Attached files
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| 8-K/A - FORM 8-K/A - COOPER TIRE & RUBBER CO | l38561e8vkza.htm |
Exhibit 99.1
COMPANY CONTACT:
|
Curtis Schneekloth | FOR IMMEDIATE RELEASE | ||
| (419) 427-4768 | March 5, 2010 |
Cooper Tire & Rubber Company Issues Amended Release
We are
issuing an amended version of the press release issued on March 2,
2010 in order to conform the presentation of certain balance sheet
items to the Form 10-K which was filed on the same day. No changes
have been made to the narrative of the press release.
Cooper Tire & Rubber Company Reports
Improved Fourth Quarter Results
Improved Fourth Quarter Results
| • | Net income (attributable to Cooper Tire) of $39 million, or 63 cents per share | |
| • | 28 percent increase in unit sales | |
| • | Net sales increase of 22 percent | |
| • | Cash and cash equivalents of $427 million |
Findlay, Ohio, March 2, 2010 — Cooper Tire & Rubber Company (NYSE:CTB) today reported net income of
$39 million for the quarter ended Dec. 31, 2009, a $183 million improvement from the same period in
2008. Net sales were $773 million, an increase of $137 million, or 22 percent, from the prior
year. Operating profit was $60 million for the quarter, a $224 million improvement from a loss of
$164 million in 2008. The Company reported net income of 63 cents per share during the quarter on a
diluted basis. These results included income of $6 million from discontinued operations during the
quarter.
Results during the quarter included restructuring charges of $12 million, primarily related to the
closure of the Albany, Ga., facility, a decrease of $64 million from the fourth quarter of 2008.
During the prior year same quarter, the Company also had a $31 million non-recurring pretax charge
for impairment of goodwill in the International segment. Excluding these charges, operating profit
in the fourth quarter of 2009 improved by $129 million from the same quarter in 2008.
Stronger results for the quarter when compared to the prior year were driven by lower raw material
costs, improved volumes and increased utilization of manufacturing capacity. These positive
impacts were partially offset by unfavorable price and mix.
For the year 2009, Cooper generated net sales of $2.8 billion, down 4 percent from 2008. Net
income was $52 million for the year — a significant improvement from a net loss of $219 million in
2008. The Company ended the year with $427 million in cash and cash equivalents, reflecting strong
cash flows from operations and prudently managed resources. A payment of $97 million was made to
retire maturing parent Company debt during the fourth quarter of 2009.
North American Tire Operations
North American Tire Operations sales were $566 million during the fourth quarter, up from 2008 net
sales of $511 million. Increased volumes were offset by unfavorable price and mix. Total light
vehicle tire shipments for Cooper’s North America segment in the United States increased by 22
percent, outpacing the total industry shipment increase of 7 percent reported by the Rubber
Manufacturers Association. This improvement occurred across all product segments as the Company
was able to increase market share in the replacement market.
Operating profit of $39 million for the fourth quarter rose by $148 million when compared with the
same period in 2008. Excluding restructuring charges, which dropped by $64 million, the
improvement from the prior year was $84 million. Raw material cost improvements during the quarter
positively affected results by $74 million. Higher volumes improved results by $29 million.
Manufacturing operations improved by $21 million, primarily as a result of better capacity
utilization. The segment’s operating results also benefited by approximately $15 million from the
sale of units that were valued at lower historical costs, in accordance with the use of LIFO
cost-flow methodology, as the Company liquidated inventory levels to meet surging demand.
Partially offsetting these impacts were net unfavorable price and mix changes of $36 million.
Higher other costs, including those related to incentive and administrative costs, were $19 million
larger than the prior year.
For the 12 months ended December 2009, the segment generated operating profit before restructuring
of $160 million, or 8 percent, on sales of $2 billion.
International Tire Operations
The Company’s International Tire Operations reported $274 million in sales, a substantial increase
of $98 million, or 56 percent, compared with the prior year same quarter. This was the result of
increased volume offset slightly by negative price and mix. Asian operations increased sales
volumes by 92 percent, while European operations reported increased unit sales of 6 percent.
The segment’s operating profit increased $77 million, to $26 million for the fourth quarter.
Excluding the non-recurrence of a $31 million write-off of goodwill that occurred in 2008, results
improved by $46 million. This change, when compared to the fourth quarter of 2008, resulted partly
from a $34 million improvement in raw material costs. Improved volumes contributed $12 million. The
segment’s better utilization and focus on reducing waste was a positive of $6 million. The segment
also benefited
approximately $9 million from favorable currency rates and other costs when compared with the prior
year. These positives were partially offset by negative price and mix impacts of $15 million.
International sales for the total year were $994 million, generating operating profit of $73
million, or 7 percent of net sales.
Management Commentary and Outlook
Roy Armes, Chief Executive Officer, commented, “During the fourth quarter, we were encouraged by
the stronger demand in many markets for our tires. This improvement allowed the progress we have
made to be more visible on the bottom line. In recent years, we have focused on strengthening the
foundation of our Company in order to leverage opportunities as they emerge and better face
challenges as they arise. We are staying the course with our strategic direction of improving our
global cost structure, profitably increasing the top line, and enhancing organizational
capabilities.
“The tire industry and the global environment continue to be fluid. Successful implementation of
the three imperatives detailed in our Strategic Plan and improvement in market or industry
conditions can drive improved operating results. We recognize these results may also be subjected
to uncontrollable factors that impact the replacement tire industry. Our focus remains on prudent
management of our critical resources to drive shareholder value. With recent trends in mind, our
outlook remains cautiously optimistic. The successes we achieve, combined with improved global
industry conditions, can result in an even stronger Company with a more consistent level of
profitability.”
Cooper’s management team will discuss the financial and operating results for the quarter in a
conference call today at 11 a.m. Eastern time. Interested parties may access the audio portion of
that conference call on the investor relations page of the Company’s Web site at
www.coopertire.com.
About Cooper Tire & Rubber Company
Cooper Tire & Rubber Company is a global company that specializes in the design, manufacture,
marketing and sales of passenger car, light truck, medium truck tires and subsidiaries that
specialize in motorcycle and racing tires. With headquarters in Findlay, Ohio, Cooper Tire has
manufacturing, sales, distribution, technical and design facilities within its family of companies
located in 10 countries around the world. For more information, visit Cooper Tire’s Web site at
www.coopertire.com.
Forward-Looking Statements
This report contains what the Company believes are “forward-looking statements,” as that term is
defined under the Private Securities Litigation Reform Act of 1995, regarding projections,
expectations or matters that the Company anticipates may happen with respect to the future
performance of the industries in which the Company operates, the economies of the United States and
other countries, or the performance of the Company itself, which involve uncertainty and risk.
Such “forward-looking statements” are generally, though not always, preceded by words such as
“anticipates,” “expects,” “believes,” “projects,” “intends,” “plans,” “estimates,” and similar
terms that connote a view to the future and are not merely recitations of
historical fact. Such statements are made solely on the basis of the Company’s current views and
perceptions of future events, and there can be no assurance that such statements will prove to be
true.
It is possible that actual results may differ materially from those projections or expectations due
to a variety of factors, including but not limited to:
| • | changes in economic and business conditions in the world; | |
| • | the failure to achieve expected sales levels; | |
| • | consolidation among the Company’s competitors and customers; | |
| • | technology advancements; | |
| • | the failure of the Company’s suppliers to timely deliver products in accordance with contract specifications; | |
| • | changes in interest and foreign exchange rates; | |
| • | changes in the Company’s customer relationships, including loss of particular business for competitive or other reasons; | |
| • | the impact of reductions in the insurance program covering the principal risks to the Company, and other unanticipated events and conditions; | |
| • | volatility in raw material and energy prices, including those of steel, petroleum based products and natural gas and the unavailability of such raw materials or energy sources; | |
| • | the inability to obtain and maintain price increases to offset higher production or material costs; | |
| • | increased competitive activity including actions by larger competitors or low-cost producers; | |
| • | the inability to recover the costs to develop and test new products or processes; | |
| • | the risks associated with doing business outside of the United States; | |
| • | changes in pension expense and/or funding resulting from investment performance of the Company’s pension plan assets and changes in discount rate, salary increase rate, and expected return on plan assets assumptions, or changes to related accounting regulations; | |
| • | government regulatory initiatives, including regulations under the TREAD Act; | |
| • | the impact of labor problems, including a strike brought against the Company or against one or more of its large customers or suppliers; | |
| • | litigation brought against the Company including products liability; | |
| • | an adverse change in the Company’s credit ratings, which could increase its borrowing costs and/or hamper its access to the credit markets; | |
| • | changes to the credit markets and/or access to those markets; | |
| • | inaccurate assumptions used in developing the Company’s strategic plan or the inability or failure to successfully implement the Company’s strategic plan including closure of the Albany, Georgia facility; |
| • | inability to adequately protect the Company’s intellectual property rights; | |
| • | failure to successfully integrate acquisitions into operations or their related financings may impact liquidity and capital resources; | |
| • | inability to use deferred tax assets; | |
| • | recent changes to tariffs on certain tires imported into the United States from the People’s Republic of China; | |
| • | and changes in the Company’s relationship with joint venture partners. |
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
Consolidated Statements of Income
(Dollar amounts in thousands except per share amounts)
| Quarter Ended | Year Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||||
Net sales |
$ | 635,832 | $ | 773,059 | $ | 2,881,811 | $ | 2,778,990 | ||||||||
Cost of products sold |
645,589 | 645,278 | 2,805,638 | 2,359,963 | ||||||||||||
Gross profit (loss) |
(9,757 | ) | 127,781 | 76,173 | 419,027 | |||||||||||
Selling, general and administrative |
46,256 | 55,162 | 185,064 | 206,990 | ||||||||||||
Impairment of goodwill |
31,340 | — | 31,340 | — | ||||||||||||
Restructuring charges |
76,402 | 12,272 | 76,402 | 48,718 | ||||||||||||
Settlement of retiree medical case |
— | — | — | 7,050 | ||||||||||||
Operating profit (loss) |
(163,755 | ) | 60,347 | (216,633 | ) | 156,269 | ||||||||||
Interest expense |
(13,484 | ) | (11,019 | ) | (50,525 | ) | (47,211 | ) | ||||||||
Debt extinguishment |
— | — | (593 | ) | — | |||||||||||
Interest income |
1,593 | 454 | 12,887 | 5,193 | ||||||||||||
Dividend from unconsolidated subsidiary |
— | — | 1,943 | — | ||||||||||||
Other income — net |
(7,128 | ) | 247 | (4,854 | ) | 1,272 | ||||||||||
Income (loss) from continuing operations
before income taxes |
(182,774 | ) | 50,029 | (257,775 | ) | 115,523 | ||||||||||
Income tax benefit (expense) |
28,327 | (409 | ) | 30,274 | (231 | ) | ||||||||||
Income (loss) from continuing operations |
(154,447 | ) | 49,620 | (227,501 | ) | 115,292 | ||||||||||
Income (loss) from discontinued operations,
net of income taxes |
(16 | ) | 6,133 | 64 | (31,653 | ) | ||||||||||
Net income (loss) |
(154,463 | ) | 55,753 | (227,437 | ) | 83,639 | ||||||||||
Net income (loss) attributable to noncontrolling shareholders’ interests |
(11,009 | ) | 16,590 | (8,057 | ) | 31,872 | ||||||||||
Net income (loss) attributable to Cooper Tire & Rubber Company |
$ | (143,454 | ) | $ | 39,163 | $ | (219,380 | ) | $ | 51,767 | ||||||
Basic earnings (loss) per share |
||||||||||||||||
Income (loss) from continuing operations
attributable to Cooper Tire & Rubber Company |
$ | (2.43 | ) | $ | 0.55 | $ | (3.72 | ) | $ | 1.40 | ||||||
Income (loss) from discontinued operations |
(0.00 | ) | 0.10 | 0.00 | (0.53 | ) | ||||||||||
Net income (loss) attributable to Cooper Tire & Rubber Company |
$ | (2.44) | * | $ | 0.65 | $ | (3.72 | ) | $ | 0.87 | ||||||
Diluted earnings (loss) per share |
||||||||||||||||
Income (loss) from continuing operations
attributable to Cooper Tire & Rubber Company |
$ | (2.43 | ) | $ | 0.53 | $ | (3.72 | ) | $ | 1.37 | ||||||
Income (loss) from discontinued operations |
(0.00 | ) | 0.10 | 0.00 | (0.52 | ) | ||||||||||
Net income (loss) attributable to Cooper Tire & Rubber Company |
$ | (2.44) | * | $ | 0.63 | $ | (3.72 | ) | $ | 0.85 | ||||||
Weighted average shares outstanding |
||||||||||||||||
Basic |
58,910 | 60,509 | 59,048 | 59,439 | ||||||||||||
Diluted |
58,910 | 62,419 | 59,048 | 60,681 | ||||||||||||
Depreciation |
$ | 34,918 | $ | 30,515 | $ | 138,805 | $ | 121,483 | ||||||||
Amortization |
$ | 319 | $ | 383 | $ | 3,954 | $ | 2,028 | ||||||||
Capital expenditures |
$ | 28,181 | $ | 15,355 | $ | 128,773 | $ | 79,333 | ||||||||
Segment information |
||||||||||||||||
Net sales |
||||||||||||||||
North American Tire |
$ | 510,766 | $ | 565,647 | $ | 2,142,139 | $ | 2,006,183 | ||||||||
International Tire |
175,577 | 273,604 | 975,007 | 993,839 | ||||||||||||
Eliminations |
(50,511 | ) | (66,192 | ) | (235,335 | ) | (221,032 | ) | ||||||||
Segment profit (loss) |
||||||||||||||||
North American Tire |
(109,138 | ) | 39,008 | (174,065 | ) | 110,957 | ||||||||||
International Tire |
(50,179 | ) | 26,468 | (30,094 | ) | 72,753 | ||||||||||
Eliminations |
(1,443 | ) | (59 | ) | (1,330 | ) | (1,637 | ) | ||||||||
Unallocated corporate charges |
(2,995 | ) | (5,070 | ) | (11,144 | ) | (25,804 | ) | ||||||||
******************************
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS
| December 31 | ||||||||
| 2008 | 2009 | |||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 247,672 | $ | 426,981 | ||||
Accounts receivable |
318,109 | 367,023 | ||||||
Inventories |
420,112 | 298,435 | ||||||
Other current assets |
58,290 | 39,392 | ||||||
Total current assets |
1,044,183 | 1,131,831 | ||||||
Net property, plant and equipment |
901,274 | 850,971 | ||||||
Restricted cash |
2,432 | 2,219 | ||||||
Intangibles and other assets |
95,007 | 115,319 | ||||||
| $ | 2,042,896 | $ | 2,100,340 | |||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Notes payable |
$ | 184,774 | $ | 156,719 | ||||
Trade payables and accrued liabilities |
372,408 | 459,091 | ||||||
Income taxes |
1,409 | 3,955 | ||||||
Liabilities of discontinued operations |
1,182 | 1,061 | ||||||
Current portion of long-term debt |
147,761 | 15,515 | ||||||
Total current liabilities |
707,534 | 636,341 | ||||||
Long-term debt |
325,749 | 330,971 | ||||||
Postretirement benefits other than pensions |
236,025 | 244,905 | ||||||
Pension benefits |
268,773 | 272,050 | ||||||
Other long-term liabilities |
115,803 | 145,978 | ||||||
Long-term liabilities of discontinued operations |
8,046 | 6,043 | ||||||
Deferred income taxes |
— | — | ||||||
Stockholders’ equity |
380,966 | 464,052 | ||||||
| $ | 2,042,896 | $ | 2,100,340 | |||||
| * | Amounts do not add due to rounding. |