Tenneco Automotive Inc. (ticker: TEN, exchange: New York Stock Exchange) News Release

April 24, 2001

 
TENNECO AUTOMOTIVE REPORTS 2001 FIRST QUARTER EARNINGS
  • Company reports net loss of $16 million, or 44 cents per diluted share, before restructuring and other unusual charges
  • Revenue declines two percent year-over-year to $864 million
  • Working capital, as a percent of sales, improves from 16.7% to 13.7% ($100 million improvement)
  • SGA&E, as a percent of sales, decreases from 13.8% to 11.9% ($18 million improvement)

LAKE FOREST, ILLINOIS, APRIL 24, 2001 - Tenneco Automotive (NYSE: TEN) reported a net loss of $31 million, or 84 cents per diluted share, for the first quarter of 2001. These results include pre-tax restructuring charges of $12 million (23 cents per share), pre-tax environmental charges of $6 million (12 cents per share), and pre-tax charges associated with the company's re-negotiation of its senior debt agreements of $2 million (5 cents per share).

The company reported a net loss of $16 million, or 44 cents per diluted share, for the first quarter of 2001, before restructuring charges and other unusual charges, compared to net income of $1 million, or 3 cents per diluted share, for the first quarter of 2000.

The company's revenue and profitability continue to be impacted by downturns in North American light vehicle and heavy-duty truck production as well as the depressed global aftermarket, despite strong performances during the quarter by its European original equipment and rest of world operations. Revenue for the quarter was $864 million versus $878 million in the first quarter of 2000. EBITDA for the quarter, excluding restructuring and other unusual charges, was $63 million compared with $86 million the previous year, a 27 percent decline.

The company reported that cash flow from operations during the quarter, while negative, did not decline as much as the decline in EBITDA. At quarter end, working capital, before factored receivables, improved by $100 million compared to the first quarter 2000, as the company enhanced its receivables performance by three days and shrunk inventory levels by six days. A $9 million decrease in capital spending and lower taxes also contributed to this cash flow improvement. Additionally, the company reduced its SGA&E expense by $18 million year-over-year, as a result of previously announced restructuring initiatives.

"We continue to focus on the key areas that we can control - manufacturing costs, SGA&E, discretionary spending, and working capital - in order to meet the immediate challenges caused by the difficult industry conditions," said Mark P. Frissora, chairman and CEO, Tenneco Automotive.

The company reported the following geographical results before restructuring and other unusual charges:

NORTH AMERICA
North American original equipment revenue declined 15 percent during the quarter to $324 million versus $382 million in the first quarter of 2000. North American aftermarket revenue decreased 13 percent to $111 million from $128 million in the previous year.

North American EBIT declined to $6 million versus $34 million in the first quarter of 2000. EBIT was primarily impacted by lower revenues, including a significant downturn in the high margin heavy-duty elastomer business. Operating inefficiencies and aftermarket bad debt expense also contributed to the decline.

EUROPE
Driven by increased original equipment exhaust volumes, European original equipment revenue increased 36 percent to $275 million compared to $202 million in the previous year. European aftermarket revenue declined 20 percent to $74 million versus $92 million in first quarter of 2000.

European EBIT increased 33 percent to $16 million for the quarter. This increase was driven primarily by operational improvements in the European original equipment exhaust business.

REST OF WORLD
The company's Australian operations reported a 10 percent revenue decline from $29 million to $26 million; however, revenue would have increased 5 percent if currency exchange rates had been the same in the first quarter of 2000 as in the first quarter of 2001.

The launch of new original equipment programs in South America fueled a 9 percent increase in revenue to $36 million, from $33 million in 2000.

Revenue from Asian operations grew 64 percent to $18 million from $11 million in the first quarter of 2000, driven by production from the company's new facility in Shanghai and aftermarket volumes.

Combined EBIT for South America, Australia, and Asia was $4 million compared to $2 million in the previous year, primarily the result of volume increases.

"We are by no means satisfied with our results," Frissora said. "However, we are encouraged by progress we've made in reducing our overhead costs and spending, and our entire organization is determined to make additional improvement in these areas in the second quarter and throughout 2001."

The attached exhibit provides additional information on Tenneco Automotive's first quarter 2001 operating results.

Tenneco Automotive is a $3.5 billion manufacturing company headquartered in Lake Forest, Ill., with 23,000 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® and Walker® global brand names. Among its products are Sensa-Trac® and Reflex™ shocks and struts, Rancho® shock absorbers, Walker® Quiet-Flow™ mufflers and DynoMax™ performance exhaust products, and Monroe® Clevite™ vibration control components.



TENNECO AUTOMOTIVE INC. CONSOLIDATED EARNINGS RESULTS

THREE MONTHS ENDED MARCH 31, 2001

(Unaudited)

   

     2001

 

     2000

 

Net sales and operating revenues

 

$     864

 

$     878

(d)
 

Costs and Expenses

         

Cost of Sales (exclusive of depreciation shown below)

 

706

(a) (b)

672

 

Engineering, Research and Development

 

13

 

15

 

Selling, General and Administrative

 

101

(a) (c)

106

(d)

Depreciation and Amortization

 

37

 

39

 

Total Costs and Expenses

 

857

 

832

 
 

Other Income (Expense)

 

(1)

 

1

 
 

Operating Income (Loss)

         

North America

 

(3)

(a) (b) (c)

34

 

Europe

 

8

(a) (b) (c)

12

 

Rest of World

 

1

(a) (b)

1

 

 

 

6

 

47

 

Less:

         

Interest expense (net of interest capitalized)

 

47

 

45

 

Income tax expense (benefit)

 

(10)

 

(1)

 

Minority interest

 

-

 

2

 

Net Income (Loss)

 

$     (31)

 

$     1

 
 

Average common shares outstanding

 

 

 

 

 

Basic

 

36.6

 

33.7

 

Diluted

 

36.8

 

33.9

 
 

Earnings (Loss) per share of common stock

         

Basic

 

$     (0.84)

 

$     0.03

 

Diluted

 

$     (0.84)

 

$     0.03

 
 

(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 North America and Europe.

(d) Pursuant to EITF Issue No. 00-14, Accounting for Certain Sales Incentives, some incentives that were previously recorded in SG&A are now classified as a reduction in revenues. Results for 2000 were reclassified accordingly, with net sales and SG&A each reduced by $4 million with no impact on income.

 

 

 

 


CONTACT: Tenneco Automotive, Media relations
Jane Ostrander, 847/482-5607
jane.ostrander@tenneco-automotive.com

Tenneco Automotive, Investor relations
Leslie Cleveland Hague, 847/482-5042
lchague@tenneco-automotive.com

 

 


TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES

STATEMENT OF CASH FLOWS

(Unaudited)

(Millions)

 

Three Months Ended

 

March 31,

 

    2001

 

    2000

Operating activities:

     

Income (Loss) from continuing operations

$   (31)

 

$   1

Adjustments to reconcile income (loss) from continuing

     

operations to net cash provided (used) by operating activities -

     

Depreciation and amortization

37

 

39

Deferred income taxes

(18)

 

-

(Gain)/Loss on sale of businesses and assets, net

2

 

-

Changes in components of working capital -

     

(Inc.)/dec. in receivables

(35)

 

(71)

(Inc.)/dec. in inventories

(4)

 

(13)

(Inc.)/dec. in prepayments and other current assets

(5)

 

(4)

Inc./(dec.) in payables

16

 

50

Inc./(dec.) in taxes accrued

-

 

(11)

Inc./(dec.) in interest accrued

13

 

17

Inc./(dec.) in other current liabilities

(6)

 

(13)

Other

2

 

1

Net cash provided (used) by operating activities

(29)

 

(4)


Investing activities:

     

Net proceeds from sale of assets

-

 

2

Expenditures for plant, property & equipment

(25)

 

(34)

Acquisition of businesses

-

 

-

Investments and other

(5)

 

(4)

Net cash provided (used) by investing activities

(30)

 

(36)


Net Cash provided (used) before financing activities

     

- continuing operations

(59)

 

(40)


Financing activities:

     

Issuance of common and treasury shares

3

 

-

Proceeds from subsidiary equity issuance

-

 

-

Purchase of common stock

-

 

-

Issuance of equity securities by subsidiaries

-

 

-

Issuance of long-term debt

-

 

-

Retirement of long-term debt

(5)

 

-

Net inc./(dec.) in short-term debt excluding current

     

maturities on long-term debt

78

 

13

Dividends (common)

-

 

(2)

Other

-

 

-

Net cash provided (used) by financing activities

76

 

11


Effect of foreign exchange rate changes on cash and

     

temporary cash investments

4

 

(2)


Inc./(dec.) in cash and temporary cash investments

21

 

(31)

Cash and temporary cash investments, January 1

35

 

84

Cash and temporary cash investments, March 31

$   56

 

$   53


Cash paid during the period for interest

$   34

 

$   29

Cash paid during the period for income taxes

$   8

 

$   15


 

 


TENNECO AUTOMOTIVE INC. AND CONSOLIDATED SUBSIDIARIES

BALANCE SHEET

(Unaudited)

(Millions)

       

March 31, 2001

 

December 2000

       

Actual

 

Actual

ASSETS

   

CASH

 

56

 

35

   

RECEIVABLES, Net

 

499

 

487

   

INVENTORIES

 

409

 

422

   

OTHER CURRENT ASSETS

 

163

 

165

   

TOTAL CURRENT ASSETS

 

1,127

 

1,109

   

INVESTMENTS AND OTHER ASSETS

 

778

 

772

   

PLANT, PROPERTY, AND EQUIPMENT, Net

 

964

 

1,005

   

TOTAL ASSETS

 

$     2,869

 

$     2,886

 

LIABILITIES AND SHAREOWNERS' EQUITY

   

SHORT-TERM DEBT

 

188

 

92

   

ACCOUNTS PAYABLE

 

465

 

464

   

OTHER CURRENT LIABILITIES

 

187

 

202

   

ACCRUED TAXES

 

17

 

16

   

ACCRUED INTEREST

 

47

 

35

   

LONG-TERM DEBT

 

1,409

 

1,435

   

DEFERRED INCOME TAXES

 

136

 

144

   

DEFERRED CREDITS AND OTHER LIABILITIES

 

158

 

154

   

MINORITY INTEREST

 

15

 

14

   

TOTAL SHAREHOLDERS' EQUITY

 

247

 

330

   

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$     2,869

 

$     2,886


 

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