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EXHIBIT 99.1
For immediate release
Contacts:
Jane Ostrander Leslie Cleveland Hague
Media Relations Investor Relations
847 482 5607 847 482-5042
jane.ostrander@tenneco-automotive.com lchague@tenneco-automotive.com
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TENNECO AUTOMOTIVE REPORTS 2001 FIRST QUARTER EARNINGS
- - COMPANY REPORTS NET LOSS OF $16 MILLION, OR 44 CENTS PER DILUTED SHARE,
BEFORE RESTRUCTURING AND OTHER UNUSUAL CHARGES;
- - REVENUE DECLINES TWO PERCENT YEAR-OVER-YEAR TO $864 MILLION;
- - WORKING CAPITAL, AS A PERCENT OF SALES, IMPROVES FROM 16.7% TO 13.7% ($100
MILLION IMPROVEMENT);
- - SGA&E, AS A PERCENT OF SALES, DECREASES FROM 13.8% TO 11.9% ($18 MILLION
IMPROVEMENT).
LAKE FOREST, ILLINOIS, APRIL 24, 2001 - Tenneco Automotive (NYSE: TEN) reported
a net loss of $31 million, or 84 cents per diluted share, for the first quarter
of 2001. These results include pre-tax restructuring charges of $12 million (23
cents per share), pre-tax environmental charges of $6 million (12 cents per
share), and pre-tax charges associated with the company's re-negotiation of its
senior debt agreements of $2 million (5 cents per share).
The company reported a net loss of $16 million, or 44 cents per diluted share,
for the first quarter of 2001, before restructuring charges and other unusual
charges, compared to net income of $1 million, or 3 cents per diluted share, for
the first quarter of 2000.
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The company's revenue and profitability continue to be impacted by downturns in
North American light vehicle and heavy-duty truck production as well as the
depressed global aftermarket, despite strong performances during the quarter by
its European original equipment and rest of world operations. Revenue for the
quarter was $864 million versus $878 million in the first quarter of 2000.
EBITDA for the quarter, excluding restructuring and other charges, was $63
million compared with $86 million the previous year, a 27 percent decline.
The company reported that cash flow from operations during the quarter, while
negative, did not decline as much as the decline in EBITDA. At quarter end,
working capital, before factored receivables, improved by $100 million compared
to the first quarter 2000, as the company enhanced its receivables performance
by three days and shrunk inventory levels by six days. A $9 million decrease in
capital spending and lower taxes also contributed to this cash flow improvement.
Additionally, the company reduced its SGA&E expense by $18 million
year-over-year, as a result of previously announced restructuring initiatives.
"We continue to focus on the key areas that we can control - manufacturing
costs, SGA&E, discretionary spending, and working capital - in order to meet the
immediate challenges caused by the difficult industry conditions," said Mark P.
Frissora, chairman and CEO, Tenneco Automotive.
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The company reported the following geographical results before restructuring and
other unusual charges:
NORTH AMERICA
North American original equipment revenue declined 15 percent during the quarter
to $324 million versus $382 million in the first quarter of 2000. North American
aftermarket revenue decreased 13 percent to $111 million from $128 million in
the previous year.
North American EBIT declined to $6 million versus $34 million in the first
quarter of 2000. EBIT was primarily impacted by lower revenues, including a
significant downturn in the high margin heavy-duty elastomer business. Operating
inefficiencies and aftermarket bad debt expense also contributed to the decline.
EUROPE
Driven by increased original equipment exhaust volumes, European original
equipment revenue increased 36 percent to $275 million compared to $202 million
in the previous year. European aftermarket revenue declined 20 percent to $74
million versus $92 million in first quarter of 2000.
European EBIT increased 33 percent to $16 million for the quarter. This increase
was driven primarily by operational improvements in the European exhaust
business.
REST OF WORLD
The company's Australian operations reported an 10 percent revenue decline from
$29 million to $26 million; however, revenue would have increased 5 percent if
currency exchange rates had been the same in the first quarter of 2000 as in the
first quarter of 2001.
The launch of new original equipment programs in South America fueled a 9
percent increase in revenue to $36 million, from $33 million in 2000.
Revenue from Asian operations grew 64 percent to $18 million from $11 million in
the first quarter of 2000, driven by production from the company's new facility
in Shanghai and aftermarket volumes.
Combined EBIT for South America, Australia, and Asia was $4 million compared to
$2 million in the previous year, primarily the result of volume increases.
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"We are by no means satisfied with our results," Frissora said. "However, we are
encouraged by progress we've made in reducing our overhead costs and spending,
and our entire organization is determined to make additional improvement in
these areas in the second quarter and throughout 2001. "
The attached exhibits provide additional information on Tenneco Automotive's
first quarter 2001 operating results.
The company will host a conference call on April 24, 2001 at 10:30 a.m. EDT. The
dial-in number is 877 915-2770 domestic or 1-312 470-0017 international.
Passcode is Tenneco Auto. A recording of this call will be available from 1:00
p.m. EDT on April 24 through May 1. To access this recording, dial 800-568-4850
domestic or 402-220-2274 international, and enter passcode 8400. The call will
also be available on the Tenneco Automotive web site at
www.tenneco-automotive.com.
Tenneco Automotive is a $3.5 billion manufacturing company headquartered in Lake
Forest, Ill., with 23,000 employees worldwide. Tenneco Automotive is one of the
world's largest producers and marketers of ride control and exhaust systems and
products, which are sold under the Monroe(R) and Walker (R) global brand names.
Among its products are Sensa-Trac(R) and Reflex(TM) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance
exhaust products, and Monroe(R) Clevite(TM) vibration control components.
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TENNECO AUTOMOTIVE INC. CONSOLIDATED EARNINGS RESULTS
Unaudited
THREE MONTHS ENDED MARCH 31,
2001 2000
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Net sales and operating revenues: $ 864 $ 878 (d)
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Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 706 (a)(b) 672
Engineering, Research and Development 13 15
Selling, General and Administrative 101 (a)(c) 106 (d)
Depreciation and Amortization 37 39
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Total Costs and Expenses 857 832
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Other Income (Expense) (1) 1
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Operating Income (Loss)
North America (3)(a)(b)(c) 34
Europe 8 (a)(b)(c) 12
Rest of World 1 (a)(b) 1
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6 47
Less:
Interest expense (net of interest capitalized) 47 45
Income tax expense (benefit) (10) (1)
Minority interest - 2
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Net income (loss) $ (31) $ 1
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Average common shares outstanding:
Basic 36.6 33.7
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Diluted 36.8 33.9
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Earnings (loss) per share of common stock:
Basic- $ (0.84) $ 0.03
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Diluted- $ (0.84) $ 0.03
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(a) Includes restructuring and other charges of $12 million pre-tax, $9 million
after-tax or $0.23 per share. Of the charge, $10 million is recorded in SG&A and
the remaining $2 million is in cost of sales. Geographically, $8 million is
recorded in North America, $2 million in Europe and $2 million in Rest of World.
(b) Includes environmental charges of $6 million pre-tax, $5 million after-tax
or $0.12 per share. The entire charge is recorded in cost of sales.
Geographically, $5 million is recorded in Europe and $1 million is in North
America.
(c) Includes costs associated with the renegotiation of senior debt of $2
million pre-tax, $2 million after-tax or $0.05 per share. The entire charge is
recorded in SG&A. Geographically, $1 million is recorded in both North America
and Europe.
(d) Pursuant to EITF Issue No. 00-14, Accounting for Certain Sales Incentives,
some incentives that were previously recorded in SG&A are now classified as a
reduction in revenues. Results for 2000 were reclassified accordingly, with net
sales and SG&A each reduced by $4 million with no impact on income.
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TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
(Unaudited)
(Millions)
MARCH 31, 2001 DECEMBER 2000
ACTUAL ACTUAL
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ASSETS
CASH 56 35
RECEIVABLES, Net 499 487
INVENTORIES 409 422
OTHER CURRENT ASSETS 163 165
TOTAL CURRENT ASSETS 1,127 1,109
INVESTMENTS AND OTHER ASSETS 778 772
PLANT, PROPERTY, AND EQUIPMENT, NET 964 1,005
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TOTAL ASSETS $2,869 $2,886
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LIABILITIES AND SHAREOWNERS' EQUITY
SHORT-TERM DEBT 188 92
ACCOUNTS PAYABLE 465 464
OTHER CURRENT LIABILITIES 187 202
ACCRUED TAXES 17 16
ACCRUED INTEREST 47 35
LONG-TERM DEBT 1,409 1,435
DEFERRED INCOME TAXES 136 144
DEFERRED CREDITS AND OTHER LIABILITIES 158 154
MINORITY INTEREST 15 14
TOTAL SHAREHOLDERS' EQUITY 247 330
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,869 $2,886
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TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
(Millions)
THREE MONTHS ENDED
MARCH 31,
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2001 2000
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Operating activities:
Income (loss) from continuing operations $ (31) $ 1
Adjustments to reconcile income (loss) from continuing
operations to net cash provided (used) by
operating activities -
Depreciation and amortization 37 39
Deferred income taxes (18) -
(Gain)/loss on sale of businesses and assets, net 2 -
Changes in components of working capital -
(Inc.)/dec. in receivables (35) (71)
(Inc.)/dec. in inventories (4) (13)
(Inc.)/dec. in prepayments and other current assets (5) (4)
Inc./(dec.) in payables 16 50
Inc./(dec.) in taxes accrued - (11)
Inc./(dec.) in interest accrued 13 17
Inc./(dec.) in other current liabilities (6) (13)
Other 2 1
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Net cash provided (used) by operating activities (29) (4)
Investing activities:
Net proceeds from sale of assets - 2
Expenditures for plant, property & equipment (25) (34)
Acquisition of businesses - -
Investments and other (5) (4)
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Net cash provided (used) by investing activities (30) (36)
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Net Cash provided (used) before financing activities - continuing operations (59) (40)
Financing activities:
Issuance of common and treasury shares 3 -
Proceeds from subsidiary equity issuance - -
Purchase of common stock - -
Issuance of equity securities by a subsidiaries - -
Issuance of long-term debt - -
Retirement of long-term debt (5) -
Net inc./(dec.) in short-term debt excluding current
maturities on long-term debt 78 13
Dividends (common) - (2)
Other -
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Net cash provided (used) by financing activities 76 11
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Effect of foreign exchange rate changes on cash and
temporary cash investments 4 (2)
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Inc./(dec.) in cash and temporary cash investments 21 (31)
Cash and temporary cash investments, January 1 35 84
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Cash and temporary cash investments, March 31 $ 56 $ 53
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Cash paid during the period for interest $ 34 $ 29
Cash paid during the period for income taxes $ 8 $ 15