Collins & Aikman Posts Record First Quarter Results
28 April 2000
Collins & Aikman Posts Record First Quarter Results
TROY, Mich., April 27 Collins & Aikman Corporation
(NYSE: CKC) today reported record first quarter automotive sales and operating
income. Sales rose 12 percent to $534.8 million, operating income climbed
35 percent to $40.2 million and net income more than tripled to $7.0 million,
or $.11 per share.
Year-to-Date Automotive Highlights Include:
* Record sales of $535 million - 12% increase, strong top-line growth.
* Record first quarter operating income of $40.2 million -- Fourth
consecutive quarter of year-over-year improvement.
* Diluted EPS of $.11 - 210% increase, strong bottom-line performance.
* Free cash flow generation of $38 million - 224% improvement vs. 1999.
* Net debt reduced to $856 million - Continued balance sheet
strengthening.
* New Product Development Division established -- Organization aligned
for innovation and technology-driven growth.
* Frank Preston named President of North American Automotive Interior
Systems division - Broadening Collins & Aikman's management talent.
* Outstanding Product Quality Awards received - SAE, Toyota and Saturn.
Commenting on the Company's first quarter results, Thomas E. Evans,
Collins & Aikman's Chairman and Chief Executive Officer, stated, "Collins
& Aikman's management continues to deliver on its commitment to strengthen the
core earnings power of this Company. The first quarter of 2000 marked our
fourth consecutive quarter of year-over-year growth in sales, operating income
and free cash flow. We're extremely pleased with this performance which is
being driven by the benefits of our global restructuring program, steady gains
in operating performance, our intense focus on cost reduction and cash flow
generation, and the strength of the North American light vehicle market."
For first quarter of 2000, the Company earned net income of $7.0 million,
or $.11 per share, as compared to a net loss of ($6.5) million, or ($.10) per
share in the first quarter of 1999. In the 1999 first quarter, the Company
incurred a charge of ($8.9) million, or ($.14) per share, resulting from the
impact of a cumulative effect of a required change in accounting principle.
For the fiscal first quarter ended April 1, 2000, the Company had
approximately 62.4 million shares outstanding on a weighted average diluted
basis, which was unchanged from the year ago period.
Cash flow for the first quarter was exceptionally strong, as free cash
flow more than tripled to $38 million, versus $12 million in the first quarter
of 1999. Compared to the year ago period, working capital decreased by
$57 million, an improvement of 24 percent.
Net sales for the first quarter rose 12 percent to a record
$534.8 million, as compared with $478.3 million in the first quarter of 1999,
benefiting from the continued strength of the North American light vehicle
market as well as an additional week in the first quarter of 2000. Strong
production schedules helped drive sales for the Company's North American
Automotive Interior Systems division up nearly 15 percent to $326.6 million.
Sales in Europe of $86.2 million were five percent higher as compared with the
same period in 1999, due primarily to increased sales levels at the Company's
carpet, acoustics and plastics operations. Net sales for the Company's
Specialty Automotive Products division increased approximately eight percent
to $121.9 million, due primarily to production volume increases in the fabrics
business and strong performance in the convertible systems division, which
benefited from incremental Ford Mustang volume.
Evans continued, "We believe our first quarter results clearly demonstrate
that the financial turnaround of Collins & Aikman is in full force. This
strong operating performance continues to reflect both the improvements being
derived from our 1999 restructuring initiatives as well as our ongoing focus
on achieving overall operational excellence. Particularly noteworthy, is the
operational turnaround occurring at the Company's U.K. Plastics operation,
which has benefited from both a strengthened management team and significant
cost reduction actions taken during the first quarter of this year. We
believe that these steady improvements, coupled with the organizational
changes we recently announced, and the expanding telematics driven
opportunities for our acoustics business, clearly position Collins & Aikman
for a strong future."
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited - in thousands, except per share data)
Quarter Ended
April 1, 2000 March 27, 1999
(14 weeks) (13 weeks)
Net sales $ 534,761 $ 478,337
Cost of sales 451,046 407,749
Gross profit 83,715 70,588
Selling, general and
administrative expenses 43,553 40,755
Operating income 40,162 29,833
Interest expense, net 25,062 21,815
Loss on sale of receivables 3,818 1,311
Other expense (income) (1,079) 2,177
Income before income taxes 12,361 4,530
Income tax expense 5,347 2,214
Income before cumulative
effect of a change in
accounting principle 7,014 2,316
Cumulative effect of a
change in accounting
principle, net of income taxes -- (8,850)
Net income (loss) $ 7,014 $ (6,534)
Net income (loss) per basic
and diluted common share:
Income before cumulative
effect of a change in
accounting principle $ 0.11 $ 0.04
Cumulative effect of a
change in accounting principle -- (0.14)
Net income (loss) $ 0.11 $ (0.10)
Average common shares outstanding:
Basic 61,889 61,992
Diluted 62,365 62,351
EBITDA $ 58,923 $ 47,065
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
ASSETS April 1, 2000 December 25, 1999
Current Assets:
Cash and cash equivalents $ 41,478 $ 13,980
Accounts and other receivables, net 229,078 233,819
Inventories 137,534 132,625
Other 76,260 84,942
Total current assets 484,350 465,366
Property, plant and equipment, net 441,395 443,526
Deferred tax assets 86,449 86,235
Goodwill, net 252,604 256,362
Other assets 92,871 97,401
$ 1,357,669 $ 1,348,890
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Current Liabilities:
Short-term borrowings $ 8,503 $ 3,088
Current maturities of long-term debt 29,021 27,992
Accounts payable 188,141 198,466
Accrued expenses 167,484 132,709
Total current liabilities 393,149 362,255
Long-term debt 860,040 884,550
Other, including postretirement
benefit obligation 252,190 253,206
Commitments and contingencies
Common stock (150,000 shares
authorized, 70,521 shares issued
and 61,879 shares outstanding at
April 1, 2000 and 70,521 shares
issued and 61,904 shares outstanding
at December 25, 1999) 705 705
Other paid-in capital 585,679 585,484
Accumulated deficit (634,103) (641,117)
Accumulated other comprehensive loss (36,922) (33,260)
Treasury stock, at cost (8,642 shares
at April 1, 2000 and 8,617 shares
at December 25, 1999) (63,069) (62,933)
Total common stockholders' deficit (147,710) (151,121)
$ 1,357,669 $ 1,348,890
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Quarter Ended
April 1, 2000 March 27, 1999
(14 weeks) (13 weeks)
OPERATING ACTIVITIES
Income from continuing operations $ 7,014 $ 2,316
Adjustments to derive cash flow
from continuing operating activities:
Deferred income tax expense (benefit) 2,143 (1,193)
Depreciation and amortization 18,761 17,232
Decrease (increase) in accounts
and other receivables 9,392 (20,775)
Decrease (increase) in inventories (4,909) 11,134
Decrease in accounts payable (10,325) (13,166)
Increase in interest payable 14,910 14,131
Other, net 31,969 5,839
Net cash provided by continuing
operating activities 68,955 15,518
Net cash used in discontinued operations (3,188) (1,683)
INVESTING ACTIVITIES
Additions to property, plant and equipment (15,095) (12,534)
Sales of property, plant and equipment 74 2,441
Other, net -- (800)
Net cash used in investing activities (15,021) (10,893)
FINANCING ACTIVITIES
Repayment of long-term debt (13,676) (4,589)
Proceeds from (reduction of)a
participating interest in
accounts receivable (4,651) 8,300
Net borrowings (repayments) on
revolving credit facilities (10,463) 9,500
Increase on short-term borrowings 5,678 2,151
Purchase of treasury stock, net (136) (1,233)
Dividends paid -- (6,193)
Other, net -- (158)
Net cash provided by (used in)
financing activities (23,248) 7,778
Net increase in cash and cash equivalents 27,498 10,720
Cash and cash equivalents at
beginning of period 13,980 23,755
Cash and cash equivalents
at end of period $ 41,478 $ 34,475
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
FIRST QUARTER 2000 -- SUPPLEMENTAL SCHEDULE
(Unaudited -- in millions, except CPV)
SALES DATA:
Quarter Ended
April 1, 2000 March 27, 1999
DIVISION: (14 weeks) (13 weeks)
North American Automotive
Interior Systems $ 327 $ 283
European Automotive
Interior Systems 86 82
Specialty Automotive Products 122 113
Total $ 535 $ 478
OPERATING INCOME (LOSS):
Quarter Ended
April 1, 2000 March 27, 1999
DIVISION: (14 weeks) (13 weeks)
North American Automotive
Interior Systems $ 28 $ 19
European Automotive Interior Systems 2 1
Specialty Automotive Products 11 11
Other (1) (1)
Total $ 40 $ 30
STATISTICAL DATA:
Quarter Ended
April 1, 2000 March 27, 1999
(14 weeks) (13 weeks)
EUROPEAN CPV $ 17 $ 16
N. AMERICAN CPV $ 91 $ 87
EBITDA $ 59 $ 47
CAPITAL EXPENDITURES $ 15 $ 13
FREE CASH FLOW * $ 38 $ 12
* Free Cash Flow = EBITDA less capital expenditures plus/minus the change
in accounts receivable, accounts payable, and inventory.