FINDLAY, Ohio — Cooper Tire & Rubber Co. has reported results for the second quarter of 2013. Net sales were $884 million, a decrease of $174 million compared with the same period a year ago. Operating profit for the second quarter was $69 million, which is $26 million lower than the same period in 2012 and 7.8 percent of net sales.
The company reported net income attributable to Cooper Tire & Rubber Co. of $35 million, or 55 cents per share, in the second quarter. This compares with $52 million, or 82 cents per share, for the same period last year. For the first six months of 2013, operating profit was $166 million compared with $143 million for the same period in 2012.
On June 12, 2013, the company announced it had reached a definitive merger agreement under which a wholly owned subsidiary of Apollo Tyres, Ltd. will acquire Cooper in an all-cash transaction valued at approximately $2.5 billion. The transaction, which will bring together two companies with highly complementary brands, geographic presence and technological expertise, is expected to close before the end of this year.
“Clearly, the big news in the second quarter was the pending merger with Apollo, a transaction that, subject to customary closing conditions, will create a combined company with approximately $6.6 billion in total sales and a strong presence in high-growth end-markets across four continents,” said Cooper Chairman, CEO and President Roy Armes. “We are excited about the long-term growth opportunities the pending merger will create and expect it to close before the end of this year. With regard to Cooper’s second quarter results, the period was one of challenge for the economy, the tire industry and Cooper, as we continued to navigate through a tough business environment. We are pleased with the initial reaction to the pricing changes we made toward the end of the quarter, but more remains to be seen as we enter the third quarter. While the second quarter was challenging, we are pleased to have ended the first half of 2013 with operating profit that is $4 million higher than the same time last year, excluding one-time items. Cooper has once again demonstrated an ability to deliver bottom line results across varied industry conditions.”
The company ended the second quarter with $244 million in cash and cash equivalents, a decrease of $108 million from Dec. 31, 2012, and an increase of $3 million from second quarter 2012.
Outlook
Second quarter raw material prices were down by approximately 1 percent from the first quarter of 2013. Management anticipates third quarter raw material prices will decline approximately 4 percent sequentially compared to the second quarter. The long-term raw material outlook is for prices to generally trend higher with periods of volatility. Capital expenditures for 2013 are expected to be between $190 million and $210 million.
“Looking ahead to the remainder of the year, we have much to accomplish with respect to the pending merger with Apollo, and we look forward to the opportunities the combined company will have to compete and grow within the global tire industry long term,” said Armes. “Regarding our near-term view for Cooper, we continue to be cautious about volumes as weak global economic conditions and sluggish tire demand are expected to continue. Yet, we remain confident that Cooper’s transformed business model and continued solid execution of our strategic plan will position us to perform well in the future."
