Tenneco Announces Preliminary Fourth Quarter and Full-Year 2018 Revenue
LAKE FOREST, Ill.--(BUSINESS WIRE)--Feb 22, 2019--Tenneco (NYSE: TEN) today announced preliminary revenue for the fourth quarter and full year 2018 and provided 2019 revenue guidance. The company also announced that in the near future it will reschedule the date of its previously announced earnings release and teleconference for the fourth quarter and full year 2018 to allow it sufficient time to complete the first year-end closing process for the combined company.
Total revenue in the fourth quarter was $4.3 billion, up 79% year-over-year, driven mainly by the completion of the Federal-Mogul acquisition on October 1, 2018. Excluding the acquisition and on a constant currency basis, revenue increased 4%, outpacing light vehicle industry production* by 10 percentage points. The outperformance was driven by volume and content growth with commercial truck and off-highway as well as light vehicle customers. Value-add revenue was $3.6 billion, up 100% compared to last year including Federal-Mogul results.
For the full year, total revenue was $11.8 billion, including Federal-Mogul revenues since October 1. Excluding the acquisition and the impact of currency exchange rates, Tenneco delivered full-year organic revenue growth of 6%, outpacing industry production* by 7 percentage points, driven by 24% growth in commercial truck and off-highway and 5% light vehicle growth versus last year. Value-add revenue was $9.3 billion, up 31% compared to last year including Federal-Mogul results. The company anticipates that 2018 adjusted earnings will be near the low end of the guidance range previously provided for the fourth quarter.
During the year-end closing process for the newly combined business, a difference was identified through the alignment of the combined company’s accounting practices. This practice relates to determining the appropriate capitalization and/or classification of certain expenses within the income statement. In this respect, the company is taking more time to complete its first combined year-end financial statements. The company currently believes that any changes related to this practice will not be material to earnings or cash flow in any reporting period; however, the cumulative effect may require some revision to prior period results.
“Tenneco’s organic growth continued in the fourth quarter, outpacing industry production by ten percentage points, supported by the strength of our diverse business profile in terms of products, geographic regions and end-markets served,” said Brian Kesseler, Tenneco co-CEO. “We closed the Federal-Mogul transaction, accelerating the transformation of the combined businesses into two purpose-built, industry leading companies, and our acquisition of Öhlins Racing will fuel the growth of advanced suspension technology and enhance our portfolio in broader mobility markets.”
On a pro forma basis, the company expects 2019 constant dollar revenue growth in the range of 4% to 5%, outpacing light vehicle industry production* by 6 to 7 percentage points. Global light vehicle production* is forecast to be down 2% in 2019.
“Our global teams are executing well against the integration plans,” said Roger Wood, Tenneco co-CEO. “In 2019, we expect continued revenue growth that outpaces global industry production, powered by diverse and sustainable growth drivers across our business.”
*Source: IHS Markit February 2019 global light vehicle production forecast and Tenneco estimates.
Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3 Months Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 12 Months Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – 3 Months and 12 Months Reconciliation of GAAP Revenue to Non-GAAP Revenue Measures – Original Equipment and Aftermarket Revenue – 3 Months and 12 Months Reconciliation of GAAP Revenue to Pro Forma Revenue Measures – 2017 and 2018
The Tenneco Board of Directors has scheduled the corporation’s annual meeting of shareholders for Wednesday, May 15, 2019 at 1:00 p.m. ET. The meeting will be held at the Detroit Foundation Hotel, 250 W Larned Street, Detroit, Michigan. The record date for shareholders eligible to vote at the meeting is March 18, 2019.
Headquartered in Lake Forest, Illinois, Tenneco is one of the world’s leading designers, manufacturers and marketers of Aftermarket, Ride Performance, Clean Air and Powertrain products and technology solutions for diversified markets, including light vehicle, commercial truck, off-highway, industrial and the aftermarket, with 2018 revenues of $11.8 billion and approximately 81,000 employees worldwide. On October 1, 2018, Tenneco completed the acquisition of Federal-Mogul, a leading global supplier to original equipment manufacturers and the aftermarket. Additionally, the company expects to separate its businesses to form two new, independent companies, an Aftermarket and Ride Performance company as well as a new Powertrain Technology company, in the second half of 2019.
About DRiV™ - the future Aftermarket and Ride Performance Company
Following the separation, DRiV will be one of the largest global multi-line, multi-brand aftermarket companies, and one of the largest global OE ride performance and braking companies. DRiV’s principal product brands will feature Monroe ®, Öhlins® Walker®, Clevite®Elastomers, MOOG®, Fel-Pro®, Wagner®, Ferodo®, Champion® and others. DRiV would have 2018 pro-forma revenues of $6.4 billion, with 54% of those revenues from aftermarket and 46% from original equipment customers.
About the new Tenneco - the future Powertrain Technology Company
Following the separation, the new Tenneco will be one of the world’s largest pure-play powertrain companies serving OE markets worldwide with engineered solutions addressing fuel economy, power output, and criteria pollution requirements for gasoline, diesel and electrified powertrains. The new Tenneco would have 2018 pro-forma revenues of $11.4 billion, serving light vehicle, commercial truck, off-highway and industrial markets.
Revenue estimates and other forecasted information in this release are based on OE manufacturers’ programs that have been formally awarded to the company; programs where Tenneco is highly confident that it will be awarded business based on informal customer indications consistent with past practices; and Tenneco’s status as supplier for the existing program and its relationship with the customer. This information is also based on anticipated vehicle production levels and pricing, including precious metals pricing and the impact of material cost changes. Unless otherwise indicated, our methodology does not attempt to forecast currency fluctuations, and accordingly, reflects constant currency.
This press release contains forward-looking statements regarding the company’s anticipated 2018 earnings. These forward-looking statements are based on the current expectations of the company (including its subsidiaries). Because these statements involve risks and uncertainties, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include the final results of the Company’s evaluation of the accounting issues described herein. In addition, investors should consider the risk factors and uncertainties detailed from time to time in the company’s SEC filings, including but not limited to its annual report on Form 10-K for the year ended December 31, 2017, and its quarterly report on Form 10-Q for the quarter ended September 30, 2018.
In addition, this press release contains forward-looking statements. The words “may,” “will,” “believe,” “should,” “could,” “plan,” “expect,” “anticipate,” “estimate,” and similar expressions (and variations thereof), identify these forward-looking statements. These forward-looking statements are based on the current expectations of the company (including its subsidiaries). Because these statements involve risks and uncertainties, actual results may differ materially from the expectations expressed in the forward-looking statements. Important factors that could cause actual results to differ materially from the expectations reflected in the forward-looking statements include:
In addition, important factors related to the acquisition of Federal-Mogul LLC (“Federal-Mogul”) and the planned separation of our company into a powertrain technology company and an aftermarket and ride performance company that could cause actual results to differ materially from the expectations reflected in the forward-looking statements, including:
The company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release. Additional information regarding these risk factors and uncertainties is detailed from time to time in the company’s SEC filings, including but not limited to its annual report on Form 10-K for the year ended December 31, 2017, and its quarterly report on Form 10-Q for the quarter ended September 30, 2018.
View source version on businesswire.com:https://www.businesswire.com/news/home/20190222005516/en/
CONTACT: Investor inquiries:
KEYWORD: UNITED STATES NORTH AMERICA ILLINOIS
INDUSTRY KEYWORD: MANUFACTURING AUTOMOTIVE MANUFACTURING AUTOMOTIVE AFTERMARKET GENERAL AUTOMOTIVE
SOURCE: Tenneco Inc.
Copyright Business Wire 2019.
PUB: 02/22/2019 04:44 PM/DISC: 02/22/2019 04:44 PM