DRRA Dura Automotive Systems

DURA Automotive Systems, Inc. (Nasdaq:DRRA), today reported revenues of $535.9 million for the third quarter ended October 2, 2005, compared to $616.4 million in the prior-year quarter. Net loss for the quarter was $6.6 million, or $0.35 per diluted share, compared to net loss of $2.7 million, or $0.15 per diluted share, in the prior-year quarter. DURA's adjusted loss from continuing operations for the quarter, which excludes facility consolidation charges and minority interest totaled $5.2 million, or $0.28 per diluted share, compared to income of $0.9 million, or $0.05 per diluted share, in the prior-year quarter. "As industry conditions continue to soften, we have taken significant actions to improve our liquidity and further accelerate cost reductions. However, we are not satisfied with our results," said Larry Denton, president and chief executive officer of DURA Automotive. "During these difficult times, we have not sacrificed our commitments to our customers and growing our business organically. The company's management team remains dedicated to returning DURA to profitability." The decrease in third-quarter revenue from the prior year was driven primarily by lower North American automotive production by the domestic OEMs, lower European automotive volumes, lower RV production and five fewer business days. Partially offsetting these decreases was the benefit received from foreign currency exchange. The decrease in third-quarter income from continuing operations from the prior year reflects the impact of lower overall production levels and five fewer business days. The facility consolidation charge for the quarter relates to the previously announced headcount reductions associated with DURA's plan to migrate to one enterprise resource planning system and the continuation of the previously announced actions in the U.S. and Germany. The third quarter's facility consolidation charge before taxes of $1.9 million primarily represents employee severance costs. Nine-Month Results For the nine-month period ended October 2, 2005, revenue totaled $1.8 billion compared to $1.9 billion for the same period in 2004. Net loss for the nine-month period was $8.5 million, or $0.45 per diluted share, compared to net income of $9.8 million, or $0.52 per diluted share, in the prior year. DURA's adjusted loss from continuing operations for the nine months ended October 2, 2005, which excludes facility consolidation and other charges, a loss on the early extinguishment of debt, the favorable resolution of an environmental matter and minority interest, totaled $7.3 million, or $0.39 per diluted share, as compared to adjusted income from continuing operations of $23.4 million, or $1.24 per diluted share, in the same period last year. 2005 Full-Year Outlook For the full-year, our automotive industry production planning assumptions are 15.6 million units for North America and 20.0 million units for Europe. For the full year, revenue is expected to be $2.3 to $2.4 billion, versus $2.5 billion last year. Adjusted EBITDA is expected to be between $170 and $180 million. Full-year capital spending is expected to be approximately $70 million, interest expense $100 million and depreciation $82 million. We expect net debt to increase by $20 to $40 million for the year. A reconciliation of adjusted EBITDA to the most directly comparable GAAP measures is set forth below. Conference Call A conference call to review the second-quarter results is scheduled for October 27, 2005, at 11 a.m. EDT. Interested participants may listen to the live conference call or replay over the Internet by logging onto the investor relations section of the company's Web site, www.duraauto.com. A recording of this call also will be available until 6 p.m. ET on Thursday, November 3, 2005, by dialing (303) 590-3000, passcode 11040683. About DURA Automotive Systems, Inc. DURA Automotive Systems, Inc., is a leading independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry. The company is also a leading supplier of similar products to the recreation vehicle (RV) and specialty vehicle industries. DURA sells its automotive products to every North American, Japanese and European original equipment manufacturer (OEM) and many leading Tier 1 automotive suppliers. DURA is headquartered in Rochester Hills, Mich. Information about DURA and its products is available on the Internet at www.duraauto.com. Use of Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States ("GAAP") included throughout this news release, the Company has provided information regarding "adjusted income from continuing operations" and "adjusted EBITDA" (non-GAAP financial measures). Adjusted income from continuing operations represents income from continuing operations adjusted for facility consolidation and other charges, net, the favorable resolution of an environmental matter and a loss on early extinguishment of debt, net. Adjusted EBITDA represents income from continuing operations adjusted for facility consolidation and other charges, a loss on early extinguishment of debt, the favorable resolution of an environmental matter, interest, amortization, depreciation and taxes. Management believes that adjusted income from continuing operations and adjusted EBITDA are useful to both management and investors in their analysis of the Company's ability to analyze operational performance. Adjusted income from continuing operations and adjusted EBITDA should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. Also, adjusted income from continuing operations and adjusted EBITDA, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies. Forward-Looking Statements This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", or similar expressions. These statements are based on certain assumptions that the company has made in light of its experience in the industry as well as its perspective of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to (i) expected synergies, economies of scale and cost savings from the company's acquisitions not being fully realized or realized within the expected times frames; (ii) unanticipated difficulties servicing the indebtedness of the company; (iii) costs or operational difficulties related to integrating the operations of the acquired entities with those of the company being greater than expected; (iv) labor disputes involving the company or its significant customers; (v) risks associated with conducting business in foreign countries, and (vi) general economic or business conditions affecting the automotive industry, either nationally or regionally, being less favorable than expected. -0- *T DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share amounts - unaudited) Three Months Ended Nine Months Ended October 2, October 3, October 2, October 3, 2005 2004 2005 2004 ---------- ---------- ----------- ----------- Revenues $535,922 $616,363 $1,779,735 $1,909,742 Cost of sales 484,717 552,459 1,589,594 1,692,490 ---------- ---------- ----------- ----------- Gross profit 51,205 63,904 190,141 217,252 Selling, general and administrative expenses 35,843 38,606 119,041 117,333 Facility consolidation, asset impairments and other charges 1,860 5,061 6,150 18,087 Amortization expense 101 103 317 334 ---------- ---------- ----------- ----------- Operating income 13,401 20,134 64,633 81,498 Interest expense, net 24,513 23,907 74,390 66,695 Loss on early extinguishment of debt - - 3,349 - ---------- ---------- ----------- ----------- Income (loss) from continuing operations before provision for income taxes and minority interest (11,112) (3,773) (13,106) 14,803 Provision (benefit) for income taxes (4,638) (1,094) (4,864) 4,293 ---------- ---------- ----------- ----------- Income (loss) from continuing operations (6,474) (2,679) (8,242) 10,510 Minority interests in income (110) - (110) Loss from discontinued operations, net - (18) (106) (699) ---------- ---------- ----------- ----------- Net income (loss) $(6,584) $(2,697) $(8,458) $9,811 ========== ========== =========== =========== Basic earnings (loss) per share: Income (loss) from continuing operations $(0.35) $(0.15) $(0.45) $0.57 Discontinued operations - - - (0.04) ---------- ---------- ----------- ----------- Net income (loss) $(0.35) $(0.15) $(0.45) $0.53 ========== ========== =========== =========== Basic shares outstanding 18,711 18,578 18,689 18,468 ========== ========== =========== =========== Diluted earnings (loss) per share: Income (loss) from continuing operations $(0.35) $(0.15) $(0.45) $0.56 Discontinued operations - - - (0.04) ---------- ---------- ----------- ----------- Net income (loss) $(0.35) $(0.15) $(0.45) $0.52 ========== ========== =========== =========== Diluted shares outstanding 18,711 18,578 18,689 18,881 ========== ========== =========== =========== Capital expenditures $17,086 $14,660 $44,690 $43,963 Depreciation $19,971 $21,216 $61,463 $64,758 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES ADJUSTED INCOME FROM CONTINUING OPERATIONS (Amounts in thousands, except per share amounts - unaudited) Three Months Ended Nine Months Ended October 2, October 3, October 2, October 3, 2005 2004 2005 2004 ---------- ---------- ----------- ----------- Net income (loss) $(6,584) $(2,679) $(8,458) $9,811 Facility consolidation and other charges, net 1,228 3,590 4,007 12,918 Loss on early extinguishment of debt, net - - 2,143 - Favorable settlement of environmental matter, net - - (5,243) - Discontinued operations - - 106 699 Minority interest 110 - 110 - ---------- ---------- ----------- ----------- Adjusted income (loss) from continuing operations $(5,246) $911 $(7,335) $23,428 ========== ========== =========== =========== Basic earnings (loss) per share: Adjusted income (loss) from continuing operations $(0.28) $0.05 $(0.39) $1.27 ========== ========== =========== =========== Basic shares outstanding 18,711 18,578 18,689 18,468 ========== ========== =========== =========== Diluted earnings (loss) per share: Adjusted income (loss) from continuing operations $(0.28) $0.05 $(0.39) $1.24 ========== ========== =========== =========== Diluted shares outstanding 18,711 18,717 18,689 18,881 ========== ========== =========== =========== DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES ADJUSTED EBITDA GUIDANCE (Amounts in millions, except per share amounts - unaudited) Twelve Months Ended December 31, 2005 Range -------------------- Low High ---------- --------- Operating Income $87 $97 Depreciation expense 82 82 Facility consolidation and other charges 9 9 Favorable settlement of environmental matter (8) (8) ---------- --------- Adjusted EBITDA $170 $180 DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) October 2, December 31, Assets 2005 2004 --------------------------------------------- ----------- ------------ Current assets: Cash and cash equivalents $93,670 $191,568 Accounts receivable, net 356,809 273,956 Inventories 136,836 149,834 Current portion of derivative instruments - 7,746 Other current assets 104,437 92,016 ----------- ------------ Total current assets 691,752 715,120 ----------- ------------ Property, plant and equipment, net 448,373 487,106 Goodwill, net 865,424 903,584 Noncurrent portion of derivative instruments - 10,601 Deferred income taxes and other assets, net 100,148 107,510 ----------- ------------ $2,105,697 $2,223,921 =========== ============ Liabilities and Stockholders' Investment --------------------------------------------- Current liabilities: Accounts payable $256,739 $270,341 Accrued liabilities 182,942 187,254 Current maturities of long-term debt 1,294 2,968 ----------- ------------ Total current liabilities 440,975 460,563 ----------- ------------ Long-term debt, net of current maturities 154,482 150,898 Senior notes 400,000 400,000 Subordinated notes 575,068 589,469 Mandatorily redeemable convertible trust preferred securities 55,250 55,250 Senior notes - hedging mark-to-market value adjustment (6,190) 18,347 Other noncurrent liabilities 139,723 141,903 Stockholders' investment: Common stock - Class A 187 186 Additional paid-in capital 352,148 351,571 Treasury stock (1,962) (2,513) Retained deficit (101,800) (93,342) Accumulated other comprehensive income 97,816 151,589 ----------- ------------ Total stockholders' investment 346,389 407,491 ----------- ------------ $2,105,697 $2,223,921 =========== ============ *T