Tower International, Inc. (NYSE: TOWR), a leading manufacturer of engineered automotive structural metal components and assemblies, today announced First Quarter 2019 results and updated its business outlook.
During the First Quarter 2019, Tower completed the sale of its European operations. In December 2018, Tower entered into an agreement to sell all of its European operations to Financière SNOP Dunois S.A. (“FSD”), a privately owned French auto supplier. The sale price represents an Enterprise Value of € 255 million, or an EV / Adjusted EBITDA multiple of 5.4x 2018 full year earnings. The transaction closed March 1, 2019. Tower received $250 million in net proceeds after fees and settlement of fixed rate Term Loan swaps. Upon completion of the divestiture, a payment of $50 million was made on the Term Loan, reducing the balance to $253 million.
Revenue for the First Quarter was $379 million compared with $407 million in 2018, and previous Outlook of $375 million. The year over year revenue decrease reflects primarily lower sales resulting from launch cadence and program changeover, offset partially by higher revenue from new platforms.
Income from continuing operations for the First Quarter 2019 was $7.7 million compared with $16.5 million in 2018. Including discontinued operations, GAAP net income was negative $5.1 million for the first quarter or $(0.24) per share, compared with net income of $17.3 million or $0.83 per diluted share last year. As detailed below, this year’s results included certain items which adversely impacted net income by $9.8 million. Excluding these items and comparable items in 2018, earnings per diluted share for the First Quarter 2019 was $0.23 compared with $0.82 a year ago and previous Outlook of $0.18 per share.
Adjusted EBITDA for the First Quarter 2019 was $30.4 million compared with $43.0 million a year ago and previous Outlook of $30 million.
“Tower delivered First Quarter 2019 results in-line with our Outlook. The sale of Tower Europe further strengthens our balance sheet and positions Tower to capitalize on the healthy and growing light truck and SUV market in North America. We continue to balance our capital allocation, by investing in profitable growth, reducing debt and returning capital to shareholders,” said CEO Jim Gouin. “Near-term results will continue to be impacted by significant launch activity. However, with the completion of these launches, projected second half 2019 performance will result in higher run rate revenue, EBITDA and Free Cash Flow leading the way to a step function improvement in financial results for Full Year 2020.”
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