-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RsKEo33q6DKIkDXk8llXNTRVaBT9UWZMDX67gqAXc5hsT6Ur+kSFxGRumIcmR57j cltPFEn7zT7PpMK/HMwf7g== 0001157523-07-003795.txt : 20070419 0001157523-07-003795.hdr.sgml : 20070419 20070419075818 ACCESSION NUMBER: 0001157523-07-003795 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070419 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070419 DATE AS OF CHANGE: 20070419 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FEDERAL MOGUL CORP CENTRAL INDEX KEY: 0000034879 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 380533580 STATE OF INCORPORATION: MI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01511 FILM NUMBER: 07774914 BUSINESS ADDRESS: STREET 1: 26555 NORTHWESTERN HGWY CITY: SOUTHFIELD STATE: MI ZIP: 48034 BUSINESS PHONE: 2483547700 8-K 1 a5380869.txt FEDERAL-MOGUL CORPORATION 8-K - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K ---------------- CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: April 19, 2007 (Date of earliest event reported) ---------------- FEDERAL-MOGUL CORPORATION (Exact Name of Registrant as specified in its Charter) ---------------- Michigan (State or Other Jurisdiction of Incorporation) 1-1511 38-0533580 (Commission File Number) (IRS Employer Identification Number) 26555 Northwestern Highway, Southfield, Michigan 48033 (Address of Principal Executive Offices) (Zip Code) (248) 354-7700 (Registrant's Telephone Number, Including Area Code) ---------------- Check the appropriate box below if the Form 8-K filings is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) - -------------------------------------------------------------------------------- INFORMATION TO BE INCLUDED IN THE REPORT Item 2.02. Results of Operations and Financial Condition. On April 19, 2007, Federal-Mogul Corporation issued a press release announcing its earnings for the three months ended March 31, 2007. A copy of the press release is attached as Exhibit 99.1 to this Current Report. Item 9.01. Financial Statements and Exhibits. (c) Exhibits. 99.1 Press release dated April 19, 2007. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: April 19, 2007 FEDERAL-MOGUL CORPORATION By: /s/ Robert L. Katz ------------------------------ Name: Robert L. Katz Title: Vice President and General Counsel EXHIBIT INDEX 99.1 Press Release dated April 19, 2007. EX-99.1 2 a5380869-ex991.txt EXHIBIT 99.1 EXHIBIT 99.1 Federal-Mogul Reports First Quarter 2007 Results SOUTHFIELD, Mich.--(BUSINESS WIRE)--April 19, 2007--Federal-Mogul Corporation (OTCBB:FDMLQ) today reported its financial results for the three months ended March 31, 2007. Financial Summary (in millions) - ---------------------------------------------------- Three Months Ended March 31 ------------------ 2007 2006 --------- -------- Net sales $1,717 $1,600 Gross margin 308 285 Selling, general and administrative expense 207 228 Earnings (loss) before income taxes 36 (39) Income tax expense (31) (29) Net earnings (loss) 5 (68) Operational EBITDA(a) 199 146 (a) Operational EBITDA is a non-GAAP measure defined to include discontinued operations and exclude impairment charges, Chapter 11 and U.K. Administration expenses, restructuring costs, income tax expense, interest expense, depreciation and amortization Federal-Mogul reported net income of $5 million for the quarter ended March 31, 2007, compared to a net loss of $68 million for the first quarter of 2006. This result reflects a 7% increase in sales, improved gross margin, reduced selling, general and administrative expenses, and reduced impairment and restructuring charges. Federal-Mogul reported net sales of $1,717 million for the quarter ended March 31, 2007, an increase of $117 million, or 7%, compared to the first quarter of 2006. The most significant factors impacting sales were increased volumes of $39 million, the May 2006 acquisition of Federal-Mogul Goetze India ("FMG") which increased sales by $32 million, and favorable foreign currency of $60 million. Gross margin for the quarter increased by $23 million over the first quarter of 2006. Improvements in gross margin resulted from a combination of the October 2006 settlement of the U.K. pension plans, increased volumes, favorable foreign currency, and productivity in excess of labor and benefits inflation. These favorable impacts were partially offset by customer pricing and increased raw materials costs. Selling, general and administrative ("SG&A") expense for the quarter improved by $21 million over the first quarter of 2006. Reductions in SG&A resulted from a combination of the settlement of the U.K. pension plans, and cost reduction actions in excess of labor and benefits inflation. These favorable impacts were partially offset by increased SG&A from the acquisition of FMG and adverse foreign currency. Federal-Mogul reported net earnings before income taxes for the three months ended March 31, 2007 of $36 million, compared to a net loss before income taxes of $39 million for the same period of 2006. The impact of improved gross margin and reduced selling, general and administrative expenses contributed a combined $44 million to the improved results, with reduced restructuring and impairment charges contributing an additional $30 million to net earnings. Management believes that Operational EBITDA most closely approximates the cash flow associated with the operational earnings of the Company and uses Operational EBITDA to measure the performance of its operations. Operational EBITDA is defined to include discontinued operations and exclude impairment charges, Chapter 11 and U.K. Administration expenses, restructuring costs, income tax expense, interest expense, depreciation and amortization. The Company reported Operational EBITDA of $199 million, an improvement of $53 million compared to 2006, largely due to the improvements reported within gross margin and reduced SG&A expenses. A reconciliation of Operational EBITDA to the Company's earnings before income taxes for the three months ended March 31, 2007 has been provided. Combining cash provided from operating activities with cash used by investing activities, the Company generated positive cash inflows of $12 million for the quarter ended March 31, 2007, compared to $31 million for the comparable period of 2006, reflecting the impact of increased capital expenditures of $24 million. "We are focused on the implementation of our strategy to achieve sustainable global profitable growth, providing our valued customers worldwide leading products, services and technologies at competitive cost," said Chairman, President and Chief Executive Officer Jose Maria Alapont. "Our improved operational performance during the first quarter is the result of our drive toward those strategic goals and the dedication of our employees." About Federal-Mogul Federal-Mogul Corporation is a leading global supplier, serving the world's foremost original equipment manufacturers of automotive, light commercial, heavy-duty, agricultural, marine, rail, aerospace, off-road and industrial vehicles, as well as the worldwide aftermarket. The Company's leading technology and innovation, lean manufacturing expertise, as well as marketing and distribution deliver world-class products, brands and services with quality excellence at a competitive cost. Federal-Mogul is focused on its global profitable growth strategy, creating value and satisfaction for its customers, employees and stakeholders. Federal-Mogul was founded in Detroit in 1899. The Company is headquartered in Southfield, Michigan, and employs 45,000 people in 34 countries. Visit the company's Web site at www.federal-mogul.com. Forward-Looking Statements Statements contained in this press release, which are not historical fact, constitute "Forward-Looking Statements." Actual results may differ materially due to numerous important factors that are described in Federal-Mogul's most recent report to the SEC on Form 10-K, which may be revised or supplemented in subsequent reports to the SEC on Forms 10-Q and 8-K. Such factors include, among others, the cost and timing of implementing restructuring actions, the results of the Chapter 11 and U.K. Administration proceedings, the Company's ability to generate cost savings or manufacturing efficiencies to offset or exceed contractually or competitively required price reductions or price reductions to obtain new business, conditions in the automotive industry, and certain global and regional economic conditions. Federal-Mogul does not intend or assume any obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release. FEDERAL-MOGUL CORPORATION STATEMENTS OF OPERATIONS (Millions of Dollars, Except Share and Per Share Data) (Unaudited) Three Months Ended March 31 ------------------ 2007 2006 -------- -------- Net sales $1,716.5 $1,600.3 Cost of products sold 1,408.7 1,315.3 -------- -------- Gross margin 307.8 285.0 Selling, general and administrative expenses 206.9 227.5 Adjustment of long-lived assets to fair value 0.3 20.1 Interest expense, net 50.0 39.0 Chapter 11 and U.K. Administration related reorganization expenses 13.6 21.1 Equity earnings of unconsolidated affiliates (7.9) (9.4) Restructuring expense, net 16.1 25.8 Other income, net (6.8) (0.3) -------- -------- Income (loss) before income taxes 35.6 (38.8) Income tax expense 31.1 29.6 -------- -------- Net income (loss) $ 4.5 $ (68.4) ======== ======== Basic and diluted income (loss) per common share: - ----------------------------------------------- -------- -------- Net income (loss) per common share $ 0.05 $ (0.77) ======== ======== Weighted average shares outstanding (in millions) 89.6 89.1 FEDERAL-MOGUL CORPORATION BALANCE SHEETS (Millions of Dollars) (Unaudited) March 31 December 31 2007 2006 -------------- -------------- Current assets: Cash and equivalents $ 324.0 $ 359.3 Accounts receivable, net 1,142.4 992.6 Inventories, net 903.2 892.6 Prepaid expenses and other current assets 262.8 248.2 ------------- ------------- Total current assets 2,632.4 2,492.7 Property, plant and equipment, net 2,053.2 2,078.6 Goodwill and indefinite-lived intangible assets 1,207.1 1,205.3 Definite-lived intangible assets, net 251.1 254.3 Asbestos-related insurance recoverable 860.1 859.0 Other noncurrent assets 269.6 289.2 ------------- ------------- $ 7,273.5 $ 7,179.1 ============= ============= Current liabilities: Short-term debt, including current portion of long-term debt $ 496.1 $ 482.1 Accounts payable 541.8 488.0 Accrued liabilities 490.9 435.0 Current portion of postemployment benefit liability 66.9 67.9 Other accrued liabilities 149.0 181.7 ------------- ------------- Total current liabilities 1,744.7 1,654.7 Liabilities subject to compromise 5,814.3 5,813.4 Long-term debt 26.4 26.7 Postemployment benefits 1,099.3 1,111.1 Deferred income taxes 55.6 81.8 Other accrued liabilities 167.7 185.1 Minority interest in consolidated affiliates 54.2 54.2 Shareholders' deficit: Series C ESOP preferred stock 28.0 28.0 Common stock 445.3 445.3 Additional paid-in capital 2,161.3 2,160.2 Accumulated deficit (4,133.3) (4,151.7) Accumulated other comprehensive loss (190.0) (229.7) ------------- ------------- Total shareholders' deficit (1,688.7) (1,747.9) ------------- ------------- $ 7,273.5 $ 7,179.1 ============= ============= FEDERAL-MOGUL CORPORATION STATEMENTS OF CASH FLOWS (Millions of Dollars) (Unaudited) Three Months Ended March 31 ------------------ 2007 2006 -------- -------- Cash provided from (used by) operating activities Net income (loss) $ 4.5 $ (68.4) Adjustments to reconcile net loss to net cash (used by) provided from operating activities: Depreciation and amortization 83.9 78.8 Adjustment of long-lived assets to fair value 0.3 20.1 Change in postemployment benefits, including pensions (16.5) 34.9 Changes in deferred taxes (1.8) (6.3) Changes in operating assets and liabilities: Accounts receivable (143.9) (81.0) Inventories (5.8) (29.5) Accounts payable 43.8 57.4 Other assets and liabilities 85.4 48.7 -------- -------- Net cash provided from operating activities 49.9 54.7 Cash provided from (used by) investing activities Expenditures for property, plant and equipment (54.7) (30.7) Proceeds from the sale of property, plant and equipment 16.9 2.7 Proceeds from sale of business - 4.0 -------- -------- Net cash used by investing activities (37.8) (24.0) Cash provided from (used by) financing activities Proceeds from borrowings on DIP credit facility 90.0 124.7 Principal payments on DIP credit facility (88.1) (153.0) Net change in short-term debt 9.4 (0.7) Net change in restricted cash - (1.0) Principal payment in other long-term debt (1.2) (0.6) Proceeds from factoring arrangements (58.7) - Debt issuance fees (0.3) - -------- -------- Net cash used by financing activities (48.9) (30.6) Effect of foreign currency exchange rate fluctuations on cash 1.5 8.3 -------- -------- (Decrease) increase in cash and equivalents (35.3) 8.4 Cash and equivalents at beginning of period 359.3 387.2 -------- -------- Cash and equivalents at end of period $ 324.0 $ 395.6 ======== ======== FEDERAL-MOGUL CORPORATION RECONCILIATION OF NON-GAAP FINANCIAL MEASURE (Millions of Dollars) (Unaudited) Three Months Ended March 31 ------------------- 2007 2006 --------- -------- Income (loss) before income taxes $ 35.6 $ (38.8) Depreciation and amortization 83.9 78.8 Chapter 11 and Administration related reorganization expenses 13.6 21.1 Interest expense, net 50.0 39.0 Adjustment of assets to fair value 0.3 20.1 Restructuring expense, net 16.1 25.8 Other (0.1) (0.4) --------- -------- Operational EBITDA $ 199.4 $ 145.6 ========= ======== CONTACT: Federal-Mogul Corporation Jennifer Rass, 248-354-7502 jennifer.rass@federalmogul.com OR Marie Remboulis, 248-354-9809 -----END PRIVACY-ENHANCED MESSAGE-----