Tower International, Inc. (NYSE: TOWR), a leading integrated global manufacturer of engineered structural metal components and assemblies, today announced fourth quarter 2013 results and provided preliminary outlooks for 2014 and 2015.
- Revenue for the fourth quarter was $517 million, up 2 percent from $508 million in the fourth quarter 2012.
- Adjusted EBITDA for the quarter was $49.6 million, up 11 percent from$44.5 million a year ago. The improvement primarily reflected favorable net cost performance.
- Net income of $19.0 million in the fourth quarter 2013 compared with net income of $13.7 million a year ago. As detailed below, this year’s fourth quarter included certain items, primarily a tax adjustment, that favorably impacted results by $9.4 million. Excluding these items and comparable items in the fourth quarter of 2012, diluted adjusted earnings were $0.45per share, up significantly from $0.05 per share a year ago.
- For full year 2013, revenue was up 1% (at $2.1 billion), adjusted EBITDA was up 7% (to $212.3 million), adjusted EBITDA margin was up 60 basis points (to 10.1%), and diluted adjusted earnings per share were up 111% (to $2.28).
- Adjusted free cash flow was positive $23 million in the quarter and $35 million for the full year, exceeding our prior outlook by $5-$10 million.
- Net debt leverage at year-end declined to 1.7 times adjusted EBITDA.
- Pension net liability under GAAP declined by $46 million during 2013, to$55 million.
- Liquidity at year-end 2013 was a record $315 million, up from $207 millionat year-end 2012. An additional $33 million of liquidity was added onJanuary 31 when the company increased the size of its U.S. term loan (which matures in 2020), concurrent with a re-pricing that reduced the interest rate by 75 basis points (to 4.00% at present conditions); the net reduction in ongoing annual interest expense will be $1.8 million.
- For 2014, the preliminary outlook includes improvements from 2013 in revenue (to about $2,150 million) and diluted adjusted earnings per share (to a range of $2.70-$2.90). The range outlook for adjusted EBITDA is$210-$215 million, which includes higher launch-related cost of about $10 million. About half of the increased launch cost is expected to come from two new sources of profitable growth that are anticipated to add about $80 million of revenue in 2015. This new business includes a major new award in North America and a pending supply agreement that would result in Tower’s first production in Mexico. Adjusted free cash flow is projected to be about $15 million in 2014, which represents $50 million of “ongoing” cash flow, net of deploying $35 million for the opportunistic growth investments.
- For 2015, the preliminary revenue outlook increases to approximately $2.3 billion and adjusted EBITDA increases to approximately $235 million. Adjusted free cash flow is presently projected at $70 million in 2015.
“Tower delivered on several promised break-throughs in financial results in 2013, including double-digit adjusted EBITDA margin, adjusted earnings per share more than doubled, significant positive free cash flow, and significant improvements in leverage and liquidity,” said President and CEO Mark Malcolm. “We expect 2014 to be a follow-through year, further building financial strength and momentum, and setting the stage for a higher growth trajectory for Tower in 2015 and beyond.”
