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Press release from PR Newswire

Cooper Tire & Rubber Company Reports Continued Improved Results

Wednesday, May 05, 2010

Cooper Tire & Rubber Company Reports Continued Improved Results07:35 EDT Wednesday, May 05, 2010- Net Sales of $754 million an increase of 32 percent - Operating profit of $33 million an increase of $49 million - Net income (attributable to Cooper Tire) of $12 million - Cash and cash equivalents of $338 millionFINDLAY, Ohio, May 5 /PRNewswire-FirstCall/ -- Cooper Tire & Rubber Company (NYSE: CTB) today reported net income of $12 million for the quarter ended March 31, 2010, a $33 million improvement from the same period in 2009. �Net sales were $754 million, a substantial increase of $183 million, or 32 percent, from the prior year. Operating profit was $33 million for the quarter, a $49 million improvement compared with a loss of $16 million in 2009. The Company reported net income of 19 cents per share during the quarter on a diluted basis. �(Logo: )Results during the quarter included restructuring charges of $8 million, related to the closure of the Albany, Ga., facility, a decrease of $7 million from the first quarter of 2009. Stronger results for the quarter when compared to the prior year were driven by improved volumes and increased utilization of manufacturing capacity. �Partially offsetting the positives were a negative net price and mix to raw materials relationship and higher products liability charges.North American Tire OperationsNorth American Tire Operations sales were $532 million during the first quarter, up significantly from 2009 net sales of $439 million. �Total light vehicle tire shipments for Cooper's North America segment in the United States increased by 19 percent, outpacing the total industry shipment increase of 13 percent reported by the Rubber Manufacturers Association. �This improvement occurred across nearly all product segments as the Company was able to increase market share.Operating profit of $14 million for the first quarter rose by $17 million when compared with the same period in 2009. �Excluding restructuring charges, which dropped by $7 million, the improvement from the prior year was $10 million. Manufacturing operations improved by $29 million, primarily as a result of better capacity utilization. �Higher volumes improved results by $22 million. �Favorable pricing and mix contributed $8 million. �Other factors including lower selling, general and administrative costs contributed $4 million. Partially offsetting these impacts were a $29 million increase in raw material costs and charges to products liability that reduced profits by $24 million. �The higher products liability costs primarily related to increasing reserves after an adverse verdict was issued for a single case which the Company intends to appeal.International Tire OperationsThe Company's International Tire Operations reported $294 million in sales, a dramatic increase of $127 million, or 77 percent, compared with the prior year same quarter. �This result reflected volume increases partially offset by negative price and mix. �Asian operations increased sales volumes by 102 percent, while European operations reported an increase in unit sales of 20 percent.The segment's operating profit increased to $23 million for the first quarter, an improvement of $25 million from the prior year. This increase resulted from improved volumes, which contributed $20 million, positive price and mix of $9 million, and better production utilization and manufacturing costs of $6 million. These positives were partially offset by higher raw material costs of $11 million.Management Commentary and OutlookRoy Armes, Chief Executive Officer, commented, "We were extremely pleased with the improved volumes and manufacturing performance achieved during the first quarter of 2010. �The increases in volume were the result of better industry conditions combined with successfully positioning the Company for growth. �The momentum also continued in our operations where our efforts to be more cost competitive were again visible on the bottom line. �While our outlook remains cautiously optimistic, we recognize that raw material costs continue to be volatile and have a significant impact on our results. �We expect that raw materials will continue to increase and remain elevated in the near future. �As a result we announced a price increase in North America on light vehicle tires of up to 7.5 percent, effective June 1, 2010. �I am very proud of the efforts and accomplishments of the Cooper team during this period. �Our focus remains on prudent management of our critical resources to drive shareholder value. "Cooper's management team will discuss the financial and operating results for the quarter in a conference call today at 11 a.m. Eastern time. �Interested parties may access the audio portion of that conference call on the investor relations page of the Company's Web site at Cooper Tire & Rubber CompanyCooper Tire & Rubber Company is a global company that specializes in the design, manufacture, marketing and sales of passenger car, light truck, medium truck tires and subsidiaries that specialize in motorcycle and racing tires. With headquarters in Findlay, Ohio, Cooper Tire has manufacturing, sales, distribution, technical and design facilities within its family of companies located in 10 countries around the world. �For more information, visit Cooper Tire's Web site at StatementsThis report contains what the Company believes are "forward-looking statements," as that term is defined under the Private Securities Litigation Reform Act of 1995, regarding projections, expectations or matters that the Company anticipates may happen with respect to the future performance of the industries in which the Company operates, the economies of the United States and other countries, or the performance of the Company itself, which involve uncertainty and risk. Such "forward-looking statements" are generally, though not always, preceded by words such as "anticipates," "expects," "believes," "projects," "intends," "plans," "estimates," and similar terms that connote a view to the future and are not merely recitations of historical fact. �Such statements are made solely on the basis of the Company's current views and perceptions of future events, and there can be no assurance that such statements will prove to be true. It is possible that actual results may differ materially from those projections or expectations due to a variety of factors, including but not limited to:changes in economic and business conditions in the world;the failure to achieve expected sales levels;consolidation among the Company's competitors and customers;technology advancements;the failure of the Company's suppliers to timely deliver products in accordance with contract specifications;changes in interest and foreign exchange rates;changes in the Company's customer relationships, including loss of particular business for competitive or other reasons;the impact of reductions in the insurance program covering the principal risks to the Company, and other unanticipated events and conditions;volatility in raw material and energy prices, including those of steel, petroleum based products and natural gas and the unavailability of such raw materials or energy sources;the inability to obtain and maintain price increases to offset higher production or material costs;increased competitive activity including actions by larger competitors or low-cost producers;the inability to recover the costs to develop and test new products or processes;the risks associated with doing business outside of the United States;changes in pension expense and/or funding resulting from investment performance of the Company's pension plan assets and changes in discount rate, salary increase rate, and expected return on plan assets assumptions, or changes to related accounting regulations;government regulatory initiatives;the impact of labor problems, including a strike brought against the Company or against one or more of its large customers or suppliers;litigation brought against the Company including products liability;an adverse change in the Company's credit ratings, which could increase its borrowing costs and/or hamper its access to the credit markets;changes to the credit markets and/or access to those markets;inaccurate assumptions used in developing the Company's strategic plan or the inability or failure to successfully implement the Company's strategic plan;inability to adequately protect the Company's intellectual property rights;failure to successfully integrate acquisitions into operations or their related financings may impact liquidity and capital resources; inability to use deferred tax assets;recent changes to tariffs on certain tires imported into the United States from the People's Republic of China; and changes in the Company's relationship with joint venture partners.It is not possible to foresee or identify all such factors. �Any forward-looking statements in this report are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances.Prospective investors are cautioned that any such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected.The Company makes no commitment to update any forward-looking statement included herein or to disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement. Further information covering issues that could materially affect financial performance is contained in the Company's periodic filings with the U. S. Securities and Exchange Commission.(Statements of income and balance sheets follow...)Cooper Tire & Rubber CompanyConsolidated Statements of Income(Dollar amounts in thousands except per share amounts)Quarter EndedMarch 3120092010Net sales$ � 571,408$ � 754,443Cost of products sold521,139669,271Gross profit50,26985,172Selling, general and administrative45,10644,605Restructuring charges14,3527,612Settlement of retiree medical case7,050-Operating profit (loss)(16,239)32,955Interest expense12,6558,730Interest income(1,375)(1,213)Other expense (income)(823)(237)Income (loss) from continuing operations before income taxes(26,696)25,675Income tax expense (benefits)(3,773)7,743Income (loss) from continuing operations (22,923)17,932Income (loss) from discontinued operations, net of income taxes(364)(760)Net income (loss)(23,287)17,172Net income (loss) attributable to noncontrolling shareholders' interests(2,020)5,596Net income (loss) attributable to �Cooper Tire & Rubber Company$ � (21,267)$ � � 11,576Basic earnings per shareIncome (loss) from continuing operations attributable to Cooper Tire & Rubber Company$ � � � (0.35)$ � � � � 0.20Income (loss) from discontinued operations(0.01)(0.01) � Net income (loss) attributable to Cooper Tire & Rubber Company$ � � � (0.36)$ � � � � 0.19Diluted earnings per shareIncome (loss) from continuing operations attributable to Cooper Tire & Rubber Company$ � � � (0.35)$ � � � � 0.20Income (loss) from discontinued operations(0.01)(0.01) � Net income (loss) attributable to Cooper Tire & Rubber Company$ � � � (0.36)$ � � � � 0.19Weighted average shares outstanding � Basic58,94160,914 � Diluted58,94162,294Depreciation$30,551$29,859Amortization $566$501Capital expenditures$16,917$15,464Segment informationNet salesNorth American Tire$439,317$531,717International Tire166,212293,557Eliminations(34,121)(70,831)Segment profit (loss)North American Tire(3,620)13,602International Tire(2,821)22,550Eliminations(274)(509)Unallocated corporate charges (9,524)(2,688)******************************CONSOLIDATED BALANCE SHEETSMarch 3120092010AssetsCurrent assets:Cash and cash equivalents$232,693$337,500Accounts receivable351,447458,968Inventories400,505360,949Other current assets60,28439,165Total current assets1,044,9291,196,582Net property, plant and equipment886,644833,637Restricted cash2,3082,172Intangibles and other assets92,006110,501$2,025,887$2,142,892Liabilities and Stockholders' EquityCurrent liabilities:Notes payable$163,311$145,088Trade payables and accrued liabilities395,007507,321Income taxes2,1055,318Liabilities of discontinued operations1,1741,052Current portion of long term debt140,7414,995Total current liabilities702,338663,774Long-term debt328,389327,441Postretirement benefits other than pensions244,711246,624Pension benefits265,787265,963Other long-term liabilities123,596174,072Long-term liabilities of discontinued operations7,8055,888Stockholders' equity353,261459,130$2,025,887$2,142,892These interim statements are subject to year-end adjustments.SOURCE Cooper Tire & Rubber CompanyFor further information: Curtis Schneekloth, +1-419-427-4768