Collins & Aikman (NYSE:CKC)
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Collins & Aikman Announces Third Quarter Financial Results
TROY, Mich., Nov. 9 /PRNewswire-FirstCall/ -- Collins & Aikman Corporation
(C&A) (NYSE:CKC) today reported results for the third quarter and nine months
ended September 30, 2004. The company reported third quarter 2004 net sales of
$864.8 million. The company reported a loss of 67 cents per share in the third
quarter of 2004, which included after-tax charges for restructuring and
long-lived asset impairments and loss on early extinguishment of debt of $25.1
million (or 30 cents per share). In the comparable 2003 quarter, the company
had a loss of 38 cents per share, which included after-tax charges for
restructuring and long-lived asset impairments of $16.0 million (or 19 cents
per share).
Commenting on the company's third quarter operating results, David A. Stockman,
C&A Chairman and CEO, stated, "For the fifth consecutive quarter our EBITDA
performance, excluding restructuring and impairment charges, was up from the
prior year on a comparable basis. This was achieved despite the headwinds from
increased commodity costs and OEM production cuts. The savings from the
restructuring program that began in the third quarter of 2003 has generated
significant fixed cost reductions."
The third quarter 2004 pre-tax restructuring charge of $9.0 million included
costs associated with additional actions to right-size the company's overhead
structure, further reduce salaried headcount and streamline the senior
management team on a worldwide basis. This restructuring initiative is expected
to further reduce the company's cost structure by approximately $20 million
when fully implemented. During the third quarter of 2004, the company also
recognized $10.3 million of impairments of long-lived assets primarily related
to plant closings.
For the nine months ended September 30, 2004, the company reported sales of
$2,968 million compared to $2,971 million for the comparable period of 2003.
The company also reported a net loss of $108.6 million or $1.30 per share,
which included $61.7 million (or 74 cents per share) of after-tax charges for
restructuring and long-lived asset impairments and loss on early extinguishment
of debt. For the comparable 2003 period, the net loss was $47.6 million or 57
cents per share, which included after-tax charges for restructuring and
long-lived asset impairments of $33.1 million (or 40 cents per share).
Collins & Aikman's net debt, including outstandings under an off-balance sheet
accounts receivable facility, was $1,552 million at September 30, 2004. During
the third quarter of 2004, the company completed the refinancing of its senior
subordinated debt and senior credit facilities.
EBITDA Discussion
EBITDA was $48.7 million for the third quarter of 2004, which was reduced by
charges of $9.0 million for restructuring and $10.3 million for the impairment
of long-lived assets. The third quarter 2003 EBITDA was $41.9 million, which
was reduced by charges of $21.9 million for restructuring and $2.2 million for
the impairment of long-lived assets. EBITDA was $178.2 million for the nine
months ended September 30, 2004, which was reduced by charges of $28.9 million
for restructuring and $40.7 million for impairment of long-lived assets.
EBITDA for the nine months ended September 30, 2003 was $172.8 million, which
was reduced by charges of $26.8 million for restructuring and $21.1 million for
the impairment of long-lived assets. A reconciliation of our EBITDA, a
non-GAAP financial measure, to U.S. GAAP loss from continuing operations, our
most comparable GAAP figure, is set out in the attached EBITDA reconciliation
schedule. The company believes that EBITDA is a meaningful measure of
performance as it is commonly utilized in the industry to analyze operating
performance. EBITDA should not be construed as income from operations, net
income (loss) or cash flow from operating activities as determined by generally
accepted accounting principles. Other companies may calculate EBITDA
differently.
New Business Wins
During the third quarter of 2004, Collins & Aikman continued to achieve good
progress on increasing new business by adding $140 million of annual newly
booked business. This brings the last-twelve-months' total to over $900
million. These programs begin with model years incepting 2005 to 2007.
Business wins during the quarter included content on vehicles including Big 3
SUV's, a Big 3 compact car, Transplant SUV's and a European sedan. The content
on these vehicles includes products from the plastics and soft-trim divisions
of the company.
2004 Outlook
Primarily due to lower third and fourth quarter Big 3 NAFTA production, we now
expect our full year 2004 sales to be approximately $3,875 million, reflecting
a $25 million decline from plan in the third quarter and an approximate $100
million reduction in fourth quarter revenue. 2004 full year EBITDA before
restructuring and impairment charges is now projected at $335 million to $345
million, reflecting approximately $25 million in lower contribution margin on
reduced third and fourth quarter sales, with additional cost savings
off-setting expected commodity price increases. After approximately $150
million of depreciation and amortization charges, operating earnings before
restructuring and impairment charges are projected to be $185 million to $195
million. Earnings per share before restructuring and impairment charges and
loss on early extinguishment of debt is now projected at a loss of $0.60 to
$0.65 per common share. Full year 2004 capital spending levels are now
projected at approximately $155 million (net of equipment leasing).
The company will hold a briefing with automotive institutional investors and
security analysts, news media representatives and other interested parties,
including its security holders, at 10:00 a.m. EST on Tuesday, November 9, 2004
to discuss its third quarter results and other matters. To participate by
phone, please dial (973) 582-2745. The briefing will also be audio webcast, on
our website at: http://www.collinsaikman.com/investor/confcalls.html. A slide
presentation will also be used in conjunction with this teleconference and will
be available on the company's website.
Collins & Aikman Corporation, a Fortune 500 company, is a global leader in
cockpit modules and automotive floor and acoustic systems and a leading
supplier of instrument panels, automotive fabric, plastic-based trim and
convertible top systems. The company's current operations span the globe
through 16 countries, more than 100 facilities and nearly 24,000 employees who
are committed to achieving total excellence. Collins & Aikman's high-quality
products combine superior design, styling and manufacturing capabilities with
NVH "quiet" technologies that are among the most effective in the industry.
Information about Collins & Aikman is available on the Internet at
http://www.collinsaikman.com/ .
This news release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Actual results may differ
materially from the anticipated results because of certain risks and
uncertainties, including but not limited to conditions affecting the markets
and industry within which we operate, including declines in North American,
South American and European automobile and light truck builds, our dependence
on significant automotive customers, the level of competition in the automotive
supply industry and pricing pressures from automotive customers, fluctuations
in the productions of vehicles for which we are a supplier, changes in the
popularity of particular cars and interior trim programs, labor costs and
strikes at our major customers and at our facilities and risks associated with
doing business in foreign countries; the adequacy of our liquidity and capital
resources and required capital expenditures; our high debt levels and our
ability to obtain financing and service or refinance our debt, uncertainty
regarding our future operating results, prevailing levels of interest rates and
other factors detailed in the company's filings with the Securities and
Exchange Commission.
COLLINS & AIKMAN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
(In millions, except per share data)
Net sales $864.8 $902.2 $2,967.5 $2,970.8
Cost of goods sold 800.8 812.1 2,687.7 2,658.3
Gross profit 64.0 90.1 279.8 312.5
Selling, general and
administrative expenses 35.2 57.7 144.7 193.0
Restructuring charges 9.0 21.9 28.9 26.8
Impairment of long-lived
assets 10.3 2.2 40.7 21.1
Operating income 9.5 8.3 65.5 71.6
Net interest expense (46.9) (37.8) (127.4) (111.3)
Interest from subsidiary
preferred stock dividends (10.5) (9.2) (30.5) (22.4)
Interest from subsidiary
preferred stock accretion (0.6) (0.4) (1.6) (4.8)
Loss on sale of receivables (2.4) (1.8) (7.2) (4.5)
Loss on early extinguishment
of debt (18.8) -- (20.3) --
Other income (expense), net 0.7 0.2 (4.1) 23.9
Loss from continuing
operations before income taxes (69.0) (40.7) (125.6) (47.5)
Income tax benefit (expense) 13.4 8.6 17.0 (0.1)
Net (loss) income $(55.6) $(32.1) $(108.6) $(47.6)
Net loss per basic and
diluted common share data:
Total $(0.67) $(0.38) $(1.30) $(0.57)
Basic and diluted shares
outstanding 83.6 83.6 83.6 83.6
COLLINS & AIKMAN
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, December 31,
2004 2003
(Unaudited)
(In millions)
ASSETS
Current assets:
Cash and equivalents $3.5 $13.2
Accounts and other receivables, net 255.1 257.3
Inventories 178.8 169.4
Other 217.1 212.2
Total current assets 654.5 652.1
Property, plant and equipment, net 806.0 834.1
Deferred tax assets 206.0 178.1
Goodwill and other intangible assets, net 1,424.2 1,430.0
Other assets 106.0 96.9
Total assets $3,196.7 $3,191.2
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Short-term borrowings $25.3 $16.0
Current maturities of long-term debt and
lease obligations 8.5 31.5
Accounts payable 636.3 638.9
Accrued expenses 225.1 238.9
Total current liabilities 895.2 925.3
Long-term debt and lease obligations 1,361.2 1,237.7
Mandatorily redeemable preferred stock of
subsidiary 193.3 161.2
Other, including pensions and
post-retirement obligations 404.6 423.4
Minority interest 2.3 3.3
Stockholders' equity 340.1 440.3
Total liabilities and stockholders' equity $3,196.7 $3,191.2
COLLINS & AIKMAN
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three months Nine
ended months ended
September 30, September 30,
2004 2003 2004 2003
(In millions)
Operating activities
Net loss (income)
$(55.6) $(32.1) $(108.6) $(47.6)
Depreciation and amortization 39.2 33.6 112.7 101.2
Other adjustments to net loss 16.0 (0.8) 62.1 40.8
Changes in assets and
liabilities 15.3 (17.0) (75.1) (50.4)
Net cash flow provided by (used in)
operating activities 14.9 (16.3) (8.9) 44.0
Investing activities
Capital expenditures (69.2) (44.8) (151.3) (119.9)
Sales of property, plant and
equipment 21.9 11.9 60.4 15.2
Payments of acquisitions and
related costs, net of cash
acquired (3.2) (4.7) (3.2) (37.8)
Financing activities
Net increase (decrease) in
debt 26.3 36.8 92.7 38.2
Effect of exchange rate changes on
cash 1.8 (0.5) 0.6 1.5
Increase (decrease) in cash and
equivalents (7.5) (17.6) (9.7) (58.8)
Cash and equivalents at beginning
of period 11.0 40.1 13.2 81.3
Cash and equivalents at end of
period $3.5 $22.5 $3.5 $22.5
COLLINS & AIKMAN
SUPPLEMENTAL DATA - EBITDA RECONCILIATION SCHEDULE
(unaudited)
Three months Nine
ended months ended
September 30, September 30,
2004 2003 2004 2003
(In millions)
Net loss
$(55.6) $(32.1) $(108.6) $(47.6)
Income tax (benefit) expense (13.4) (8.6) (17.0) 0.1
Net interest expense 46.9 37.8 127.4 111.3
Loss on sale of receivables 2.4 1.8 7.2 4.5
Interest from subsidiary preferred
stock dividends and accretion 11.1 9.6 32.1 27.2
Loss on early extinguishment of
debt 18.8 -- 20.3 --
Other expense (income), net (0.7) (0.2) 4.1 (23.9)
Operating income $9.5 $8.3 $65.5 $71.6
Depreciation and amortization 39.2 33.6 112.7 101.2
EBITDA $48.7 $41.9 $178.2 $172.8
Memo:
Restructuring charges $9.0 $21.9 $28.9 $26.8
Impairment of long-lived assets 10.3 2.2 40.7 21.1
Total restructuring and impairment
charges $19.3 $24.1 $69.6 $47.9
This supplemental data presented above is a reconciliation of a certain
financial measure which is intended to facilitate analysis of Collins & Aikman
Corporation's business and operating performance.
EBITDA is defined as operating income plus depreciation and amortization.
Management considers EBITDA to be a key measure of performance as it is
commonly utilized in the industry to analyze operating performance. EBITDA
should not be construed as income from operations, net income (loss) or cash
flow from operating activities as determined by generally accepted accounting
principles. Other companies may calculate EBITDA differently.
DATASOURCE: Collins & Aikman Corporation
CONTACT: Bryce Koth, Chief Financial Officer, +1-248-824-1520, or
, or Robert A. Krause, Sr. VP - Finance & Admin., Head of
Investor Relations, +1-248-733-4355, or , both of
Collins & Aikman Corporation
Web site: http://www.collinsaikman.com/