Cooper Tire & Rubber Company Announces Record First Quarter Results
19 April 2000
Cooper Tire & Rubber Company Announces Record First Quarter Results
FINDLAY, Ohio--April 19, 2000--(NYSE:CTB)FIRST QUARTER HIGHLIGHTS
-- Record sales and earnings
-- Completed acquisition of Siebe Automotive
-- Strong Tire Group sales dramatically outpace the industry
-- Over $46 million in new automotive business awarded
-- Texarkana tire operations nearing full production levels
-- French plant closure authorized and in progress
COOPER TIRE & RUBBER COMPANY (NYSE:CTB) today reported record high earnings of $31.5 million or 42 cents per share in the quarter ended March 31, 2000. Net sales for the quarter reached a record $922 million, a 97 percent increase over 1999. The acquisition of The Standard Products Company and Siebe Automotive contributed $397 million in sales to the quarter total. Earnings were higher than anticipated primarily due to stronger than expected sales in the Tire Group late in the quarter. The record earnings include the negative impact (about 9 cents per share) of continued transition activities including the closure of one production facility in France and losses from operation of a troubled plant within the Plastics Division of Cooper-Standard Automotive. In addition, higher raw materials costs reduced earnings by approximately 6 cents per share. Operating profit increased 35 percent over last year to $72.2 million and EBITDA rose 56 percent to $122.8 million, both all-time records.
Sales were strong for both segments of the company. Tire Group net sales soared to $445 million, a 27 percent increase over the same period of 1999. Sales of the Oliver Rubber Company, which was acquired late last year, totaled $42 million. Automotive Group sales of $485 million included $355 million attributable to two months of revenue from the former Siebe Automotive operations acquired in late January and a full quarter impact from the Standard Products acquisition. Overall, Automotive Group sales were more than quadruple last year's first quarter levels.
"We are very pleased with our first quarter performance," Cooper's chairman and CEO, Patrick W. Rooney said in announcing the first quarter results. "Both operating groups performed solidly given the challenges of the marketplace.
"In the Tire Group, unit sales dramatically outpaced the industry yet again with a year-over-year increase of over 13 percent. Much of this increase resulted from particularly strong shipments late in the quarter. Our sales and marketing team remains focused on providing industry leading service and has not missed a beat while cultivating the Pirelli alliance and integrating the Oliver operations. Demand for all Cooper produced brands continues to be very strong."
Regarding the Cooper-Standard automotive group, Cooper's president and COO Thomas A. Dattilo said, "Sales were also very strong this quarter as North American light vehicle production reached record levels in March. Building on the strong performance this quarter, Cooper-Standard Automotive was successful in winning new business on several major automotive platforms for future model years totaling over $40 million in annual sales. Our acquisition of Standard Products and Siebe is already paying off. The new business awarded is an indicator of that."
"By nearly every measure, operationally, this has been the best quarter ever for Cooper," Dattilo continued. "We were able to make up the impact of transition activities through greater synergies, larger cost reductions and improved productivity. Plus, we have put some significant operational challenges substantially behind us. Our Texarkana facility is very near to being at full production following the conversion to continuous 7-day production which began last year. We received the necessary approvals to close the French operation that was losing money and the closure is in progress. We expect the closure-related costs for the French plant and operations of the troubled plastics plant to reduce earnings during the second quarter by as much as 6 cents per share and have little or no impact thereafter. Finally, we expect to complete our strategic review of the Cooper-Standard Automotive plastics division during the second quarter. With price increases in the replacement tire market and continued strong automotive sales, the pieces are in place for a very exciting year."
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, Australia 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 77 manufacturing facilities in twelve countries. For more information, visit the Company's web site at: www.coopertire.com.
Forward-Looking Statements
This report contains "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, 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 the Company's 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, the loss of a major customer, risks associated with integrating the operations of The Standard Products Company and Siebe Automotive, and the failure to achieve synergies or savings anticipated in both 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.
Further information covering issues that could materially affect financial performance is contained in the Company's periodic filings with the U.S. Securities and Exchange Commission.
(Statements of income and balance sheets follow...)
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended
(Dollar amounts in thousands March 31
except per-share amounts) ------------------------
1999 2000
--------- ---------
Net sales $ 467,887 $ 922,265
Costs of products sold 382,493 787,584
--------- ---------
Gross profit 85,394 134,681
Amortization of goodwill -- 4,212
Selling, general and administrative 32,092 58,264
--------- ---------
Operating profit 53,302 72,205
Interest expense 3,903 23,922
Other - net (225) (3,359)
--------- ---------
Income before income taxes 49,624 51,642
Provision for income taxes 18,233 20,140
--------- ---------
Net income $ 31,391 $ 31,502
--------- ---------
--------- ---------
Basic and diluted earnings per share $ .41 $ .42
Weighted average shares outstanding 75,877 75,728
Depreciation $ 25,650 $ 43,280
Amortization of goodwill
and other intangibles $ 419 $ 4,888
Capital expenditures $ 39,304 $ 48,700
Segment information:
Net sales:
Tire $ 352,062 $ 445,344
Automotive 115,825 484,679
Eliminations -- (7,758)
Segment profit:
Tire 37,197 45,109
Automotive 16,105 27,096
CONSOLIDATED BALANCE SHEETS
March 31
------------------------
1999 2000
--------- ---------
Assets
------
Current assets:
Cash and cash equivalents $ 23,294 $ 47,990
Accounts receivable 338,289 678,172
Inventories 191,912 300,492
Prepaid expenses and
deferred income taxes 21,729 75,864
---------- ----------
Total current assets 575,224 1,102,518
Property, plant and equipment - net 897,008 1,340,932
Intangibles and other assets 93,935 699,174
---------- ----------
$1,566,167 $3,142,624
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 8,939 $ 260,428
Trade payables and accrued liabilities 170,435 457,345
Income taxes 17,002 26,951
Current portion of debt 242 14,308
---------- ----------
Total current liabilities 196,618 759,032
Long-term debt 205,218 1,046,515
Postretirement benefits other than pensions 153,001 184,253
Other long-term liabilities 48,497 56,641
Deferred income taxes 73,685 112,410
Stockholders' equity 889,148 983,773
---------- ----------
$1,566,167 $3,142,624
---------- ----------
---------- ----------
These interim statements are subject to year-end adjustments.