Collins & Aikman Announces Record Second Quarter Results.Business Editors & Automotive Writers TROY, Mich.--(AutomotiveWire)--July 31, 2000 Collins & Aikman Aikman is a surname, and may refer to
See: New York Stock Exchange :CKC CKC Canadian Kennel Club CKC Chiang Kai-Shek (former leader of the Republic of China) CKC California Kiwifruit Commission CKC Cool Kids Club CKC Cairo Kidney Center CKC Cold Knife Cone (biopsy) ) today reported record second quarter results for its fiscal period ended July July: see month. 1, 2000. Compared with the second quarter of 1999, second quarter 2000 sales increased four percent to $507.2 million, operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose to $46.2 million and net income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased to $11.1 million, or $0.18 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Second Quarter Automotive Highlights Include: -- Record operating income of $46.2 million -- Fifth consecutive quarter of year-over-year improvement. -- Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of from continuing operations of $0.18 -- Strong bottom-line bot·tom-line adj. 1. Concerned exclusively with costs and profits: bottom-line issues. 2. Ruthlessly realistic; pragmatic: a bottom-line political strategy. performance. -- Collins & Aikman's Old Fort, North Carolina Old Fort is a town in McDowell County, North Carolina, United States. The population was 963 at the 2000 census. The town is well known for its weekly Mountain Music jamboree, which draws a large audience and many musicians from the surrounding areas to Old Fort's downtown on Facility rated "excellent" by DaimlerChrysler -- Leading in product quality and delivery. -- Established Global Product Development Division and unveiled ReMyx(TM) design concept -- Enhanced focus on product integration, innovation and growth. -- Awarded Automotive Industries' "Quest for Verb 1. quest for - go in search of or hunt for; "pursue a hobby" quest after, go after, pursue look for, search, seek - try to locate or discover, or try to establish the existence of; "The police are searching for clues"; "They are searching for the Excellence" second year in a row -- Strong commitment to customer service, quality, value, delivery and innovation. Commenting on the Company's second quarter results, Collins & Aikman's Chairman and Chief Executive Officer, Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs E. Evans Ev·ans , Herbert McLean 1882-1971. American anatomist who isolated four pituitary hormones and discovered vitamin E (1922). , stated, "Our solid operating performance for the second quarter of 2000 is a true reflection of the core earnings power of Collins & Aikman. Since the Company's debut as a pure-play automotive supplier, current quarter operating income sets an all-time all-time adj. Exceeding all others up to the present time: an all-time speed skating record. all-time Adjective Informal quarterly record and marks the fifth consecutive quarter of year-over-year improvement in our operating income. Despite softness in our convertible systems business, our revenue continues to benefit from the strength of the overall North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. light vehicle market. Even more importantly, and as evidenced by the Company's bottom-line performance, our operations continue to benefit from both structural and variable cost reductions we're we're Contraction of we are. we're we are achieving through our restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). initiatives and ongoing Kaizen This article is about a continual improvement philosophy. For Kaizen ($K), a fantasy currency invented by Kaizen Games, see Priston Tale. “Red tag” redirects here. For designation of damaged structures, see Red-tagged structure. activities." For the second quarter of 2000, the Company earned net income of $17.7 million, or $0.29 per diluted share, reflecting net income from continuing operations of $11.1 million, or $0.18 per diluted share, and net income from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. of $6.6 million, or $0.11 per diluted share relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the settlement of certain prior claims. In the second quarter of 1999, the Company earned net income of $5.3 million, or $0.09 per diluted share, which includes a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of $4.6 million, or $0.06 per diluted share after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. . Operating income for the current quarter rose to $46.2 million, as compared to second quarter 1999 performance of $35.4 million, or $40.0 million excluding the previously mentioned restructuring charge. For the fiscal second quarter ended July 1, 2000, the Company had approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 62.6 million shares outstanding on a weighted average diluted basis, as compared to 62.3 million shares a year ago. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the 2000 second quarter rose four percent to $507.2 million, as compared with $486.8 million in the second quarter of 1999. Total sales for the Company's North American Automotive Interior Systems division rose eight percent to $315.4 million driven by strong increases in the Company's North American plastics, carpet carpet or rug, thick fabric, usually woolen (but often synthetic), commonly used today as a floor covering. Carpet Types and Modern Manufactures and acoustics acoustics (ək  `stĭks) [Gr.,=the facts about hearing], the science of sound, including its production, propagation, and effects. operations. In Europe Europe (y r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , sales of $77.0 million were flat
compared to the second quarter of 1999, with gains from industry
production and new business offset by the negative impact of foreign
currency translation. Net sales for the Company's Specialty A contract under seal.A specialty is a written document that has been sealed and delivered and is given as security for the payment of a specifically indicated debt. Automotive Products division decreased two percent to $114.8 million, reflecting slightly lower convertible volumes on Ford's Mustang mustang [Sp. mesteño=a stray], small feral horse of the W United States. Mustangs are descended from escaped Native American horses, which in turn were descended from horses of North African blood, brought to the New World by the Spanish c.1500. and reduced production for Chrysler's Sebring Sebring may apply to:
For the six months ended July 1, 2000, the Company earned net income of $24.7 million, or $0.40 per diluted share, reflecting net income from continuing operations of $18.1 million, or $0.29 per diluted share, and net income from discontinued operations of $6.6 million, or $0.11 per diluted share relating to the settlement of certain prior claims. For the first six months of 1999, the Company incurred a net loss of $1.2 million, or ($0.02) per diluted share, which included the impact of the previously mentioned restructuring charge, as well as the impact for the cumulative after-tax effect of a change in accounting principle of $8.9 million, or $0.14 per diluted share. Operating income for the first six months climbed to $86.3 million, as compared to six month 1999 performance of $65.2 million, or $69.8 million, excluding the previously mentioned restructuring charge. For the six months ended July 1, 2000, weighted average diluted shares outstanding were 62.5 million, as compared to 62.3 million shares a year ago. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. , 2000 sales rose eight percent to $1.0 billion, as compared to $965.2 million in 1999, reflecting the continued strength of the North American light vehicle market and an extra week of sales in the first quarter of 2000. Excluding the impact of the extra sales week, year-to-date sales increased approximately four percent, consistent with industry production levels. Sales for the Company's North American Automotive Interior Systems division rose 11 percent to $642.1 million, while sales for the Company's European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. Automotive Interior Systems and Specialty Automotive Products divisions each increased three percent to $163.2 million and $236.7 million, respectively. Commenting on the Company's year-to-date results, Evans stated, "Collins & Aikman's consistently improving financial performance continues to demonstrate that our management team is well on-track in meeting the objectives of the operational turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. initiated over a year ago. Even more importantly, we continue to expand our focus on growth, innovation and product integration, as demonstrated by the recent announcement of our new Global Product Development Division and the unveiling of our unique ReMyx(TM) modular interior surface design concept. As the vehicle telematics Originally coined to mean the convergence of telecommunications and information processing, the term later evolved to refer to automation in automobiles. GPS navigation, integrated hands-free cellphones, wireless communications and automatic driving assistance systems all come under the and multi-media revolution accelerates, we remain more confident than ever that Collins & Aikman's acoustic acoustic /acous·tic/ (ah-kldbomacs´tik) relating to sound or hearing. a·cous·tic or a·cous·ti·cal adj. Of or relating to sound, the sense of hearing, or the perception of sound. capabilities will provide us with exciting growth opportunities. Going forward, we'll we'll Contraction of we will. we'll we will or we shall we'll will ~shall move even faster to further integrate our acoustics technology with the surface design properties of our interior products and convertible top systems in order to add even greater value for all our global customers." Collins & Aikman Corporation (NYSE:CKC) is the global leader in automotive floor and acoustic systems and a leading supplier of automotive fabric, interior trim, and convertible top systems. The Company's operations span the globe with 63 facilities and nearly 16,000 employees in 12 countries who are committed to achieving total excellence. Collins & Aikman's high-quality products combine industry-leading design and styling capabilities, superior manufacturing capabilities and the industry's most effective NVH NVH Noise, Vibration and Harshness NVH Nahverkehr Hohenlohekreis (German) NVH Noise Vibration and Harshness "quiet" technologies. For more information about Collins & Aikman, visit the company's web site at www.collinsaikman.com. This news release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to general economic conditions in the markets in which Collins & Aikman operates, fluctuations in the production of vehicles for which the Company is a supplier, changes in the popularity of particular car models or particular interior trim packages A trim package is an automotive package composed by a set of cosmetic (mostly non-functional) embellishments to a vehicle. In some cases the trim package may include a specific model or ending name. , the loss of programs on particular car models, labor disputes involving the Company or its significant customers, changes in consumer preferences, dependence on significant automotive customers, the level of competition in the automotive supply industry, pricing pressure from automotive customers, the substantial leverage of the Company and its subsidiaries, limitations imposed by the Company's debt facilities, charges made in connection with the integration of operations acquired by the Company, the implementation of the reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. , risks associated with conducting business in foreign countries and other risks detailed from time-to-time in the Company's Securities and Exchange Commission filings including without limitation, in Items 1 and 7 of the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year-ended December December: see month. 25, 1999, and Item 1 in the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended April 1, 2000.
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited -- in thousands, except per share data)
Quarter Ended Six Months Ended
July 1, June 26, July 1, June 26,
2000 1999 2000 1999
(13 weeks) (13 weeks) (27 weeks) (26 weeks)
----------- ----------- ----------- -----------
Net sales $ 507,209 $ 486,821 $1,041,970 $ 965,158
Cost of goods sold 423,076 408,559 874,122 816,308
----------- ----------- ----------- -----------
Gross profit 84,133 78,262 167,848 148,850
Selling, general and
administrative expenses 37,983 38,322 81,536 79,077
Restructuring charge -- 4,554 -- 4,554
----------- ----------- ----------- -----------
Operating income 46,150 35,386 86,312 65,219
Interest expense, net 24,429 23,009 49,491 44,824
Loss on sale of
receivables 1,988 1,323 5,806 2,634
Other expense (income) 2,527 (983) 1,447 1,194
----------- ----------- ----------- -----------
Income before
income taxes 17,206 12,037 29,568 16,567
Income tax expense 6,102 6,719 11,449 8,933
----------- ----------- ----------- -----------
Income from continuing
operations before
cumulative effect
of a change in
accounting principle 11,104 5,318 18,119 7,634
Income from
discontinued operations,
net of income taxes
of $4,400 6,600 -- 6,600 --
----------- ----------- ----------- -----------
Income before cumulative
effect of a change in
accounting principle 17,704 5,318 24,719 7,634
Cumulative effect of a
change in accounting
principle, net of income
taxes of $5,083 -- -- -- (8,850)
----------- ----------- ----------- -----------
Net income (loss) $ 17,704 $ 5,318 $ 24,719 $ (1,216)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Net income per basic
and diluted
common share:
Continuing
operations $ 0.18 $ 0.09 $ 0.29 $ 0.12
Discontinued
operations 0.11 -- 0.11 --
Cumulative effect
of a change in
accounting principle -- -- -- (0.14)
----------- ----------- ----------- -----------
Net income (loss) $ 0.29 $ 0.09 $ 0.40 $ (0.02)
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Average common shares
outstanding:
Basic 61,879 61,947 61,884 61,970
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Diluted 62,631 62,303 62,498 62,327
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
(Unaudited)
July 1, December 25,
2000 1999
ASSETS ------------ -----------
Current Assets:
Cash and cash equivalents $ 63,478 $ 13,980
Accounts and other receivables, net 223,973 233,819
Inventories 132,303 132,625
Other 79,554 84,942
------------ -----------
Total current assets 499,308 465,366
Property, plant and equipment, net 437,471 443,526
Deferred tax assets 80,394 86,235
Goodwill, net 249,987 256,362
Other assets 83,348 97,401
------------ -----------
$1,350,508 $1,348,890
------------ -----------
------------ -----------
LIABILITIES AND COMMON STOCKHOLDERS' DEFICIT
Current Liabilities:
Short-term borrowings $ 6,500 $ 3,088
Current maturities of long-term debt 115,929 27,992
Accounts payable 168,767 198,466
Accrued expenses 132,477 132,709
------------ -----------
Total current liabilities 423,673 362,255
Long-term debt 802,088 884,550
Other, including postretirement
benefit obligation 259,627 253,206
Commitments and contingencies
Common stock (150,000 shares authorized,
70,521 shares issued and 61,895 shares
outstanding at July 1, 2000 and
70,521 shares issued and 61,904 shares
outstanding at December 25, 1999) 705 705
Other paid-in capital 585,978 585,484
Accumulated deficit (616,398) (641,117)
Accumulated other comprehensive loss (42,177) (33,260)
Treasury stock, at cost (8,626 shares
at July 1, 2000 and 8,617 shares
at December 25, 1999) (62,988) (62,933)
------------ -----------
Total common stockholders' deficit (134,880) (151,121)
------------ -----------
$1,350,508 $1,348,890
------------ -----------
------------ -----------
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited -- in thousands)
Quarter Ended Six Months Ended
----------------------- -----------------------
July 1, June 26, July 1, June 26,
2000 1999 2000 1999
(13 weeks) (13 weeks) (27 weeks) (26 weeks)
----------- ----------- ----------- -----------
OPERATING ACTIVITIES
Income from continuing
operations $ 11,104 $ 5,318 $ 18,119 $ 7,634
Adjustments to derive
cash flow from
continuing operating
activities:
Impairment of
long-lived assets -- 536 -- 536
Deferred income tax
expense (benefit) 3,194 (38) 5,337 (1,231)
Depreciation
and amortization 18,493 17,699 37,254 34,931
Decrease in
accounts and
other receivables 17,074 34,326 26,466 13,551
Decrease (increase)
in inventories 5,231 (751) 322 10,383
Decrease in
accounts payable (19,374) (8,041) (29,699) (21,207)
Increase (decrease)
in interest
payable (13,408) (12,783) 1,502 1,348
Other, net (15,124) (10,346) 16,844 (4,507)
----------- ----------- ----------- -----------
Net cash provided
by continuing
operating
activities 7,190 25,920 76,145 41,438
----------- ----------- ----------- -----------
Net cash provided by
(used in)
discontinued operations 7,434 (2,748) 4,246 (4,431)
----------- ----------- ----------- -----------
INVESTING ACTIVITIES
Additions to property,
plant and equipment (15,477) (19,843) (30,572) (32,377)
Sales of property,
plant and equipment 500 193 574 2,634
Acquisition of
businesses, net of cash
acquired -- (369) -- (369)
Other, net -- -- -- (800)
----------- ----------- ----------- -----------
Net cash used in
investing activities (14,977) (20,019) (29,998) (30,912)
----------- ----------- ----------- -----------
FINANCING ACTIVITIES
Issuance of long-term debt -- 100,000 -- 100,000
Repayment of
long-term debt (7,777) (4,897) (21,453) (9,486)
Reduction of
participating interests
in accounts receivable (5,169) (10,500) (9,820) (2,200)
Net borrowings
(repayments) on
revolving credit
facilities 36,668 (26,881) 26,205 (17,381)
Increase (decrease) in
short-term borrowings (1,404) (7,423) 4,274 (5,272)
Reissuance (purchase)
of treasury stock, net 35 83 (101) (1,308)
Dividends paid -- (44,005) -- (50,198)
----------- ----------- ----------- -----------
Net cash provided by
(used in) financing
activities 22,353 6,377 (895) 14,155
----------- ----------- ----------- -----------
Net increase in cash
and cash equivalents 22,000 9,530 49,498 20,250
Cash and cash
equivalents at
beginning of period 41,478 34,475 13,980 23,755
----------- ----------- ----------- -----------
Cash and cash
equivalents at
end of period $ 63,478 $ 44,005 $ 63,478 $ 44,005
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
COLLINS & AIKMAN CORPORATION AND SUBSIDIARIES
SECOND QUARTER 2000 - SUPPLEMENTAL SCHEDULE
(Unaudited - in millions, except CPV)
SALES DATA:
----------- Quarter Ended Year-to-Date
------------------- --------------------
DIVISION: July 1, June 26, July 1, June 26,
2000 1999 2000 1999
(13 weeks) (13 weeks) (27 weeks) (26 weeks)
-------- -------- -------- --------
North American Automotive
Interior Systems $ 315 $ 293 $ 642 $ 576
European Automotive
Interior Systems 77 77 163 159
Specialty Automotive Products 115 117 237 230
----- ----- ------ -----
Total $ 507 $ 487 $1,042 $ 965
----- ----- ------ -----
----- ----- ------ -----
OPERATING INCOME (LOSS)(a):
-------------------------- Quarter Ended Year-to-Date
------------------ --------------------
DIVISION: July 1, June 26, July 1, June 26,
2000 1999 2000 1999
(13 weeks) (13 weeks) (27 weeks) (26 weeks)
-------- -------- -------- --------
North American Automotive
Interior Systems $ 31 $ 21 $ 59 $ 40
European Automotive
Interior Systems 5 3 7 4
Specialty Automotive Products 9 15 21 26
Other 1 1 (1) --
----- ----- ------ -----
Total $ 46 $ 40 $ 86 $ 70
----- ----- ------ -----
----- ----- ------ -----
STATISTICAL DATA:
----------------- Quarter Ended Year-to-Date
------------------ --------------------
July 1, June 26, July 1, June 26,
2000 1999 2000 1999
(13 weeks) (13 weeks) (27 weeks) (26 weeks)
-------- -------- -------- --------
EUROPEAN CPV $ 14 $ 15 $ 15 $ 16
N. AMERICAN CPV $ 88 $ 88 $ 90 $ 86
EBITDA (a) $ 65 $ 58 $124 $105
CAPITAL EXPENDITURES $ 15 $ 20 $ 31 $ 32
FREE CASH FLOW (b) $ 52 $ 63 $ 90 $ 75
(a) Excludes restructuring charge.
(b) Free Cash Flow equals EBITDA (excluding restructuring) less
capital expenditures, plus/minus the operating change in accounts
receivable, accounts payable, and inventory.
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