announced our intention to purchase Siebe Automotive, the fluid handling division of Invensys plc. These historic events were carefully planned and executed according to our Cooper 21 plan to poise our company for global growth in the 21st century."
Thomas A. Dattilo, Cooper's president and chief operating officer commented, "The company's operations during the quarter and the year were excellent. As our Cooper teams began the integration process for both the tire and automotive groups, we didn't miss a beat in sales activity. Sales attained for both groups would have established company records without the acquisition of Standard.
"In the tire operation, sales were strong for our premium passenger and our light truck radial lines. According to preliminary industry replacement shipment records, Cooper's 1999 tire shipments outpaced the industry in passenger tires by more than double the industry's rate of increase over 1998. In light truck tires, Cooper also grew faster than the industry in replacement shipments during the year. The integration began for Standard's Oliver Rubber operation during the fourth quarter and the prospects are promising as we explore the contribution this segment can make to the company's overall commercial tire sales.
"Our automotive operation is extremely active with the integration process for the Standard group and also the Siebe Automotive group which was finalized on January 28, 2000. We have a well-defined organization structure in place with excellent leaders to help us maximize the synergies of these two acquisitions and grow our business around the world. Despite the enhanced activity level for the automotive group, we have maintained our commitments to customers and sales have been strong throughout the quarter. We expect to continue adding new business as we go forward with our new structure," he concluded.
Company Description
Cooper Tire & Rubber Company is headquartered in Findlay, Ohio and specializes in the manufacture and marketing of automotive products. Products for Cooper's tire group include automotive, motorcycle and truck tires, inner tubes, tread rubber and equipment. In the automotive group, Cooper is an original equipment supplier of sealing, trim, NVH control systems and fluid handling systems for the automotive industry in North America, Europe and South America. Other products for this group include rubber and plastic sealing components for the refrigeration industry in North America. Cooper has more than 25,000 employees and 74 manufacturing facilities in thirteen countries. For more information, 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 Siebe Automotive and the failure to achieve synergies or savings anticipated in the acquisitions, 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 analyses 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.
(Statement of income and balance sheet follows...)
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands; Quarter Ended Twelve Months Ended
per share amounts in dollars) December 31 December 31
------------------- ----------------------
1999 1998 1999 1998
--------- --------- ---------- ----------
Net sales $ 701,221 $ 496,211 $2,196,343 $1,876,125
Cost of products sold 589,669 402,768 1,810,524 1,545,760
--------- --------- ---------- ----------
Gross profit 111,552 93,443 385,819 330,365
Amortization of goodwill 2,550 - 2,550 -
Selling, general
and administrative 44,145 33,235 144,189 120,830
--------- --------- ---------- ----------
Operating profit 64,857 60,208 239,080 209,535
Interest 13,236 3,866 24,445 15,224
Other (786) (1,750) (862) (3,906)
--------- --------- ---------- ----------
Income before income taxes 52,407 58,092 215,497 198,217
Provision for income taxes 20,880 20,015 80,023 71,250
--------- --------- ---------- ----------
Net income $ 31,527 $ 38,077 $ 135,474 $ 126,967
--------- --------- ---------- ----------
--------- --------- ---------- ----------
Basic and diluted
earnings per share $ .42 $ .50 $ 1.79 $ 1.64
Weighted average
shares outstanding 75,870 75,821 75,889 77,656
Depreciation $ 41,407 $ 26,779 $ 120,977 $ 101,899
Capital expenditures $ 45,899 $ 42,777 $ 149,817 $ 131,533
Segment information:
Net Sales:
Tire $ 412,328 $ 377,228 $1,557,110 $1,444,334
Automotive 293,302 118,983 643,642 431,791
Eliminations (4,409) - (4,409) -
Segment profit(1):
Tire 45,108 43,793 176,389 155,242
Automotive 19,749 16,415 62,691 54,293
CONSOLIDATED BALANCE SHEETS
December 31
----------------------
Assets 1999 1998
------ ---------- ----------
Current assets:
Cash and cash equivalents $ 71,127 $ 41,966
Accounts receivable 545,155 319,685
Inventories 273,963 186,386
Prepaid expenses and deferred income taxes 55,183 21,436
---------- ----------
Total current assets 945,428 569,473
Property, plant and equipment - net 1,227,069 885,282
Intangibles and other assets 585,148 86,520
---------- ----------
$2,757,645 $1,541,275
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 13,148 $ 8,129
Trade payables and accrued liabilities 363,724 181,776
Income taxes 5,100 2,834
Current portion of debt 13,893 249
---------- ----------
Total current liabilities 395,865 192,988
Long-term debt 1,046,463 205,285
Postretirement benefits other than pensions 181,267 151,520
Other long-term liabilities 61,409 48,741
Deferred income taxes 97,007 74,805
Stockholders' equity 975,634 867,936
---------- ----------
$2,757,645 $1,541,275
---------- ----------
---------- ----------
(1) Segment profit is operating profit as derived in the Consolidated
Statements of Income. In 1999 the Company redefined its
measurement of segment profit to exclude interest expense and
foreign currency gains/losses and has restated the prior year to
reflect the change.