Cooper Tire & Rubber Company Announces Sales, Third Quarter Results
19 October 2000
Cooper Tire & Rubber Company Announces Record Sales, Third Quarter Results
FINDLAY, Ohio--Oct. 19, 2000--Cooper Tire & Rubber CompanyThird Quarter Highlights:
| -- | Record third quarter sales |
| -- | Operating profit increased 5 percent |
| -- | All-time record Tire Group sales in the month of August |
| -- | Over $150 million in net new automotive business awards |
| -- | Comprehensive restructuring of Automotive Group planned |
Cooper Tire & Rubber Company today reported record net sales of $844 million for the quarter ended September 30, 2000.
This represents a 59 percent increase over the same period a year ago. Operating profit for the quarter increased 5 percent to $60.1 million. Earnings per share for the quarter were 32 cents compared to 46 cents per share in the same period one year ago.
For the first nine months of 2000, Company net sales were a record $2.7 billion, an increase of 77 percent over the same period in 1999. Operating profits were up 24 percent to $215.4 million. Net earnings per share were $1.22 for the period compared to $1.37 per share in the same period last year.
The recently acquired Standard Products Company and Siebe Automotive, which were not yet owned during the third quarter of 1999, contributed $294 million in sales for the quarter and $1.1 billion in the first nine months.
On a segment basis, Automotive Group sales reached $368 million during the quarter, more than tripling the 1999 mark of $108 million. Standard Products and Siebe Automotive accounted for $261 million of the total. Tire Group sales were up 14 percent to $482 million compared to $424 million in 1999. Oliver Rubber Company, which was acquired with Standard, contributed sales of $40 million to the Tire Group total for the quarter.
During the first nine months, Automotive Group sales increased from $350 million in 1999 to $1.3 billion in 2000. Acquired operations accounted for $976 million of the total. Tire Group sales were $1.3 billion compared to $1.1 billion last year, and acquired operations contributed $123 million.
Commenting on the Company's third quarter results, Cooper's chairman, president and chief executive officer Thomas A. Dattilo said, "While our Tire Group benefited from the increased demand for SUV tires, higher productivity in our plants and the positive impact of a $3 million tax settlement, raw material costs continued to increase and impacted our results by approximately 5 cents per share. Actions to integrate Oliver Rubber resulted in nonrecurring charges of another 1 cent per share.
"We were able to keep overall unit volumes constant during the quarter in spite of a reduction in sales of entry level tires to several private label customers. Sales of Cooper and Mastercraft brand tires again reached record levels. This helped us achieve a significant improvement in our product mix during the quarter, partially offsetting the impact of increasing raw material costs. Strong brand sales helped the month of August become the highest sales month in our history."
Regarding Cooper-Standard Automotive, Dattilo stated, "Seasonal third quarter shutdowns and OEM production cutbacks, as well as inefficiencies in our European and Mexican sealing operations, were negative factors in the quarter. However, our integration of operations is progressing as planned and we were able to achieve nearly $6 million in realized synergies in the third quarter alone. We were also successful in winning more than $150 million in incremental new business awards during the quarter and have received a total of $265 million through Sept. 30. This new business is a direct result of our global strategies."
Aggressive integration plans continued throughout the quarter. Through the first nine months of the year, Cooper Tire & Rubber Company has incurred nearly $18 million or 15 cents per share in non-recurring charges relating to downsizing, plant shutdowns and losses from operations of a plant within the Plastics Division of Cooper-Standard Automotive prior to its sale.
In addition to the restructuring steps already initiated or completed, Cooper today announced a comprehensive restructuring plan to further significantly improve efficiencies and reduce costs throughout its worldwide operations. The overall plan will result in the downsizing or closing of up to 18 facilities around the world and the reduction of approximately 1,100 employees. The plan with respect to facilities in North America will impact plants in Luzerne and Mio, Mich.; Rocky Mount, N.C.; and the Oliver Rubber facility in Dallas, Texas. Implementation in North America will commence immediately. Decisions regarding the facilities to be affected and the implementation of the plan in Europe will be undertaken in consultation with local works councils and employee representatives, as appropriate. The company has targeted the end of 2001 for full implementation of the plan. Associated restructuring charges are expected to range from $35 million to $40 million and are expected to be taken mostly in the fourth quarter of 2000. Related non-recurring expenses will be charged to operations as incurred. When the restructuring is complete, it is expected to result in annual cost savings of approximately $30 million and will generate pretax proceeds of approximately $25 million from the sale of related facilities and assets.
"This was another quarter of advancement for Cooper Tire & Rubber Company," Dattilo concluded. "Despite the challenges of our industries, we were able to set record sales numbers for the Cooper brand, win a tremendous amount of new automotive business and put together a restructuring plan that will result in the total integration of Standard, Siebe and Cooper and yield significant operating savings in the future. We were able to continue to increase our synergies, execute our strategies, and still report solid earnings and cash flow."
COOPER TIRE & RUBBER COMPANY
CONSOLIDATED STATEMENTS OF INCOME
(Dollar amounts in thousands except per share amounts)
Quarter Ended Nine Months Ended
Sept. 30 Sept. 30
------------------------ ------------------------
1999 2000 1999 2000
----------- ----------- ----------- -----------
Net sales $ 531,883 $ 843,607 $ 1,495,122 $ 2,652,524
Costs of
products sold 440,346 726,215 1,220,855 2,255,172
----------- ----------- ----------- -----------
Gross profit 91,537 117,392 274,267 397,352
Amortization
of goodwill -- 4,171 -- 12,854
Selling, general
and administrative 34,156 53,169 100,044 169,055
----------- ----------- ----------- -----------
Operating profit 57,381 60,052 174,223 215,443
Interest expense 3,710 23,589 11,209 72,887
Other - net (198) (1,915) (76) (5,636)
----------- ----------- ----------- -----------
Income before
income taxes 53,869 38,378 163,090 148,192
Provision for
income taxes 19,269 14,958 59,143 57,795
----------- ----------- ----------- -----------
Net income $ 34,600 $ 23,420 $ 103,947 $ 90,397
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Basic and diluted
earnings per
share $ .46 $ .32 $ 1.37 $ 1.22
Weighted average
shares outstanding 75,895 72,599 75,895 74,002
Depreciation $ 27,143 $ 42,035 $ 79,570 $ 127,508
Amortization
of goodwill
and other
intangibles $ 429 $ 4,848 $ 1,272 $ 14,890
Capital
expenditures $ 33,378 $ 58,161 $ 103,918 $ 158,385
Segment information:
Net sales:
Tire $ 424,310 $ 482,039 $ 1,144,782 $ 1,337,803
Automotive 107,573 368,231 350,340 1,337,835
Eliminations -- (6,663) -- (23,114)
Segment profit:
Tire 47,961 51,469 131,281 138,682
Automotive 9,420 8,583 42,942 76,761
CONSOLIDATED BALANCE SHEETS
Sept. 30
-----------------------
1999 2000
---------- ----------
Assets
------
Current assets:
Cash and cash equivalents $ 40,302 $ 26,400
Accounts receivable 412,548 686,952
Inventories 167,811 290,379
Prepaid expenses, deferred
income taxes and other 23,349 90,840
---------- ----------
Total current assets 644,010 1,094,571
Property, plant and equipment - net 908,597 1,313,235
Goodwill - net -- 409,834
Intangibles and other assets 100,190 253,418
---------- ----------
$1,652,797 $3,071,058
---------- ----------
---------- ----------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Notes payable $ 11,289 $ 179,064
Trade payables and
accrued liabilities 201,950 434,243
Income taxes 3,473 10,238
Current portion of debt 212 13,498
---------- ----------
Total current liabilities 216,924 637,043
Long-term debt 205,119 1,045,762
Postretirement benefits other
than pensions 155,985 185,522
Other long-term liabilities 50,287 56,473
Deferred income taxes 76,977 182,753
Stockholders' equity 947,505 963,505
---------- ----------
$1,652,797 $3,071,058
---------- ----------
---------- ----------
These interim statements are subject to year-end adjustments.