Exhibit 99.1

 

 

 

 

FOR IMMEDIATE RELEASE

 

Tower International Reports Fourth Quarter Results and Provides Outlook for 2018

 

LIVONIA, Mich., February 13, 2018 – Tower International, Inc. [NYSE: TOWR], a leading global manufacturer of engineered automotive structural metal components and assemblies, today announced fourth quarter 2017 results and provided its business outlook for 2018.

 

·Revenue for the fourth quarter was $538 million compared with $462 million in the fourth quarter of 2016 representing a 16 percent increase.

 

·Net income was negative $3.9 million or $(0.19) per share, compared with $16.9 million or $0.81 per share in the fourth quarter last year. As detailed below, this year’s fourth quarter included a non-cash charge of $27.2 million related to U.S. tax reform legislation as well as other certain items that, in aggregate, adversely impacted results by $28.4 million. Excluding these items and comparable items in the fourth quarter of 2016, adjusted earnings per share amounted to $1.17, an increase of 15 percent from the $1.02 reported a year ago.

 

·Adjusted EBITDA for the quarter was $61.1 million slightly ahead of the Company’s outlook and up 9 percent from $56.2 million a year ago.

 

·For the quarter, net cash provided by continuing operating activities was $129 million. Cash disbursed for purchases of equipment totaled $28 million resulting in Free Cash Flow of $101 million.

 

·Tower also provided its three year net new business backlog of $350 million for 2018 through 2020. This represents an increase of more than 20 percent from the company’s previous three year backlog of $290 million provided last year.

 

·Full year 2018 outlook includes:

 

oRevenue growth of 7 percent to $2.14 billion, reflecting primarily net new business of $125 million and favorable foreign exchange;
oAdjusted EBITDA of $230 million;
oExpansion of Adjusted EBITDA Margin to 10.7 percent;
oDiluted Adjusted EPS of $4.10 per share – up 9 percent from 2017; and
oFree Cash Flow of $50 million, with strong free cash flow in the second half of the year more than offsetting the expected cash outflow in the first half of the year.

 

·The Company’s outlook for first quarter 2018 includes revenue of $550 million, Adjusted EBITDA of $53 million and Diluted Adjusted Earnings Per Share of 80 cents.

 

 

 

 

“Tower delivered solid financial results in the fourth quarter as revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow were all above our previous outlook”, said CEO Jim Gouin.  “The Tower team did a great job throughout 2017, remaining focused on safety and quality, while meeting our customers’ requirements and delivering impressive financial results.  We continue to invest in Tower’s growth, and are benefitting from the emerging industry trends, as demonstrated by the $350 million of net new business backlog.  This new business coupled with our exposure to trucks and SUVs in North America position Tower for continued growth in the coming years at a faster pace than the industry.”

 

Tower to Host Conference Call Today at 11 a.m. EST

Tower will discuss its fourth quarter 2017 results and other related matters in a conference call at 11 a.m. EST today. Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company’s website or by telephone. The slide presentation and webcast can be accessed via the investor relations portion of Tower’s website www.towerinternational.com. To dial into the conference call, domestic callers should dial (866) 393-4576, international callers should dial (706) 679-1462. An audio recording of the call will be available approximately two hours after the completion of the call. To access this recording, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and reference Conference I.D. #6286489. A webcast replay will also be available and may be accessed via Tower’s website.

 

Non-GAAP Financial Measures

 

This press release includes the following non-GAAP financial measures: “adjusted EBITDA”, “adjusted EBITDA margin”, “adjusted earnings per share”, and “free cash flow”. We define adjusted EBITDA as net income/(loss) before interest, taxes, depreciation, amortization, restructuring items and other adjustments described in the reconciliations provided in this press release. Adjusted EBITDA margin represents Adjusted EBITDA divided by revenues, Adjusted earnings per share exclude certain income and expense items described in the reconciliation provided in this press release. Free cash flow is defined as cash provided by continuing operating activities less cash disbursed for purchases of property, plant and equipment. We use adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, and free cash flow as supplements to information provided in accordance with generally accepted accounting principles (“GAAP”) in evaluating our business and they are included in this press release because they are principal factors upon which our management assesses performance and in certain instances in measuring performance for compensation purposes. Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are set forth below. The non-GAAP measures presented above are not measures of performance under GAAP. These measures should not be considered as alternatives for the most directly comparable financial measures calculated in accordance with GAAP. Other companies in our industry may define these non-GAAP measures differently than we do and, as a result, these non-GAAP measures may not be comparable to similarly titled measures used by other companies in our industry; and certain of our non-GAAP financial measures exclude financial information that some may consider important in evaluating our performance. Given the inherent uncertainty regarding mark to market adjustments of financial instruments, potential gain or loss on our Discontinued Operations, potential restructuring expenses, and expenses related to our long-term incentive compensation programs in any future period, a reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is not feasible. Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors. The magnitude of these items, however, may be significant.

 

 

 

 

 

Forward-Looking Statements and Risk Factors

 

This press release contains statements which constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company’s projected full year earnings, cash flow and revenues, net new business backlog, business growth, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The forward-looking statements can be identified by words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “project,” “target,” and other similar expressions. Forward-looking statements are made as of the date of this press release and are based upon management’s current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, as well as risk factors described in our reports filed with the SEC, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements:

 

·global automobile production volumes;
·the financial condition of our customers and suppliers;
·our ability to make scheduled payments of principal or interest on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;
·our ability to refinance our indebtedness;
·risks associated with our non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions;
·any increase in the expense and funding requirements of our pension and other postretirement benefits;
·our customers’ ability to obtain equity and debt financing for their businesses;
·our dependence on our largest customers;
·pricing pressure from our customers;
·work stoppages or other labor issues affecting us or our customers or suppliers;
·our ability to integrate acquired businesses;
·our ability to take advantage of emerging secular trends;
·risks associated with business divestitures; and

·costs or liabilities relating to environmental and safety regulations.

 

We do not assume any obligation to update or revise the forward-looking statements contained in this press release.

 

Contact:

Derek Fiebig

Executive Director, Investor & External Relations

(248) 675-6457

fiebig.derek@towerinternational.com

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except share and per share amounts - unaudited)

 

   Three Months Ended Dec. 31,   Year Ended Dec. 31, 
   2017   2016   2017   2016 
                 
Revenues  $538,159   $462,274   $1,988,046   $1,913,641 
Cost of sales   470,753    403,332    1,743,511    1,675,232 
Gross profit   67,406    58,942    244,535    238,409 
Selling, general, and administrative expenses   30,162    35,427    118,061    131,552 
Amortization expense   110    105    443    449 
Restructuring and asset impairment charges, net   2,356    2,607    10,735    5,389 
  Operating income   34,778    20,803    115,296    101,019 
Interest expense   5,802    3,451    13,735    21,618 
Interest income   133    506    330    614 
Other expense   -    -    575    6,481 
Income before provision for income taxes and income / (loss) from discontinued operations   29,109    17,858    101,316    73,534 
Provision  for income taxes   33,264    3,476    55,434    17,246 
Income  / (loss) from continuing operations   (4,155)   14,382    45,882    56,288 
Income / (loss) from discontinued operations, net of tax   288    2,991    1,853    (17,008)
Net income / (loss)   (3,867)   17,373    47,735    39,280 
Less: Net income attributable to the noncontrolling interests   -    488    110    701 
Net income / (loss) attributable to Tower International, Inc.  $(3,867)  $16,885   $47,625   $38,579 
                     
Weighted average basic shares outstanding   20,536,983    20,345,078    20,498,668    20,864,321 
Weighted average diluted shares outstanding   20,536,983    20,775,024    20,828,888    21,222,183 
                     
Basic income per share attributable to Tower International, Inc.:                    
Income / (loss) per share from continuing operations  $(0.20)  $0.68   $2.23   $2.66 
Income / (loss) per share from discontinued operations   0.01    0.15    0.09    (0.82)
Income / (loss) per share   (0.19)   0.83    2.32    1.85 
                     
Diluted income per share attributable to Tower International, Inc.:                    
Income / (loss) per share from continuing operations  $(0.20)  $0.67   $2.20   $2.62 
Income / (loss) per share from discontinued operations   0.01    0.14    0.09    (0.80)
Income / (loss) per share   (0.19)   0.81    2.29    1.82 
                     
Dividends declared per share  $0.12   $0.11   $0.45   $0.41 

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands - unaudited)

 

   Dec. 31,   Dec. 31, 
   2017   2016 
         
ASSETS        
Cash and cash equivalents  $123,688   $62,788 
Accounts receivable, net of allowance of $1,385 and $961   239,319    178,251 
Inventories   78,745    71,710 
Assets held for sale   44,250    102,252 
Prepaid tooling, notes receivable, and other   78,481    103,023 
Total current assets   564,483    518,024 
           
Property, plant, and equipment, net   535,272    465,569 
Goodwill   63,665    56,383 
Deferred tax asset   83,035    112,645 
Other assets, net   13,642    9,902 
Total assets  $1,260,097   $1,162,523 
           
LIABILITIES AND EQUITY          
Short-term debt and current maturities of capital lease obligations  $42,048   $34,211 
Accounts payable   323,271    258,129 
Accrued liabilities   113,949    114,079 
Liabilities held for sale   17,336    53,310 
Total current liabilities   496,604    459,729 
           
Long-term debt, net of current maturities   344,738    351,232 
Obligations under capital leases, net of current maturities   -    4,863 
Deferred tax liability   4,807    5,594 
Pension liability   47,813    61,627 
Other non-current liabilities   96,263    65,539 
Total non-current liabilities   493,621    488,855 
Total liabilities   990,225    948,584 
           
           
Stockholders' equity:          
Tower International, Inc.'s stockholders' equity          
Common stock  $223   $221 
Additional paid in capital   344,153    340,623 
Treasury stock   (36,408)   (35,645)
Accumulated earnings / (deficit)   29,712    (14,021)
Accumulated other comprehensive loss   (67,808)   (83,383)
     Total Tower International, Inc.'s stockholders' equity   269,872    207,795 
Noncontrolling interests in subsidiaries   -    6,144 
     Total stockholders' equity   269,872    213,939 
           
Total liabilities and stockholders' equity  $1,260,097   $1,162,523 

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands - unaudited)

 

   Three Months Ended Dec. 31,   Year Ended Dec. 31, 
   2017   2016   2017   2016 
                 
OPERATING ACTIVITIES:                    
Net income / (loss)  $(3,867)  $17,373   $47,735   $39,280 
Less: Income / (loss) from discontinued operations, net of tax   288    2,991    1,853    (17,008)
Income / (loss) from continuing operations   (4,155)   14,382    45,882    56,288 
                     
Adjustments required to reconcile income / (loss) from continuing operations to net cash provided by continuing operating activities:                    
Deferred income tax provision  $30,759   $3,691   $46,126   $9,546 
Depreciation and amortization   22,431    19,086    77,284    72,469 
Non-cash share-based compensation   562    910    2,219    2,455 
Pension income, net of contributions   (1,606)   5,852    (11,512)   (1,999)
Change in working capital and other operating items   80,835    61,412    4,740    (1,051)
Net cash provided by continuing operating activities  $128,826   $105,333   $164,739   $137,708 
                     
INVESTING ACTIVITIES:                    
Cash disbursed for purchases of property, plant, and equipment, net  $(27,466)  $(42,767)  $(104,153)  $(116,283)
Proceeds from disposition of joint venture, net   -    4,546    15,944    4,546 
Net cash used in continuing investing activities  $(27,466)  $(38,221)  $(88,209)  $(111,737)
                     
FINANCING ACTIVITIES:                    
Proceeds from borrowings  $63,962   $123,081   $599,888   $581,833 
Repayments of  borrowings   (82,687)   (169,482)   (604,716)   (587,146)
Repayments on Term Loan Credit Facility   -    -    -    (50,000)
Original issuance discount   -    -    (1,808)   - 
Debt issuance costs   -    -    (4,747)   - 
Dividend payment to Tower stockholders   (2,465)   (2,236)   (9,221)   (8,570)
Proceeds from stock options exercised   219    237    1,313    305 
Purchase of treasury stock   -    (1,045)   (763)   (19,578)
Net cash used in continuing financing activities  $(20,971)  $(49,445)  $(20,054)  $(83,156)
                     
Discontinued operations:                    
Net cash from discontinued operating activities  $2,790   $2,318   $2,468   $6,032 
Net cash used in discontinued investing activities   (1,340)   (1,479)   (2,591)   (3,589)
Net cash from / (used in) discontinued financing activities   (846)   (542)   291    (3,441)
Net cash from / (used in) discontinued operations  $604   $297   $168   $(998)
                     
Effect of exchange rate changes on continuing cash and cash equivalents  $(902)  $(2,392)  $4,256   $(623)
                     
NET CHANGE IN CASH AND CASH EQUIVALENTS  $80,091   $15,572   $60,900   $(58,806)
                     
CASH AND CASH EQUIVALENTS:                    
Beginning of period  $43,597   $47,216   $62,788   $121,594 
                     
End of period  $123,688   $62,788   $123,688   $62,788 

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
SEGMENT DATA AND NON-GAAP FINANCIAL MEASURE RECONCILIATIONS
(Amounts in thousands - unaudited)

 

Segment Data  Three Months Ended Dec. 31, 
   2017   2016 
   Revenues  

Adjusted

EBITDA

   Revenues  

Adjusted

EBITDA

 
Europe  $197,893   $12,515   $155,243   $18,007 
North America   340,266    48,579    307,031    38,238 
Consolidated  $538,159   $61,094   $462,274   $56,245 

 

 

   Year Ended Dec. 31, 
   2017   2016 
   Revenues  

Adjusted

EBITDA

   Revenues  

Adjusted

EBITDA

 
Europe  $664,849   $45,518   $639,307   $55,314 
North America   1,323,197    164,218    1,274,334    146,408 
Consolidated  $1,988,046   $209,736   $1,913,641   $201,722 

 

 

Adjusted EBITDA Reconciliation  Three Months Ended Dec. 31,   Year Ended Dec. 31, 
   2017   2016   2017   2016 
Net income / (loss) attributable to Tower International, Inc.  $(3,867)  $16,885   $47,625   $38,579 
Restructuring and asset impairment charges, net   2,356    2,607    10,735    5,389 
Depreciation and amortization   22,431    19,086    77,284    72,469 
Acquisition costs and other   151    104    425    422 
Long-term compensation expense   1,378    5,315    5,996    14,093 
Pension actuarial loss   -    8,330    -    8,330 
Interest expense, net   5,669    2,945    13,405    21,004 
Other expense   -    -    575    6,481 
Provision for income taxes   33,264    3,476    55,434    17,246 
(Income) / loss from discontinued operations, net of tax   (288)   (2,991)   (1,853)   17,008 
Net income attributable to noncontrolling interests   -    488    110    701 
Adjusted EBITDA  $61,094   $56,245   $209,736   $201,722 

 

 

Free Cash Flow Reconciliation  Three Months Ended Dec. 31,   Year Ended Dec. 31, 
   2017   2016   2017   2016 
Net cash provided by continuing operating activities  $128,826   $105,333   $164,739   $137,708 
Cash disbursed for purchases of PP&E   (27,466)   (42,767)   (104,153)   (116,283)
Free cash flow  $101,360   $62,566   $60,586   $21,425 

 

 

Net Debt Reconciliation  Dec. 31,   Dec. 31,         
   2017   2016         
Short-term debt and current maturities of capital lease obligations  $42,048   $34,211         
Long-term debt, net of current maturities   352,886    357,298           
Debt issue costs   (8,148)   (6,066)          
Obligations under capital leases, net of current maturities   -    4,863           
Total debt   386,786    390,306           
Less: Cash and cash equivalents   (123,688)   (62,788)          
Net debt  $263,098   $327,518           

 

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CERTAIN ITEMS INCLUDED IN NET INCOME
(Amounts in thousands, except per share amounts - unaudited)

 

   After tax   Before tax 
   Three Months Ended   Three Months Ended 
   Dec. 31,   Dec. 31, 
   2017   2016   2017   2016 
                 
Income / (expense) items included in net income, net of tax:                    
 Cost of sales                    
 Pension actuarial loss  $-   $(5,415)  $-   $(8,330)
Selling, general, and administrative expenses                    
One-time CEO compensation awards   -    (1,375)   -    (2,115)
Restructuring and asset impairment charges, net                    
One-time restructuring actions   (1,107)   -    (1,658)   - 
Lease buyout of previously closed facility   -    (1,186)   -    (1,824)
Interest expense                    
Mark-to-market gain / (loss) on derivative financial instruments   (393)   653    (634)   1,005 
Provision for income taxes                    
U.S. tax reform   (27,163)   -    (27,163)   - 
Release of valuation allowances, net   -    553    -    553 
Discontinued operations                    
Income from discontinued operations   288    2,991    288    2,991 
Noncontrolling interests                    
Net income attributable to noncontrolling interests*   -    (488)   -    (488)
Total items included in net income, net of tax  $(28,375)  $(4,267)          
                     
Net income / (loss) attributable to Tower International, Inc.  $(3,867)  $16,885           
                     
Memo:  Average shares outstanding (in thousands)                    
Basic   20,537    20,345           
Diluted   20,537    20,775           
                     
Income / (loss) per common share (GAAP)                    
Basic  $(0.19)  $0.83           
Diluted   (0.19)   0.81           
                     
Diluted adjusted earnings per share (non-GAAP)**  $1.17   $1.02           

 

 

* Amounts attributable to noncontrolling interests of discontinued operations
** For the three months ended December 31, 2017 diluted share count of 20.9 million was used to calculate diluted adjusted earnings per share.

 

 

 

 

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES
CERTAIN ITEMS INCLUDED IN NET INCOME
(Amounts in thousands, except per share amounts - unaudited)

 

   After tax   Before tax 
   Year Ended   Year Ended 
   Dec. 31,   Dec. 31, 
   2017   2016   2017   2016 
                 
Income / (expense) items included in net income, net of tax:                    
 Cost of sales                    
 Pension actuarial loss  $-   $(5,415)  $-   $(8,330)
Selling, general, and administrative expenses                    
One-time CEO compensation awards   -    (2,477)   -    (3,812)
Restructuring and asset impairment charges, net                    
One-time restructuring actions   (5,687)   -    (8,942)   - 
Lease buyout of previously closed facility   -    (1,186)   -    (1,824)
Interest expense                    
Mark-to-market gain / (loss) on derivative financial instruments   3,278    (1,565)   5,287    (2,407)
Acceleration of the amortization of debt issue costs and OID   -    (481)   -    (740)
Other expense                    
Debt refinancing costs   (357)   -    (575)   - 
European divestiture expenses   -    (4,476)   -    (6,481)
Provision for income taxes                    
U.S. tax reform   (27,163)   -    (27,163)   - 
Establishment of valuation allowance   (2,448)   -    (2,448)   - 
Release of valuation allowances, net   -    553    -    553 
Discontinued operations                    
Loss on sale of joint venture   (2,596)   -    (2,596)   - 
Income / (loss) from discontinued operations   4,449    (17,008)   4,449    (17,008)
Noncontrolling interests                    
Net income attributable to noncontrolling interests*   (110)   (701)   (110)   (701)
Total items included in net income, net of tax  $(30,634)  $(32,756)          
                     
Net income attributable to Tower International, Inc.  $47,625   $38,579           
                     
Memo:  Average shares outstanding (in thousands)                    
Basic   20,499    20,864           
Diluted   20,829    21,222           
                     
Income per common share (GAAP)                    
Basic  $2.32   $1.85           
Diluted   2.29    1.82           
                     
Diluted adjusted earnings per share (non-GAAP)  $3.76   $3.36           

 

 

* Amounts attributable to noncontrolling interests of discontinued operations

 

 

View differences made from one to another to evaluate Tower International, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Tower International, Inc..

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Intrinsic Value Calculator


Intrinsic Value Calculator
Screenshot of intrinsic value for AT&T (2019)
Last10K.com Member Feature

Our Intrinsic Value calculator estimates what an entire company is worth using up to 10 years of financial ratios to determine if a stock is overvalued or not

Continue

Financial Stability Report


Financial Stability Report
Screenshot of financial stability report for Coco-Cola (2019)
Last10K.com Member Feature

Our Financial Stability reports uses up to 10 years of financial ratios to determine the health of a company's EPS, Dividends, Book Value, Return on Equity, Current Ratio and Debt-to-Equity

Continue

Get a Better Picture of a Company's Performance


Financial Ratios
Available Financial Ratios
Last10K.com Member Feature

See how over 70 Growth, Profitability and Financial Ratios perform over 10 Years

Continue

Log in with your credentials

or    

Forgot your details?

Create Account