2014

Tower International Reports Solid Fourth Quarter Results and Positive Outlooks for 2013 and 2014

LIVONIA, Mich., Feb. 15, 2013 /PRNewswire/ -- Tower International, Inc. [NYSE: TOWR], a leading integrated global manufacturer of engineered structural metal components and assemblies, today announced its 2012 results and provided preliminary outlooks for 2013 and 2014.

  • Revenue from continuing operations for fourth quarter 2012 was $508 million, slightly better than company guidance of $503 million.   Revenue was down from $517 million in the fourth quarter 2011. 
  • Adjusted EBITDA for the quarter was $43.4 million, ahead of guidance of $42 million.  Adjusted EBITDA was down from $46.7 million a year ago, mainly reflecting slightly less favorable mix and adverse foreign-exchange translation.
  • Net income for the fourth quarter was $13.7 million, compared with a net loss of $26.1 million a year ago.  As detailed in the financial table below, this year's fourth quarter included certain items that favorably impacted results by $12.7 million.  Excluding these items and comparable items in the fourth quarter of 2011, diluted adjusted earnings per share from continuing operations were $0.05 this year, compared with $0.32 last year. 
  • Free cash flow in the fourth quarter was positive $29 million.  Liquidity at year-end was good, at $207 million
  • Results from continuing operations for full year 2012 included revenue of $2.085 billion, adjusted EBITDA of $193.7 million, and adjusted earnings of $1.08 per share.
  • For 2013, the preliminary outlook includes improvements from 2012 in revenue ($2.1 billion to $2.15 billion), adjusted EBITDA ($200 million to $210 million), adjusted earnings per share ($1.10 to $1.40), and free cash flow (positive $15 million to $25 million).
  • For 2014, Tower's net backlog is an increase of approximately $100 million in revenue from 2013 from new business wins net of losses (at current industry and customer production mix). 

"Tower finished 2012 with a solid fourth quarter and full year, and the company is well-positioned for 2013 and 2014," said President and CEO Mark Malcolm.  "Despite uneven industry and customer production in some regions in 2012, the company exceeded initial Plan expectations for all key financial deliverables.  Additional highlights included the achievement of record quality and the opportunistic, accretive sale of Korean operations.  Looking forward, 2013 should be an up year if customer volumes hold up, generating positive free cash flow and a growing liquidity cushion.  Our revenue backlog and potential significant re-financing savings in 2014 are other positive catalysts on the near horizon."

Tower to Host Conference Call Today at 11 a.m. EST

Tower will discuss its fourth quarter 2012 results and other related matters in a conference call at 11 a.m. EST 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 1-855-859-2056 (domestic) or 1-404-537-3406 (international) and reference Conference I.D. #97607881.  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 December 31,


Year Ended December 31,




2012


2011


2012


2011












Revenues


$           508,144


$           516,862


$        2,084,914


$        2,053,708


Cost of sales


474,808


491,332


1,871,290


1,851,878


Gross profit


33,336


25,530


213,624


201,830


Selling, general and administrative expenses


32,768


37,519


134,019


151,553


Amortization expense


1,140


1,191


4,579


4,589


Restructuring and asset impairment charges, net


2,785


514


10,738


2,660


  Operating income


(3,357)


(13,694)


64,288


43,028


Interest expense


13,508


14,745


54,757


54,256


Interest income


111


199


942


749


Other expense


-


131


-


1,331


Income / (loss) before provision for income taxes


(16,754)


(28,371)


10,473


(11,810)


Provision / (benefit) for income taxes


(2,458)


2,039


15,255


13,293


Loss from continuing operations


(14,296)


(30,410)


(4,782)


(25,103)


Income from discontinued operations, net of tax


30,368


5,431


29,790


6,948


        Net income / (loss)


16,072


(24,979)


25,008


(18,155)


Less: Net income attributable to the noncontrolling interests


2,349


1,072


6,976


5,109


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


$             13,723


$           (26,051)


$             18,032


$           (23,264)












Weighted average common shares outstanding










Basic


20,247,134


19,683,032


20,080,839


19,364,433


Diluted


20,411,868


19,683,032


20,447,072


19,364,433












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








Loss per share from continuing operations


$               (0.82)


$               (1.60)


$               (0.58)


$               (1.56)


Income per share from discontinued operations


1.50


0.28


1.48


0.36


Income/(loss) per share


0.68


(1.32)


0.90


(1.20)












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








Loss per share from continuing operations


$               (0.82)


$               (1.60)


$               (0.58)


$               (1.56)


Income per share from discontinued operations


1.49


0.28


1.46


0.36


Income/(loss) per share


0.67


(1.32)


0.88


(1.20)






















 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED BALANCE SHEETS


(Amounts in thousands, except share data - unaudited)
















December 31, 2012


December 31, 2011 (1)








ASSETS






Cash and cash equivalents


$                    113,943


$                    134,984


Accounts receivable, net of allowance of $4,105 and $3,612


266,138


327,992


Inventories


81,336


85,100


Deferred tax asset - current


10,447


12,966


Assets held for sale


-


4,027


Prepaid tooling, notes receivable, and other


96,349


56,189


Total current assets


568,213


621,258








Property, plant and equipment, net


573,148


667,686


Goodwill


64,793


63,983


Deferred tax asset - non-current


3,149


14,450


Other assets, net


28,819


30,001


Total assets


$                 1,238,122


$                 1,397,378








LIABILITIES AND STOCKHOLDERS' EQUITY






Short-term debt and current maturities of capital lease obligations


$                      74,605


$                    109,447


Accounts payable


264,897


395,287


Accrued liabilities


134,664


126,416


Total current liabilities


474,166


631,150








Long-term debt, net of current maturities


411,590


461,838


Obligations under capital leases, net of current maturities


10,783


12,213


Deferred tax liability - non-current


13,021


11,229


Pension liability


100,780


96,223


Other non-current liabilities


86,908


87,265


Total non-current liabilities


623,082


668,768


  Total liabilities


1,097,248


1,299,918








Stockholders' equity:






Tower International, Inc.'s stockholders' equity






Common stock, $0.01 par value, 350,000,000 authorized, 20,830,425 issued and 20,247,134 outstanding at December 31, 2012 and 19,983,403 issued and 19,683,032 outstanding at December 31, 2011


208


200


Additional paid in capital


321,032


311,427


Treasury stock, at cost, 583,291 and 300,371 shares as of December 31, 2012 and 2011


(8,297)


(5,130)


Accumulated deficit


(237,240)


(255,244)


Accumulated other comprehensive loss


(12,456)


(11,250)


Total Tower International, Inc.'s stockholders' equity


63,247


40,003


Noncontrolling interests in subsidiaries


77,627


57,457


Total stockholders' equity


140,874


97,460








Total liabilities and stockholders' equity


$                 1,238,122


$                 1,397,378








(1) Includes the results of our South Korean subsidiary which was divested on December 28, 2012




 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(Amounts in thousands - unaudited)












Three Months Ended


Year Ended



December 31,


December 31,



2012


2011


2012


2011


OPERATING ACTIVITIES:









Net income / (loss)

$               16,072


$              (24,979)


$               25,008


$              (18,155)


Less: income from discontinued operations, net of tax

30,368


5,431


29,790


6,948


Loss from continuing operations

(14,296)


(30,410)


(4,782)


(25,103)


Adjustments required to reconcile loss from continuing operations to net cash provided by operating activities:









Non-cash restructuring and asset impairment charges

575


-


575


-


Deferred income tax provision

(3,538)


144


9,052


(725)


Depreciation and amortization

24,643


22,152


92,856


102,583


Non-cash share-based compensation

1,128


3,874


9,613


15,174


Pension expense, net of contributions

18,516


30,509


2,568


18,336


Change in working capital and other operating items

36,576


39,685


(8,501)


(23,405)


Net cash provided by continuing operating activities

$               63,604


$               65,954


$             101,381


$               86,860











INVESTING ACTIVITIES:









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

$              (35,068)


$              (31,524)


$            (119,771)


$            (100,829)


Net assets acquired, net of cash acquired

-


-


-


(22,300)


Net cash used in continuing investing activities

$              (35,068)


$              (31,524)


$            (119,771)


$            (123,129)











FINANCING ACTIVITIES:









Proceeds from borrowings

$             186,520


$             176,834


$             651,781


$             654,420


Repayments of  borrowings

(227,756)


(172,762)


(638,782)


(580,220)


Retirement of senior secured notes

-


(7,500)


-


(42,008)


Purchase of treasury stock

-


-


(3,167)


(5,130)


Net cash provided by / (used in) continuing financing activities

$              (41,236)


$                (3,428)


$                 9,832


$               27,062











Discontinued operations:









Net cash from discontinued operating activities

$                 9,320


$               33,532


$              (10,616)


$               13,598


Net cash from discontinued investing activities

(29,474)


(5,960)


(51,352)


(19,580)


Net cash from discontinued financing activities

25,783


(19,935)


45,358


(763)


Net cash from discontinued operations

$                 5,629


$                 7,637


$              (16,610)


$                (6,745)











Effect of exchange rate changes on cash and cash equivalents

$                 2,044


$                   (355)


$                 4,127


$                    591











NET CHANGE IN CASH AND CASH EQUIVALENTS

$                (5,027)


$               38,284


$              (21,041)


$              (15,361)











CASH AND CASH EQUIVALENTS:









Beginning of period

$             118,970


$               96,700


$             134,984


$             150,345











End of period

$             113,943


$             134,984


$             113,943


$             134,984











 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES


SEGMENT DATA AND NON-GAAP FINANCIAL MEASURE RECONCILIATIONS


(Amounts in thousands - unaudited)
































Segment Data


Three Months Ended December 31,




2012


2011




Revenues


Adjusted EBITDA


Revenues


Adjusted EBITDA


International


$              235,889


$                21,771


$              243,568


$                21,758


Americas


272,255


21,603


273,294


24,991


Consolidated


$              508,144


$                43,374


$              516,862


$                46,749














Year Ended December 31,




2012


2011




Revenues


Adjusted EBITDA


Revenues


Adjusted EBITDA


International


$              945,905


$                85,423


$              981,652


$                96,481


Americas


1,139,009


108,276


1,072,056


104,681


Consolidated


$           2,084,914


$              193,699


$           2,053,708


$              201,162
































Adjusted EBITDA reconciliation


Three Months Ended December 31,


Year Ended December 31,




2012


2011


2012


2011


Adjusted EBITDA


$                43,374


$                46,749


$              193,699


$              201,162


Restructuring


(2,785)


(514)


(10,738)


(2,660)


Depreciation and amortization


(24,643)


(22,152)


(92,856)


(102,583)


Acquisition costs and other


(146)


(109)


(431)


(1,554)


Expense related to the compensation programs


-


(4,445)


(6,229)


(18,114)


Interest expense, net


(13,397)


(14,546)


(53,815)


(53,507)


Other expense


-


(131)


-


(1,331)


(Provision) / benefit for income taxes


2,458


(2,039)


(15,255)


(13,293)


Net income attributable to noncontrolling interests


(2,349)


(1,072)


(6,976)


(5,109)


Pension actuarial loss


(19,157)


(33,223)


(19,157)


(33,223)


Income from discontinued operations, net of tax


30,368


5,431


29,790


6,948


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

$                13,723


$              (26,051)


$                18,032


$              (23,264)
































Free cash flow reconciliation


Three Months Ended December 31,


Year Ended December 31,




2012


2011


2012


2011


Net cash provided by operating activities


$                63,604


$                65,954


$              101,381


$                86,860


Cash disbursed for purchases of PP&E, net


(35,068)


(31,524)


(119,771)


(100,829)


Free cash flow


$                28,536


$                34,430


$              (18,390)


$              (13,969)
































Net debt reconciliation






December 31,


December 31,








2012


2011


Short-term debt and current maturities of capital lease obligations






$                74,605


$              109,447


Long-term debt, net of current maturities






411,590


461,838


Obligations under capital leases, net of current maturities






10,783


12,213


Total debt






496,978


583,498


Less: cash and cash equivalents






(113,943)


(134,984)


Net debt






$              383,035


$              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


Year Ended





December 31,


December 31,





2012


2011


2012


2011










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











Selling, general and administrative expenses











Incentive compensation related to funding events


$               -


$      (4,305)


$      (6,105)


$    (17,341)



Pension actuarial loss


(19,157)


(33,223)


(19,157)


(33,223)



Acquisition costs


-


-


-


(1,100)



Interest expense











Acceleration of the amortization of debt issue costs and OID


-


(302)


-


(1,760)



Settlement of value added tax audit in Brazil


-


-


-


2,838



Restructuring expense











Severance costs in Europe


(515)


-


(1,718)


-



One-time restructuring actions in North America


(1,048)


-


(1,048)


-



Plant relocation costs


(170)


-


(3,041)


-



Asset impairments


-


-


(575)


-



Adjustment of lease liability


-


-


-


754



Other items











Partial retirement of senior secured notes


-


(131)


-


(1,331)



Provision for income taxes











Tax audits and other adjustments


3,252


-


4,339


-



Valuation allowance in Brazil


-


-


(6,494)


-



Tax law and tax election changes


-


-


-


1,406



Discontinued operations











Income from discontinued operations


30,368


5,431


29,790


6,948



Total items included in net income / (loss)


$     12,730


$    (32,530)


$      (4,009)


$    (42,809)














Net income attributable to Tower International, Inc.


$     13,723


$    (26,051)


$     18,032


$    (23,264)














Memo:  Average shares outstanding (in thousands)











Basic


20,247


19,683


20,081


19,364



Diluted


20,412


19,683


20,447


19,364














Loss per common share (GAAP)











Basic


$         0.68


$        (1.32)


$         0.90


$        (1.20)



Diluted


0.67


(1.32)


0.88


(1.20)














Diluted adjusted income per share (non-GAAP)*


0.05


0.32


1.08


0.97














* Excludes the certain items shown above. For the quarter ended December 31, 2011 and year ended December 31, 2011, diluted share count of 20.2 million and 20.1 million, respectively, were used to calculate diluted adjusted income per share.
















 

SOURCE Tower International, Inc.



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