Third Quarter Highlights FINDLAY, Ohio, Nov. 6
/PRNewswire-FirstCall/ -- Cooper Tire & Rubber Company
(NYSE:CTB) today reported net income of $30 million or 48 cents per
share for the quarter ended September 30, 2007. Income from
continuing operations increased $41 million from a loss of $24
million for the same period last year, resulting in earnings per
share of 29 cents from continuing operations. Income from
discontinued operations also contributed $12 million or 20 cents
per share for the quarter. The continued strong growth in earnings
was accompanied by a new record of $768 million in sales for the
quarter, an 11 percent increase over the same period last year.
(Logo: http://www.newscom.com/cgi-bin/prnh/20010404/COOPERLOGO )
Improved pricing in North America, and increased tire unit sales
for the International segment, contributed to the dramatically
improved results. The improvement was also supported by the ongoing
cost and profit improvement initiative implemented throughout the
year. As a result, operating profit improved to $33 million in the
third quarter of 2007, compared with an operating loss of $5
million in the third quarter of 2006. For the nine month period
ended September 30, 2007, the Company's net income improved to $69
million on $2.2 billion of sales. This is a $119 million
improvement in net income over the same period a year ago. North
American Tire Operations The Company's North American tire
operations reported sales of $576 million in the quarter, up 10
percent compared with $526 million in the third quarter of 2006.
This increase was driven by improved pricing, as well as increased
unit volumes in sport utility vehicle and broadline tires. North
American operations increased market share during the quarter
versus third quarter 2006. Cooper's unit shipments of light vehicle
replacement tires in the U.S. were up approximately 2 percent in
the quarter over the same period last year, exceeding the decrease
of less than 1 percent for the industry as reported by the Rubber
Manufacturers Association. North American Tire generated $26.9
million in operating profit from continuing operations in the
quarter, or an increase of $27.9 million compared with the third
quarter of 2006. This improvement was the result of favorable
pricing changes and the Company's cost savings and profit
improvement initiatives. The absence of production curtailments
experienced in 2006 contributed a total of $10 million toward the
improvement. Changes in last- in, first-out inventory valuations
also contributed $14 million to the third quarter results. These
were partially offset by unfavorable plant operations as the
Company continues to align its production to meet future market
needs and high demand. Raw material costs also negatively affected
the quarter's results by $6 million as compared with last year.
Discontinued operations relate to the segregation of operations of
Oliver Rubber Company, a subsidiary which was sold in October 2007,
tax benefits relating to release of a tax valuation allowance, and
charges to reflect changes in estimated obligations retained
following the sale of the Company's former automotive group. Due to
the impending sale of Oliver Rubber Company, the Company revised
its judgment regarding the realization of certain deferred tax
assets associated with tax attribute carryforwards in recognizing
the tax benefits. Amounts included in the third quarter were income
from the Oliver operations of $700,000, loss of $2.3 million from
former automotive operations, and $14 million due to the change in
the tax valuation allowance. For the nine-month period ended
September 30, 2007, North American operations generated $74 million
of operating profit on $1.6 billion of net sales. This is an
improvement of $103 million over operating profit during the same
period a year ago. International Tire Operations The Company's
International Tire Operations reported sales of $236 million in the
quarter, an increase of 22 percent compared with the third quarter
of 2006. Cooper Europe continued to improve its operating profit
while the segment's sales in Asia increased by 32 percent, driven
by a 28 percent increase in unit sales and favorable pricing
improvements over the same period last year. Operating profit for
the International segment was $7.2 million in the third quarter of
2007, compared with $3.1 million in the third quarter of 2006. The
segment increased operating profit on stronger sales and improved
pricing, partially offset by higher raw material costs. Production
continued to ramp up at the Cooper-Kenda joint venture plant in
China. Operating profit for the segment improved to $25 million for
the first nine months of the year. This is a $10.8 million increase
over the same period last year. Management Commentary Commenting on
the results, Cooper President and CEO Roy Armes said, "During the
third quarter we continued to deliver improved results to the top
and bottom lines. People throughout the organization have been
focused on executing the strategies that we previously identified
and are excited about what the future holds for the Company. We
aren't satisfied with where we are, but we are pleased with what
we've accomplished over the last year. North America had another
quarter of dramatically improved operating profit, and our
international segment has continued its impressive growth. This
global growth has been accompanied by an improved balance sheet as
our margins improve and we continue to focus on inventory
management. As we launch into the fourth quarter, we expect to
continue with our improvements, I have confidence that the
employees at Cooper will execute to our expectations. Outlook "The
story at Cooper during the first nine months of 2007 has been
continued improvement and positive momentum," Armes continued.
"There are always concerns or risks regarding raw material costs,
which are at high levels and trending upward, as well as economic
and industry effects. We believe that we will be able to continue
operational improvements in the fourth quarter and inventory levels
will remain at low levels throughout the rest of the year.
"Overall, we expect to build on the momentum we have established
during 2007. We are pleased with our results thus far, but are
determined to continue reviewing and improving on all aspects of
our company so that we can provide the greatest returns possible
for all of our stakeholders," Armes concluded. 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
http://www.coopertire.com/. Company Description Cooper 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 66 manufacturing, sales, distribution, technical and design
facilities within its family of companies located around the world.
For more information, visit Cooper Tire's web site at:
http://www.coopertire.com/. Forward-Looking Statements This 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, especially the continuation
of the global tensions and risks of further terrorist incidents
that currently exist; -- increased competitive activity, including
the inability to obtain and maintain price increases to offset
higher production or material costs; -- the failure to achieve
expected sales levels; -- consolidation among the Company's
competitors and customers; -- technology advancements; --
fluctuations in raw material and energy prices, including those of
steel, crude petroleum and natural gas and the unavailability of
such raw materials or energy sources; -- changes in interest and
foreign exchange rates; -- increases in pension expense 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; -- government regulatory
initiatives, including the proposed and final regulations under the
TREAD Act; -- changes in the Company's customer relationships,
including loss of particular business for competitive or other
reasons; -- the impact of labor problems, including a strike
brought against the Company or against one or more of its large
customers; -- litigation brought against the Company; -- an adverse
change in the Company's credit ratings, which could increase its
borrowing costs and/or hamper its access to the credit markets; --
the inability of the Company to execute its cost reduction/Asian
strategies; -- the failure of the Company's suppliers to timely
deliver products in accordance with contract specifications; -- the
impact of reductions in the insurance program covering the
principal risks to the Company, and other unanticipated events and
conditions; and -- the failure of the Company to achieve the full
cost reduction and profit improvement targets set forth in
presentations made by senior management and filed on Forms 8-K on
September 7, 2006, October 31, 2006 and April 5, 2007. 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 ("SEC"). Cooper Tire & Rubber Company Consolidated
Statements of Income (Dollar amounts in thousands except per share
amounts) Quarter Ended Nine Months Ended September 30 September 30
2006 2007 2006 2007 Net sales $689,902 $767,710 $1,860,119
$2,167,445 Cost of products sold 638,859 691,627 1,738,634
1,945,161 Gross profit 51,043 76,083 121,485 222,284 Selling,
general and administrative 54,790 42,559 146,705 127,390
Restructuring charges 1,315 776 1,315 3,515 Operating profit (loss)
(5,062) 32,748 (26,535) 91,379 Interest expense 12,964 12,351
35,360 37,027 Interest income (2,064) (4,506) (7,132) (12,294) Debt
extinguishment - 1,541 (77) 1,541 Dividend from unconsolidated
subsidiary - - (4,286) (2,007) Other income - net (1,529) (4,762)
(1,416) (11,015) Income (loss) from continuing operations before
income taxes (14,433) 28,124 (48,984) 78,127 Income tax benefit
(expense) (7,610) (6,861) 7,829 (18,417) Income (loss) from
continuing operations before noncontrolling shareholders' interests
(22,043) 21,263 (41,155) 59,710 Noncontrolling shareholders'
interests (1,483) (3,418) (4,953) (6,745) Income (loss) from
continuing operations (23,526) 17,845 (46,108) 52,965 Income (loss)
from discontinued operations, net of income taxes (1,467) 12,359
(4,770) 15,603 Net income (loss) $(24,993) $30,204 $(50,878)
$68,568 Basic earnings (loss) per share Income (loss) from
continuing operations $(0.38) $0.29 $(0.75) $0.85 Income (loss)
from discontinued operations $(0.02) $0.20 $(0.08) $0.25 Net income
(loss) $(0.41)* $0.48 * $(0.83) $1.11 * Diluted earnings (loss) per
share Income (loss) from continuing operations $(0.38) $0.28
$(0.75) $0.84 Income (loss) from discontinued operations $(0.02)
$0.19 $(0.08) $0.25 Net income (loss) $(0.41)* $0.48 * $(0.83)
$1.09 Weighted average shares outstanding Basic 61,339 62,603
61,336 62,023 Diluted 61,339 63,519 61,336 62,807 Depreciation
$32,895 $32,512 $94,104 $97,046 Amortization $1,199 $1,252 $3,551
$4,523 Capital expenditures $49,760 $26,189 $123,181 $103,771
Segment information Net sales North American Tire $525,788 $576,276
$1,433,937 $1,624,546 International Tire 192,659 235,860 503,636
653,317 Eliminations (28,545) (44,426) (77,454) (110,418) Segment
profit (loss) North American Tire (1,026) 26,948 (28,075) 74,436
International Tire 3,137 7,179 14,262 25,064 Eliminations 566 731
(1,105) 319 Unallocated corporate charges (7,739) (2,110) (11,617)
(8,440) CONSOLIDATED BALANCE SHEETS September 30 2006 2007 Assets
Current assets: Cash and cash equivalents $105,137 $301,839
Short-term investments - 50,087 Accounts receivable 449,130 399,596
Inventories 409,132 304,457 Other current assets 31,892 151,751
Deferred income taxes 12,971 - Assets of discontinued operations
62,236 52,145 1,070,498 1,259,875 Property, plant and equipment
968,364 984,487 Goodwill 57,133 24,439 Restricted cash 13,243 7,673
Intangibles and other assets 353,543 103,797 $2,462,781 $2,380,271
Liabilities and Stockholders' Equity Current liabilities: Notes
payable $110,850 $112,980 Payable to noncontrolling owner 54,159
7,517 Trade payables and accrued liabilities 389,167 419,627 Income
taxes 1,808 4,301 Liabilities of discontinued operations 14,430
16,690 570,414 561,115 Long-term debt 513,013 495,076
Postretirement benefits other than pensions 190,503 265,433 Other
long-term liabilities 228,447 212,646 Long-term liabilities of
discontinued operations 8,827 10,482 Deferred income taxes 12,971 -
Noncontrolling shareholders' interests 60,578 83,183 Stockholders'
equity 878,028 752,336 $2,462,781 $2,380,271 * Amounts do not add
due to rounding. These interim statements are subject to year-end
adjustments. Certain amounts from 2006 have been reclassed to
conform to 2007 presentation.
http://www.newscom.com/cgi-bin/prnh/20010404/COOPERLOGO
http://photoarchive.ap.org/ DATASOURCE: Cooper Tire & Rubber
Company CONTACT: Curtis Schneekloth of Cooper Tire & Rubber
Company, +1-419-427- 4768 Web site:
http://www.coopertireandrubber.com/
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