Tower International, Inc. [NYSE: TOWR], a leading global manufacturer of engineered automotive structural metal components and assemblies, today announced third quarter 2014 results and updated its outlook for the full year.
- Revenue for the third quarter was $523 million, up 6 percent from $495 million in the third quarter 2013.
- Adjusted EBITDA for the quarter was $50.4 million, compared with $48.4 million a year ago. Volume and mix was net favorable versus a year ago, with good news in North America and Europe and bad news in Brazil. Higher launch cost to support customer new-model programs was a partial offset.
- Net income was $11.2 million, compared with $3.3 million a year ago. As detailed below, this year’s third quarter included certain items that adversely impacted results by $4.5 million. Excluding these items and comparable items in the third quarter of 2013, diluted adjusted earnings were 73 cents per share, up 52% from 48 cents a year ago.
- For full year 2014, Tower is reducing the revenue outlook to $2.175 billion from the prior guidance of $2.20-$2.225 billion, reflecting lower customer production in Europe and Brazil and unfavorable currency translation. Despite these revenue changes, the outlook for adjusted EBITDA, at $217 million, remains within the range of the previous guidance of $217-$220 million. Including other anticipated net improvements, Tower is raising its forecasts for adjusted earnings per share (to $3.10, up 5-15 cents from prior guidance) and adjusted free cash flow (to $25-$30 million versus prior $25 million).
- Tower also recently completed two financing enhancements that further strengthen the company’s financial position and reduce long-term balance sheet risk. In September, a $150 million asset-backed revolver was replaced by a $200 millioncash-flow revolver; Tower’s liquidity at September 30 was a record $354 million. In October, the company swapped $200 million of its $450 million Term Loan B maturing in 2020 from variable-rate U.S. Dollar to 4% fixed-rate Euro; this action locked in an attractive long-term interest rate, reduced the company’s exposure to future variable-rate increases, and provided an enterprise-value hedge against changes in the value of the Euro.
“With our Third Quarter performance, Tower’s earnings have now met or beat the consensus in all 17 quarters since our IPO in 2010,” said President and CEO Mark Malcolm. “In addition, providing full year earnings and cash-flow guidance within and above the range of prior guidance conveys Tower’s view that the adverse macro developments in Europe and Brazil should be kept in context relative to what we believe is continuing strong total Company performance and a positive future outlook.”
