Tenneco Reports Fourth Quarter and Full Year 2008 Results - aftermarketNews

Tenneco Reports Fourth Quarter and Full Year 2008 Results

Fourth quarter revenue was $1.208 billion, down from $1.565 billion in fourth quarter 2007.

LAKE FOREST, Ill. — Tenneco has reported a fourth quarter net loss of $298 million, or $6.40 per diluted share, compared with a net loss of $72 million, or $1.57 per diluted share in fourth quarter 2007.

Adjusted for the items below, the net loss was $24 million, or 51-cents per diluted share, down from net income of $17 million, or 34-cents per diluted share, a year ago. The adjustments include the non-cash impairment charges for goodwill and deferred tax assets.

EBIT (earnings before interest, taxes and minority interest) was a loss of $145 million, versus earnings of $43 million a year ago. EBIT was negatively impacted by the goodwill impairment charge, lower OE production volumes globally, lower aftermarket sales and higher restructuring costs, all of which were driven by the severe industry conditions. The company said these factors more than offset the benefits of new OE business launches, reduced overhead spending and cost savings from restructuring and operational flexing actions implemented worldwide. In addition, the global downturn drove unusual changes in currency exchange rates during the quarter, which reduced EBIT by $21 million due to currency transaction and translation losses. Adjusted EBIT was a loss of $7 million, compared with earnings of $61 million the prior year.

EBITDA including minority interest (EBIT before depreciation and amortization) was a loss of $91 million versus earnings of $98 million in fourth quarter 2007. Adjusted EBITDA including minority interest was $47 million compared with $116 million.

“The fourth quarter saw further vehicle sales and OE production volumes declines in North America, compounded by the dramatic fall-off in Europe and rest of the world due to the global economic crisis and ongoing credit freeze, which has driven every major economy into recession. As with the entire automotive industry, Tenneco has been significantly impacted by these severe and unprecedented external conditions,” said Gregg Sherrill, chairman and CEO, Tenneco. “In response, we have and will continue to take aggressive actions to reduce costs, re-size our operations and generate and preserve cash in order to weather this crisis.”

In the fourth quarter 2008, the company announced a global restructuring program that is expected to generate $58 million in annualized savings once fully implemented by the end of 2009.

Fourth quarter revenue was $1.208 billion, down from $1.565 billion in fourth quarter 2007. The impact of unfavorable currency in the quarter was $123 million. Excluding currency and substrate sales, revenue was $1.025 billion versus $1.125 billion a year ago. The decline was driven by falling production volumes, particularly in the North America and Europe emission control businesses and in China.

Tenneco generated $126 million in cash flow from operations in fourth quarter 2008, driven by $115 million in cash from working capital, primarily from accounts receivable collections and inventory reductions. The company generated $199 million in cash flow from operations in the fourth quarter 2007. The year-over-year decline in cash flow from operations was due to the significantly lower production environment.

At quarter-end, total debt was $1.451 billion, compared with $1.374 billion a year ago. Cash balances were $126 million versus $188 million the prior year and debt net of cash balances was $1.325 billion, compared with $1.186 billion at December 31, 2007.

FULL-YEAR 2008 RESULTS

Tenneco reported annual revenue of $5.916 billion, down from $6.184 billion in 2007. Excluding currency and substrate sales, revenue was $4.334 billion, compared with $4.511 billion the year before. The year-over-year decrease was driven by significantly lower OE production volumes, primarily in North America and the rapid decline in Europe and China in the fourth quarter.

The company reported a net loss of $415 million, or $8.95 per diluted share, compared with a net loss of $5 million, or 11-cents per diluted share in 2007. Adjusted for the items below, net income was $20 million, or 42-cents per diluted share, versus net income of $88 million, or $1.82 per diluted share a year ago.

Full-year EBIT was a loss of $3 million, down from earnings of $252 million in 2007. Adjusted EBIT was $158 million, compared with $282 million in 2007. EBIT for full-year 2008 includes the negative impact of $22 million in currency. EBITDA for full-year 2008 was $219 million, compared with $457 million in 2007. Adjusted EBITDA was $380 million, a 22 percent decrease from $487 million a year ago.

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