EXHIBIT 99.1
For immediate release
Contacts: Jane Ostrander
Media Relations
847 482-5607
jane.ostrander@tenneco-automotive.com
Leslie Hunziker
Investor Relations
847 482-5042
leslie.hunziker@tenneco-automotive.com
TENNECO AUTOMOTIVE REPORTS 2002 FIRST QUARTER EARNINGS
- - Company reports 94 percent improvement in earnings per share versus first
quarter 2001, on 6 percent lower revenues
- - Company reports third consecutive quarter of gross margin improvement with
a 2.6 percentage point increase to 20.9 percent
- - Working capital, before factoring, improved $184 million year-over-year or,
as a percent of sales, from 14 percent to 9 percent
- - North American aftermarket profitability improved significantly, driven by
premium product strategy and strong marketing programs
- - Company awarded approximately $151 million in new original equipment
contracts during the first quarter
LAKE FOREST, ILLINOIS, APRIL 23, 2002 - Tenneco Automotive (NYSE: TEN) announced
today that the company's first quarter 2002 performance improved significantly
versus one year ago with a reported net loss of $2 million, or 5-cents per
share, for the first quarter of 2002, compared with a net loss of $31 million,
or 84-cents per share, in the first quarter of 2001. More importantly, the
company generated $14 million in positive cash flow, before financing
activities, which was a $73 million cash flow improvement versus first quarter
2001. The company also reduced its net debt by $11 million at quarter-end.
"We are pleased with an improved first quarter and particularly with our
momentum in North America as well as our continued success in effectively
managing cash," said Mark P. Frissora, chairman and CEO, Tenneco Automotive. "We
continue to make steady progress on our key objectives of improving gross
margins, reducing working capital, and operating more efficiently, which is
reflected in our improving performance."
The company reported revenue of $809 million for the quarter, down 6 percent
versus $864 million in the first quarter of 2001. EBITDA for the quarter was $61
million, compared with $43 million the previous year, a 42 percent improvement.
Year-over-year,
working capital performance improved by $184 million and capital spending was $2
million lower.
The first quarter 2002 results include a pre-tax non-accruable restructuring
expense of $1 million (1-cent per share), pre-tax charges associated with the
company's renegotiation of its senior debt agreements of $2 million (3-cents per
share) and income from a tax benefit of $4 million (10-cents per share). In
addition, the company incurred higher incremental aftermarket changeover costs
of $5 million (7-cents per share) in the first quarter of 2002 related to
acquiring significant new aftermarket business. The first quarter 2001 results
included pre-tax restructuring charges of $12 million (23-cents per share),
pre-tax environmental charges of $6 million (12-cents per share) and $2 million
in charges associated with the company's renegotiation of its senior debt
agreements (5-cents per share).
NORTH AMERICA
"We are encouraged by our North American aftermarket performance and the results
we are seeing this quarter from expanding our customer base and leveraging our
premium products," Frissora said. "In addition, our lean initiatives and Six
Sigma in the North American original equipment business drove improved
profitability."
North American original equipment revenue increased 5 percent during the quarter
to $341 million versus $324 million in the first quarter of 2001. Excluding
catalytic converter pass-through sales, revenue decreased 1 percent. North
American aftermarket revenue increased 14 percent to $126 million from $111
million one year ago.
North American EBIT increased to $19 million from a loss of $3 million in the
first quarter of 2001. EBIT improvement was driven by stronger aftermarket
performance and lower manufacturing and overhead costs. First quarter 2001 EBIT
included $8 million in restructuring charges and $1 million in environmental
charges.
EUROPE
"In Europe, we continue to face a struggling market for replacement parts and
expect to see improvement as we lower our cost of doing business, reduce
capacity in the aftermarket exhaust business and fuel growth with new business
and product introductions," Frissora said. "We were also impacted this quarter
by slowing vehicle sales and launches of key platforms with our components that
were delayed until the second quarter."
The company reported European original equipment revenue of $207 million for the
quarter, a 25 percent decrease over first quarter 2001 revenue of $275 million.
Excluding catalytic converter pass-through sales, revenue would have decreased
14 percent. The 25 percent decrease in the company's European original equipment
revenue was the result of lower precious metal prices (10 percent), lower
currency exchange rates (5 percent), lower production volumes (9 percent) and
delayed platform launches with Tenneco
Automotive products (1 percent). The company's European aftermarket revenue
decreased 12 percent to $65 million, versus $74 million one year ago.
European EBIT was $5 million, down from $8 million in 2001. The decline this
quarter was the result of lower volumes in both the original equipment and
aftermarket businesses. First quarter 2001 EBIT included $2 million in
restructuring charges, $5 million in environmental charges and $1 million in
charges associated with renegotiation of the company's senior debt agreements.
REST OF WORLD
The company's Australian operations reported revenue of $26 million for the
quarter, even with the first quarter of 2001.
In South America, the company reported revenue of $26 million, compared with
first quarter 2001 revenue of $36 million. The sharp decline was primarily the
result of worsening economic conditions in Argentina and currency devaluations
in Brazil and Argentina of $7 million.
Revenue from the company's Asian operations was also flat year-over-year at $18
million.
Combined EBIT for Australia, South America, and Asia was $3 million compared
with $1 million in first quarter 2001. First quarter 2001 EBIT included $2
million in restructuring charges and $1 million in charges related to
renegotiating the company's senior debt agreements.
"While we see some positive upturns in our North American markets, we remain
cautiously optimistic given the global nature of our business and our exposure
to softer economies and slowing vehicle sales in Europe and South America,"
Frissora said. "We continue to be a cash-driven organization, focused on the
areas we can control and our long-term goal of debt reduction through gross
margin improvement."
The attachments provide additional information on Tenneco Automotive's first
quarter 2002 operating results.
FIRST QUARTER CONFERENCE CALL INFORMATION
The company will host a conference call today, April 23, 2002 at 10:30 a.m. EDT.
The dial-in number is 888-913-9965 domestic or 712-257-2880 international.
Passcode is Tenneco Auto. A recording of this call will be available from 1:00
p.m. EDT on April 23 through April 30, 2002. To access this recording, dial
800-945-1615 domestic or 402-220-3455 international and enter passcode 8400. The
call will also be available on the Tenneco Automotive web site at
www.tenneco-automotive.com
2002 ANNUAL MEETING
Tenneco Automotive will hold its annual meeting of stockholders on Tuesday, May
14 at 10:00 a.m. CDT at the Peabody Hotel in Memphis, Tennessee to, among other
things, elect directors, approve a new Tenneco Automotive equity incentive plan,
and report on the company's results. The company will provide a simultaneous
webcast of the annual meeting.
Tenneco Automotive is a $3.4 billion manufacturing company with headquarters in
Lake Forest, Illinois and 21,600 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 Monroe(R) Reflex(TM)
shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM) mufflers
and DynoMax(R) performance exhaust products, and Monroe(R) Clevite(TM) vibration
control components.
This press release contains forward-looking statements. Words such as "expect",
"continue", "remain", "optimistic", "encouraged" and similar expressions
identify these forward-looking statements. These forward-looking statements are
based on the current expectations of the company (including its subsidiaries).
Because these forward-looking statements involve risks and uncertainties, the
company's plans, actions and actual results could differ materially. Among the
factors that could cause these plans, actions and results to differ materially
from current expectations are: (i) the general political, economic and
competitive conditions in markets and countries where the company and its
subsidiaries operate, including currency fluctuations and other risks associated
with operating in foreign countries; (ii) governmental actions, including the
ability to receive regulatory approvals and the timing of such approvals; (iii)
changes in capital availability or costs, including increases in the company's
costs of borrowing (i.e., interest rate increases); (iv) changes in automotive
manufacturers' production rates and their actual and forecasted requirements for
the company's products, including the company's resultant inability to realize
the sales represented by its awarded book of business; (v) changes in consumer
demand and prices, including decreases in demand for automobiles which include
the company's products, and the potential negative impact on the company's
revenues and margins from such products; (vi) the cost of compliance with
changes in regulations, including environmental regulations; (vii) workforce
factors such as strikes or labor interruptions; (viii) material substitutions
and increases in the costs of raw materials; (ix) the company's ability to
execute restructuring and other cost reduction plans and to realize anticipated
benefits from these plans; (x) the company's ability to develop and profitably
commercialize new products and technologies, and the acceptance of such new
products and technologies by the company's customers; (xi) further changes in
the distribution channels for the company's aftermarket products, and further
consolidations among automotive parts customers and suppliers; (xii) changes by
the Financial Accounting Standards Board or other accounting regulatory bodies
of authoritative generally accepted accounting principles or policies; (xiii)
acts of war or terrorism and the impact of these acts on economic, financial and
social conditions in the countries where we operate and (xiv) the timing and
occurrence (or non-occurrence) of transactions and events which may be subject
to circumstances beyond the control of the
company and its subsidiaries. The company undertakes no obligation to update any
forward-looking statement to reflect events or circumstances after the date of
this press release.
###
TENNECO AUTOMOTIVE INC. CONSOLIDATED EARNINGS RESULTS
Unaudited
THREE MONTHS ENDED MARCH 31,
2002 2001
--------- ---------
Net sales and operating revenues: $ 809 $ 864
========= =========
Costs and Expenses
Cost of Sales (exclusive of depreciation shown below) 640 (d) 706 (a)(b)
Engineering, Research and Development 10 13
Selling, General and Administrative 97 (e) 101 (a)(c)
Depreciation and Amortization 34 37
--------- ---------
Total Costs and Expenses 781 857
========= =========
Other Income (Loss) (1) (1)
Operating Income (Loss)
North America 19 (d)(e) (3)(a)(b)
Europe 5 (e) 8 (a)(b)(c)
Rest of World 3 1 (a)(b)(c)
Other - -
--------- ---------
27 6
Less:
Interest expense (net of
interest capitalized) 36 47
Income tax expense (benefit) (8)(f) (10)
Minority interest 1 -
--------- ---------
Net income (loss) (2) (31)
========= =========
Average common shares outstanding:
Basic 39.7 36.6
========= =========
Diluted 40.9 36.8
========= =========
Earnings (loss) per share of common stock:
Basic-
Continuing operations $ (0.05) $ (0.84)
========= =========
Diluted-
Continuing operations $ (0.05) $ (0.84)
========= =========
(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 Europe and Rest
of World.
(d) Includes restructuring and other charges of $1 million pre-tax, $1 million
after-tax or $0.01 per share. The entire charge is recorded in cost of sales.
Geographically, $1 million is recorded in North America.
(e) Includes costs associated with the renegotiation of senior debt of $2
million pre-tax, $1 million after-tax or $0.03 per share. The entire charge is
recorded in SG&A. Geographically, $1 million is recorded in both North America
and Europe.
(f) Includes a $4 million or $.10 per share tax benefit related to
lower-than-expected costs for withholding taxes. The lower cost of the tax
withholding for the fourth quarter 2001 tax repatriation transaction resulted
from an amendment in the bank agreement allowing a more efficient transaction to
be completed.
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
BALANCE SHEET
(Unaudited)
(Millions)
MARCH 31, 2002 DECEMBER 2001
ACTUAL ACTUAL
-------------- -------------
ASSETS
CASH AND TEMPORARY CASH INVESTMENTS 56 53
RECEIVABLES, Net 442 395
INVENTORIES 324 326
OTHER CURRENT ASSETS 176 167
TOTAL CURRENT ASSETS 998 941
INVESTMENTS AND OTHER ASSETS 770 773
PLANT, PROPERTY, AND EQUIPMENT, NET 951 967
------ ------
TOTAL ASSETS $2,719 $2,681
====== ======
LIABILITIES AND SHAREOWNERS' EQUITY
SHORT-TERM DEBT $ 208 $ 191
ACCOUNTS PAYABLE 454 401
ACCRUED TAXES 34 35
ACCRUED INTEREST 40 25
OTHER CURRENT LIABILITIES 236 224
LONG-TERM DEBT 1,299 1,324
DEFERRED INCOME TAXES 168 166
DEFERRED CREDITS AND OTHER LIABILITIES 222 226
MINORITY INTEREST 16 15
TOTAL SHAREOWNERS' EQUITY 42 74
------ ------
TOTAL LIABILITIES AND SHAREOWNERS' EQUITY $2,719 $2,681
====== ======
DEBT TO CAPITALIZATION RATIO 96.3% 94.5%
====== ======
EXTERNAL BASIS
TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES
STATEMENT OF CASH FLOWS
(Millions)
THREE MONTHS ENDED 2002
MARCH 31, OVER/
----------------- (UNDER)
2002 2001 2001
---- ---- ----
Operating activities:
Income (loss) from continuing operations $ (2) $(31) $ 30
Adjustments to reconcile income (loss) from continuing
operations to net cash provided (used) by
operating activities -
Depreciation and amortization 34 37 (3)
Deferred income taxes (15) (18) 3
(Gain)/loss on sale of businesses and assets, net - 2 (2)
Changes in components of working capital -
(Inc.)/dec. in receivables (53) (35) (18)
(Inc.)/dec. in inventories (2) (4) 2
(Inc.)/dec. in prepayments and other current assets (9) (5) (4)
Inc./(dec.) in payables 58 16 42
Inc./(dec.) in taxes accrued (2) - (1)
Inc./(dec.) in interest accrued 15 13 2
Inc./(dec.) in other current liabilities 19 (6) 25
Other (2) 2 (5)
---- ---- ----
Net cash provided (used) by operating activities 41 (29) 71
Investing activities:
Expenditures for plant, property & equipment (23) (25) 2
Investments and other (4) (5) 0
---- ---- ----
Net cash provided (used) by investing activities (27) (30) 2
---- ---- ----
Net cash provided (used) before financing activities - continuing operations 14 (59) 73
Financing activities:
Issuance of common and treasury shares - 3 (3)
Retirement of long-term debt - (5) 5
Net inc./(dec.) in short-term debt excluding current
maturities on long-term debt (7) 78 (85)
Other - -
---- ---- ----
Net cash provided (used) by financing activities (7) 76 (83)
---- ---- ----
Effect of foreign exchange rate changes on cash and
temporary cash investments (4) 4 (8)
---- ---- ----
Inc./(dec.) in cash and temporary cash investments 3 21 (18)
Cash and temporary cash investments, January 1 53 35 18
---- ---- ----
Cash and temporary cash investments, March 31 $ 56 $ 56 $ -
==== ==== ====
Cash paid during the period for interest $ 22 $ 34
Cash paid during the period for income taxes $ 9 $ 8