EXBIBIT 99.1
NEWS RELEASE [TENNECO LOGO]
Contacts: Jane Ostrander Leslie Hunziker
Media Relations Investor Relations
847 482-5607 847 482-5042
jostrander@tenneco.com lhunziker@tenneco.com
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TENNECO ANNOUNCES NEW AFTERMARKET BUSINESS AND
SECOND QUARTER RESTRUCTURING INITIATIVES
- Awarded new aftermarket business with revenue of $8 million annually
- Restructuring projects estimated to generate $10 million in annual
savings
Lake Forest, Illinois, June 19, 2006 - Tenneco Inc. (NYSE: TEN) announced today
that the company has won new aftermarket business from 13 aftermarket customers
in North America, expected to generate approximately $8 million in revenue
annually. Initial orders are expected to generate $4 million in revenue in the
second quarter of 2006. The company's targeted sales efforts have established
new long-term relationships with customers for its ride control, exhaust and
brake products. Tenneco expects to record charges associated with changing over
these new customers of approximately $6 million in the second quarter of 2006.
Tenneco also announced that the company estimates it will record pre-tax
restructuring and restructuring related charges of approximately $15 million for
projects to improve the company's distribution and manufacturing operations
globally. The company estimates it will record approximately $8 million of the
charges during the second quarter of 2006 and an additional $7 million over the
next four quarters. The company estimates these actions will result in annual
savings of approximately $10 million when completed.
"We continue to generate top-line growth while reducing costs and improving our
operational efficiency," said Mark P. Frissora, chairman, CEO and president,
Tenneco. "Our ongoing restructuring activities are driven by our successful Lean
manufacturing and Six Sigma initiatives and our continuous efforts to optimize
our global distribution and manufacturing footprint."
The second quarter restructuring costs are for restructuring activities taking
place at about 20 locations worldwide, aimed at improving efficiency, reducing
costs and sizing operations to better reflect local market conditions. The
restructuring charges include an estimated $4 million for severance costs and
other benefits related to employee layoffs and $4 million for other
restructuring and related costs including closing plants, plant relocations and
asset impairments. Tenneco estimates that approximately 80% of these charges
will be paid in cash. The company also estimates that roughly $7 million of the
annual savings are the result of efficiency improvements and cost reductions and
$3 million driven by activities to size operations to local market conditions.
-More-
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The locations with the greatest impact have already been announced locally
including headcount reductions at the company's Adelaide, Australia operations
to reflect lower OE production in Australia; consolidation at its Etain, France
facility; closing of the Sterling Heights, Michigan just-in-time facility;
discontinuation of the company's Martorell, Spain just-in-time operations;
consolidation and sale of the company's Harrisonburg, Virginia aftermarket
distribution center; and the continued integration of Tenneco's recent
acquisition of the Gabilan exhaust manufacturing company.
Tenneco will conduct any workforce reductions in compliance with all legal and
contractual requirements including obligations to consult with workers'
councils, union representatives and others.
Tenneco is a $4.4 billion manufacturing company with headquarters in Lake
Forest, Illinois and approximately 19,000 employees worldwide. Tenneco is one of
the world's largest designers, manufacturers and marketers of emission control
and ride control products and systems for the automotive original equipment
market and the aftermarket. Tenneco markets its products principally under the
Monroe(R), Walker(R), Gillet(R) and Clevite(R)Elastomer brand names. Among its
products are Sensa-Trac(R) and Monroe Reflex(R) shocks and struts, Rancho(R)
shock absorbers, Walker(R) Quiet-Flow(R) mufflers, Dynomax(R) performance
exhaust products, and Clevite(R)Elastomer noise, vibration and harshness control
components.
This press release contains forward-looking statements. Words such as
"estimates," "anticipates," "expected," "will," "plans" and similar expressions
identify 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 overall highly competitive nature of the
automotive parts industry; (ii) increases in the costs of raw materials,
including the company's ability to successfully reduce the impact of any such
cost increases through materials substitutions, cost reduction initiatives and
other methods; (iii) the cyclical nature of the global vehicular industry,
including the performance of the global aftermarket sector, and changes in
consumer demand and prices; (iv) the company's continued success in cost
reduction and cash management programs and its ability to execute restructuring
and other cost reduction plans and to realize anticipated benefits from these
plans; (v) the general political, economic and competitive conditions in markets
and countries where the company and its subsidiaries operate; (vi) governmental
actions; (vii) workforce factors such as strikes or labor interruptions; (viii)
further changes in the distribution channels for the company's aftermarket
products; and (ix) 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. Additional information regarding these and other risk
factors and uncertainties is detailed from time to time in the company's SEC
filings, including but not limited to its report on Form 10-K for the year ended
December 31, 2005.