The suspension parts specialist Tower Automotive has reported net income of $3 million for the fourth quarter or $.07 per diluted share. This compares with adjusted net income of $15 million, or $.31 per diluted share, in the fourth quarter of 2000.
The results were in line with analysts estimates.
For the fourth quarter, revenues were $639 million, a 2% increase, compared with $629 million in the 2000 period. Debt reduction in the fourth quarter of 2001 was an additional $44 million, bringing debt reduction to $320 million for the full year.
For the year ended December 31, 2001, revenues were $2,467 million, a 3% decrease, compared with $2,532 million in the 2000 period. Revenues for 2001 include $285 million of sales from Asian operations that were not consolidated in 2000. Adjusted net income for the year was $32 million, or $.69 per diluted share. This compares with adjusted net income of $98 million, or $1.81 per diluted share, for 2000. Including the after-tax effect of restructuring and impairment charges results in a net loss of $268 million for 2001, or $5.87 per diluted share, compared with 2000 net income of $13 million, or $.28 per diluted share.
In commenting on the fourth quarter and year-end results, Dug Campbell, president and chief executive officer of Tower Automotive, said, “2001 proved to be a challenging year for us. Sales for the full year were down 16% at comparable locations compared to 2000, reflecting reduced automotive production, particularly in North America. As expected, we also incurred product launch costs in the fourth quarter of $7 million, bringing these charges for three key product introductions to approximately $30 million for 2001.”
“Despite the impact of reduced volumes and launch activities, we achieved significant reduction in debt through effective working capital management and financing activities. Our overall debt reduction for 2001 of $320 million – roughly 30% from December 31, 2000 – exceeded our goal for the year. We also made difficult decisions to reduce our manufacturing capacity and administrative footprint, to more closely align the cost structure of Tower Automotive to the current economic outlook for automotive production.”
“Looking ahead, we expect continued weakness in production volumes in the first part of 2002, resulting in earnings challenges for the first and second quarters. However, underlying economic indicators are positive, and we expect our restructuring activities to result in more cost-effective operations that allow us to meet the challenges of lower volumes and to provide a greater return on incremental sales when volumes increase.”
“Although our focus in 2001 has been on cost containment and cash generation, we also continued to win new business and broaden our customer base. We expect our new awards to contribute to organic growth rates of eight to nine% over the next three years, building from our 2001 sales base.”