DURA Automotive Reports Second Quarter 2006 Results.ROCHESTER Rochester (rŏch`ĕstər, –ĭstər). 1 City (1990 pop. 70,745), seat of Olmsted co., SE Minn.; inc. 1858. HILLS, Mich. -- DURA Automotive Systems Dura Automotive Systems (Pink Sheets: DRRAQ), headquartered in Rochester Hills, Michigan, USA was ranked in the 2006 Fortune 1000. It is engaged in the business of manufacturing and distribution of automotive components. , Inc. (Nasdaq:DRRA DRRA Dynamic Radio Resource Allocation ), today reported revenues of $573.3 million for the second quarter ended July July: see month. 2, 2006 compared to $623.8 million in the prior year's quarter. Net loss for the quarter was $131.3 million, or $6.96 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, compared to net income of $3.0 million, or $0.16 per diluted share, for the prior year's quarter. Adjusted loss 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 for the quarter, which excludes facility consolidation charges and a deferred tax asset valuation allowance totaled $38.3 million, or $2.03 per diluted share, compared to income of $1.6 million, or $0.09 per diluted share, in the prior year's quarter. Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become for the quarter was $21.4 million compared to $50.2 million in the prior year's quarter. A reconciliation of adjusted income from continuing operations and adjusted EBITDA to the most directly comparable GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). measures is set forth below. "While we haven't have·n't Contraction of have not. haven't have not haven't have begun to experience material financial improvements to date, our operational 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). plan is off to an excellent start," said Larry Lar´ry n. 1. Same as Lorry, or Lorrie. Denton Denton, city (1990 pop. 66,270), seat of Denton co., N Tex.; inc. 1866. The city lies in an agricultural and industrial region, but the economy is based on education and research. The Univ. of North Texas, Texas Woman's Univ. , chairman and chief executive officer of DURA Automotive. "Our management team is committed to meeting our restructuring goals and our entire organization is aligned to deliver this program." The decrease in second quarter revenue from the prior year was driven primarily by lower North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. and European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. automotive production, unfavorable vehicle platform mix and the loss of the GMT (Greenwich Mean Time) See UTC. GMT - Universal Time 1 800 seat adjuster business. Partially offsetting these decreases was the benefit received from foreign currency exchange. The decrease in second quarter income from continuing operations from the prior year reflects the impact of lower automotive production, the loss of the GMT 800 seat adjuster business and higher raw material prices. Denton continued, "We need to match our overhead structure to the market share of our major customers. While our 50 cubed restructuring plan is focused on structuring our operations for the future, we must take action immediately to address the current industry conditions. To support this effort, we will reduce our labor force by 510 employees by year end." The $2.9 million facility consolidation charge for the quarter relates primarily to actions associated with the previously announced 50 cubed operational restructuring plan. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $2.3 million of the charge relates to employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs and $0.6 million was for facility closure and asset impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement of Financial Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 109 "Accounting for Income Taxes", DURA's second quarter 2006 provision for income taxes includes the recording of a $90.8 million valuation allowance U.S. deferred tax assets recorded as of December December: see month. 31, 2005. DURA determined the need for a valuation allowance based upon its updated quarterly analysis of its U.S. operations taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. together with the extended impact of elevated raw material prices on the automotive and recreation vehicle industries. Six-month Results For the six month period ended July 2, 2006, revenue totaled $1.2 billion compared to $1.2 billion for the same period in 2005. Net loss for the six month period was $138.3 million, or $7.35 per diluted share, compared to a net loss of $1.9 million, or $0.10 per diluted share, in the prior year. DURA's adjusted loss from continuing operations for the six months ended July 2, 2006, which excludes facility consolidation and other charges, net and the deferred tax asset valuation allowance totaled $44.7 million, or $2.37 per diluted share, compared to adjusted loss from continuing operations of $2.1 million, or $0.11 per diluted share, in the same period last year. Potential Material Goodwill Impairment Charge In accordance with SFAS No. 142, "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. ," DURA periodically evaluates the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of its goodwill for indicators of impairment. SFAS No. 142 requires the company to evaluate the carrying value of its goodwill for potential impairment on an annual basis or on an interim basis if there are indicators of potential impairment. As in prior quarters, DURA performed this assessment during the second quarter of 2006. Based on the second quarter analysis, it has been determined that due to continued unfavorable operating results, primarily as a result of continued higher raw material costs, lower production volumes on key platforms and insufficient in·suf·fi·cient adj. 1. Not sufficient. 2. Incapable of proper functioning. customer pricing, DURA's Control Systems reporting unit's goodwill may be materially impaired See assistive technology. . At July 2, 2006, the total amount of recorded goodwill in DURA's Control Systems reporting unit is approximately $626.3 million. At this time, DURA is unable to make a good-faith estimate of the potential amount or range of amounts of the impairment charge. Such impairment charge will not result in future cash expenditures. DURA will file a report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. pursuant to Item 2.06 within four business days after it makes an estimate of such amount or range of amounts. Conference Call A conference call to review the second-quarter results is scheduled for July 27, 2006 at 11:30 a.m. ET. Interested participants may listen to the live conference call or replay over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the by logging onto the investor relations Investor relations The process by which the corporation communicates with its investors. section of the company's Web site, www.duraauto.com. A telephone recording of this call also will be available until 6 p.m. ET on Thursday Thursday: see week. , August 3, 2006 by dialing (303) 590-3000, passcode 11066077. About DURA Automotive Systems, Inc. DURA Automotive Systems, Inc., is a leading independent designer and manufacturer of driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems for the global automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide. . The company is also a leading supplier of similar products to the recreation vehicle (RV) and 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. vehicle industries. DURA sells its automotive products to every North American, Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and and European original equipment manufacturer (OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and ) and many leading Tier 1 automotive suppliers. DURA is headquartered in Rochester Hills, Mich. Information about DURA and its products is available on the Internet at www.duraauto.com. Use of Non-GAAP Financial Information In addition to the results reported in accordance with accounting principles generally accepted in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP") included throughout this news release, the Company has provided information regarding "adjusted income (loss) from continuing operations" and "adjusted EBITDA" (non-GAAP financial measures). Adjusted income from continuing operations represents income from continuing operations adjusted for facility consolidation and other charges, net, the deferred tax asset valuation allowance, the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of certain environmental matters and gain on retirement of debt, net. Adjusted EBITDA represents income from continuing operations adjusted for facility consolidation and other charges, the deferred tax asset valuation allowance, a gain on retirement of debt, the favorable resolution of certain environmental matters, interest, amortization, depreciation and taxes. Management believes that adjusted income from continuing operations and adjusted EBITDA are useful to both management and investors in their analysis of the Company's ability to analyze an·a·lyze v. 1. To examine methodically by separating into parts and studying their interrelations. 2. To separate a chemical substance into its constituent elements to determine their nature or proportions. 3. operational performance. Adjusted income (loss) from continuing operations and adjusted EBITDA should not be considered in isolation or as a substitute for net income or other income statement data prepared in accordance with GAAP, or as a measure of profitability or liquidity. Also, adjusted income (loss) from continuing operations and adjusted EBITDA, as determined and presented by the Company, may not be comparable to related or similarly titled measures reported by other companies. 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. This press release contains forward-looking statements that are subject to risks and uncertainties. These statements often include words such as "believe", "expect", "anticipate", "intend", "plan", "estimate", or similar expressions. These statements are based on certain assumptions that the company has made in light of its experience in the industry as well as its perspective of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or . Actual results may differ materially from the anticipated results because of certain risks and uncertainties, including but not limited to (i) expected synergies, economies of scale and cost savings from the company's acquisitions not being fully realized or realized within the expected times frames; (ii) unanticipated difficulties servicing the indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of the company; (iii) costs or operational difficulties related to integrating the operations of the acquired entities with those of the company being greater than expected; (iv) labor disputes involving the company or its significant customers; (v) risks associated with conducting business in foreign countries, and (vi) general economic or business conditions affecting the automotive industry, either nationally or regionally, being less favorable than expected.
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Six Months Ended
--------------------- -----------------------
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
---------- --------- ----------- -----------
Revenues $573,326 $623,834 $1,157,704 $1,243,813
Cost of sales 535,056 545,478 1,065,472 1,104,876
---------- --------- ----------- -----------
Gross profit 38,270 78,356 92,232 138,937
Selling, general and
administrative expenses 37,850 41,025 74,779 83,198
Facility consolidation,
asset impairments and
other charges 2,878 2,624 5,450 4,290
Amortization expense 105 104 210 216
---------- --------- ----------- -----------
Operating income (2,563) 34,603 11,793 51,233
Interest expense, net 28,831 24,907 55,005 49,877
Loss on early
extinguishment of debt - 3,349 - 3,349
---------- --------- ----------- -----------
Income (loss) from
continuing operations
before provision for
income taxes and
minority interest (31,394) 6,347 (43,212) (1,993)
Provision (benefit) for
income taxes 99,614 3,391 95,781 (226)
---------- --------- ----------- -----------
Income (loss) from
continuing operations
before
minority interest (131,008) 2,956 (138,993) (1,767)
Minority interests in
income (155) - (210) -
---------- --------- ----------- -----------
Income (loss) from
continuing operations (131,163) 2,956 (139,203) 2,956
Gain (loss) from
discontinued operations,
net (105) 3 (105) (106)
Cumulative effect of
change in accounting
principle - - 1,020 -
---------- --------- ----------- -----------
Net income (loss) $(131,268) $2,959 $(138,288) $(1,873)
========== ========= =========== ===========
Basic earnings (loss) per
share:
Income (loss) from
continuing operations $(6.95) $0.16 $(7.39) $(0.09)
Discontinued operations (0.01) - (0.01) (0.01)
Cumulative effect of
change in accounting
principle - - 0.05 -
---------- --------- ----------- -----------
Net income (loss) $(6.96) $0.16 $(7.35) $(0.10)
========== ========= =========== ===========
Basic shares outstanding 18,861 18,704 18,834 18,683
Diluted earnings (loss)
per share:
Income (loss) from
continuing operations $(6.95) $0.16 $(7.39) $(0.09)
Discontinued operations (0.01) - (0.01) (0.01)
Cumulative effect of
change in accounting
principle - - 0.05 -
---------- --------- ----------- -----------
Net income (loss) $(6.96) $0.16 $(7.35) $(0.10)
========== ========= =========== ===========
Diluted shares
outstanding 18,861 18,818 18,834 18,683
Capital expenditures $20,825 $13,326 $43,942 $27,604
Depreciation $20,971 $21,057 $41,269 $41,492
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
ADJUSTED INCOME FROM CONTINUING OPERATIONS
(Amounts in thousands, except per share amounts - unaudited)
Three Months Ended Six Months Ended
------------------- -------------------
July 2, July 3, July 2, July 3,
2006 2005 2006 2005
---------- -------- ---------- --------
Adjusted income (loss) from
continuing operations
------------------------------
Income (loss) from continuing
operations before
minority interest $(131,008) $2,956 $(138,993) $(1,767)
Facility consolidation and
other charges, net 1,927 1,767 3,565 2,777
Valuation allowance for U.S.
deferred taxes 90,773 - 90,773 -
Loss on early extinguishment
of debt, net - 2,143 - 2,143
Favorable settlement of
environmental matter, net - (5,243) - (5,243)
---------- -------- ---------- --------
Adjusted income (loss) from
continuing operations $(38,308) $1,623 $(44,655) $(2,090)
========== ======== ========== ========
Basic earnings (loss) per
share:
Adjusted income (loss) from
continuing operations $(2.03) $0.09 $(2.37) $(0.11)
Basic shares outstanding 18,861 18,704 18,834 18,683
Diluted earnings (loss) per
share:
Adjusted income (loss) from
continuing operations $(2.03) $0.09 $(2.37) $(0.11)
Diluted shares outstanding 18,861 18,818 18,834 18,683
Adjusted EBITDA
------------------------------
Operating income $(2,563) $34,603 $11,793 $51,233
Amortization 105 104 210 216
Depreciation 20,971 21,057 41,269 41,492
Favorable settlement of
environmental matter - (8,192) - (8,192)
Facility consolidation, asset
impairment and other charges 2,878 2,624 5,450 4,290
---------- -------- ---------- --------
Adjusted EBITDA $21,391 $50,196 $58,722 $89,039
========== ======== ========== ========
DURA AUTOMOTIVE SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
July 2, December 31,
Assets 2006 2005
-------------------------------------------- ----------- -------------
Current assets:
Cash and cash equivalents $123,042 $101,889
Accounts receivable, net 332,563 291,119
Inventories, net 142,625 132,148
Other current assets 113,917 107,650
----------- -------------
Total current assets 712,147 632,806
----------- -------------
Property, plant and equipment, net 473,233 458,258
Goodwill, net 887,870 854,296
Deferred income taxes and other assets, net 72,233 129,849
----------- -------------
$2,145,483 $2,075,209
=========== =============
Liabilities and Stockholders' Investment
--------------------------------------------
Current liabilities:
Accounts payable $250,960 $265,560
Accrued liabilities 197,908 180,622
Current maturities of long-term debt 3,042 3,473
----------- -------------
Total current liabilities 451,910 449,655
----------- -------------
Long-term debt, net of current maturities 278,809 171,577
Senior unsecured notes 400,000 400,000
Senior subordinated notes 532,519 523,906
Convertible trust preferred securities
subject to mandatory redemption 55,250 55,250
Senior notes - derivative instrument
adjustment (22,968) (10,781)
Minority interests 5,122 4,864
Other noncurrent liabilities 190,454 141,031
Stockholders' investment:
Common stock - Class A 189 188
Additional paid-in capital 352,271 351,994
Treasury stock (1,781) (1,948)
Accumulated deficit (229,816) (91,528)
Accumulated other comprehensive income 133,524 81,001
----------- -------------
Total stockholders' investment 254,387 339,707
----------- -------------
$2,145,483 $2,075,209
=========== =============
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion