Tenneco Automotive Inc. (ticker: TEN, exchange: New York Stock Exchange) News Release
April 27, 2000
TENNECO AUTOMOTIVE GROWS NORTH AMERICAN AFTERMARKET BUSINESS
LAKE FOREST, Ill.--(BUSINESS WIRE)--April 27, 2000--Tenneco Automotive today announced that its North American aftermarket business group added $14 million of incremental business in the first quarter. Both ride control and emission control businesses contributed to the increase, adding $11 million and $3 million respectively.
First quarter 2000 revenues for the company's North American aftermarket business were $132 million, up two percent compared to first quarter 1999. The company continues to turn around the business unit's performance despite continuing static conditions in the industry.
"We are gaining momentum and transforming our North American aftermarket business with new products, new technology, new positioning strategies and new pricing," said David Gabriel, senior vice president and general manager for the business group.
This growth follows a successful 1999 fourth quarter when Tenneco Automotive's North American aftermarket business revenue grew for the first time in eight quarters, rising nine percent to $138 million. Market share also increased in the fourth quarter with ride control up nearly two points to 48 percent and exhaust up five points to 37 percent.
The transformation began in late 1998 in response to eroding market conditions. The business unit changed its fundamental marketing approach; introduced new products; and aggressively attacked its overall cost structure, primarily by restructuring its manufacturing and distribution operations.
The introduction of the premium Reflex shocks in the light truck and sports utility vehicle markets has helped fuel the growth in the ride control business. The company will soon expand the Reflex line to include passenger car shocks and struts. The introduction of Reflex has allowed the company to expand its customer base.
The new exhaust business resulted from competitively re-pricing some exhaust products and initiating the realignment of the entire exhaust product offering to address changes in car park, distribution channels, and consumer purchasing habits. The company also saw its heavy-duty exhaust business increase by more than five percent, fueled by its Mega Flow muffler line, which is currently being expanded into the growing RV market. "The stage is set to introduce a new muffler program later this year, also aimed at the heavy-duty market segment," Gabriel said.
The strength of the High Performance Dynomax exhaust and Rancho ride control brands are also contributing to the aftermarket performance. "Sales in these specialty areas were up more than 50 percent and we expect these trends to continue. We are very pleased that Pep Boys will add the Dynomax product line to their operations early in the second quarter, " Gabriel added.
Tenneco Automotive's North American aftermarket business group continues to look for ways to reduce its overall costs. "We slashed our break-even point by more than 25 percent in the last 12 months," Gabriel said. "We will continue to focus on reducing our overall costs."
"The combination of sharper marketing focus, new products, and cost control should continue to drive growth in our North American aftermarket in 2000," he concluded.
Tenneco Automotive is a $3.3 billion manufacturing company headquartered in Lake Forest, Ill., with 24,000 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(R) and Walker(R) global brand names. Among its products are Sensa-Trac(R) and Reflex(TM) shocks and struts, Rancho(R) shock absorbers, Walker(R) Quiet-Flow(TM) mufflers and DynoMax(TM) performance exhaust products, and Monroe(R) Clevite(TM) vibration control components.
Several statements in this press release are forward-looking and are identified by the use of forward-looking words and phrases, such as "will soon," "the stage is set," "we expect this trend," "will continue to focus on," and "should continue." These forward-looking statements are based on the current expectations of the Company (including its subsidiaries). Because forward-looking statements involve risks and uncertainties, the Company's plans, actions and actual results could differ materially. Among the factors that could cause plans, actions and results to differ materially from current expectations are: (i) the general economic and competitive conditions in the aftermarket; (ii) governmental actions, including the ability to receive regulatory approvals and the timing of such approvals; (iii) changes in capital availability or costs; (iv) changes in consumer demand and prices and the potential negative impact on the Company's revenues and margins; (v) the cost of compliance with changes in regulations, including environmental regulations; (vi) workforce factors such as strikes or labor interruptions; (vii) material substitutions and increases in the costs of raw materials; (viii) the ability of the Company and its subsidiaries to transition to being an independent, stand-alone public company in a timely and cost-effective manner; (ix) the introduction and acceptance of new technologies; (x) further changes in the distribution channels for the Company's aftermarket products, and further consolidations among automotive parts customers and suppliers; (xi) changes by the Financing Accounting Standards Board or other accounting regulatory bodies of authoritative generally accepted accounting principles or policies; and (xii) 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.