12th
November 2007 - Affinia Group
Reports Improved Gross Profit for Q3 2007
Affinia Group
Inc. announced improved gross profit for the third quarter ended
September 30, 2007. The company also announced improved gross profit and
net income for the nine months ended September 30, 2007.
“During
the third quarter, we continued implementing our comprehensive
restructuring plan. This effort is now in its second year and is about
halfway complete. We estimate that we will incur approximately $62
million of cash and non-cash restructuring costs during the remainder of
2007, 2008 and 2009. We continue to expect the total cash and non-cash
restructuring costs to aggregate to $152 million,” said Thomas Madden,
Affinia’s Chief Financial Officer.
For the third
quarter of 2007, net sales were $541 million, as compared to $548
million for the third quarter of 2006.
Gross profit for
the quarter increased to $101 million, a 3percent improvement over the
$98 million reported for the third quarter of 2006.
Selling, general
and administrative expenses for the third quarter of 2007 were $78
million as compared to $76 million for the same period in 2006.
Net income for
the quarter ended September 30, 2007 was $4 million, compared to net
income of $12 million for the quarter ended September 30, 2006.The
variance in net income was the result of a $4 million tax burden for the
third quarter of 2007 as compared to a $4 million tax benefit for the
third quarter of 2006.
“While
restructuring progress has been somewhat slower than initially
anticipated we are convinced that our strategic rationale is solid and
is the key to our future growth,” said Terry McCormack ,Affinia Group’s
Chief Executive Officer. “We are making solid progress, and we expect
that the enhanced global manufacturing and distribution capabilities we
are developing will position us as a true global low-cost aftermarket
manufacturing company able to compete everywhere in the world,” said
McCormack.
For the nine
months ended September 30, 2007, net sales were$1.62 billion, as
compared to $1.66 billion for the same period in 2006.
Gross profit for
the nine months increased to $292 million, an increase of $3 million
compared to $289 million for the same period in 2006.
Selling, general
and administrative expenses for the nine months ended September 30, 2007
were $240 million as compared to $245 million for the same period in
2006.
Net income for
the nine months ended September 30, 2007 increased to $5 million,
compared to $4 million for the same period in 2006.
As of September
30, 2007 Affinia had $59 million of cash. Total long-term debt
outstanding as of September 30, 2007 was $597 million, unchanged from
the year ended December 31, 2006. Affinia had no borrowings under its
receivables securitization program. At September 30, 2007 Affinia
continued to be in compliance with all covenants in its senior credit
agreement including the following financial covenants: a leverage ratio,
cash interest expense ratio and a maximum annual capital expenditure.
Affinia Group
Inc. is a global leader in the on andoff highway replacement products
and service industry. In North America the Affinia family of brands
includes WIX®filters, Raybestos® brand brakes and AIMCO® brake products,
and McQuay-Norris® and Spicer® Chassis parts. South American and
European brands include Nakata®, Filtron®, Urba® and Quinton Hazell®.
For more information, visit
www.affiniagroup.com.
CAUTIONARY NOTE
REGARDING FORWARD-LOOKING STATEMENTS
This report includes ‘‘forward-looking
statements’’ within the meaning of Section 27A of the Securities Act of
1933, as amended (the ‘‘Securities Act’’) and Section 21Eof the
Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’).These
forward-looking statements may include comments concerning our plans,
objectives, goals, strategies, future events, future revenue or
performance, capital expenditures, financing needs, plans or intentions
relating toacquisitions, business trends and other information that is
not historical. When used in this report, the words ‘‘estimates,’’
‘‘expects,’’‘‘anticipates,’’ ‘‘projects,’’ ‘‘plans,’’ ‘‘intends,’’
‘‘believes,’’‘‘forecasts,’’ or future or conditional verbs, such as
‘‘will,’’ ‘‘should,’’‘‘could’’ or ‘‘may,’’ and variations of such words
or similar expressions are intended to identify forward-looking
statements. All forward-looking statements, including, without
limitation, management’s examination of historical operating trends and
data are based upon our current expectations and various assumptions.
Our expectations, beliefs and projections are expressed in good faith
and we believe there is a reasonable basis for them. However, there is
no assurance that these expectations, beliefs and projections will be
achieved. With respect to all forward-looking statements, we claim the
protection of the safe harbor for forward-looking statements contained
in the Private Securities Litigation Reform Act of 1995.
There are a number of risks and
uncertainties that could cause our actual results to differ materially
from the forward-looking statements contained in this report. Such
risks, uncertainties and other important factors include, among others:
our substantial leverage; limitations on flexibility in operating our
business contained in our debt agreements; pricing and import pressures;
the shift in demand from premium to economy products; our dependence on
our largest customers; changing distribution channels; increasing costs
for manufactured components, raw materials, crude oil and energy prices;
our ability to achieve cost savings from our restructuring; the
consolidation of distributors; risks associated with our non-U.S.
operations; product liability and customer warranty and recall claims;
changes to environmental and automotive safety regulations; changes to
anti-dumping rates; risk of impairment to intangibles and goodwill; risk
of a successful refinancing if required; non-performance by, or
insolvency of, our suppliers or our customers; the threat of work
stoppages and other labor disputes; challenges to our intellectual
property portfolio; and our exposure to product liability and other
liabilities for which Dana Corporation retained responsibility due to
its Chapter 11 filing. Additionally, there may be other factors that
could cause our actual results to differ materially from the
forward-looking statements.
Source:
Affinia Group Press Release