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The eBearing News
October 4, 2006
Federal-Mogul Reports Second Quarter Financials
copyright © 2006 eBearing Inc.
Federal-Mogul Corp. (USA; operating under Chapter 11 bankruptcy protection since October 2001)
earlier released second quarter financial results.
Sales for the quarter were USD $1.63 billion, down from $1.67 billion in 2005.
While COGS remained relatively steady at 82%, the cost of debt service rose to $44 million
from 2005's $34 million.
In the end, Federal-Mogul recorded a net loss for the quarter of $16.8 million, worse than
the $11.6 million loss for second quarter 2005.
Even though sales declined substantially, Federal-Mogul's receivables exposure is now
more than $120 million higher than just six months ago, at the beginning of the
fiscal year. Inventory has also grown, by $100 million since January 1.
The current portion of its liabilities -- short term debt and accounts payable, for example -- has
also ballooned since January 1, by nearly $160 million, to $1.82 billion. Long-term debt is up by
$74 million since January 1, to $82 million.
By the end of the quarter, Federal-Mogul's accumulated shareholder defecit had broken through
the $2.5 billion level to end at $2.501 billion, from $2.4 billion six months earlier.
In April, Federal-Mogul announced the closing of its St. Johns, Michigan engine bearing
manufacturing facility.
article: F-M closing St. Johns engine bearing plant
The plant will be entirely shuttered by the end of 2006; the St. Johns closure triggered asset
writedowns this quarter totaling $3.4 million as F-M adjusted for the realizable value
of St. Johns' plant and equipment.
Also during 2006, F-M said it has taken impairment charges of $7.1 million related to its Powertrain
bearing and pistons businesses to reflect declining sales and projected future cash flows.
In a statement, Federal-Mogul blamed softness in the North American aftermarket for the drop
in overall sales. For the $20 million decline in six-month sales results, the company largely
blamed unfavorable exchange rates.
Jose Maria Alapont, who holds all three offices of Chairman, President, and CEO, said: "The company
remains committed to its global profitable growth strategy. Our recent acquisition
[boosting its ownership of Goetze India Ltd. from 25.47% to 50.11%]
and our successful restructuring efforts are important activities supporting this strategy and
expanding our capability to provide innovative and quality products at the most competitive cost."
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- by Bruce A. Carr
from individual research,
tips and commercial sources.
Bruce Carr edited this content.
Copyrighted material; unauthorized reproduction prohibited.
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eBearing.com ... for everything that moves™
Entire contents Copyright © 1999-2011, eBearing Inc. All rights reserved.
eBearing.com and "... for everything that moves" are registered trademarks of eBearing Inc.
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