Collins & Aikman Announces Record Sales and Fourth Quarter Financial Results
11 März 2004 - 2:26PM
PR Newswire (US)
Collins & Aikman Announces Record Sales and Fourth Quarter
Financial Results TROY, Mich., March 11 /PRNewswire-FirstCall/ --
Collins & Aikman Corporation (C&A) today reported results
for fourth quarter and year ended December 31, 2003. The
companyreported record fourth quarter 2003 net sales of $1.013
billion compared to $963 million in the fourth quarter of 2002, a
5% increase which mainly reflects sales from companies acquired in
January 2003 along with improved currency impact. The company
reported a loss of 14 cents per share from continuing operations in
the fourth quarter of 2003, which included after-tax charges for
restructuring and long-lived asset impairments of $16.7 million (or
20 cents per share). In the comparable 2002 quarter,the company had
a loss of 4 cents per share, which included after-tax charges for
restructuring and long-lived asset impairments of $13.0 million (or
16 cents per share). Commenting on the company's fourth quarter
operating results, David A. Stockman, C&A Chairman and CEO,
stated, "We are pleased with the solid improvement in EBITDA
performance, excluding restructuring and impairment charges. For
the second consecutive quarter our results were up significantly
from the prior year on a comparable basis. Additionally, the
restructuring program that began in the third quarter is resulting
in significant fixed cost savings as indicated by our
year-over-year decline in selling, general and administrative
expenses." The fourth quarter 2003 pre-tax restructuring charge of
$13.8 million included costs associated with the previously
announced third quarter restructuring actions that would reduce the
company's salaried workforce by almost 800 or 15%. This
restructuring initiative and related actions are expected to reduce
the company's fixed-cost structure by $80 million per year. For the
full-year 2003, the company reported sales of $3.98 billion
compared to $3.89 billion for 2002. The company also reported a net
loss available to common shareholders from continuing operations of
$59.1 million or 71 cents per share, which included $49.9 million
(or 60 cents per share) of after-tax charges for restructuring and
long-lived asset impairments. For the comparable 2002 period, the
net loss availableto common shareholders from continuing operations
was $87.6 million or $1.15 per share, which included after-tax
charges for restructuring and long-lived asset impairments of $40.9
million (or 53 cents per share). C&A's net debt, including
outstandings under an off-balance sheet accounts receivable
facility, was $1.346 billion at December 31, 2003. Net Business
Wins and Other Accomplishments During the fourth quarter 2003,
Collins & Aikman continued to achieve solid marketing progress
by adding $200 million of annual newly booked business, bringing
the year-to-date total to over $900 million in annualized revenues
incepting with model year 2005. These figures are net of business
being transitioned to other suppliers. Wins for the quarter
included one of the largest fabric contracts the company has
received in recent history -- a contract to supply seat fabric to a
North American OEM for multiple unnamed models. Wins also included
numerous instrument panel, carpet and acoustic, and interior trim
programs. In particular, the company recently secured contracts to
supply instrument panels and center consoles for multiple
derivatives of a new crossover type vehicle. EBITDA Discussion
EBITDA was $69.4 million for the fourth quarter of 2003, which was
reduced by charges of $13.8 million for restructuring and $7.3
million for the impairment of long-lived assets. The fourth quarter
2002 EBITDA was $68.2 million, which was reduced by charges of $4.8
million for restructuring and $9.3 million for the impairment of
long-lived assets. A reconciliation of our EBITDA, a non-GAAP
financial measure, to U.S. GAAP loss from continuing operations,
our most comparable GAAP figure, is set out in the attached EBITDA
reconciliation schedule. The companybelieves that EBITDA is a
meaningful measure of performance as it is commonly utilized in the
industry to analyze operating performance. EBITDA should not be
construed as income from operations, net income (loss) or cash flow
from operating activitiesas determined by generally accepted
accounting principles. Other companies may calculate EBITDA
differently. Completion of Previously Announced Audit Committee
Inquiry As separately announced today, the company's Audit
Committee inquiry into certainassertions made by two former
executives and related matters has been completed. The Audit
Committee's inquiry extended into the following areas: (1)
assertions regarding the company's accounting for revenue and
tooling, (2) a comprehensive review of related party transactions
and (3) certain corporate governance procedures. The primary
findings of the Audit Committee include that (1) it did not become
aware of any events that would necessitate a restatement of any
previously issued financial statements and (2) that all related
party transactions had a legitimate business purpose, were
negotiated fairly, and were intended to advance the interests of
the company and not to benefit the related parties at the company's
expense. The Audit Committee,however, has made certain corporate
governance and disclosure recommendations concerning related party
transactions that are summarized in the company's separate press
release. The company intends to file amended Quarterly Reports on
Form 10-Q for the quarters ended June 30, 2003 and September 30,
2003, to reflect the conclusion of the Audit Committee's inquiry
and its recommendations, but, as indicated above, no restatement of
any previously issued financial statements is required or being
made. The 2003 Form 10-K is expected to include audited financial
statements and the required CEO and CFO certifications under
Sarbanes-Oxley. The members of the company's Audit Committee are
Robert C. Clark, the former Dean of the Harvard Law School,
Marshall A. Cohen, counsel at Cassels Brock and Blackwell, a
Canadian law firm, and former Senator Warren B. Rudman. The Audit
Committee was advised by Davis Polk & Wardwell and an
accounting expert, Alex Arcady, a retired partner from Ernst &
Young LLP. Commenting upon the completion of the Audit Committee's
work, which began in August 2003, Mr. Stockman said, "The company
is deeply grateful to the members of the Audit Committee and its
advisors for their tireless work in examining these matters." 2004
Outlook We estimate net sales for the full year 2004 will be $4.0
billion to $4.05 billion based on a 16.2 million NAFTA vehicle
build and we expect operating income to be in the $225 million to
$240 million range for 2004. EBITDA is expected to be in the $355
million to $370 million range. We anticipate that in 2004 net
earnings will range between a breakeven and 10 cents per common
share. All of these numbers exclude the impacts of any future
restructuring or impairment charges. Capital spending is expected
to be in the $145 million to $155 million range for 2004. FASB
Interpretation No. 46 The company is currently evaluating whether
the recently revised FASB Interpretation No. 46, "Consolidation of
Variable Interest Entities," applies to certain of the company's
previously-disclosed operating leases with a related party. The
financial information contained in this release has been presented
on the basis that FIN 46 is not applicable in this instance, but
the company's Annual Report on Form 10-K will reflect its ultimate
conclusion on this issue. Management believes that, if FIN 46 is
applicable, the resulting implementation will not have a material
effect on the company's financial statements. The company will hold
a briefing with automotive institutional investors and security
analysts, news media representatives and other interested parties,
including its security holders, at 10:30 a.m. EST on Thursday,
March 11, 2004 to discuss its fourth quarter and year-end results
and other matters. To participate by phone, please dial (973)
582-2729. The briefing will also be audio webcast, on our website
at: http://www.collinsaikman.com/investor/confcalls.html. A slide
presentation will also be used in conjunction with this
teleconference and will be available on the company's website.
Collins & Aikman Corporation is a leading global supplier of
automotive interior components and systems, including: instrument
panels, cockpit modules, flooring and acoustic systems, automotive
fabric, and interior trim, as well as exterior trim and convertible
roof systems. The company's current operations include 15
countries, more than 100 facilities and nearly 24,000 employees.
Information about Collins & Aikman is available on the Internet
at http://www.collinsaikman.com/. This news release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Actual results may differ
materially from the anticipated results because of certain risks
and uncertainties, including but not limited to general economic
conditions in the markets in which Collins & Aikman operates,
fluctuations in the production of vehicles for which the company is
a supplier, changes in the popularity of particular car models,
labor disputes involving the company or its significant customers,
changes in consumer preferences, dependence on significant
automotive customers, the level of competition in the automotive
supply industry, pricing pressure from automotive customers, the
substantial leverage of the company and its subsidiaries,
limitations imposed by the company's debt facilities,
implementation of the reorganization plan, charges made in
connection with the integration of operations acquired by the
company, the risks associated with conducting business in foreign
countries and other risks detailed from time-to-time in the
company's Securities and Exchange Commission filings. COLLINS &
AIKMAN CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) Three months ended Year ended December 31, December 31,
2003 2002 2003 2002 (In millions, except per share data) Net sales
$1,012.9 $ 963.2 $3,983.7 $3,885.8 Cost of goods sold 898.3 835.4
3,539.5 3,367.7 Gross profit 114.6 127.8 444.2 518.1 Selling,
general and administrative expenses 63.1 77.7 273.2 293.5
Restructuring charges 13.8 4.8 40.6 38.9 Impairment of long-lived
assets 7.3 9.3 28.4 18.0 Operating income 30.4 36.0 102.0 167.7 Net
interest expense (40.0) (36.3) (151.3) (148.9) Loss on sale of
receivables (2.8) (1.2) (7.3) (4.2) Interest from subsidiary
preferred stock dividends (9.6) (6.4) (32.0) (30.8) Interest from
subsidiary preferred stock accretion (0.5) (2.0) (5.3) (7.6) Other
income (expense), net 9.0 3.4 32.9 (10.0) Loss from continuing
operations before income taxes (13.5) (6.5) (61.0) (33.8) Income
tax benefit (expense) 2.0 3.4 1.9 (17.5) Loss from continuing
operations (11.5) (3.1) (59.1) (51.3) Income from discontinued
ops., net 1.6 - 1.6 9.5 Cumulative effect of change in accounting
principle, net - - - (11.7) Net loss $ (9.9) $ (3.1) $ (57.5) $
(53.5) Loss on redemption of subsidiary preferred stock - - -
(36.3) Net loss available to common shareholders $ (9.9) $ (3.1) $
(57.5) $ (89.8) Net income (loss) per basic and diluted common
share data: Continuing operations $ (0.14) $ (0.04) $ (0.71) $
(1.15) Discontinued operations 0.02 - 0.02 0.12 Change in acct.
principle - - - (0.15) Total $ (0.12) $ (0.04) $ (0.69) $ (1.18)
Basic and diluted shares outstanding 83.6 83.6 83.6 76.3 COLLINS
& AIKMAN CONDENSED CONSOLIDATED BALANCE SHEETS December 31,
December 31, 2003 2002 (Unaudited) (In millions) ASSETS Current
assets: Cash and equivalents $ 13.2 $ 81.3 Accounts and other
receivables, net 257.3 373.0 Inventories 169.4 171.6 Other 216.0
177.4 Total current assets 655.9 803.3 Property, plant and
equipment, net 825.9 737.8 Deferred tax assets 178.1 165.0 Goodwill
and other intangible assets,net 1,430.0 1,350.8 Other assets 101.3
100.2 Total assets $3,191.2 $3,157.1 LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities Short-term borrowings $ 16.0 $ 10.5
Current maturities of long-term debt and lease obl. 31.5 23.5
Accounts payable 638.9 595.5 Accrued expenses 238.9 299.9 Total
current liabilities 925.3 929.4 Long-term debt and lease
obligations 1,237.7 1,255.2 Mandatorily redeemable preferred stock
of subsidiary 161.2 123.9 Other, including pensions and
post-retirement obligations 423.4 438.4 Minority interest 3.3 12.7
Stockholders' equity 440.3 397.5 Total liabilities and
stockholders' equity $3,191.2 $3,157.1 COLLINS & AIKMAN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Three
months ended Year ended December 31, December 31, 20032002 2003
2002 (In millions) Operating activities Net loss $ (9.9) $ (3.1) $
(57.5) $ (53.5) Depreciation and amortization 39.0 32.2 140.2 117.0
Changes in working capital 41.5 20.2 (10.7) 51.2 Other 10.2 2.9
50.9 74.7 Net cash flow provided by operating activities 80.8 52.2
122.9 189.4 Investing activities Capital expenditures (50.5) (46.7)
(170.4) (147.9) Sales of property, plant and equipment 3.1 13.1
18.3 13.3 Additional investment in joint venture - (3.3) - (5.9)
Payments of acquisitions and related costs, net of cash acquired -
- (37.8) (45.6) Financing activities Net decrease in debt (44.9)
(18.9) (4.8) (46.6) Repurchase of preferred stock - - - (100.0) Net
proceeds from issuance of common stock - (0.3) - 150.6 Effect of
exchange rate changes on cash 2.2 8.0 3.7 0.1 Increase (decrease)
in cash and equivalents (9.3) 4.1 (68.1) 7.4 Cash and equivalents
at beginning of period 22.5 77.2 81.3 73.9 Cash and equivalents at
end of period $ 13.2 $ 81.3 $ 13.2 $ 81.3 COLLINS & AIKMAN
SUPPLEMENTAL DATA - EBITDA RECONCILIATION SCHEDULE (unaudited)
Three months ended Year ended December 31, December 31, 2003 2002
2003 2002 (In millions) Loss from continuing operations $(11.5) $
(3.1) $(59.1) $(51.3) Income tax (benefit) expense (2.0) (3.4)
(1.9) 17.5 Net interest expense 40.0 36.3 151.3 148.9 Loss on sale
of receivables 2.8 1.2 7.3 4.2 Interest from subsidiary preferred
stock dividends and accretion 10.1 8.4 37.3 38.4 Other income
(expense), net (9.0) (3.4) (32.9) 10.0 Operating income $ 30.4 $
36.0 $102.0 $167.7 Depreciation and amortization 39.0 32.2 140.2
117.0 EBITDA $ 69.4 $ 68.2 $242.2 $284.7 Memo: Restructuring
charges $ 13.8 $ 4.8 $ 40.6 $ 38.9 Impairment of long-lived assets
7.3 9.3 28.4 18.0 Total restructuring and impairment charges $ 21.1
$ 14.1 $ 69.0 $ 56.9 This supplemental data presented above is a
reconciliation of a certain financial measure which is intended to
facilitate analysis of Collins & Aikman Corporation's business
and operating performance. EBITDAis defined as operating income
plus depreciation and amortization. The company believes that
EBITDA is a meaningful measure of performance as it is commonly
utilized in the industry to analyze operating performance. EBITDA
should not be construed as income from operations, net income
(loss) or cash flow from operating activities as determined by
generally accepted accounting principles. Other companies may
calculate EBITDA differently. DATASOURCE: Collins & Aikman
Corporation CONTACT: J. Michael Stepp, Vice Chairman & CFO,
+1-248-824-1520, , or Robert A. Krause, Vice President &
Treasurer, Head of Investor Relations, +1-248-733-4355, , both of
Collins & Aikman Corporation Web site:
http://www.collinsaikman.com/
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