Takes $0.67 Per Share Restructuring Charge in Fourth Quarter AUBURN
HILLS, Mich., Feb. 8 /PRNewswire-FirstCall/ -- BorgWarner Inc.
(NYSE:BWA) today reported fourth quarter and full year results that
reflect solid performance in Europe and Asia while addressing
challenges in North America. The company also raised its 2007
earnings guidance by $0.10 per diluted share as a result of fourth
quarter 2006 restructuring activities. Fourth Quarter Highlights: *
Sales of $1,201.7 million, up 14.7% from 2005 * Sales outside of
the U.S. grew 19.6% over fourth quarter 2005, excluding the impact
of currency, while sales in the U.S. declined 3.5% * Earnings of
$0.70 per diluted share on a U.S. GAAP basis. For comparison with
other quarters, the quarter included: - $(0.67) per diluted share
for restructuring charges, related primarily to asset impairments
in North America, supplemental to the restructuring activities
announced in third quarter 2006 - $(0.04) per diluted share of
final purchase accounting adjustments related to the third quarter
2006 acquisition of transmission and engine controls product lines
from Eaton Corporation in Monaco - $0.43 per diluted share of
favorable tax adjustments Excluding these items, earnings were
$0.99 per diluted share, which includes $(0.04) per diluted share
related to the 2006 implementation of FAS 123( R ) * Quarterly
dividend increased 6% to $0.17 per share Full Year Highlights: *
Sales of $4,585.4 million, up 6.8% from 2005 * Sales outside of the
U.S. grew 14.9% over 2005, excluding the impact of currency, while
sales in the U.S. declined 5.4% * Earnings of $3.65 per diluted
share on a U.S. GAAP basis. For comparison with other fiscal years,
the year included: - $(0.82) per diluted share for restructuring
charges, related primarily to asset impairments in North America,
reported in the third and fourth quarters - $(0.04) per diluted
share of final purchase accounting adjustments related to the third
quarter 2006 acquisition of transmission and engine controls
product lines from Eaton Corporation in Monaco - A $0.06 per
diluted share gain related to a previous divestiture, reported in
the third quarter - $0.38 per diluted share of favorable tax
adjustments Excluding these items, earnings were $4.07 per diluted
share, which includes $(0.16) per diluted share related to the 2006
implementation of FAS 123( R ) * Net cash provided by operating
activities of $442.1 million * After-tax return on average invested
capital of 12.2% Comment and Outlook: "In 2006, the company faced
divergent business conditions in its North American business and in
its businesses around the world," said Tim Manganello, Chairman and
CEO. "Deterioration of our business in North America drove
strategic restructuring activities while our strong growth in
Europe and Asia drove continued investment. Our sales were up 7%,
compared with North American vehicle production down 3% and
worldwide vehicle production up 3%. We clearly demonstrated the
viability of our technology- driven growth strategy and the
benefits of building one of the most diverse customer and
geographic business profiles in the industry." "The third quarter
reduction of our North American workforce addressed an immediate
need to adjust our employment levels to meet customer
restructurings and significantly lower production schedules going
forward. During the fourth quarter, we evaluated the
competitiveness of our North American facilities, as well as our
long-term asset capacity needs. As a result, we will be closing a
Drivetrain Group plant in Muncie, Indiana and have adjusted the
carrying value of other assets, primarily related to our four-wheel
drive transfer case product line." "Looking ahead, the process of
stabilizing our business in North America, while difficult, has
left us a stronger, leaner company better equipped to manage the
dynamics of that market. Furthermore, powertrain technology trends
around the world, which continue to move toward improved fuel
economy, lower emissions and better vehicle performance, indicate
strong growth for the company." As a result of the fourth quarter
restructuring, the company said that it expects 2007 earnings to be
$0.10 per diluted share higher than its previous guidance, or in a
range of $4.70 to $4.90 per diluted share. The company also
reiterated its expectations of 7% to 9% sales growth and operating
margins toward the low end of its historical range of 8.5% to 9.0%.
Financial Results: For fourth quarter 2006, sales were $1,201.7
million, up 14.7% from $1,048.0 million in fourth quarter 2005. Net
income in the quarter was $40.9 million, or $0.70 per diluted
share, compared with $64.6 million, or $1.12 per diluted share in
fourth quarter 2005. Fourth quarter 2006 net income included: costs
related to the implementation of FAS 123( R ) of $(2.6) million, or
$(0.04) per diluted share; restructuring charges, related primarily
to asset impairments in North America, supplemental to the third
quarter 2006 restructuring of the company's North American
business, of $(39.2) million, or $(0.67) per diluted share; final
purchase accounting adjustments of $(2.4) million, or $(0.04) per
diluted share, related to the third quarter 2006 acquisition of
transmission and engine controls product lines from Eaton
Corporation in Monaco; and $25.0 million, or $0.43 per diluted
share, related to favorable tax adjustments. Fourth quarter 2005
net income included final purchase accounting adjustments related
to the first quarter 2005 acquisition of a majority stake in BERU
of $(5.1) million, or $(0.09) per diluted share. The impact of
foreign currencies in fourth quarter 2006, primarily the Euro,
increased sales by $51.3 million and net income by $1.8 million.
Sales for 2006 totaled $4,585.4 million, up 6.8% from $4,293.8
million in 2005. Full-year 2006 net income was $211.6 million, or
$3.65 per diluted share, compared with $239.6 million, or $4.17 per
diluted share in 2005. Full-year 2006 net income included: costs
related to the implementation of FAS 123( R ) of $(9.4) million, or
$(0.16) per diluted share; charges related to restructuring
activities in North America, reported in the third and fourth
quarters, of $(47.6) million, or $(0.82) per diluted share; final
purchase accounting adjustments of $(2.4) million, or $(0.04) per
diluted share, related to the third quarter 2006 acquisition of
transmission and engine controls product lines from Eaton
Corporation in Monaco; a gain related to a previous divestiture,
reported in the third quarter, of $3.5 million, or $0.06 per
diluted share; and $22.3 million, or $0.38 per diluted share,
related to favorable tax adjustments. Full-year 2005 net income
included: purchase accounting adjustments related to the
acquisition of a majority stake in BERU, reported in the first and
fourth quarters, of $(12.2) million, or $(0.21) per diluted share;
net gains from divestitures, reported in the first quarter, of $6.3
million, or $0.11 per diluted share; favorable tax adjustments,
reported in the first and third quarters, of $25.7 million, or
$0.45 per diluted share; a charge associated with the anticipated
cost of settling all Crystal Springs- related alleged environmental
contamination personal injury and property damage claims, reported
in the second quarter, of $(28.7) million, or $(0.50) per diluted
share. The impact of foreign currencies, primarily the Euro and the
Korean Won, added $36.8 million to sales in 2006 compared with
2005, and $0.4 million to net income. Net cash provided by
operating activities was $442.1 million in 2006. Investments in
capital expenditures, including tooling outlays, totaled $268.3
million for 2006, compared with $292.5 million for 2005. Debt
decreased $19.4 million, cash and cash equivalents increased $33.6
million in 2006, and marketable securities increased by $18.5
million during the same period. Engine Group Results: Strong demand
for Engine Group products boosted Engine Group sales in both the
fourth quarter and the full year. Fourth quarter 2006 sales were up
20% versus fourth quarter 2005 to $840.6 million with a 10%
increase in segment earnings before interest and income taxes to
$98.0 million. Excluding the impact of foreign currencies, sales
were up 14% with a 5% increase in segment earnings before interest
and income taxes in the quarter. For the full year, sales were up
10% versus 2005 to $3,154.9 million with a 5% increase in segment
earnings before interest and income taxes to $365.8 million.
Excluding the impact of foreign currencies, sales were up 10% with
a 5% increase in segment earnings before interest and income taxes
for the full year. The group continued to benefit from Asian
automaker demand for turbochargers and timing systems, European
automaker demand for turbochargers, timing systems, exhaust gas
recirculation ("EGR") valves and diesel engine ignition systems,
the continued roll-out of its variable cam timing systems with
General Motors high-value V6 engines, stronger exhaust gas
recirculation ("EGR") valve sales in North America, and higher
turbocharger and thermal products sales due to stronger global
commercial vehicle production. Segment earnings in the quarter and
for the full year were negatively impacted by sharply higher
commodity costs, primarily related to higher nickel prices, and the
incremental margin on lost sales in the U.S. Drivetrain Group
Results: Fourth quarter 2006 sales were up 4% versus fourth quarter
2005 to $368.0 million with a 4% increase in segment earnings
before interest and income taxes to $26.1 million. Fourth quarter
2006 sales in the U.S. declined 14% while sales outside of the U.S.
increased 38%. For the full year, sales were down 1% versus 2005 to
$1,461.4 million with a 14% decrease in segment earnings before
interest and income taxes to $90.6 million. Full year sales in the
U.S. declined 12% while sales outside of the U.S. increased 25%.
The group continued to benefit from growth outside of North America
including the continued ramp up of dual-clutch transmission and
torque transfer product sales in Europe. In the U.S., sales were
negatively impacted by sharply lower production of light trucks and
sport-utility vehicles equipped with its torque transfer products.
Segment earnings in the quarter were negatively impacted by the
incremental margin on lost sales in the U.S. The restructuring
charges taken in the quarter were primarily related to the closure
of the Drivetrain Group's four-wheel drive transfer case facility
in Muncie, Indiana. Production of transfer cases at the Muncie
plant is expected to wind down and cease as early as is practical,
currently no later than the expiration of the current labor
agreement in April of 2009. Approximately 80% of the restructuring
charges in the quarter are related to asset impairments and other
non-cash items, while the remaining 20% are related to cash outlays
over the next two years. Recent Highlights: During the quarter,
BorgWarner announced $1.7 billion of net new business for the
three-year period ending in 2009. In addition, announcements during
the quarter reflect the company's ability to leverage its
technology globally. In the Drivetrain Group, the company's
DualTronic(R) transmission technology will be provided to Shanghai
Automotive Industry Co. Ltd. (SAIC) for the development of China's
first dual-clutch transmission. Also, AutoAlliance Thailand, a
joint venture between Ford and Mazda, will use BorgWarner's
electric shift-on-the-fly transfer cases and electronic control
units on its new Ranger and Everest vehicles beginning with the
2007 model year. This is BorgWarner's first application of its
part-time all-wheel drive technology in Thailand. The Engine Group
has nearly doubled the size of its manufacturing facility in
Pyongtaek, South Korea to meet increasing demand for engine timing
systems by Hyundai/Kia. Annual volumes at the facility are expected
to reach over three million engines by 2010. Engine Group
technology was also recognized in two "Best Engine" trade
publication competitions. Six of the "10 Best Engines 2007"
selected by Ward's Auto World are equipped with Engine Group
systems and components, including: turbochargers, engine timing
systems, oil pumps, solenoid exhaust gas recirculation valves and
BERU instant starting systems and glow plugs. Seven of China's ten
best engines selected by Auto Sports magazine, a publication of
China Automotive News, are equipped with Engine Group systems and
components including: timing chain systems, oil pumps, air pumps,
water pumps and turbochargers. At 9:30 a.m. ET today, a brief
conference call concerning fourth quarter and full year results
will be webcast at:
http://www.borgwarner.com/invest/webcasts.shtml. Auburn Hills,
Michigan-based BorgWarner Inc. (NYSE:BWA) is a product leader in
highly engineered components and systems for vehicle powertrain
applications worldwide. The FORTUNE 500 company operates
manufacturing and technical facilities in 63 locations in 18
countries. Customers include Ford, VW/Audi, DaimlerChrysler,
General Motors, Toyota, Renault/Nissan, Hyundai/Kia, Honda, BMW,
Caterpillar, Navistar International, and Peugeot. The Internet
address for BorgWarner is: http://www.borgwarner.com/. The
following table reconciles the Company's non-U.S. GAAP amounts
included in the press release to the most directly comparable U.S.
GAAP amounts and is provided for comparisons with other results:
Net earnings per share - diluted Fourth Quarter Full Year 2006(1)
2005 2006 2005(1) Non-U.S. GAAP excluding FAS 123( R ): $1.03 $1.21
$4.23 $4.33 Implementation of FAS 123( R ) (0.04) (0.16) Non-U.S.
GAAP including FAS 123( R ): 0.99 4.07 Reconciliations: One-time
write-off of the excess purchase price associated with in-process
R&D, order backlog and beginning inventory--Monaco (Eaton)
acquisition (2006); BERU acquisition (2005) (0.04) (0.09) (0.04)
(0.21) Net gain from divestitures 0.06 0.11 Crystal Springs-related
settlement (0.50) Restructuring charge (0.67) (0.82) Adjustment to
tax accounts 0.38 0.38 0.45 Fourth quarter impact of annual
effective tax rate adjustment for the first 9 months from 27% to
26% 0.05 U.S. GAAP (1) $0.70 $1.12 $3.65 $4.17 (1) Does not add due
to rounding Additional Important Information Statements contained
in this news release may contain forward-looking statements as
contemplated by the 1995 Private Securities Litigation Reform Act
that are based on management's current expectations, estimates and
projections. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "estimates," variations of such words and
similar expressions are intended to identify such forward-looking
statements. Forward-looking statements are subject to risks and
uncertainties, many of which are difficult to predict and generally
beyond the control of the Company, that could cause actual results
to differ materially from those expressed, projected or implied in
or by the forward-looking statements. Such risks and uncertainties
include: fluctuations in domestic or foreign automotive production,
the continued use of outside suppliers by original equipment
manufacturers, fluctuations in demand for vehicles containing the
Company's products, general economic conditions, as well as other
risks detailed in the Company's filings with the Securities and
Exchange Commission, including the Risk Factors identified in its
most recently filed annual report on Form 10-K. The Company does
not undertake any obligation to update any forward-looking
statement. BorgWarner Inc. Condensed Consolidated Statements of
Operations (Unaudited) (millions of dollars, except per share data)
Three Months Ended Twelve Months Ended December 31, December 31,
2006 2005 2006 2005 Net sales $1,201.7 $1,048.0 $4,585.4 $4,293.8
Cost of sales 989.5 848.5 3,735.5 3,440.0 Gross profit 212.2 199.5
849.9 853.8 Selling, general and administrative expenses $127.5
$110.1 498.1 495.9 Restructuring expense 73.2 0.0 84.7 - Other
(income) loss, including litigation settlement (0.7) (0.9) (7.5)
34.8 Operating income 12.2 90.3 274.6 323.1 Equity in affiliate
earnings, net of tax (9.6) (10.5) (35.9) (28.2) Interest expense
and finance charges 11.4 8.3 40.2 37.1 Earnings before income taxes
and minority interest 10.4 92.5 270.3 314.2 Provision for income
taxes (37.8) 23.1 32.4 55.1 Minority interest, net of tax 7.3 4.8
26.3 19.5 Net earnings $40.9 $64.6 $211.6 $239.6 Earnings per share
- Diluted $0.70 $1.12 $3.65 $4.17 Weighted average shares
outstanding - Diluted (in millions) 58.1 57.7 58.0 57.4
Supplemental Information (Unaudited) (millions of dollars) Three
Months Twelve Months Ended Ended December 31, December 31, 2006
2005 2006 2005 Capital expenditures, including tooling outlays
$76.3 $112.8 $268.3 $292.5 Depreciation and amortization: Fixed
assets & tooling $65.4 $56.3 $239.1 $223.8 Other 7.4 4.9 17.5
31.7 $72.8 $61.2 $256.6 $255.5 BorgWarner Inc. Net Sales by
Operating Segment (Unaudited) (millions of dollars) Three Months
Ended Twelve Months Ended December 31, December 31, 2006 2005 2006
2005 Engine $840.6 $700.7 $3,154.9 $2,855.4 Drivetrain 368.0 355.2
1,461.4 1,472.9 Inter-segment eliminations (6.9) (7.9) (30.9)
(34.5) Net sales $1,201.7 $1,048.0 $4,585.4 $4,293.8 Segment
Earnings Before Interest and Income Taxes (Unaudited) (millions of
dollars) Three Months Twelve Months Ended Ended December 31,
December 31, 2006 2005 2006 2005 Engine $98.0 $88.8 $365.8 $346.9
Drivetrain 26.1 25.2 90.6 105.2 Segment earnings before interest
and income taxes (Segment EBIT) 124.1 114.0 456.4 452.1 Litigation
settlement expense - - - 45.5 Restructuring expense 73.2 - 84.7 -
Corporate expenses, including equity in affiliates earnings and FAS
123( R ) 29.1 13.2 61.2 55.3 Consolidated earnings before interest
and taxes (EBIT) 21.8 100.8 310.5 351.3 Interest expense and
finance charges 11.4 8.3 40.2 37.1 Earnings before income taxes
& minority interest 10.4 92.5 270.3 314.2 Provision for income
taxes (37.8) 23.1 32.4 55.1 Minority interest, net of tax 7.3 4.8
26.3 19.5 Net earnings $40.9 $64.6 $211.6 $239.6 Note 1: Effective
January 1, 2006, the Company assigned an operating facility
previously reported in the Engine segment to the Drivetrain segment
due to changes in the facility's product mix. Prior period segment
amounts have been re-classified to conform to the current year's
segment presentation. Note 2: The restructuring charges recorded
relate to the following segments: Drivetrain $67.3 million and
Engine $5.9 million for fourth-quarter 2006. Drivetrain $70.9
million, Engine $13.2 million and Corporate $0.6 million for
full-year 2006. BorgWarner Inc. Condensed Consolidated Balance
Sheets (millions of dollars) December 31, December 31, 2006 2005
Assets Cash and cash equivalents $123.3 $89.7 Marketable securities
59.1 40.6 Receivables, net 744.0 626.1 Inventories, net 386.9 332.0
Other current assets 124.2 80.3 Total current assets 1,437.5
1,168.7 Property, plant and equipment, net 1,460.7 1,401.1 Other
long-term assets 1,685.8 1,519.6 Total assets $4,584.0 $4,089.4
Liabilities and stockholders' equity Notes payable $151.7 $160.9
Current portion of long-term debt - 139.0 Accounts payable and
accrued expenses 843.4 786.4 Income taxes payable 39.7 35.8 Total
current liabilities 1,034.8 1,122.1 Long-term debt 569.4 440.6
Other long-term liabilities 942.3 746.4 Minority interest in
consolidated subsidiaries 162.1 136.1 Stockholders' equity 1,875.4
1,644.2 Total liabilities and stockholders' equity $4,584.0
$4,089.4 BorgWarner Inc. Condensed Consolidated Statements of Cash
Flows (Unaudited) (millions of dollars) Twelve Months Ended
December 31, 2006 2005 Operating Activities: Net earnings $211.6
$239.6 Non-cash charges to operations: Depreciation and
amortization 256.6 255.5 Restructuring 79.4 0.0 Other non-cash
items 1.5 (31.1) Net earnings adjusted for non-cash charges 549.1
464.0 Changes in assets and liabilities (107.0) (67.5) Net cash
provided by operating activities 442.1 396.5 Investing Activities:
Capital expenditures, including tooling outlays (268.3) (292.5)
Payments for business acquired, net of cash acquired (63.7) (477.2)
Proceeds from sale of businesses - 54.2 (Increase) decrease in
marketable securities (12.7) 5.9 Other 3.6 9.5 Net cash used in
investing activities (341.1) (700.1) Financing Activities: Net
(reductions in) additions of debt (35.2) 144.7 Dividends paid to
BorgWarner shareholders (36.7) (31.8) Dividends paid to minority
shareholders (15.1) (8.2) Other 20.7 17.6 Net cash (used in)
provided by financing activities (66.3) 122.3 Effect of exchange
rate changes on cash and cash equivalents (1.1) 41.3 Net increase
(decrease) in cash and cash equivalents 33.6 (140.0) Cash and cash
equivalents at beginning of period 89.7 229.7 Cash and cash
equivalents at end of period $123.3 $89.7 DATASOURCE: BorgWarner
Inc. CONTACT: Mary Brevard, +1-248-754-0881, Ken Lamb,
+1-248-754-0884, both of BorgWarner Inc. Web site:
http://www.borgwarner.com/
http://www.borgwarner.com/invest/webcasts.shtml
Copyright
BorgWarner (NYSE:BWA)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
BorgWarner (NYSE:BWA)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024