From Staff & Wire Reports

FINDLAY, OHIO -- Cooper Tire & Rubber Co. had a pretty good 2004, posting net sales of $2.1 billion and a net profit of $27 million from continuing operations.

The sales figure was a 12 percent increase over fiscal 2003, while the profits compared to a net gain of $25 million in 2003.

Adding in the proceeds from the sale of its Cooper-Standard Automotive unit late last year, Cooper posted total net income of $201 million, the company said.

Cooper’s North American Tire Operations posted 2004 sales of $1.9 billion, up from 2003’s $1.7 billion, while net profits dropped slightly from $77 million in 2003 to $76 million last year.

The decline, Cooper said, was due to “higher raw material costs, increasing production complexity, higher product liability and insurance costs, and an increased investment in advertising, marketing and promotional programs, which combined to offset the positive impact of higher prices, higher volume and improved mix.” On an overall basis, though, Cooper said its tire unit shipments were down, primarily due to reduced “economy and broadline tire” shipments.

For 2004, Cooper’s International Tire Operations reported sales of $257 million, up 23 percent vs. $210 million in 2003, while operating profit was down to $9 million from the $10 million profit posted in 2003. Cooper said the reduced profit results were due to higher raw material costs and expenses related to the startup of unspecified operations in Asia.

“We concluded the year with a significant number of milestones and accomplishments,” said Tom Dattilo, Cooper chairman, president and CEO. “With the fourth quarter record sales performance, we set sales records in each quarter this year. With the sale of Cooper-Standard, we set the stage for a new period of growth and opportunity in the tire business. We now have our focus solely on the global tire market. Our Asian initiatives will provide production capacity to help restore service levels in North America at the same time they establish Cooper's presence within the Asian region for future sales opportunities.

“We are excited about our opportunities in 2005 as a whole,” Dattilo said. “We will continue to pursue strategic investments in the tire business and advance our Asian strategy, including the development of our relationship with Kumho following our recently announced acquisition of 11 percent of them. We are confident that our strategy and the execution of our plans will drive long-term shareholder value.”

Other key points made in Cooper Tire & Rubber Co.’s full-year 2004 results:

• Cooper received $1.221 billion in the sale of its Cooper-Standard Automotive unit late last year, higher than the $1.165 billion it had estimated. The higher figure was due to an estimated $49 million from post-closing adjustments due in 2005.

• Cooper’s unfunded pension liability was reduced from $200 million at end of 2003 to $101 million at close of 2004. Pension liabilities of $252 million and assets of approximately $185 million were retained by the Cooper-Standard Automotive group when it was sold. Cooper said it also made pension contributions in excess of expense during the year.

• Raw material costs were higher in the fourth quarter vs. the same period of 2003, and cut into 2004 operating profit by $28 million. The overall average increase was 16%, Cooper reported. Prices for synthetic rubber (up 25 percent) and steel components (up 18 percent) had the highest increases.

• Tire production complexity has been driven by “the company's aggressive schedule for new product introductions, with more than 1,200 new SKUs having been introduced in 2004,” said Cooper. The tiremaker said it has invested in “new and more efficient production equipment” at its North American plants, and plans to continue capacity expansion at its Albany, Ga., facility.

• In a meeting held on Feb. 15, Cooper’s board of directors authorized the repurchase of up to $200 million of the company's publicly traded notes. The repurchase of debt may be accomplished through open market transactions, a tender offer or a combination of the two. In addition, the board authorized the repurchase of up to $200 million worth of Cooper’s common stock through open market transactions.

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