Cooper Reports Net Sales Increase and Income Drop

Cooper Tire & Rubber has reported a 5 per cent year-over-year increase in net sales, a fourth quarter record for the company’s tyre operations. At the same time the board of directors authorised the repurchase of up to $200 million of the company’s publicly traded notes. This will be done through open market transactions, a tender offer or a combination of the two. Total net sales for the company’s continuing operations increased to $541 million in the quarter ended 31 December 2004, compared to $515 million in the same period of 2003. Income from continuing operations dipped significantly in the quarter to $3 million (4 cents per share) from $8 million (10 cents per share) in the fourth quarter of 2003.

On 23 December, the company completed the sale of Cooper-Standard Automotive for $1.221 billion including estimated proceeds of $49 million from post-closing adjustments due in 2005. Cooper reports that the sale resulted in a net gain of $112 million. Including the income from discontinued operations and the gain from the sale of Cooper-Standard Automotive, total net income for the company was $133 million, or $1.79 per share in the three-month period, according to the company.

Thomas A Datillo, Cooper’s chairman, president and CEO, commented on the results: “We concluded the year with a significant number of milestones and accomplishments. With the fourth quarter record sales performance, we set sales records in each quarter this year. With the sale of Cooper-Standard, we set the stage for a new period of growth and opportunity in the tyre business. We now have our focus solely on the global tyre market. Our Asian initiatives will provide production capacity to help restore service levels in North America at the same time they establish Cooper’s presence within the Asian region for future sales opportunities.”

Cooper Tire & Rubber also has announced that it will pay its 132nd quarterly dividend. The 10.5 cents per common stock share payment will be paid to shareholders recorded at the close of business 7 March 2005.
The board of directors also authorised the repurchase of up to $200 million worth of the company’s common stock through open market transactions. This authorisation to repurchase common stock will supersede and effectively cancel the previous share repurchase programme authorised by the Board in May 2000.

“We are excited about our opportunities in 2005 as a whole,” Mr Dattilo continued. “We will continue to pursue strategic investments in the tyre business and advance our Asian strategy, including the development of our relationship with Kumho following our recently announced acquisition of 11 per cent of them.

“Our product mix is definitely getting richer as we introduce new, premium products and we will benefit from a positive pricing environment in the industry. All these elements combined with our work to offset rising production costs should lead to improving margins in the second half of the year and an overall improved performance in 2005.”