SOUTHFIELD, Mich., Feb. 18 /PRNewswire-FirstCall/ -- Federal-Mogul
Corporation (OTC Bulletin Board: FDMLQ) today reported its financial results
for the three and twelve months ended December 31, 2003.
Financial Summary (in millions)
Three Months Ended Twelve Months Ended
December 31 December 31
2003 2002 2003 2002
Net sales $1,413 $1,239 $5,546 $5,184
Gross margin 269 235 1,087 1,021
Net loss from continuing
operations (121) (89) (186) (201)
Asset impairments (102) (32) (106) (63)
Asbestos charge (39) - (39) -
Cash flow from operating
activities 50 68 319 257
Financial Results for the Three Months Ended December 31, 2003
Federal-Mogul reported fourth quarter 2003 sales from continuing
operations of $1,413 million, an increase of $174 million when compared to
sales from continuing operations of $1,239 million for the same period in
2002. Sales from continuing operations were favorably impacted by $93 million
of foreign currency translation. The remaining increase was driven by higher
OEM and Aftermarket volumes reflecting vehicle production in both North
America and Europe and favorable market share performance in the North America
Aftermarket, offset by customer price reductions. During this same period,
gross margin increased $34 million or 14.5 percent. Gross margin was
favorably impacted by $15 million of foreign currency translation. The
remaining increase in gross margin was due to increased sales volumes and
productivity resulting from the Company's cost reduction and restructuring
activities, which offset price reductions and increased pension costs.
The Company reported a net loss from continuing operations of $121 million
during the fourth quarter of 2003, compared to a net loss from continuing
operations of $89 million for the same period in 2002. The fourth quarter
2003 net loss from continuing operations was driven by asset impairments of
$102 million and an asbestos charge of $39 million. Asset impairments were
recorded to adjust the carrying value of certain intangible and tangible
assets to their estimated fair values because of reductions in projected
future asset recoverability. The asbestos charge was recorded to adjust the
Company's asbestos-related insurance recoverable pursuant to the terms of a
settlement.
The Company continued to generate positive cash from operating activities
during the fourth quarter of 2003, providing $50 million for the period.
Financial Results for the Twelve Months Ended December 31, 2003
Federal-Mogul reported sales from continuing operations for the 12 months
ended December 31, 2003 of $5,546 million, an increase of $362 million when
compared to sales from continuing operations of $5,184 million for the same
period in 2002. Sales from continuing operations were favorably impacted by
$352 million of foreign currency translation and by favorable sales volumes,
which more than offset customer price reductions. Gross margin increased by
$66 million or 6.5 percent during 2003. Gross margin was favorably impacted
by $63 million of foreign currency translation. Productivity generated by the
Company's cost reduction and restructuring activities more than offset price
reductions and increased pension costs.
The Company reported a net loss from continuing operations of $186 million
during 2003, compared to a net loss from continuing operations of $201 million
in 2002. Included in the Company's net loss from continuing operations for
2003 are asset impairments of $106 million, which were recorded to adjust the
carrying value of certain intangible and tangible assets to their estimated
fair values because of reductions in projected future asset recoverability.
The Company's 2003 net loss from continuing operations was further impacted by
an asbestos charge of $39 million, which was recorded to adjust the Company's
asbestos-related insurance recoverable pursuant to the terms of a settlement.
Cash flow from operating activities for 2003 of $319 million represents an
increase of $62 million over 2002 results. The increase is attributable to
improved gross margin and reductions in working capital.
"We are pleased with the improvements we made in 2003, particularly the
growth in cash flow from operating activities. We continue to improve our
operating performance in a challenging environment and remain focused on the
delivery of superior quality and customer satisfaction," said Chip McClure,
chief executive officer and president.
About Federal-Mogul
Federal-Mogul is a global supplier of automotive components, sub-systems,
modules and systems serving the world's original equipment manufacturers and
the aftermarket. The company utilizes its engineering and materials
expertise, proprietary technology, manufacturing skill, distribution
flexibility and marketing power to deliver products, brands and services of
value to its customers. Federal-Mogul is focused on the globalization of its
teams, products and processes to bring greater opportunities for its customers
and employees, and value to its constituents.
Headquartered in Southfield, Michigan, Federal-Mogul was founded in
Detroit in 1899 and today employs more than 45,000 people in 24 countries. On
October 1, 2001, Federal-Mogul decided to separate its asbestos liabilities
from its true operating potential by voluntarily filing for financial
restructuring under Chapter 11 of the Bankruptcy Code in the United States and
Administration in the United Kingdom. For more information on Federal-Mogul,
visit the company's Web site at http://www.federal-mogul.com .
Forward-Looking Statements
Statements contained in this press release, which are not historical fact,
constitute "Forward-Looking Statements." Actual results may differ materially
due to numerous important factors that are described in Federal-Mogul's most
recent report to the SEC on Form 10-K, which may be revised or supplemented in
subsequent reports to the SEC on Forms 10-Q and 8-K. Such factors include,
among others, the cost and timing of implementing restructuring actions, the
results of the Chapter 11 and Administration proceedings, the Company's
ability to generate cost savings or manufacturing efficiencies to offset or
exceed contractually or competitively required price reductions or price
reductions to obtain new business, conditions in the automotive industry, and
certain global and regional economic conditions. Federal-Mogul does not
intend or assume any obligation to update any forward-looking statement to
reflect events or circumstances after the date of this press release.
F E D E R A L - M O G U L C O R P O R A T I O N
S T A T E M E N T S O F O P E R A T I O N S
(Millions of Dollars, Except Per Share Data)
(Unaudited)
Three Months Ended Year Ended
December 31 December 31
2003 2002 2003 2002
Net sales $1,412.9 $1,238.9 $5,546.0 $5,184.3
Cost of products sold 1,143.6 1,003.8 4,459.1 4,162.9
Gross margin 269.3 235.1 1,086.9 1,021.4
Selling, general and
administrative expenses 207.2 200.1 872.1 816.7
Restructuring charges, net 7.7 15.2 34.2 40.5
Adjustment of assets held for
sale and other long-lived
assets to fair value 101.5 32.4 106.0 62.9
Asbestos charge 38.9 - 38.9 -
Interest expense, net 23.6 33.1 98.2 123.4
Chapter 11 and Administration
related reorganization expenses 11.7 31.0 97.1 107.4
Equity in earnings of
unconsolidated subsidiaries (6.6) (3.8) (27.3) (19.8)
Other expense (income), net 4.7 (3.1) 0.7 13.3
Loss from Continuing Operations
Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle (119.4) (69.8) (133.0) (123.0)
Income tax expense 1.3 19.2 52.5 77.9
Loss From Continuing Operations
Before Cumulative Effect
of Change in Accounting
Principle (120.7) (89.0) (185.5) (200.9)
Loss from discontinued
operations, net of income taxes - (23.5) (4.0) (10.1)
Cumulative effect of change in
accounting principle,
net of applicable income tax
benefit - - - 1,417.9
Net Loss $(120.7) $(112.5) $(189.5) $(1,628.9)
Loss Per Common Share:
Basic and Diluted
Loss from continuing operations
before cumulative effect
of change in accounting
principle $(1.39) $(1.05) $(2.13) $(2.42)
Loss from discontinued
operations - (0.28) (0.04) (0.12)
Cumulative effect of change in
accounting principle, net of
applicable income tax benefit - - - 17.08
Loss Available for Common
Shareholders $(1.39) $(1.33) $(2.17) $(19.62)
Weighted Average Shares (Thousands)
Basic and Diluted 87,129 84,886 87,129 83,022
F E D E R A L - M O G U L C O R P O R A T I O N
B A L A N C E S H E E T S
(Millions of Dollars)
(Unaudited)
December 31 December 31
2003 2002
Assets
Cash and equivalents $472.4 $395.1
Accounts receivable 976.5 946.6
Inventories 834.4 800.1
Prepaid expenses and other current assets 257.5 217.3
Total current assets 2,540.8 2,359.1
Property, plant and equipment, net 2,404.8 2,273.0
Goodwill and indefinite-lived intangible
assets 1,517.1 1,565.2
Definite-lived intangible assets, net 348.0 351.6
Asbestos-related insurance recoverable 806.1 780.6
Prepaid pension costs 309.2 361.5
Other noncurrent assets 190.7 222.3
Total Assets $8,116.7 $7,913.3
Liabilities and Shareholders' Deficit
Short-term debt, including current
portion of long-term debt $14.8 $346.1
Accounts payable 332.3 318.9
Accrued liabilities 513.3 535.0
Other current liabilities 158.4 204.4
Total current liabilities 1,018.8 1,404.4
Liabilities subject to compromise 6,087.8 6,053.2
Long-term debt 331.2 14.3
Postemployment benefits 1,716.6 1,541.2
Deferred income taxes 70.4 52.4
Other accrued liabilities 214.4 205.7
Minority interest in consolidated subsidiaries 54.4 45.7
Shareholders' deficit:
Series C ESOP preferred stock 28.0 28.0
Common stock 435.6 435.6
Additional paid-in capital 2,060.5 2,060.5
Accumulated deficit (2,933.4) (2,743.9)
Accumulated other comprehensive loss (967.6) (1,183.7)
Other - (0.1)
Total Shareholders' Deficit (1,376.9) (1,403.6)
Total Liabilities and Shareholders'
Deficit $8,116.7 $7,913.3
F E D E R A L - M O G U L C O R P O R A T I O N
S T A T E M E N T S O F C A S H F L O W S
(Millions of Dollars)
(Unaudited)
Three Months Ended Year Ended
December 31 December 31
2003 2002 2003 2002
Cash Provided From (Used By)
Operating Activities
Net loss $(120.7) $(112.5) $(189.5) $(1,628.9)
Adjustments to reconcile net
loss to net cash
provided from (used by)
operating activities:
Cumulative effect of change
in accounting principle - - - 1,464.5
Depreciation and
amortization 79.6 70.2 307.1 277.1
Restructuring charges, net 7.7 15.3 36.0 43.3
Chapter 11 and
Administration related
reorganization expenses 11.7 31.0 97.1 107.4
Adjustment of assets held
for sale and other
long-lived assets to fair
value 101.5 43.0 106.0 70.2
Asbestos charge 38.9 - 38.9 -
Loss (gain) on sale of
businesses - 3.6 7.9 (1.1)
Change in postemployment
benefits, including
pensions (2.4) (21.5) 84.6 19.7
Deferred taxes (10.5) (10.5) 15.5 (31.5)
Decrease in accounts
receivable 38.4 111.2 50.1 44.1
(Increase) decrease in
inventories (0.5) 14.1 18.5 (46.8)
(Decrease) increase in
accounts payable (25.6) (9.8) (27.6) 6.4
Change in other assets and
other liabilities (26.6) 6.1 (60.8) 89.2
Payments against
restructuring reserves (17.6) (26.1) (76.7) (53.1)
Payments of Chapter 11 and
Administration related
reorganization expenses (24.0) (46.4) (88.1) (104.0)
Net Cash Provided From
Operating Activities 49.9 67.7 319.0 256.5
Cash Provided From (Used By)
Investing Activities
Expenditures for property,
plant and equipment and
other long-term assets (86.1) (111.0) (300.9) (339.1)
Net proceeds from sale of
businesses - 9.1 23.6 34.6
Net Cash Used By Investing
Activities (86.1) (101.9) (277.3) (304.5)
Cash Provided From (Used By)
Financing Activities
Proceeds from the issuance of
long-term debt - 4.1 1.2 6.6
Principal payments on long-
term debt (0.6) (0.3) (4.3) (2.4)
Borrowings on DIP credit
facility 20.0 75.0 125.5 75.0
Principal payments on DIP
credit facility (10.0) (0.3) (120.2) (10.3)
Increase (decrease) in short-
term debt 0.5 3.2 (16.6) 6.5
Net Cash Provided From (Used
By) Financing Activities 9.9 81.7 (14.4) 75.4
Effect of Foreign Currency
Exchange Rate Fluctuations On
Cash 25.9 8.3 50.0 20.8
(Decrease) increase in Cash
and Equivalents (0.4) 55.8 77.3 48.2
Cash and equivalents at
beginning of period 472.8 339.3 395.1 346.9
Cash and Equivalents at End
of Period $472.4 $395.1 $472.4 $395.1
SOURCE Federal-Mogul Corporation
 back to top
Related links:
http://www.federal-mogul.com
Company News On-Call:
http://www.prnewswire.com/comp/306225.html
CONTACT:
Media: Marie Remboulis, +1-248-354-9809, or
Investors: Janet Halpin, +1-248-354-8847, both of Federal-Mogul
Corporation
|
