News Release

<< Back
Tower International Reports Improved Results

LIVONIA, Mich., Feb. 18, 2011 /PRNewswire via COMTEX/ --

Tower International, Inc. (NYSE: TOWR), a leading integrated global manufacturer of engineered structural metal components and assemblies, today announced its fourth quarter and full year 2010 results.

  • Revenue for the quarter was $541.6 million, up 8 percent from $501 million in the fourth quarter 2009.
  • Adjusted EBITDA of $48.7 million for the quarter was up 28 percent compared with $38.1 million in the fourth quarter of 2009. The improvement was driven by higher volume, the absence of non-recurring items from 2009, and higher efficiencies.
  • Net loss in the fourth quarter of 2010 was $21.3 million or $1.18 per common share, compared with a loss of $19 million or $1.86 per common share in the fourth quarter of 2009. As detailed below, certain items adversely impacted results by $17 million in the fourth quarter of 2010 and $3.8 million in the fourth quarter of 2009.
  • For full year 2010, revenue was $2 billion, up 22 percent from 2009. Adjusted EBITDA was $190.2 million, up 52 percent. Adjusted EBITDA margin improved from 7.6 percent to 9.5 percent.
  • Net loss for full year 2010 was $36.9 million or $3.43 per common share, compared with a net loss of $67.9 million or $6.74 per common share in 2009. As detailed below, certain items adversely impacted full year results by $24.4 million in 2010 and improved full year results by $36.2 million in 2009.
  • Free cash flow was positive $44.4 million in the fourth quarter and positive $19.9 million for the full year of 2010. Net debt at December 31, 2010 totaled $407.8 million, down from $519.8 million as of December 31, 2009.

"Consistent with our ongoing game plan, Tower continued to do a good job converting increased volume into higher Adjusted EBITDA and higher margin", said Tower President and CEO Mark Malcolm. "We believe our financial results in 2010 were right on track for this important first year of an anticipated multi-year auto recovery cycle. Looking forward, we remain intensely focused on satisfying customers, delivering solid and predictable results, profitably growing our business over time, and further strengthening our balance sheet."

Tower's preliminary financial outlook for full year 2011 includes revenues increasing to a range of $2.05 billion to $2.1 billion, Adjusted EBITDA increasing to a range of $200 million to $210 million, and Adjusted EBITDA margin improving to about 10 percent.

Tower to Host Conference Call Today at 11 a.m. EST

Tower will discuss its fourth quarter and full year 2010 results and preliminary 2011 outlook in a conference call at 11 a.m. EST today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone. The slide presentation and webcast can be accessed via the investor relations portion of Tower's website www.towerinternational.com. To dial into the conference call, domestic callers should dial 1-866-393-4576, international callers should dial 1-706-679-1462. An audio recording of the call will be available approximately two hours after the completion of the call. To access this recording, please dial 1-800-642-1687 (domestic) or 1-706-645-9291 (international) and reference Conference I.D. # 42015381. A webcast replay will also be available and may be accessed via Tower's website.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures: "Adjusted EBITDA", "Adjusted EBITDA margin", "free cash flow" and "net debt." We define Adjusted EBITDA as net income / (loss) before interest, taxes, depreciation, amortization, restructuring items and other adjustments described in the reconciliations provided in this press release. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenues. Free cash flow is defined as cash provided by operating activities less cash disbursed for purchases of property, plant and equipment. Net debt represents total debt less cash and cash equivalents. We use Adjusted EBITDA, Adjusted EBITDA margin, free cash flow and net debt as supplements to information provided in accordance with generally accepted accounting principles ("GAAP") in evaluating our business and they are included in this press release because they are four of the principal factors upon which our management assesses performance. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are set forth below. The non-GAAP measures presented above are not measures of performance under GAAP. These measures should not be considered as alternatives for the most directly comparable financial measures calculated in accordance with GAAP. Other companies in our industry may define these non-GAAP measures differently than we do and, as a result, these non-GAAP measures may not be comparable to similarly titled measures used by other companies in our industry; and (ii)certain of our non-GAAP financial measures exclude financial information that some may consider important in evaluating our performance.

Forward-Looking Statements and Risk Factors

This press release contains statements which constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding expected 2011 full year revenues, Adjusted EBITDA and Adjusted EBITDA margin, the existence of a multi-year recovery cycle in the automotive sector and future goals relating to the satisfaction of customers, the delivery of solid and predictable results, profitable growth and the strength of our balance sheet. The forward-looking statements can be identified by the words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "project," "target," and other similar expressions. Forward-looking statements are made as of the date of this press release and are based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors could affect (and in some cases have affected) our actual results and could cause such results to differ materially from estimates or expectations reflected in such forward-looking statements:

  • automobile production volumes;
  • the financial condition of our customers and suppliers;
  • our ability to make scheduled payments on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;
  • our ability to refinance our indebtedness;
  • our ability to generate non-automotive revenues;
  • our dependence on our largest customers;
  • significant recalls experienced by our customers;
  • pricing pressure from our customers;
  • work stoppages or other labor issues affecting us or our customers or suppliers;
  • risks associated with our non-U.S.operations, including foreign exchange risks and economic uncertainty;
  • costs or liabilities relating to environmental and safety regulations; and
  • any increase in the expense and funding requirements of our pension and other postretirement benefits.

We do not assume any obligation to update or revise the forward-looking statements contained in this press release.

Contact:

Derek Fiebig

Executive Director, Investor & External Relations

(248) 675-6457

fiebig.derek@towerautomotive.com

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share amounts - unaudited)




Three Months Ended


Year Ended


December 31,


December 31,


2010


2009


2010


2009









Revenues

$ 541,607


$ 500,994


$ 1,997,058


$ 1,634,405

Cost of sales

484,666


459,319


1,786,476


1,536,752

Gross profit

56,941


41,675


210,582


97,653

Selling, general and administrative expenses

40,887


35,014


143,975


118,331

Amortization expense

880


751


3,265


2,784

Restructuring and related asset impairment charges, net

9,281


12,503


14,288


13,436

Operating income / (loss)

5,893


(6,593)


49,054


(36,898)

Interest expense

18,447


16,695


66,872


57,881

Interest income

102


300


962


982

Other expense / (income), net

1,300


-


1,300


(33,661)

Loss before provision for income taxes

(13,752)


(22,988)


(18,156)


(60,136)

Provision / (benefit) for income taxes

5,672


(6,396)


10,297


(1,104)

Net loss

(19,424)


(16,592)


(28,453)


(59,032)

Less: Net income attributable to the noncontrolling interests

1,898


2,384


8,441


8,904

Net loss attributable to Tower International, Inc.

$ (21,322)


$ (18,976)


$ (36,894)


$ (67,936)









Less: Preferred unit dividends

$ -


$ (4,200)


$ (10,707)


$ (16,087)

Loss available to common shareholders

$ (21,322)


$ (23,176)


$ (47,601)


$ (84,023)









Weighted average basic and diluted shares outstanding

18,012,862


12,467,866


13,865,509


12,467,866









Basic and diluted loss per share:








Loss per common share

$ (1.18)


$ (1.86)


$ (3.43)


$ (6.74)

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands - unaudited)





December 31, 2010


December 31, 2009






ASSETS





Cash and cash equivalents


$ 150,345


$ 149,802

Accounts receivable, net of allowance of $1,674 and $2,439


297,086


290,098

Inventories


73,189


62,611

Deferred tax asset - current


12,406


4,762

Assets held for sale


8,178


6,008

Prepaid tooling and other


57,754


60,139

Total current assets


598,958


573,420






Property, plant and equipment, net


627,497


640,148

Goodwill


66,309


70,565

Deferred tax asset - non-current


17,377


15,009

Other assets, net


30,035


35,279

Total assets


$ 1,340,176


$ 1,334,421






LIABILITIES AND EQUITY / (DEFICIT)





Current maturities of long-term debt and capital lease obligations


$ 109,848


$ 137,499

Current maturities of long-term debt with affiliate


-


4,132

Accounts payable


366,761


333,773

Accrued liabilities


132,614


127,823

Total current liabilities


609,223


603,227






Long-term debt, net of current maturities


432,726


112,602

Long-term debt with affiliate, net of current maturities


-


399,776

Obligations under capital leases, net of current maturities


15,604


15,544

Deferred tax liability - non-current


12,710


13,917

Pension liability


76,403


78,730

Other non-current liabilities


81,884


86,869

Total non-current liabilities


619,327


707,438

Total liabilities


1,228,550


1,310,665

Commitments and contingencies










Redeemable preferred units


-


170,915






Equity / (deficit):





Tower International, Inc.'s equity / (deficit)





Common units


-


12,595

Common stock, $0.01 par value, 350,000,000 authorized, 19,101,588 issued and outstanding


191


-

Additional paid in capital


296,262


-

Accumulated deficit


(192,556)


(144,955)

Accumulated other comprehensive loss


(36,530)


(54,363)

Total Tower International, Inc.'s equity / (deficit)


67,367


(186,723)

Noncontrolling interests in subsidiaries


44,259


39,564

Total equity / (deficit)


111,626


(147,159)






Total liabilities and equity / (deficit)


$ 1,340,176


$ 1,334,421

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands - unaudited)




Three Months Ended


Year Ended


December 31,


December 31,


2010


2009


2010


2009









OPERATING ACTIVITIES:








Net loss

$ (19,424)


$ (16,592)


$ (28,453)


$ (59,032)

Adjustments required to reconcile net loss to net cash provided by operating activities:








Non-cash restructuring and asset impairment charges

9,999


1,787


9,999


1,787

Deferred income tax provision

(4,793)


(13,053)


(13,851)


(13,053)

Depreciation and amortization

28,426


31,936


114,668


147,705

Gain from debt repurchase / letter of credit reduction

-


-


-


(33,661)

Non-cash share-based compensation

3,047


-


3,047


-

Pension expense, net of contributions

(1,210)


(526)


(5,619)


(2,102)

Change in working capital and other operating items

72,914


48,050


40,568


7,231

Net cash provided by operating activities

$ 88,959


$ 51,602


$ 120,359


$ 48,875









INVESTING ACTIVITIES:








Cash disbursed for purchases of property, plant and

equipment, net

$ (44,559)


$ (25,407)


$ (100,495)


$ (85,995)

Net assets acquired, net of cash acquired

-


-


(16,687)


-

Net cash used in investing activities

$ (44,559)


$ (25,407)


$ (117,182)


$ (85,995)









FINANCING ACTIVITIES:








Proceeds from letter of credit reduction

$ -


$ -


$ -


$ 13,250

Repayments of term debt

-


(1,205)


(3,484)


(16,381)

Repayment of first lien term loan

-


-


(414,172)


-

Issuance of senior secured notes

-


-


417,203


-

Partial redemption of senior secured notes

(26,000)


-


(26,000)


-

Noncontrolling interest dividends

-


-


(5,257)


(4,866)

Preferred units dividends

-


-


(95)


(388)

Proceeds from borrowings

29,982


99,369


418,238


436,172

Repayments of borrowings

(89,893)


(89,062)


(452,286)


(375,501)

Financing costs

(548)


-


(8,356)


(1,488)

Net proceeds from initial public offering

76,550


-


74,020


-

Net cash provided by / (used in) financing activities

$ (9,909)


$ 9,102


$ (189)


$ 50,798









Effect of exchange rate changes on cash and cash equivalents

$ 875


$ 2,526


$ (2,445)


$ 9,304









NET CHANGE IN CASH AND CASH EQUIVALENTS

$ 35,366


$ 37,823


$ 543


$ 22,982









CASH AND CASH EQUIVALENTS:








Beginning of period

$ 114,979


$ 111,979


$ 149,802


$ 126,820









End of period

$ 150,345


$ 149,802


$ 150,345


$ 149,802

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

SEGMENT DATA AND NON-GAAP FINANCIAL MEASURE RECONCILIATIONS

(Amounts in thousands - unaudited)



Segment Data


Three Months Ended December 31,



2010


2009



Revenues


Adjusted

EBITDA


Revenues


Adjusted

EBITDA

International


$ 326,027


$ 37,091


$ 298,802


$ 36,120

Americas


215,580


11,639


202,192


1,968

Consolidated


$ 541,607


$ 48,730


$ 500,994


$ 38,088












Year Ended December 31,



2010


2009



Revenues


Adjusted

EBITDA


Revenues


Adjusted

EBITDA

International


$ 1,147,614


$ 125,545


$ 990,523


$ 108,650

Americas


849,444


64,690


643,882


16,350

Consolidated


$ 1,997,058


$ 190,235


$ 1,634,405


$ 125,000




























Adjusted EBITDA reconciliation


Three Months Ended December 31,


Year Ended December 31,



2010


2009


2010


2009

Adjusted EBITDA


$ 48,730


$ 38,088


$ 190,235


$ 125,000

Restructuring


(9,281)


(12,503)


(14,288)


(13,436)

Depreciation and amortization


(28,427)


(31,935)


(114,668)


(147,705)

Receivable factoring charges and other


(113)


(243)


(471)


(757)

Acquisition costs


-


-


(679)


-

Expense related to the compensation programs


(5,016)


-


(11,075)


-

Interest expense, net


(18,345)


(16,395)


(65,910)


(56,899)

Other income, net


(1,300)


-


(1,300)


33,661

(Provision) / benefit for income taxes


(5,672)


6,396


(10,297)


1,104

Net income attributable to noncontrolling interest


(1,898)


(2,384)


(8,441)


(8,904)

Net loss attributable to Tower International, Inc.


$ (21,322)


$ (18,976)


$ (36,894)


$ (67,936)




























Free cash flow reconciliation


Three Months Ended December 31,


Year Ended December 31,



2010


2009


2010


2009

Net cash provided by operating activities


$ 88,959


$ 51,602


$ 120,359


$ 48,875

Cash disbursed for purchases of PP&E, net


(44,559)


(25,407)


(100,495)


(85,995)

Free cash flow


$ 44,400


$ 26,195


$ 19,864


$ (37,120)




























Net debt reconciliation






December 31,







2010


2009

Current maturities of long-term debt and capital lease obligations






$ 109,848


$ 141,631

Long-term debt, net of current maturities






432,726


512,378

Obligations under capital leases, net of current maturities






15,604


15,544

Total debt






558,178


669,553

Less: cash and cash equivalents






(150,345)


(149,802)

Net debt






$ 407,833


$ 519,751

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CERTAIN ITEMS INCLUDED IN NET LOSS

(Amounts in thousands - unaudited)





















Three Months Ended


Year Ended



December 31,


December 31,



2010


2009


2010


2009






Income / (expense) items included in net loss, net of tax:









Selling, general and administrative expenses









Incentive compensation related to funding events


$ (4,793)


$ -


$ (10,852)


$ -

Acquisition costs


-


-


(679)


-

Interest expense









Acceleration of the amortization of debt issue costs and OID


(1,247)


-


(6,574)


(538)

Restructuring expense









Closure of press shop in Bergisch Gladbach, Germany


-


(6,945)


-


(6,945)

Restructuring income pursuant to recoveries for the cancellation of an

old customer program


-


-


-


6,910

Asset impairments - primarily SES


(7,300)


(1,787)


(9,142)


(1,787)

Sale of closed facilities


(2,327)


-


(1,680)


-

Other income









Debt repurchase / letter of credit reduction


(1,300)


-


(1,300)


33,661

Provision for income taxes









Reversal of South Korean valuation allowance


-


-


7,785


-

Tax effect of gains/losses on pension and interest rate swaps


-


4,901


(2,000)


4,901

Total items included in net loss


$ (16,967)


$ (3,831)


$ (24,442)


$ 36,202










Net loss attributable to Tower International, Inc.


$ (21,322)


$ (18,976)


$ (36,894)


$ (67,936)

Less: Preferred unit dividends


-


(4,200)


(10,707)


(16,087)

Loss available to common shareholders


$ (21,322)


$ (23,176)


$ (47,601)


$ (84,023)










Memo: Average shares outstanding (in thousands)


18,013


12,468


13,866


12,468










Loss per common share*


$ (1.18)


$ (1.86)


$ (3.43)


$ (6.74)










* Loss per common share is calculated using "Loss available to common shareholders" and includes the certain items included above.

SOURCE Tower International, Inc.