Tower International Inc., an integrated global manufacturer of engineered automotive structural metal components and assemblies, has announced fourth quarter 2016 results and provided a preliminary outlook for 2017.
The company reported that revenue for the fourth quarter was $462.3 million, up 2 percent from $454.9 million in the fourth quarter 2015. Net income in the fourth quarter was $16.9 million or 81 cents per diluted share, compared with $145.1 million of $6.76 per diluted share last year.
This year’s fourth quarter included certain items that adversely impacted results by $4.3 million. Certain items in the fourth quarter a year ago favorably affected results by $128.5 million, reflecting primarily the release of a U.S. tax valuation allowance. Excluding these certain items in both periods, diluted adjusted earnings per share were $1.02 in the fourth quarter 2016, compared with 77 cents a year ago.
Adjusted EBITDA for the quarter was $56.2 million, compared with $45.9 million a year ago, an increase of 22 percent from last year. The year-over-year increase reflected primarily the benefit of major new business wins, lower launch costs and favorable commercial settlements.
For full year 2017, the preliminary outlook includes:
- 1 percent growth in revenue, to $1.925 billion, despite an anticipated currency translation headwind of $35 million (with an average Euro assumption of $1.05), and a 1.5 percent year-over-year decrease in forecasted North American industry production;
- Adjusted EBITDA up 4 percent, to about $210 million;
- Adjusted EBITDA margin increasing by 40 basis points, to 10.9 percent;
- Diluted Adjusted Earnings Per Share of $3.60, an increase of 7 percent from 2016; and
- The company’s outlook for first quarter 2017 includes revenue of $480 million, adjusted EBITDA of $43 million and diluted adjusted earnings per share of $60 cents.
The company has also secured approximately $225 million in net new business for 2018 and 2019. About two thirds of this incremental revenue is expected to occur in 2019, and the average Adjusted EBITDA margin of the new business is expected to be about 15 percent. Tower said the launch of these programs should allow the company to grow significantly faster than the overall automotive market and contribute to Adjusted EBITDA margin expansion, which is expected to increase by more than 100 basis points from the 10.5 percent recorded for full year 2016.
“Tower delivered solid financial results in the fourth quarter as revenue, Adjusted EBITDA, Adjusted EPS and free cash flow were all above our previous outlook,” said CEO Jim Gouin. “With a solid order book of net new business through 2019, Tower is well-positioned to grow revenue at a CAGR of 5 points above industry compared to 2017, while expanding margins and generating significant free cash flow.”