Tecumseh Products Company Reports First Quarter 2001 Net of $0.74 Per Share

Apr 24, 2001, 01:00 ET from Tecumseh Products Company

    TECUMSEH, Mich., April 24 /PRNewswire Interactive News Release/ --
 Tecumseh Products Company (Nasdaq:   TECUA, TECUB) announced today its 2001
 first quarter results as summarized in the following Consolidated Condensed
 Statements of Income.
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
                                                        Three Months Ended
     (Dollars in millions except per share amounts)           March 31,
                                                           2001     2000
 
     Net Sales                                          $ 404.7   $ 476.2
       Cost of sales and operating expenses               355.4     400.1
       Selling and administrative expenses                 30.5      30.9
       Nonrecurring items                                    --      33.5
     Operating Income                                      18.8      11.7
       Interest expense                                    (1.2)     (1.4)
       Interest income and other, net                       4.6       6.9
     Income Before Taxes on Income                         22.2      17.2
       Taxes on Income                                      8.2       8.2
     Net Income                                         $  14.0   $   9.0
     Basic and Diluted Earnings Per Share                 $0.74     $0.46
     Weighted Average Shares (in thousands of shares)    18,836    19,668
 
     Consolidated net income for the first quarter of 2001 amounted to
 $14.0 million, or $0.74 per share, compared to $9.0 million or $.46 per share
 in the first quarter of 2000.  Exclusive of nonrecurring charges of
 $23.3 million net of tax, first quarter 2000 results were $32.3 million, or
 $1.64 per share.  Consolidated net sales in the first quarter of
 2001 decreased to $404.7 million from $476.2 million in 2000.
 
     Compressor Business
     First quarter 2001 sales in the Company's Compressor Business declined to
 $236.3 million from $247.1 million in the first quarter of 2000.  This decline
 was caused primarily by lower demand for commercial refrigeration products
 reflecting the weak economy, as well as low levels of capital expenditures in
 the beverage dispensing markets.  Sales of room air conditioning compressors,
 although flat, continued at low levels because of continued price competition
 from Asian producers.
     In addition to the effects of lower sales and reduced coverage of fixed
 costs, Compressor Business operating income was adversely affected by costs
 and production inefficiencies associated with the closure of its Somerset,
 Kentucky manufacturing plant.  It is expected that the movement of production
 from that plant will be complete by the end of the second quarter of this
 year.
     Results from the Company's Brazilian compressor operations, while reduced
 slightly from first quarter 2000 levels, remained strong and comprised
 approximately 84% of the total Compressor Business operating income in the
 first quarter of 2001.
 
     Engine & Power Train Business
     Results in the Company's Engine & Power Train Business declined
 significantly in the first quarter of 2001 when compared to the same period of
 the previous year.  Net sales declined to $137.1 million in 2001 compared to
 $196.3 million in 2000.
     Demand for the Company's lawn and garden engines was negatively impacted
 by poor Spring weather conditions and high customer inventories.  As a result
 of the significantly lower sales, operating income fell to $4.5 million in the
 first quarter compared to $22.3 million in the first quarter of 2000.
     The Company curtailed its engine manufacturing schedules during April to
 reduce its inventories.  This lower level of production and expected continued
 weak demand are likely to result in second quarter segment sales and earnings
 significantly below the levels achieved in the second quarter of 2000.
 
     Pump Business
     Sales in the Pump Business declined to $31.3 million in the quarter ended
 March 31, 2001 compared to $32.8 million in the same period of 2000.  The
 primary reason for the sales decrease was a reduction in sales for water
 gardening applications.  This was partially offset by increased sales to the
 plumbing market.  The decline in water gardening sales was primarily a result
 of poor weather conditions during the quarter.
     Pump Business operating income amounted to $3.0 million in 2001 compared
 to $4.1 million in 2000.  Reduced retail sales and increased costs associated
 with the absorption and integration of the fourth quarter 2000 acquisition of
 Interon Corporation contributed to the reduction in operating income.
 
     Outlook
     Although second quarter sales and earnings are expected to improve over
 the first quarter, Somerset plant closing costs and continued weakness in the
 engine and power train business are likely to cause second quarter results to
 be below those of the second quarter of 2000.
     In view of poor market conditions and the over-capacity situation which
 exists in the Company's two main operating segments, Compressors and Engine &
 Power Train operations, it is highly likely that the Company will undertake
 further restructuring and/or realignment actions designed to address capacity
 issues, as well as to improve overall cost structure and competitive position
 in all its major markets.  Studies are currently underway to determine how
 best to reorganize the Company's operations in light of current and projected
 market conditions.  As these actions are finalized, future results will be
 impacted by one or more nonrecurring charges.  While the amount and timing of
 these charges cannot currently be accurately predicted, they may affect
 several quarterly periods or years, and they could be material to the reported
 results in the particular quarter or year in which they are recorded.
 
 
     RESULTS BY BUSINESS SEGMENTS (UNAUDITED)
                                                         Three Months Ended
     (Dollars in millions)                                     March 31,
                                                            2001     2000
     Net Sales:
      Compressor Products                                $ 236.3   $ 247.1
      Engine & Power Train Products                        137.1     196.3
      Pump Products                                         31.3      32.8
           Total Net Sales                               $ 404.7   $ 476.2
     Operating Income:
      Compressor Products                                $  13.5   $  21.2
      Engine & Power Train Products                          4.5      22.3
      Pump Products                                          3.0       4.1
      Corporate expenses                                    (2.2)     (2.4)
      Nonrecurring items                                      --     (33.5)
           Total Operating Income                           18.8      11.7
      Interest expense                                      (1.2)     (1.4)
      Interest income and other, net                         4.6       6.9
     Income Before Taxes on Income                       $  22.2   $  17.2
 
 
     CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
 
                                                  March 31,       December 31,
     (Dollars in millions)                          2001               2000
 
     Assets
     Current Assets:
      Cash and cash equivalents                 $   221.3         $   268.2
      Accounts receivable, net                      315.4             265.6
      Inventories                                   280.2             274.9
      Deferred income taxes and other                71.0              74.0
         Total Current Assets                       887.9             882.7
     Property, Plant and Equipment - Net            430.6             444.7
     Other Assets                                   237.5             225.7
         Total Assets                            $1,556.0          $1,553.1
     Liabilities and Stockholders' Equity
     Current Liabilities:
      Accounts payable, trade                    $  137.2          $  123.5
      Short-term borrowings                          13.1               6.3
      Accrued liabilities                           151.5             150.5
         Total Current Liabilities                  301.8             280.3
     Product Warranty and Self-Insured Risks         23.1              24.5
     Long-term Debt                                  14.0              14.2
     Pension and Postretirement Benefits            205.7             205.4
     Accrual for Environmental Matters               33.0              33.3
         Total Liabilities                          577.6             557.7
     Stockholders' Equity                           978.4             995.4
         Total Liabilities and Stockholders'
          Equity                                 $1,556.0          $1,553.1
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
                                                          Three Months Ended
     (Dollars in millions)                                     March 31,
                                                           2001        2000
     Total Stockholders' Equity
       Beginning Balance                                $ 995.4    $1,014.2
     Comprehensive Income:
       Net Income                                          14.0         9.0
       Accumulated Other Comprehensive Income             (14.1)       (4.5)
     Total Comprehensive Income                            (0.1)        4.5
     Cash Dividends Declared                               (6.0)       (6.2)
     Stock Repurchases                                    (10.9)      (16.5)
     Total Stockholders' Equity
       Ending Balance                                   $ 978.4     $ 996.0
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                         Three Months Ended
     (Dollars in millions)                                    March 31,
                                                         2001        2000
 
     Cash Flows From Operating Activities:
      Net income                                       $ 14.0     $  9.0
      Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                   18.9       19.3
         Nonrecurring items                                --       33.5
         Accounts receivable                            (56.9)     (68.1)
         Inventories                                    (10.2)     (10.3)
         Payables and accrued expenses                   26.0       42.7
         Prepaid pension expense                         (6.2)      (6.3)
         Other                                           (3.3)     (10.7)
            Cash Provided By (Used In)
             Operating Activities                       (17.7)       9.1
     Cash Flows From Investing Activities:
      Capital expenditures                              (13.6)     (14.9)
            Cash Used in Investing Activities           (13.6)     (14.9)
     Cash Flows From Financing Activities:
      Dividends paid                                     (6.0)      (6.2)
      Increase in borrowings, net                         7.0        3.7
      Repurchases of common stock                       (10.9)     (16.5)
            Cash Used In Financing Activities            (9.9)     (19.0)
     Effect of Exchange Rate Changes on Cash             (5.7)      (2.7)
     Decrease in Cash and Cash Equivalents              (46.9)     (27.5)
     Cash and Cash Equivalents:
      Beginning of Period                               268.2      270.5
      End of Period                                   $ 221.3    $ 243.0
 
     Cautionary Statement Relating to Forward-Looking Statements
     This report contains forward-looking statements within the meaning of the
 Private Securities Litigation Reform Act of 1995 that are subject to the safe
 harbor provisions created by that Act.  In addition, forward-looking
 statements may be made orally in the future by or on behalf of the Company.
 Forward-looking statements can be identified by the use of terms such as
 "expects", "should", "may", "believes", "anticipates", "will", and other
 future tense and forward-looking terminology.
 
     Readers are cautioned that actual results may differ materially from those
 projected as a result of certain risks and uncertainties, including, but not
 limited to: i) changes in business conditions and the economy in general in
 both foreign and domestic markets; ii) weather conditions affecting demand for
 air conditioners, lawn and garden products and snow throwers; iii) the extent
 to which the decline in demand for lawn and garden and utility engines will
 continue, and the success of the Company's ongoing effort to bring costs in
 line with projected production levels and product mix; iv) financial market
 changes, including fluctuations in interest rates and foreign currency
 exchange rates; v) economic trend factors such as housing starts; vi)
 governmental regulations; vii) availability of materials; viii) actions of
 competitors; ix) the ultimate cost of resolving environmental matters; x) the
 extent of any business disruption resulting from the conversion to the Euro;
 xi) the Company's ability to profitably develop, manufacture and sell both new
 and existing products;  xii) the extent of any business disruption that may
 result from the restructuring and realignment of the Company's manufacturing
 operations and the ultimate cost of those initiatives; and xiii) potential
 political and economic adversities that could adversely affect anticipated
 sales and production in Brazil.  These forward-looking statements are made
 only as of the date hereof, and the Company undertakes no obligation to update
 or revise the forward-looking statements, whether as a result of new
 information, future events or otherwise.
 
     Tecumseh Products Company will host a conference call to report on the
 first quarter results on Tuesday, April 24th at 11:00 a.m. ET.  The call will
 be broadcast live over the Internet and then available for replay through
 Tecumseh Products Company's website at www.tecumseh.com .
 
     Press releases and other investor information can be accessed via Tecumseh
 Products Company's Internet web site at http://www.tecumseh.com .  Recent
 quarterly earnings information and press releases can be obtained at no
 charge, via fax, by calling "Company News On-Call" at 1-800-758-5804, ext.
 842875, or by accessing PR Newswire's Internet web site at
 http://www.prnewswire.com .
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X41572742
 
 

SOURCE Tecumseh Products Company
    TECUMSEH, Mich., April 24 /PRNewswire Interactive News Release/ --
 Tecumseh Products Company (Nasdaq:   TECUA, TECUB) announced today its 2001
 first quarter results as summarized in the following Consolidated Condensed
 Statements of Income.
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
                                                        Three Months Ended
     (Dollars in millions except per share amounts)           March 31,
                                                           2001     2000
 
     Net Sales                                          $ 404.7   $ 476.2
       Cost of sales and operating expenses               355.4     400.1
       Selling and administrative expenses                 30.5      30.9
       Nonrecurring items                                    --      33.5
     Operating Income                                      18.8      11.7
       Interest expense                                    (1.2)     (1.4)
       Interest income and other, net                       4.6       6.9
     Income Before Taxes on Income                         22.2      17.2
       Taxes on Income                                      8.2       8.2
     Net Income                                         $  14.0   $   9.0
     Basic and Diluted Earnings Per Share                 $0.74     $0.46
     Weighted Average Shares (in thousands of shares)    18,836    19,668
 
     Consolidated net income for the first quarter of 2001 amounted to
 $14.0 million, or $0.74 per share, compared to $9.0 million or $.46 per share
 in the first quarter of 2000.  Exclusive of nonrecurring charges of
 $23.3 million net of tax, first quarter 2000 results were $32.3 million, or
 $1.64 per share.  Consolidated net sales in the first quarter of
 2001 decreased to $404.7 million from $476.2 million in 2000.
 
     Compressor Business
     First quarter 2001 sales in the Company's Compressor Business declined to
 $236.3 million from $247.1 million in the first quarter of 2000.  This decline
 was caused primarily by lower demand for commercial refrigeration products
 reflecting the weak economy, as well as low levels of capital expenditures in
 the beverage dispensing markets.  Sales of room air conditioning compressors,
 although flat, continued at low levels because of continued price competition
 from Asian producers.
     In addition to the effects of lower sales and reduced coverage of fixed
 costs, Compressor Business operating income was adversely affected by costs
 and production inefficiencies associated with the closure of its Somerset,
 Kentucky manufacturing plant.  It is expected that the movement of production
 from that plant will be complete by the end of the second quarter of this
 year.
     Results from the Company's Brazilian compressor operations, while reduced
 slightly from first quarter 2000 levels, remained strong and comprised
 approximately 84% of the total Compressor Business operating income in the
 first quarter of 2001.
 
     Engine & Power Train Business
     Results in the Company's Engine & Power Train Business declined
 significantly in the first quarter of 2001 when compared to the same period of
 the previous year.  Net sales declined to $137.1 million in 2001 compared to
 $196.3 million in 2000.
     Demand for the Company's lawn and garden engines was negatively impacted
 by poor Spring weather conditions and high customer inventories.  As a result
 of the significantly lower sales, operating income fell to $4.5 million in the
 first quarter compared to $22.3 million in the first quarter of 2000.
     The Company curtailed its engine manufacturing schedules during April to
 reduce its inventories.  This lower level of production and expected continued
 weak demand are likely to result in second quarter segment sales and earnings
 significantly below the levels achieved in the second quarter of 2000.
 
     Pump Business
     Sales in the Pump Business declined to $31.3 million in the quarter ended
 March 31, 2001 compared to $32.8 million in the same period of 2000.  The
 primary reason for the sales decrease was a reduction in sales for water
 gardening applications.  This was partially offset by increased sales to the
 plumbing market.  The decline in water gardening sales was primarily a result
 of poor weather conditions during the quarter.
     Pump Business operating income amounted to $3.0 million in 2001 compared
 to $4.1 million in 2000.  Reduced retail sales and increased costs associated
 with the absorption and integration of the fourth quarter 2000 acquisition of
 Interon Corporation contributed to the reduction in operating income.
 
     Outlook
     Although second quarter sales and earnings are expected to improve over
 the first quarter, Somerset plant closing costs and continued weakness in the
 engine and power train business are likely to cause second quarter results to
 be below those of the second quarter of 2000.
     In view of poor market conditions and the over-capacity situation which
 exists in the Company's two main operating segments, Compressors and Engine &
 Power Train operations, it is highly likely that the Company will undertake
 further restructuring and/or realignment actions designed to address capacity
 issues, as well as to improve overall cost structure and competitive position
 in all its major markets.  Studies are currently underway to determine how
 best to reorganize the Company's operations in light of current and projected
 market conditions.  As these actions are finalized, future results will be
 impacted by one or more nonrecurring charges.  While the amount and timing of
 these charges cannot currently be accurately predicted, they may affect
 several quarterly periods or years, and they could be material to the reported
 results in the particular quarter or year in which they are recorded.
 
 
     RESULTS BY BUSINESS SEGMENTS (UNAUDITED)
                                                         Three Months Ended
     (Dollars in millions)                                     March 31,
                                                            2001     2000
     Net Sales:
      Compressor Products                                $ 236.3   $ 247.1
      Engine & Power Train Products                        137.1     196.3
      Pump Products                                         31.3      32.8
           Total Net Sales                               $ 404.7   $ 476.2
     Operating Income:
      Compressor Products                                $  13.5   $  21.2
      Engine & Power Train Products                          4.5      22.3
      Pump Products                                          3.0       4.1
      Corporate expenses                                    (2.2)     (2.4)
      Nonrecurring items                                      --     (33.5)
           Total Operating Income                           18.8      11.7
      Interest expense                                      (1.2)     (1.4)
      Interest income and other, net                         4.6       6.9
     Income Before Taxes on Income                       $  22.2   $  17.2
 
 
     CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
 
                                                  March 31,       December 31,
     (Dollars in millions)                          2001               2000
 
     Assets
     Current Assets:
      Cash and cash equivalents                 $   221.3         $   268.2
      Accounts receivable, net                      315.4             265.6
      Inventories                                   280.2             274.9
      Deferred income taxes and other                71.0              74.0
         Total Current Assets                       887.9             882.7
     Property, Plant and Equipment - Net            430.6             444.7
     Other Assets                                   237.5             225.7
         Total Assets                            $1,556.0          $1,553.1
     Liabilities and Stockholders' Equity
     Current Liabilities:
      Accounts payable, trade                    $  137.2          $  123.5
      Short-term borrowings                          13.1               6.3
      Accrued liabilities                           151.5             150.5
         Total Current Liabilities                  301.8             280.3
     Product Warranty and Self-Insured Risks         23.1              24.5
     Long-term Debt                                  14.0              14.2
     Pension and Postretirement Benefits            205.7             205.4
     Accrual for Environmental Matters               33.0              33.3
         Total Liabilities                          577.6             557.7
     Stockholders' Equity                           978.4             995.4
         Total Liabilities and Stockholders'
          Equity                                 $1,556.0          $1,553.1
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
                                                          Three Months Ended
     (Dollars in millions)                                     March 31,
                                                           2001        2000
     Total Stockholders' Equity
       Beginning Balance                                $ 995.4    $1,014.2
     Comprehensive Income:
       Net Income                                          14.0         9.0
       Accumulated Other Comprehensive Income             (14.1)       (4.5)
     Total Comprehensive Income                            (0.1)        4.5
     Cash Dividends Declared                               (6.0)       (6.2)
     Stock Repurchases                                    (10.9)      (16.5)
     Total Stockholders' Equity
       Ending Balance                                   $ 978.4     $ 996.0
 
 
     CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                         Three Months Ended
     (Dollars in millions)                                    March 31,
                                                         2001        2000
 
     Cash Flows From Operating Activities:
      Net income                                       $ 14.0     $  9.0
      Adjustments to reconcile net income to net cash
       provided by operating activities:
         Depreciation and amortization                   18.9       19.3
         Nonrecurring items                                --       33.5
         Accounts receivable                            (56.9)     (68.1)
         Inventories                                    (10.2)     (10.3)
         Payables and accrued expenses                   26.0       42.7
         Prepaid pension expense                         (6.2)      (6.3)
         Other                                           (3.3)     (10.7)
            Cash Provided By (Used In)
             Operating Activities                       (17.7)       9.1
     Cash Flows From Investing Activities:
      Capital expenditures                              (13.6)     (14.9)
            Cash Used in Investing Activities           (13.6)     (14.9)
     Cash Flows From Financing Activities:
      Dividends paid                                     (6.0)      (6.2)
      Increase in borrowings, net                         7.0        3.7
      Repurchases of common stock                       (10.9)     (16.5)
            Cash Used In Financing Activities            (9.9)     (19.0)
     Effect of Exchange Rate Changes on Cash             (5.7)      (2.7)
     Decrease in Cash and Cash Equivalents              (46.9)     (27.5)
     Cash and Cash Equivalents:
      Beginning of Period                               268.2      270.5
      End of Period                                   $ 221.3    $ 243.0
 
     Cautionary Statement Relating to Forward-Looking Statements
     This report contains forward-looking statements within the meaning of the
 Private Securities Litigation Reform Act of 1995 that are subject to the safe
 harbor provisions created by that Act.  In addition, forward-looking
 statements may be made orally in the future by or on behalf of the Company.
 Forward-looking statements can be identified by the use of terms such as
 "expects", "should", "may", "believes", "anticipates", "will", and other
 future tense and forward-looking terminology.
 
     Readers are cautioned that actual results may differ materially from those
 projected as a result of certain risks and uncertainties, including, but not
 limited to: i) changes in business conditions and the economy in general in
 both foreign and domestic markets; ii) weather conditions affecting demand for
 air conditioners, lawn and garden products and snow throwers; iii) the extent
 to which the decline in demand for lawn and garden and utility engines will
 continue, and the success of the Company's ongoing effort to bring costs in
 line with projected production levels and product mix; iv) financial market
 changes, including fluctuations in interest rates and foreign currency
 exchange rates; v) economic trend factors such as housing starts; vi)
 governmental regulations; vii) availability of materials; viii) actions of
 competitors; ix) the ultimate cost of resolving environmental matters; x) the
 extent of any business disruption resulting from the conversion to the Euro;
 xi) the Company's ability to profitably develop, manufacture and sell both new
 and existing products;  xii) the extent of any business disruption that may
 result from the restructuring and realignment of the Company's manufacturing
 operations and the ultimate cost of those initiatives; and xiii) potential
 political and economic adversities that could adversely affect anticipated
 sales and production in Brazil.  These forward-looking statements are made
 only as of the date hereof, and the Company undertakes no obligation to update
 or revise the forward-looking statements, whether as a result of new
 information, future events or otherwise.
 
     Tecumseh Products Company will host a conference call to report on the
 first quarter results on Tuesday, April 24th at 11:00 a.m. ET.  The call will
 be broadcast live over the Internet and then available for replay through
 Tecumseh Products Company's website at www.tecumseh.com .
 
     Press releases and other investor information can be accessed via Tecumseh
 Products Company's Internet web site at http://www.tecumseh.com .  Recent
 quarterly earnings information and press releases can be obtained at no
 charge, via fax, by calling "Company News On-Call" at 1-800-758-5804, ext.
 842875, or by accessing PR Newswire's Internet web site at
 http://www.prnewswire.com .
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X41572742
 
 SOURCE  Tecumseh Products Company

RELATED LINKS

http://www.tecumseh.com