Federal-Mogul Announces First Quarter Results

Apr 19, 2001, 01:00 ET from Federal-Mogul Corporation

    SOUTHFIELD, Mich., April 19 /PRNewswire/ -- Federal-Mogul Corporation
 (NYSE:   FMO) today announced first quarter 2001 sales of $1,451 million
 compared to $1,644 million in 2000.  In line with expectations announced on
 March 28, Federal-Mogul reported a first quarter loss of $(.60) per share from
 operations versus earnings of $.86 per share from operations in 2000.
 Excluded from earnings from operations were charges for restructuring and
 impairment.  Including these items, Federal-Mogul reported a first quarter
 loss of $(.89) per share compared to net earnings of $.18 in 2000.  Cash flow
 from operations which includes capital expenditures, restructuring, and
 asbestos payments was a usage of $146 million.
     (Photo: http://www.newscom.com/cgi-bin/prnh/20000525/DETH025LOGO )
     By region, the Americas and Asia reported first quarter sales of $937
 million compared to $1,102 million in 2000.  Europe and Africa reported sales
 of $514 million compared to $542 million in 2000.  The original equipment
 market represented 58% of the company's global sales with the replacement
 market accounting for 42% of first quarter sales.  Excluding exchange impacts,
 original equipment sales were down by 10% and aftermarket sales were down 7%
 compared to first quarter 2000.
     "North American demand from both our aftermarket and original equipment
 customers was significantly lower.  Although we intensified efforts to reduce
 our cost structure, we were not able to match the pace and degree of our
 customer's volume declines.  A bright spot this quarter was our cash usage,
 which historically has run much higher in the first quarter than it did this
 year," said Frank Macher, chief executive officer.  "We are making progress on
 our efforts to run lean and competitive.  Our drive to be low cost, as
 evidenced by our announced agreement to acquire WSK Gorzyce to expand our
 piston manufacturing into Poland, reflects our company's global commitment to
 operate more efficiently."
     Federal-Mogul's asbestos liability payments were on track as planned at
 $88 million, down from fourth quarter 2000 levels.
     "As promised, we have changed our asbestos management strategy and are
 actively pursuing some form of legislative relief," said Macher.  "Our outlook
 for estimated asbestos claim payments remains $350 million in 2001."
 
     Federal-Mogul Hosts First Quarter Conference Call
     Federal-Mogul will be hosting a conference call at 2 p.m. EDT today,
 Thursday, April 19, to discuss the company's first quarter 2001 earnings
 release.  The conference call will feature Frank Macher, chief executive
 officer; Chip McClure, president and chief operating officer; and Mike Lynch,
 executive vice president and chief financial officer.  To receive the dial-in
 number, participants should call 800-289-0579 for domestic callers and
 719-457-2550 for international callers, and give 505925 as the Federal-Mogul
 RSVP confirmation code when requested.  Participants should dial into the
 conference 10 minutes prior to 2 p.m.  A recording of this call will be
 available from 5 p.m. EDT on April 19 through Tuesday, April 24, 2001.  To
 access this recording, dial 719-457-0820 and then enter 505925 for the
 confirmation code.
     Headquartered in Southfield, Michigan, Federal-Mogul is an automotive
 parts manufacturer providing innovative solutions and systems to global
 customers in the automotive, light truck, heavy-duty, railroad, farm and
 industrial markets.  The company was founded in 1899.  Visit the company's web
 site at http://www.federal-mogul.com for more information.  Federal-Mogul's
 press releases are available by fax through Company News On-Call, call
 800-758-5804, ext. 306225.
     Information in this press release contains forward-looking statements,
 which are not historical facts and involve risks and uncertainties.  Actual
 results, events and performance could differ materially from those
 contemplated by these forward-looking statements including, without
 limitation, the ability to implement and achieve the intended results of the
 strategic initiatives, the cost and timing of implementing restructuring
 actions, conditions in the automotive components industry, certain global and
 regional economic conditions and other factors detailed from time to time in
 the company's filings with the Securities and Exchange Commission.  Federal-
 Mogul undertakes no obligation to update any forward-looking statement to
 reflect events or circumstances after the date of this press release.
 
 
                 F E D E R A L - M O G U L  C O R P O R A T I O N
                  S T A T E M E N T S   O F   O P E R A T I O N S
                   (Millions of Dollars, Except Per Share Data)
 
 
 
                                                          (Unaudited)
                                                       Three Months Ended
                                                            March 31
 
                                                      2001              2000
 
     Net sales                                     $1,450.7          $1,643.7
     Cost of products sold                          1,145.4           1,210.4
           Gross margin                               305.3             433.3
 
     Selling, general and administrative
      expenses                                        229.6             211.0
     Amortization of goodwill and other
      intangible assets                                30.4              31.2
     Restructuring charge                              29.8              68.7
     Adjustment of assets held for sale
      and other long-lived
      assets to fair value                              0.6              10.0
     Interest expense                                  83.8              71.0
     Interest income                                   (1.2)             (1.3)
     International currency exchange
      losses                                            0.7               0.6
     Other expense, net                                 5.8               7.6
           Earnings (Loss) Before Income
            Taxes                                     (74.2)             34.5
 
     Income tax expense (benefit)                     (12.0)             20.6
 
 
           Net Earnings (Loss)                       $(62.2)            $13.9
 
 
     Earnings (Loss) Per Common Share:
 
      Basic                                          $(0.89)            $0.19
 
      Diluted                                        $(0.89)            $0.18
 
     Weighted Average Shares (Thousands)
      Basic                                          70,583            70,263
      Diluted                                        70,583            72,926
 
 
 
                  F E D E R A L - M O G U L  C O R P O R A T I O N
                 N E T  E A R N I N G S  R E C O N C I L A T I O N
                    (Millions of Dollars, Except Per Share Data)
                                    (Unaudited)
 
 
                                           Three Months Ended March 31, 2001
                                                      Adjustments
 
                                                   Restruct-  Impair-
                                           As        uring     ment     From
                                        Reported    Charge    Charge Operations
 
     Net sales                          $1,450.7     $  -      $ -    $1,450.7
     Cost of products sold               1,145.4        -        -     1,145.4
       Gross margin                        305.3        -        -       305.3
 
     Selling, general and
      administrative expenses              229.6        -        -       229.6
     Amortization of goodwill and
      other intangible assets               30.4        -        -        30.4
     Restructuring charges                  29.8    (29.8)       -           -
     Adjustment of assets held for
      sale and other long-lived
      assets to fair value                   0.6        -     (0.6)          -
     Interest expense                       83.8        -        -        83.8
     Interest income                        (1.2)       -        -        (1.2)
     International currency exchange
      losses                                 0.7        -        -         0.7
     Other expense, net                      5.8        -        -         5.8
       Earnings (Loss) Before Income
        Taxes                              (74.2)    29.8      0.6       (43.8)
 
     Income tax expense (benefit)          (12.0)    10.1      0.2        (1.7)
 
       Net Earnings (Loss)                $(62.2)   $19.7     $0.4      $(42.1)
 
 
       Diluted Earnings (Loss) Per
        Common Share                      $(0.89)   $0.28    $0.01      $(0.60)
 
 
 
                 F E D E R A L - M O G U L   C O R P O R A T I O N
                                C A S H   F L O W S
                               (Millions of Dollars)
 
                                                           (Unaudited)
                                                       Three Months Ended
                                                            March  31
 
                                                      2001               2000
 
     Cash Provided From (Used By)
      Operating Activities
       Net earnings (loss)                          $(62.2)             $13.9
       Adjustments to reconcile net
        earnings (loss) to net cash
        provided from (used by)
        operating activities:
           Depreciation and amortization              97.8               99.1
           Restructuring charge                       29.8               68.7
           Adjustment of assets held for
            sale and other
            long-lived assets to fair value            0.6               10.0
           Postemployment benefits                     3.5                1.2
           Increase in accounts
            receivable                               (38.3)             (84.8)
           Decrease (increase) in
            inventories                                9.1              (31.3)
           Increase (decrease) in
            accounts payable                          21.9              (99.6)
           Change in current liabilities
            and other                                (38.8)             (25.5)
           Payments against
            restructuring and
            rationalization reserves                 (16.0)             (14.7)
           Payments against asbestos
            liability                                (88.3)             (75.4)
         Net Cash Used By Operating
          Activities                                 (80.9)            (138.4)
 
     Cash Provided From (Used By)
      Investing Activities
       Expenditures for property, plant
        and equipment and
        other long-term assets, net                  (65.0)             (72.8)
       Proceeds from the sales of
        businesses                                       -                4.7
         Net Cash Used By Investing
          Activities                                 (65.0)             (68.1)
 
     Cash Provided From (Used By)
      Financing Activities
       Proceeds from the issuance of
        long-term debt                               236.0              285.0
       Principle payments on long-term debt          (22.1)             (17.2)
       Increase (decrease) in short-term debt        (32.1)             (23.8)
       Fees paid for debt issuance and
        other securities                             (14.2)                 -
       Investment in accounts receivable
        securitization                               (48.2)             (31.0)
       Dividends                                      (0.7)              (1.0)
       Other                                           3.0                2.1
         Net Cash Provided From
          Financing Activities                       121.7              214.1
 
         Increase (Decrease) in Cash and
          Equivalents                                (24.2)               7.6
 
     Cash and equivalents at beginning
      of period                                      107.2               64.5
 
         Cash and Equivalents at End of
          Period                                     $83.0              $72.1
 
 
 
                   F E D E R A L - M O G U L   C O R P O R A T I O N
                              B A L A N C E   S H E E T S
 
                                 (Millions of Dollars)
 
 
                                                    (Unaudited)
                                                      March 31      December 31
                                                        2001             2000
     Assets
     Cash and equivalents                               $83.0           $107.2
     Accounts receivable                                517.6            512.8
     Investment in accounts receivable
      securitization                                    293.7            229.1
     Inventories                                        785.9            808.6
     Deferred taxes                                     232.0            235.5
     Prepaid expenses and income tax
      benefits                                          191.2            195.1
         Total current assets                         2,103.4          2,088.3
 
     Property, plant and equipment, net               2,342.2          2,388.8
     Goodwill                                         3,220.9          3,303.1
     Other intangible assets                            727.3            746.4
     Asbestos-related insurance recoverable             745.3            771.1
     Other noncurrent assets                          1,167.1          1,155.7
         Total Assets                               $10,306.2
 
     Liabilities and Shareholders' Equity
     Short-term debt, including current
      portion of long-term debt                        $113.9           $147.8
     Accounts payable                                   446.6            431.9
     Accrued compensation                               183.9            157.8
     Restructuring and rationalization
      reserves                                          120.3            107.9
     Current portion of asbestos liability              350.0            350.0
     Income taxes payable                                63.6             94.4
     Other accrued liabilities                          395.3            439.3
         Total current liabilities                    1,673.6          1,729.1
 
     Long-term debt                                   3,773.2          3,559.7
     Long-term portion of asbestos liability          1,363.4          1,461.9
     Postemployment benefits                            635.1            637.6
     Other accrued liabilities                          861.2            882.4
     Minority interest in consolidated
      subsidiaries                                       57.0             57.5
     Company-obligated mandatorily
      redeemable preferred securities
      of subsidiary trust holding solely
      convertible subordinated
      debentures of the Company                         575.0            575.0
 
     Shareholders' equity:
       Series C ESOP preferred stock                     37.3             38.1
       Common stock                                     353.1            352.5
       Additional paid-in capital                     1,778.2          1,778.6
       Accumulated deficit                             (172.4)          (113.5)
       Accumulated other comprehensive loss            (627.8)          (504.7)
       Other                                             (0.7)            (0.8)
         Total Shareholders' Equity                   1,367.7          1,550.2
         Total Liabilities and Shareholders'
          Equity                                    $10,306.2        $10,453.4
 
 

SOURCE Federal-Mogul Corporation
    SOUTHFIELD, Mich., April 19 /PRNewswire/ -- Federal-Mogul Corporation
 (NYSE:   FMO) today announced first quarter 2001 sales of $1,451 million
 compared to $1,644 million in 2000.  In line with expectations announced on
 March 28, Federal-Mogul reported a first quarter loss of $(.60) per share from
 operations versus earnings of $.86 per share from operations in 2000.
 Excluded from earnings from operations were charges for restructuring and
 impairment.  Including these items, Federal-Mogul reported a first quarter
 loss of $(.89) per share compared to net earnings of $.18 in 2000.  Cash flow
 from operations which includes capital expenditures, restructuring, and
 asbestos payments was a usage of $146 million.
     (Photo: http://www.newscom.com/cgi-bin/prnh/20000525/DETH025LOGO )
     By region, the Americas and Asia reported first quarter sales of $937
 million compared to $1,102 million in 2000.  Europe and Africa reported sales
 of $514 million compared to $542 million in 2000.  The original equipment
 market represented 58% of the company's global sales with the replacement
 market accounting for 42% of first quarter sales.  Excluding exchange impacts,
 original equipment sales were down by 10% and aftermarket sales were down 7%
 compared to first quarter 2000.
     "North American demand from both our aftermarket and original equipment
 customers was significantly lower.  Although we intensified efforts to reduce
 our cost structure, we were not able to match the pace and degree of our
 customer's volume declines.  A bright spot this quarter was our cash usage,
 which historically has run much higher in the first quarter than it did this
 year," said Frank Macher, chief executive officer.  "We are making progress on
 our efforts to run lean and competitive.  Our drive to be low cost, as
 evidenced by our announced agreement to acquire WSK Gorzyce to expand our
 piston manufacturing into Poland, reflects our company's global commitment to
 operate more efficiently."
     Federal-Mogul's asbestos liability payments were on track as planned at
 $88 million, down from fourth quarter 2000 levels.
     "As promised, we have changed our asbestos management strategy and are
 actively pursuing some form of legislative relief," said Macher.  "Our outlook
 for estimated asbestos claim payments remains $350 million in 2001."
 
     Federal-Mogul Hosts First Quarter Conference Call
     Federal-Mogul will be hosting a conference call at 2 p.m. EDT today,
 Thursday, April 19, to discuss the company's first quarter 2001 earnings
 release.  The conference call will feature Frank Macher, chief executive
 officer; Chip McClure, president and chief operating officer; and Mike Lynch,
 executive vice president and chief financial officer.  To receive the dial-in
 number, participants should call 800-289-0579 for domestic callers and
 719-457-2550 for international callers, and give 505925 as the Federal-Mogul
 RSVP confirmation code when requested.  Participants should dial into the
 conference 10 minutes prior to 2 p.m.  A recording of this call will be
 available from 5 p.m. EDT on April 19 through Tuesday, April 24, 2001.  To
 access this recording, dial 719-457-0820 and then enter 505925 for the
 confirmation code.
     Headquartered in Southfield, Michigan, Federal-Mogul is an automotive
 parts manufacturer providing innovative solutions and systems to global
 customers in the automotive, light truck, heavy-duty, railroad, farm and
 industrial markets.  The company was founded in 1899.  Visit the company's web
 site at http://www.federal-mogul.com for more information.  Federal-Mogul's
 press releases are available by fax through Company News On-Call, call
 800-758-5804, ext. 306225.
     Information in this press release contains forward-looking statements,
 which are not historical facts and involve risks and uncertainties.  Actual
 results, events and performance could differ materially from those
 contemplated by these forward-looking statements including, without
 limitation, the ability to implement and achieve the intended results of the
 strategic initiatives, the cost and timing of implementing restructuring
 actions, conditions in the automotive components industry, certain global and
 regional economic conditions and other factors detailed from time to time in
 the company's filings with the Securities and Exchange Commission.  Federal-
 Mogul undertakes no obligation to update any forward-looking statement to
 reflect events or circumstances after the date of this press release.
 
 
                 F E D E R A L - M O G U L  C O R P O R A T I O N
                  S T A T E M E N T S   O F   O P E R A T I O N S
                   (Millions of Dollars, Except Per Share Data)
 
 
 
                                                          (Unaudited)
                                                       Three Months Ended
                                                            March 31
 
                                                      2001              2000
 
     Net sales                                     $1,450.7          $1,643.7
     Cost of products sold                          1,145.4           1,210.4
           Gross margin                               305.3             433.3
 
     Selling, general and administrative
      expenses                                        229.6             211.0
     Amortization of goodwill and other
      intangible assets                                30.4              31.2
     Restructuring charge                              29.8              68.7
     Adjustment of assets held for sale
      and other long-lived
      assets to fair value                              0.6              10.0
     Interest expense                                  83.8              71.0
     Interest income                                   (1.2)             (1.3)
     International currency exchange
      losses                                            0.7               0.6
     Other expense, net                                 5.8               7.6
           Earnings (Loss) Before Income
            Taxes                                     (74.2)             34.5
 
     Income tax expense (benefit)                     (12.0)             20.6
 
 
           Net Earnings (Loss)                       $(62.2)            $13.9
 
 
     Earnings (Loss) Per Common Share:
 
      Basic                                          $(0.89)            $0.19
 
      Diluted                                        $(0.89)            $0.18
 
     Weighted Average Shares (Thousands)
      Basic                                          70,583            70,263
      Diluted                                        70,583            72,926
 
 
 
                  F E D E R A L - M O G U L  C O R P O R A T I O N
                 N E T  E A R N I N G S  R E C O N C I L A T I O N
                    (Millions of Dollars, Except Per Share Data)
                                    (Unaudited)
 
 
                                           Three Months Ended March 31, 2001
                                                      Adjustments
 
                                                   Restruct-  Impair-
                                           As        uring     ment     From
                                        Reported    Charge    Charge Operations
 
     Net sales                          $1,450.7     $  -      $ -    $1,450.7
     Cost of products sold               1,145.4        -        -     1,145.4
       Gross margin                        305.3        -        -       305.3
 
     Selling, general and
      administrative expenses              229.6        -        -       229.6
     Amortization of goodwill and
      other intangible assets               30.4        -        -        30.4
     Restructuring charges                  29.8    (29.8)       -           -
     Adjustment of assets held for
      sale and other long-lived
      assets to fair value                   0.6        -     (0.6)          -
     Interest expense                       83.8        -        -        83.8
     Interest income                        (1.2)       -        -        (1.2)
     International currency exchange
      losses                                 0.7        -        -         0.7
     Other expense, net                      5.8        -        -         5.8
       Earnings (Loss) Before Income
        Taxes                              (74.2)    29.8      0.6       (43.8)
 
     Income tax expense (benefit)          (12.0)    10.1      0.2        (1.7)
 
       Net Earnings (Loss)                $(62.2)   $19.7     $0.4      $(42.1)
 
 
       Diluted Earnings (Loss) Per
        Common Share                      $(0.89)   $0.28    $0.01      $(0.60)
 
 
 
                 F E D E R A L - M O G U L   C O R P O R A T I O N
                                C A S H   F L O W S
                               (Millions of Dollars)
 
                                                           (Unaudited)
                                                       Three Months Ended
                                                            March  31
 
                                                      2001               2000
 
     Cash Provided From (Used By)
      Operating Activities
       Net earnings (loss)                          $(62.2)             $13.9
       Adjustments to reconcile net
        earnings (loss) to net cash
        provided from (used by)
        operating activities:
           Depreciation and amortization              97.8               99.1
           Restructuring charge                       29.8               68.7
           Adjustment of assets held for
            sale and other
            long-lived assets to fair value            0.6               10.0
           Postemployment benefits                     3.5                1.2
           Increase in accounts
            receivable                               (38.3)             (84.8)
           Decrease (increase) in
            inventories                                9.1              (31.3)
           Increase (decrease) in
            accounts payable                          21.9              (99.6)
           Change in current liabilities
            and other                                (38.8)             (25.5)
           Payments against
            restructuring and
            rationalization reserves                 (16.0)             (14.7)
           Payments against asbestos
            liability                                (88.3)             (75.4)
         Net Cash Used By Operating
          Activities                                 (80.9)            (138.4)
 
     Cash Provided From (Used By)
      Investing Activities
       Expenditures for property, plant
        and equipment and
        other long-term assets, net                  (65.0)             (72.8)
       Proceeds from the sales of
        businesses                                       -                4.7
         Net Cash Used By Investing
          Activities                                 (65.0)             (68.1)
 
     Cash Provided From (Used By)
      Financing Activities
       Proceeds from the issuance of
        long-term debt                               236.0              285.0
       Principle payments on long-term debt          (22.1)             (17.2)
       Increase (decrease) in short-term debt        (32.1)             (23.8)
       Fees paid for debt issuance and
        other securities                             (14.2)                 -
       Investment in accounts receivable
        securitization                               (48.2)             (31.0)
       Dividends                                      (0.7)              (1.0)
       Other                                           3.0                2.1
         Net Cash Provided From
          Financing Activities                       121.7              214.1
 
         Increase (Decrease) in Cash and
          Equivalents                                (24.2)               7.6
 
     Cash and equivalents at beginning
      of period                                      107.2               64.5
 
         Cash and Equivalents at End of
          Period                                     $83.0              $72.1
 
 
 
                   F E D E R A L - M O G U L   C O R P O R A T I O N
                              B A L A N C E   S H E E T S
 
                                 (Millions of Dollars)
 
 
                                                    (Unaudited)
                                                      March 31      December 31
                                                        2001             2000
     Assets
     Cash and equivalents                               $83.0           $107.2
     Accounts receivable                                517.6            512.8
     Investment in accounts receivable
      securitization                                    293.7            229.1
     Inventories                                        785.9            808.6
     Deferred taxes                                     232.0            235.5
     Prepaid expenses and income tax
      benefits                                          191.2            195.1
         Total current assets                         2,103.4          2,088.3
 
     Property, plant and equipment, net               2,342.2          2,388.8
     Goodwill                                         3,220.9          3,303.1
     Other intangible assets                            727.3            746.4
     Asbestos-related insurance recoverable             745.3            771.1
     Other noncurrent assets                          1,167.1          1,155.7
         Total Assets                               $10,306.2
 
     Liabilities and Shareholders' Equity
     Short-term debt, including current
      portion of long-term debt                        $113.9           $147.8
     Accounts payable                                   446.6            431.9
     Accrued compensation                               183.9            157.8
     Restructuring and rationalization
      reserves                                          120.3            107.9
     Current portion of asbestos liability              350.0            350.0
     Income taxes payable                                63.6             94.4
     Other accrued liabilities                          395.3            439.3
         Total current liabilities                    1,673.6          1,729.1
 
     Long-term debt                                   3,773.2          3,559.7
     Long-term portion of asbestos liability          1,363.4          1,461.9
     Postemployment benefits                            635.1            637.6
     Other accrued liabilities                          861.2            882.4
     Minority interest in consolidated
      subsidiaries                                       57.0             57.5
     Company-obligated mandatorily
      redeemable preferred securities
      of subsidiary trust holding solely
      convertible subordinated
      debentures of the Company                         575.0            575.0
 
     Shareholders' equity:
       Series C ESOP preferred stock                     37.3             38.1
       Common stock                                     353.1            352.5
       Additional paid-in capital                     1,778.2          1,778.6
       Accumulated deficit                             (172.4)          (113.5)
       Accumulated other comprehensive loss            (627.8)          (504.7)
       Other                                             (0.7)            (0.8)
         Total Shareholders' Equity                   1,367.7          1,550.2
         Total Liabilities and Shareholders'
          Equity                                    $10,306.2        $10,453.4
 
 SOURCE  Federal-Mogul Corporation

RELATED LINKS

http://www.federal-mogul.com