Cooper Tire & Rubber Company News
Cooper Tire & Rubber Company Reports First Quarter Results
Net income for the quarter includes
The Company repurchased 803 thousand shares for
North American Tire Operations
North American Tire generated sales of
Operating profit for North American Tire declined year over year as a result of several key operating factors. An improved price to raw material relationship of
The declining dollar's impact and other factors are driving record-high raw material prices, specifically, in natural rubber and oil-derived materials. The LIFO accounting method results in the most recent costs being charged against sales. When costs moderate, the North American operations will experience lower charges to cost of goods sold than would be reported under a first-in, first-out accounting method.
The North American segment was successful in rebuilding inventories to more acceptable levels while maintaining industry leading fill rates for its customers.
International Tire Operations
The Company's International Tire Operations reported sales of
Management Commentary and Outlook
Recent changes in macroeconomic conditions in
"We will increase our focus on delivering cost improvements during 2008, with the many initiatives we already have in place. These efforts, seasonal volume increases, very good order patterns in specific profitable tire lines, and success in implementing price increases, provide support for our belief that results will be appreciably more favorable as the economy improves."
Cooper's management team will discuss the financial and operating results for the quarter in a conference call today at
Company Description
Cooper Tire & Rubber Company is a global company that specializes in the design, manufacture, marketing and sales of passenger car, light truck, medium truck tires and subsidiaries that specialize in motorcycle and racing tires. With headquarters in
Forward-Looking Statements
This report contains what the Company believes are "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding projections, expectations or matters that the Company anticipates may happen with respect to the future performance of the industries in which the Company operates, the economies of
Such "forward-looking statements" are generally, though not always, preceded by words such as "anticipates," "expects," "believes," "projects," "intends," "plans," "estimates," and similar terms that connote a view to the future and are not merely recitations of historical fact. Such statements are made solely on the basis of the Company's current views and perceptions of future events, and there can be no assurance that such statements will prove to be true.
It is possible that actual results may differ materially from those projections or expectations due to a variety of factors, including but not limited to:
— changes in economic and business conditions in the world, especially the continuation of the global tensions and risks of further terrorist incidents that currently exist; — increased competitive activity, including the inability to obtain and maintain price increases to offset higher production or material costs; — the failure to achieve expected sales levels; — consolidation among the Company's competitors and customers; — technology advancements; — fluctuations in raw material and energy prices, including those of steel, crude petroleum and natural gas and the unavailability of such raw materials or energy sources; — changes in interest and foreign exchange rates; — increases in pension expense resulting from investment performance of the Company's pension plan assets and changes in discount rate, salary increase rate, and expected return on plan assets assumptions; — government regulatory initiatives, including the proposed and final regulations under the TREAD Act; — changes in the Company's customer relationships, including loss of particular business for competitive or other reasons; — the impact of labor problems, including a strike brought against the Company or against one or more of its large customers; — litigation brought against the Company; — an adverse change in the Company's credit ratings, which could increase its borrowing costs and/or hamper its access to the credit markets; — the inability of the Company to execute its cost reduction/Asian strategies; — the failure of the Company's suppliers to timely deliver products in accordance with contract specifications; — the impact of reductions in the insurance program covering the principal risks to the Company, and other unanticipated events and conditions; — the failure of the Company to achieve the full cost reduction and profit improvement targets; and — the inability or failure to implement the Company's strategic plan.
It is not possible to foresee or identify all such factors. Any forward- looking statements in this report are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.
Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected.
The Company makes no commitment to update any forward-looking statement included herein or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.
Further information covering issues that could materially affect financial performance is contained in the Company's periodic filings with the U. S. Securities and Exchange Commission ("SEC").
Cooper Tire & Rubber Company Consolidated Statements of Income (Dollar amounts in thousands except per share amounts) Quarter Ended March 31 2007 2008 Net sales $669,600 $679,321 Cost of products sold 598,761 623,083 Gross profit 70,839 56,238 Selling, general and administrative 40,663 46,684 Restructuring charges 1,047 - Operating profit 29,129 9,554 Interest expense 12,519 11,478 Interest income (3,529) (3,723) Debt extinguishment - 583 Dividend from unconsolidated subsidiary (2,007) (1,943) Other income - net (4,606) (1,317) Income from continuing operations before income taxes 26,752 4,476 Income tax expense (6,848) (1,048) Income from continuing operations before income attributable to noncontrolling shareholders 19,904 3,428 Noncontrolling shareholders' income (399) (2,086) Income from continuing operations 19,505 1,342 Income from discontinued operations, net of income taxes 1,246 344 Net income $20,751 $1,686 Basic earnings per share Income from continuing operations $0.32 $0.02 Income from discontinued operations 0.02 0.01 Net income $0.34 $0.03 Diluted earnings per share Income from continuing operations $0.31 $0.02 Income from discontinued operations 0.02 0.01 Net income $0.33 $0.03 Weighted average shares outstanding Basic 61,475 59,484 Diluted 61,972 60,474 Depreciation $31,352 $34,019 Amortization $1,867 $1,358 Capital expenditures $42,754 $31,664 Segment information Net sales North American Tire $515,089 $497,672 International Tire 182,961 231,780 Eliminations (28,450) (50,131) Segment profit (loss) North American Tire 26,797 8,144 International Tire 6,114 6,909 Eliminations (825) (1,269) Unallocated corporate charges (2,957) (4,230) ****************************** CONSOLIDATED BALANCE SHEETS March 31 2007 2008 Assets Current assets: Cash and cash equivalents $262,386 $266,041 Short term investments - 49,139 Accounts receivable 441,445 376,490 Inventories 355,518 401,570 Other current assets 130,264 133,845 Assets of discontinued operations 41,760 - Total current assets 1,231,373 1,227,085 Property, plant and equipment 980,985 1,002,482 Goodwill 24,439 24,439 Restricted cash 7,579 2,743 Intangibles and other assets 92,287 89,981 $2,336,663 $2,346,730 Liabilities and Stockholders' Equity Current liabilities: Notes payable $148,035 $126,503 Payable to non-controlling owner 22,906 3,707 Trade payables and accrued liabilities 389,675 451,733 Income taxes 8,837 1,398 Liabilities of discontinued operations 10,678 1,424 Current portion of long term debt - 17,160 Total current liabilities 580,131 601,925 Long-term debt 523,146 435,775 Postretirement benefits other than pensions 261,337 246,912 Other long-term liabilities 224,416 172,005 Long-term liabilities of discontinued operations 9,281 9,655 Deferred income taxes - - Noncontrolling shareholders' interest in consolidated subsidiaries 73,587 95,371 Stockholders' equity 664,765 785,087 $2,336,663 $2,346,730 These interim statements are subject to year-end adjustments.
Certain amounts for the prior year have been reclassified to conform to 2008 presentations.
SOURCE Cooper Tire & Rubber Company
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