Collins & Aikman has announced a sharply improved fourth-quarter performance, saying that the positive results reflect the impact of acquisitions, strong internal sales growth, new product launches and increased operating efficiency.
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Collins & Aikman also reported a 370 percent climb in operating income for full year 2002 and 113 percent sales growth.
“The management team and all our people around the world are coming together as one company,” said Jerry Mosingo, C&A President and Chief Executive Officer. “We have made significant progress in integrating our team and consolidating our asset base, and we are starting to see the improvement in financial results.”
“Excluding the restructuring and impairment charges, we are in the black,” Mosingo said. “We generated positive earnings per common share of 12 cents during the fourth quarter.”
The company reported record fourth-quarter sales of $963.2 million, up 100 percent from $482.1 million the year before, attributable primarily to the December 2001 TAC-Trim acquisition. On a comparable basis, sales for the quarter were up approximately $135 million or 16 percent due to additional content and increased volumes when compared with its 2001 pro forma sales for the quarter (after giving effect to acquisitions completed in 2001) of $828.0 million, exceeding the North American auto build rate, which rose just 2 percent in the quarter.p
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By GlobalDataFor the fourth quarter of 2002, C&A had positive net income of $9.9 million, or 12 cents per common share before the impact of restructuring and impairment charges. This compared to a loss of $23.7 million or a loss of 48 cents per common share before restructuring and impairment charges in the year-ago quarter. The company had a total net loss of $3.1 million for the fourth quarter of 2002, or a loss of 4 cents per common share including the impact of restructuring and impairment charges, which compared to a loss of $35.6 million, or a loss of 72 cents per common share for the fourth quarter of 2001. Operating income for the fourth quarter improved to a profit of $36.0 million from a loss of $13.5 million in 2001.
Restructuring and impairment charges in the fourth quarter totalled $14.1 million, versus $9.6 million in the same quarter of 2001. The fourth quarter 2002 restructuring charges were primarily related to the consolidation and closure of facilities in Europe, with production being relocated to lower cost facilities.
For the full year, the company reported a 113 percent increase in 2002 sales to approximately $3.9 billion, compared to $1.8 billion in 2001 sales. The increase is due to the acquisitions completed during 2001 and increased vehicle sales levels.
Sales for 2002 increased approximately $405 million, or approximately 12 percent, over the pro forma 2001 sales level (after giving effect to the 2001 acquisitions) of approximately $3.5 billion. By comparison, automotive production increased about 6 percent in North America.
Operating income for 2002 rose 370 percent to $167.7 million, compared with operating income of $35.6 million in 2001. This improvement results from higher margins due to manufacturing efficiencies, new program launches and additional volume. Restructuring and impairment charges for 2002 totalled $56.9 million, compared with $18.8 million in 2001. The restructuring charges incurred during the full year 2002 were to consolidate and close plants in North America and Europe, relocate production to more efficient facilities and to eliminate the company’s high-cost European headquarters and duplicative infrastructure with horizontal alignment of its key operations and functions.
“We achieved record sales levels throughout the year, our growth in operating income far outpaced our sales growth, and we have turned the corner on earnings,” Mosingo added. “We have also taken steps to position ourselves for a major improvement in our European performance in 2003.”
