-----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, JrEgHAO3X0H170Qz+nGvEeAErT5G3HoLd+3kM+jHr2iKID8iqndsN9wa7Nrjf71R WF09zPHWm/q2SxgL0dhJNA== 0000950137-04-005954.txt : 20040729 0000950137-04-005954.hdr.sgml : 20040729 20040729092219 ACCESSION NUMBER: 0000950137-04-005954 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040729 ITEM INFORMATION: FILED AS OF DATE: 20040729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BORGWARNER INC CENTRAL INDEX KEY: 0000908255 STANDARD INDUSTRIAL CLASSIFICATION: MOTOR VEHICLE PARTS & ACCESSORIES [3714] IRS NUMBER: 133404508 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-12162 FILM NUMBER: 04937508 BUSINESS ADDRESS: STREET 1: 200 S MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 BUSINESS PHONE: 3123228500 MAIL ADDRESS: STREET 1: 200 SOUTH MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60604 FORMER COMPANY: FORMER CONFORMED NAME: BORG WARNER AUTOMOTIVE INC DATE OF NAME CHANGE: 19930628 8-K 1 c87078e8vk.txt CURRENT REPORT FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: July 29, 2004 BORGWARNER INC. (Exact name of registrant as specified in its charter) Delaware 1-12162 13-3404508 (State of Incorporation) (Commission File No.) (IRS Employer Identification No.) 200 South Michigan Avenue, Chicago, Illinois 60604 (Address of principal executive offices) Registrant's telephone number, including area code: (312) 322-8500 Item 12. Results of Operations and Financial Condition On July 29, 2004, BorgWarner Inc. issued a press release, furnished as Exhibit 99.1 and incorporated herein by reference, announcing the company's second quarter results. The information contained in this Current Report on Form 8-K, including the exhibit attached hereto, is being furnished and shall not be deemed to be "filed" for the purposes of the Securities Exchange Act of 1934, as amended. SIGNATURES 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. BORGWARNER INC. By: /s/ Vincent M. Lichtenberger --------------------------- Vincent M. Lichtenberger Assistant Secretary Dated: July 29, 2004 EX-99.1 2 c87078exv99w1.txt PRESS RELEASE [BORGWARNER LOGO] IMMEDIATE RELEASE CONTACT: Mary Brevard 312/322-8683 BORGWARNER SECOND QUARTER EPS UP 17% TO $0.97; GUIDANCE FOR THE YEAR INCREASED TO $3.60 - $3.70 PER SHARE Chicago, Illinois, July 29, 2004 - BorgWarner Inc. (NYSE: BWA) announced strong second quarter 2004 results. Demand for the company's technology for fuel-efficient engines in Europe and better than expected sales in North America continued to drive growth. SECOND QUARTER HIGHLIGHTS: o Earnings per share grew by 17% to a new record high of $0.97 o Sales were up 16% to $893.2 million o New business awards include first North American contract for InterActive Torque Management(TM) System o Operating income margin improves o Engine Group sales up 19% o Drivetrain Group sales up 12% "We had a strong second quarter, delivering solid growth in both our Engine and Drivetrain businesses," said Timothy M. Manganello, Chairman and CEO. "The trends driving our growth are expected to continue into the second half of the year. These trends include the growth of diesel engines in Europe, the popularity of cross-over vehicles in North America and the move to chain engine timing systems in both Europe and Asia. Combining this growth with our focus on continuous improvement, we expect to grow faster than the industry. As a result, we are raising our guidance for the year to $3.60 to $3.70 per share, up from $3.55 to $3.65 per share. This range represents continued strong earnings growth in the second half of the year. Our guidance is based on current industry production assumptions and an expectation that commodity prices remain at current levels." For the 2004 second quarter, the company reported net earnings of $54.7 million or $0.97 per share, compared with $44.8 million or $0.83 per share, on a split-adjusted basis. Sales were $893.2 million compared with $769.5 million in the prior year's second quarter. Net earnings for the first six months of 2004 were $105.8 million, or $1.88 per share, compared with $89.0 million or $1.65 per share on a split-adjusted basis. Sales were up 16% to $1.8 billion, compared with $1.5 billion in 2003. Operating income was $81.4 million or 9.1% of sales in the 2004 second quarter, compared with $69.6 million or 9.0% of sales in the 2003 second quarter. Research and development spending was $30.8 million in the quarter, versus $28.9 million in the same period in 2003. -more- BorgWarner 2004 Second Quarter Results - Page 2 Net cash provided by operating activities was $221.5 million for the first six months of 2004 compared with $155.3 million for the same period in 2003. OPERATING GROUP RESULTS: Sales in the company's Engine Group were up 19% to $559.6 million over the second quarter of 2003. Operating income rose 25% to $75.7 million. Results were driven by continued growth of fuel-efficient diesel and gas engines in Europe, the move from belt to chain timing systems among European and Asian automakers and growing strength in the commercial vehicle market in North America and Europe. Sales for the Drivetrain Group were up 12% to $347.4 million over the second quarter of 2003. These gains were driven by strong demand for four-wheel drive systems in North America and for transmission components and systems worldwide. Operating income was $23.8 million, essentially flat with the 2003 second quarter, reflecting higher prices for steel and other commodities, and higher health care costs. RECENT HIGHLIGHTS: During the quarter, BorgWarner stockholders approved an increase in the number of shares of authorized common stock to 150 million from 50 million allowing for a two-for-one stock split. The stock split was effective May 17, 2004. In addition, the company announced the first North American application of its intelligent torque management systems for a popular front-wheel-drive-based sport wagon, beginning in 2006. The company's engine and transmission products will also help drive North America's first hybrid, the Ford Escape, which is on sale now and will be arriving in dealerships later this summer. BorgWarner Inc. (NYSE: BWA) is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. The company operates manufacturing and technical facilities in 43 locations in 14 countries. Customers include Ford, DaimlerChrysler, General Motors, Toyota, Honda, Hyundai/Kia, Caterpillar, Navistar International, Renault/Nissan, Peugeot and VW/Audi. The Internet address for BorgWarner is: http://www.bwauto.com. For further information contact BorgWarner Corporate Communications at 312-322-8500. Investor conference calls are webcast by Thomson at: http://www.bwauto.com/investor_webcasts.html. Financial Tables Follow # # # Statements contained in this news release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management's current expectations, estimates and projections. Words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: fluctuations in domestic or foreign automotive production, the continued use of outside suppliers by original equipment manufacturers, fluctuations in demand for vehicles containing the Company's products, general economic conditions, as well as other risks detailed in the Company's filings with the Securities and Exchange Commission, including the Cautionary Statements filed as Exhibit 99.1 to the Form 10-K for the fiscal year ended December 31, 2003. BorgWarner Inc. Consolidated Statements of Operations (Unaudited) - --------------------------------------------------------------------------------
(millions of dollars, except per share data) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 ------- ------ -------- -------- Net sales $893.2 $769.5 $1,796.2 $1,545.2 Cost of sales 723.4 622.8 1,453.9 1,246.9 ------ ------ -------- -------- Gross profit 169.8 146.7 342.3 298.3 Selling, general and administrative expenses 87.8 77.0 182.5 160.7 Other, net 0.6 0.1 0.9 0.1 ------ ------ -------- -------- Operating Income 81.4 69.6 158.9 137.5 Equity in affiliate earnings, net of tax (8.4) (5.2) (14.9) (11.6) Interest expense and finance charges 7.7 8.7 15.2 17.7 ------ ------ -------- -------- Earnings before income taxes 82.1 66.1 158.6 131.4 Provision for income taxes 24.6 19.2 47.5 38.1 Minority interest, net of tax 2.8 2.1 5.3 4.3 ------ ------ -------- -------- Net Earnings $ 54.7 $ 44.8 $ 105.8 $ 89.0 ====== ====== ======== ======== Net earnings/(loss) per share - Diluted $0.97 $0.83 $ 1.88 $ 1.65 ====== ====== ======== ======== Average shares outstanding - Diluted (in millions) 56.4 54.2 56.2 54.0 ====== ====== ======== ======== Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 ------ ------ -------- -------- Capital expenditures $ 43.7 $ 39.5 $ 84.2 $ 64.8 ====== ====== ======== ======== Tooling outlays, net of customer reimbursements $ 16.4 $ 11.3 $ 30.1 $ 20.7 ====== ====== ======== ======== Depreciation and amortization: Fixed asset depreciation $ 33.5 $ 30.5 $ 67.3 $ 60.2 Amortization of tooling 10.1 8.0 19.9 15.7 ------ ------ -------- -------- $ 43.6 $ 38.5 $ 87.2 $ 75.9 ====== ====== ======== ========
BorgWarner Inc. Sales by Operating Group (Unaudited) - --------------------------------------------------------------------------------
(millions of dollars) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 -------- -------- -------- -------- Drivetrain $ 347.4 $ 309.3 $ 707.0 $ 631.0 Engine 559.6 471.6 1,116.7 937.4 -------- -------- -------- -------- Subtotal 907.0 780.9 1,823.7 1,568.4 Eliminations (13.8) (11.4) (27.5) (23.2) -------- -------- -------- -------- Total Sales by operating group $ 893.2 $ 769.5 $1,796.2 $1,545.2 ======== ======== ======== ========
BorgWarner Inc. Earnings Before Interest and Taxes by Operating Group (Unaudited) - --------------------------------------------------------------------------------
(millions of dollars) Three Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003 ------ ------ ------ ------- Drivetrain $ 23.8 $ 23.7 $ 54.5 $ 49.8 Engine 75.7 60.5 143.7 121.2 ------ ------ ------ ------ Total EBIT by operating group $ 99.5 $ 84.2 $198.2 $171.0 Corporate (9.7) (9.4) (24.4) (21.9) ------ ------ ------ ------ Consolidated 89.8 74.8 173.8 149.1 Interest and finance charges (7.7) (8.7) (15.2) (17.7) ------ ------ ------ ------ Earnings before income taxes $ 82.1 $ 66.1 $158.6 $131.4 ====== ====== ====== ======
BorgWarner Inc. Condensed Consolidated Balance Sheets (Unaudited) - -------------------------------------------------------------------------------- (millions of dollars)
June 30, 2004 December 31, 2003 ASSETS Cash and cash equivalents $ 144.0 $ 113.1 Receivables 491.2 414.9 Inventories 215.6 201.3 Other current assets 112.1 95.3 -------- -------- Total current assets 962.9 824.6 Property, plant, and equipment 990.9 985.3 Other long-term assets 1,241.0 1,240.5 -------- -------- Total assets $3,194.8 $3,050.4 ======== ======== LIABILITIES Notes payable $ 9.0 $ 10.0 Accounts payable and accrued expenses 549.5 460.3 Accrued income taxes payable 17.3 - -------- -------- Total current liabilities 575.8 470.3 Long-term debt 573.9 645.5 Other long-term liabilities 663.5 674.2 STOCKHOLDERS' EQUITY Stockholders' equity 1,381.6 1,260.4 -------- -------- Total liabilities and stockholders' equity $3,194.8 $3,050.4 ======== ========
BorgWarner Inc. and Consolidated Subsidiaries Consolidated Statements of Cash Flows (Unaudited) (millions of dollars)
Six Months Ended June 30, 2004 2003 ------ -------- Operating: Net earnings $105.8 $ 89.0 Non-cash charges to operations: Depreciation and amortization 87.2 75.9 Employee retirement benefits 24.5 6.8 Other non-cash items 8.0 (0.3) ------ ------ Net earnings adjusted for non-cash charges 225.5 171.4 Changes in assets and liabilities, net of effects of divestitures (4.0) (16.1) ------ ------ Net cash provided by operating activities 221.5 155.3 Investing: Capital expenditures (84.2) (64.8) Tooling outlays, net of customer reimbursements (30.1) (20.7) Other (6.5) (11.5) ------ ------ Net cash used in investing activities (120.8) (97.0) Financing: Net reduction in debt (58.8) (10.3) Dividends paid (13.9) (9.6) Other 3.2 (1.7) ------ ------ Net cash used in financing activities (69.5) (21.6) Effect of exchange rate changes on cash and cash equivalents (0.3) 0.1 ------ ------ Net increase in cash and cash equivalents 30.9 36.8 Cash and cash equivalents at beginning of year 113.1 36.6 ------ ------ Cash and cash equivalents at end of period $144.0 $ 73.4 ====== ======
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