Tower International Reports First Quarter Results, Increases Guidance for Second Quarter and Full Year

03 May, 2012, 09:00 ET from Tower International, Inc.

LIVONIA, Mich., May 3, 2012 /PRNewswire/ -- Tower International, Inc. (NYSE: TOWR), a leading integrated global manufacturer of engineered structural metal components and assemblies, today announced its first quarter 2012 results and raised its outlook for the second quarter and full year.

  • Revenue for the quarter was $618 million, up 3 percent from $600 million in the first quarter 2011. 
  • Adjusted EBITDA for the quarter was $50.8 million.  As expected, this was down from $65.7 million a year ago, but it was at the high end of company guidance.  The decline from first quarter 2011 largely reflected non-recurrence of a customer volume reimbursement and a different quarterly cadence of productivity savings. 
  • Net loss of $0.2 million for the first quarter 2012 compared with net income of $9 million a year ago.  As detailed below, this year's first quarter included certain items that adversely impacted results by $4.7 million.  Excluding these items and comparable items in the first quarter of 2011, diluted adjusted earnings per share were $0.23, compared with $0.57 per share a year ago. 
  • Free cash flow in the first quarter was a seasonally negative $30.2 million, in line with company guidance. 
  • Liquidity at quarter-end remained strong, at $239 million
  • For the second quarter, Tower now anticipates Adjusted EBITDA of $60 to $65 million, an improvement of $4 to $9 million from prior guidance.
  • For the full year, guidance for Adjusted EBITDA is increased by $5 to $15 million, to $210 to $220 million, on anticipated sales of about $2.4 billion.

"While 2012 remains a transition year for Tower, there are promising signs in overall industry volume and our performance that the transition to profitable growth in 2013 will be smoother than previously anticipated," said President and CEO Mark Malcolm.

Tower to Host Conference Call Today at 1 p.m. EDT

Tower will discuss its first quarter 2012 results and other related matters in a conference call at 1 p.m. EDT today.  Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone.  The slide presentation and webcast can be accessed via the investor relations portion of Tower's website www.towerinternational.com.  To dial into the conference call, domestic callers should dial 1-866-393-4576, international callers should dial 1-706-679-1462.  An audio recording of the call will be available approximately two hours after the completion of the call.  To access this recording, please dial 1-800-585-8367 (domestic) or 1-404-537-3406 (international) and reference Conference I.D. #73174452.  A webcast replay will also be available and may be accessed via Tower's website.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures: "Adjusted EBITDA", "free cash flow," "net debt," and "diluted adjusted income / (loss) per share." We define Adjusted EBITDA as net income / (loss) before interest, taxes, depreciation, amortization, restructuring items and other adjustments described in the reconciliations provided in this press release.  Free cash flow is defined as net cash provided by or used in operating activities less cash disbursed for purchases of property, plant and equipment. Net debt is defined as total debt less cash and cash equivalents.  Diluted adjusted income / (loss) per share excludes the impact of certain items as described below that are included in our net income / (loss).  We use Adjusted EBITDA and free cash flow as supplements to information provided in accordance with generally accepted accounting principles ("GAAP") in evaluating our business and they are included in this press release because they are principal factors upon which our management assesses performance.  We believe these items as well as the non-GAAP financial measures of net debt and diluted adjusted income / (loss) per share are useful to investors as they provide an additional tool for investors to use in evaluating operating results and trends, and in comparing our financial results with other companies.  Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are set forth below.  The non-GAAP measures presented are not measures of performance under GAAP and should not be considered as alternatives for the most directly comparable financial measures calculated in accordance with GAAP. Other companies in our industry may define these non-GAAP measures differently than we do and, as a result, these non-GAAP measures may not be comparable to similarly titled measures used by other companies in our industry.   In addition, certain of our non-GAAP financial measures exclude financial information that some may consider important in evaluating our performance.  Given the inherent uncertainty regarding special items and other expense in any future period, a reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is not feasible.  The magnitude of these items, however, may be significant.

Forward-Looking Statements and Risk Factors

This press release contains statements which constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the company's projected revenue, Adjusted EBITDA, free cash flow, earnings, financial results and its future sales growth outlook. The forward-looking statements can be identified by words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project," "target," and other similar expressions.  Forward-looking statements are made as of the date of this press release and are based upon management's current expectations and beliefs concerning future developments and their potential effects on us.  Such forward-looking statements are not guarantees of future performance.  The following important factors, as well as risk factors described in our reports filed with the SEC, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements:

  • automobile production volumes;
  • the financial condition of our customers and suppliers;
  • our ability to make scheduled payments on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;
  • our ability to refinance our indebtedness;
  • our ability to generate non-automotive revenues;
  • risks associated with our non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions;
  • any increase in the expense and funding requirements of our pension and other postretirement benefits;
  • our customers' ability to obtain equity and debt financing for their businesses;
  • our dependence on our largest customers;
  • pricing pressure from our customers;
  • work stoppages or other labor issues affecting us or our customers or suppliers; and
  • costs or liabilities relating to environmental and safety regulations.

We do not assume any obligation to update or revise the forward-looking statements contained in this press release.

Contact: Derek Fiebig Executive Director, Investor & External Relations (248) 675-6457 fiebig.derek@towerautomotive.com

  

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts - unaudited)

Three Months Ended March 31,

2012

2011

Revenues

$    617,563

$    599,635

Cost of sales

557,425

530,065

Gross profit

60,138

69,570

Selling, general and administrative expenses

38,052

37,722

Amortization expense

1,177

892

Restructuring and asset impairment charges, net

1,934

483

  Operating income

18,975

30,473

Interest expense 

15,676

12,518

Interest income

327

263

Other expense

-

850

Income before provision for income taxes

3,626

17,368

Provision for income taxes

2,350

6,613

        Net income

1,276

10,755

Less: Net income attributable to the noncontrolling interests

1,434

1,733

Net income / (loss) attributable to Tower International, Inc.

$         (158)

$        9,022

Weighted average common shares outstanding

Basic

19,691,679

19,101,588

Diluted

19,691,679

19,890,083

Net income / (loss) per share attributable to Tower International, Inc.:

Basic

$        (0.01)

$          0.47

Diluted

(0.01)

0.45

  

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS 

(Amounts in thousands - unaudited)

March 31, 2012

December 31, 2011

ASSETS

Cash and cash equivalents

$             134,019

$                   134,984

Accounts receivable, net of allowance of $3,763 and $3,612

358,135

327,992

Inventories

101,547

85,100

Deferred tax asset - current

14,997

12,966

Assets held for sale

4,127

4,027

Prepaid tooling and other

71,015

56,189

Total current assets

683,840

621,258

Property, plant and equipment, net

686,575

667,686

Goodwill

65,845

63,983

Deferred tax asset - non-current

14,435

14,450

Other assets, net

29,099

30,001

Total assets

$          1,479,794

$                1,397,378

LIABILITIES AND STOCKHOLDERS' EQUITY

Short-term debt and current maturities of capital lease obligations

$             120,528

$                   109,447

Accounts payable 

414,070

395,287

Accrued liabilities

136,139

126,416

Total current liabilities

670,737

631,150

Long-term debt, net of current maturities

482,201

461,838

Obligations under capital leases, net of current maturities

11,793

12,213

Deferred tax liability - non-current

13,382

11,229

Pension liability

93,203

96,223

Other non-current liabilities

94,580

87,265

Total non-current liabilities 

695,159

668,768

  Total liabilities

1,365,896

1,299,918

Stockholders' Equity:

Tower International, Inc.'s stockholders' equity

Common stock, $0.01 par value, 350,000,000 authorized, 20,015,281 issued and 19,708,416 outstanding at March 31, 2012, and 19,983,403 issued and 19,683,032 outstanding at December 31, 2011

200

200

Additional paid in capital

315,771

311,427

Treasury stock, at cost, 306,865 shares as of March 31, 2012 and 300,371 shares as of December 31, 2011

(5,213)

(5,130)

Accumulated deficit

(184,650)

(184,492)

Accumulated other comprehensive loss

(71,299)

(82,002)

Total Tower International, Inc.'s stockholders' equity

54,809

40,003

Noncontrolling interests in subsidiaries

59,089

57,457

Total stockholders' equity

113,898

97,460

Total liabilities and stockholders' equity

$          1,479,794

$                1,397,378

  

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands - unaudited)

Three Months Ended March 31,

2012

2011

OPERATING ACTIVITIES:

Net income

$    1,276

$  10,755

Adjustments required to reconcile net income to net cash provided by / (used in) operating activities:

Deferred income tax provision

68

1,333

Depreciation and amortization

25,687

30,147

Non-cash share-based compensation

4,344

3,698

Pension expense, net of contributions

(2,236)

(1,392)

Change in working capital and other operating items

(23,459)

(58,503)

Net cash provided by / (used in) operating activities

$    5,680

$ (13,962)

INVESTING ACTIVITIES:

Cash disbursed for purchases of property, plant and equipment, net

$ (35,917)

$ (26,698)

Net assets acquired, net of cash acquired

-

(11,254)

Net cash used in investing activities

$ (35,917)

$ (37,952)

FINANCING ACTIVITIES:

Retirement of senior secured notes

$            -

$ (17,000)

Purchase of treasury stock

(83)

-

Proceeds from borrowings

183,690

139,296

Repayments of  borrowings

(157,157)

(88,756)

Net cash provided by financing activities

$  26,450

$  33,540

Effect of exchange rate changes on cash and cash equivalents

$    2,822

$    2,524

NET CHANGE IN CASH AND CASH EQUIVALENTS

$      (965)

$ (15,850)

CASH AND CASH EQUIVALENTS:

Beginning of period

$134,984

$150,345

End of period

$134,019

$134,495

  

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

SEGMENT DATA AND NON-GAAP FINANCIAL MEASURE RECONCILIATIONS

(Amounts in thousands - unaudited)

Segment Data

Three Months Ended March 31,

2012

2011

Revenues

Adjusted EBITDA

Revenues

Adjusted EBITDA

International

$ 336,532

$ 25,303

$  336,104

$          33,776

Americas

281,031

25,521

263,531

31,931

Consolidated

$ 617,563

$ 50,824

$  599,635

$          65,707

Adjusted EBITDA reconciliation

Three Months Ended March 31,

Last Twelve Months Ended March 31,

2012

2011

2012

2011

Adjusted EBITDA

$   50,824

$ 65,707

$  212,730

$        205,205

Restructuring

(1,934)

(483)

(4,111)

(10,664)

Depreciation and amortization

(25,687)

(30,147)

(110,118)

(114,542)

Acquisition costs and other

(68)

(105)

(1,516)

(443)

Expense related to the compensation programs

(4,160)

(4,499)

(18,012)

(15,416)

Interest expense, net

(15,349)

(12,255)

(64,249)

(64,564)

Other expense

-

(850)

(481)

(2,150)

Provision for income taxes

(2,350)

(6,613)

(10,549)

(12,776)

Net income attributable to noncontrolling interests

(1,434)

(1,733)

(4,810)

(8,040)

Net income / (loss) attributable to Tower International, Inc.

$      (158)

$   9,022

$    (1,116)

$         (23,390)

Free cash flow reconciliation

Three Months Ended March 31,

2012

2011

Net cash provided by / (used in) operating activities

$      5,680

$         (13,962)

Cash disbursed for purchases of PP&E, net

(35,917)

(26,698)

Free cash flow

$  (30,237)

$         (40,660)

Net debt reconciliation

March 31,

December 31,

2012

2011

Short-term debt and current maturities of capital lease obligations

$  120,528

$        109,447

Long-term debt, net of current maturities

482,201

461,838

Obligations under capital leases, net of current maturities

11,793

12,213

Total debt

614,522

583,498

Less: cash and cash equivalents

(134,019)

(134,984)

Net debt

$  480,503

$        448,514

  

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CERTAIN ITEMS INCLUDED IN NET INCOME / (LOSS)

(Amounts in thousands, except per share amounts - unaudited)

Three Months Ended

March 31,

2012

2011

Income / (expense) items included in net income / (loss), net of tax:

Selling, general and administrative expenses

Incentive compensation related to funding events

$ (4,029)

$ (4,349)

Interest expense

Acceleration of the amortization of debt issue costs and OID

-

(753)

Settlement of value added tax audit in Brazil

-

2,838

Restructuring expense

Severance costs in Europe

(715)

-

Adjustment of lease liability

-

754

Other income

Retirement of senior secured notes

-

(850)

Total items included in net income / (loss)

$ (4,744)

$ (2,360)

Net income / (loss) attributable to Tower International, Inc.

$    (158)

$  9,022

Memo:  Average shares outstanding (in thousands)

Basic

19,692

19,102

Diluted

19,692

19,890

Income / (loss) per common share (GAAP)

Basic

$   (0.01)

$    0.47

Diluted

(0.01)

0.45

Diluted adjusted income / (loss) per share (non-GAAP)*

0.23

0.57

* Excludes the certain items shown above

SOURCE Tower International, Inc.



RELATED LINKS

http://www.towerinternational.com