Tower International Reports Fourth Quarter Results and Provides Outlook for 2018

LIVONIA, Mich., Feb. 13, 2018

• Revenue for the fourth quarter was $538 million compared with $462 million in the fourth quarter of 2016 representing a 16 percent increase.
• Net income was negative $3.9 million or $(0.19) per share, compared with $16.9 million or $0.81 per share in the fourth quarter last year. As detailed below, this year's fourth quarter included a non-cash charge of $27.2 million related to U.S. tax reform legislation as well as other certain items that, in aggregate, adversely impacted results by $28.4 million. Excluding these items and comparable items in the fourth quarter of 2016, adjusted earnings per share amounted to $1.17, an increase of 15 percent from the $1.02 reported a year ago.
• Adjusted EBITDA for the quarter was $61.1 million slightly ahead of the Company's outlook and up 9 percent from $56.2 million a year ago.
• For the quarter, net cash provided by continuing operating activities was $129 million. Cash disbursed for purchases of equipment totaled $28 million resulting in Free Cash Flow of $101 million.
• Tower also provided its three year net new business backlog of $350 million for 2018 through 2020. This represents an increase of more than 20 percent from the company's previous three year backlog of $290 million provided last year.
• Full year 2018 outlook includes:
• Revenue growth of 7 percent to $2.14 billion, reflecting primarily net new business of $125 million and favorable foreign exchange;
• Adjusted EBITDA of $230 million;
• Expansion of Adjusted EBITDA Margin to 10.7 percent;
• Diluted Adjusted EPS of $4.10 per share – up 9 percent from 2017; and
• Free Cash Flow of $50 million, with strong free cash flow in the second half of the year more than offsetting the expected cash outflow in the first half of the year.
• The Company's outlook for first quarter 2018 includes revenue of $550 million, Adjusted EBITDA of $53 million and Diluted Adjusted Earnings Per Share of 80 cents.

"Tower delivered solid financial results in the fourth quarter as revenue, Adjusted EBITDA, Adjusted EPS and Free Cash Flow were all above our previous outlook," said CEO Jim Gouin.  "The Tower team did a great job throughout 2017, remaining focused on safety and quality, while meeting our customers' requirements and delivering impressive financial results.  We continue to invest in Tower's growth, and are benefitting from the emerging industry trends, as demonstrated by the $350 million of net new business backlog.  This new business coupled with our exposure to trucks and SUVs in North America position Tower for continued growth in the coming years at a faster pace than the industry." 

Tower to Host Conference Call Today at 11 a.m. EST

Tower will discuss its fourth quarter 2017 results and other related matters in a conference call at 11 a.m. EST today.  Participants may listen to the audio portion of the conference call either through a live audio webcast on the Company's website or by telephone.  The slide presentation and webcast can be accessed via the investor relations portion of Tower's website www.towerinternational.com.  To dial into the conference call, domestic callers should dial (866) 393-4576, international callers should dial (706) 679-1462.  An audio recording of the call will be available approximately two hours after the completion of the call.  To access this recording, please dial (855) 859-2056 (domestic) or (404) 537-3406 (international) and reference Conference I.D. #6286489.  A webcast replay will also be available and may be accessed via Tower's website.

Non-GAAP Financial Measures

This press release includes the following non-GAAP financial measures: "adjusted EBITDA", "adjusted EBITDA margin", "adjusted earnings per share", and "free cash flow".  We define adjusted EBITDA as net income/(loss) before interest, taxes, depreciation, amortization, restructuring items and other adjustments described in the reconciliations provided in this press release.  Adjusted EBITDA margin represents Adjusted EBITDA divided by revenues, Adjusted earnings per share exclude certain income and expense items described in the reconciliation provided in this press release.  Free cash flow is defined as cash provided by continuing operating activities less cash disbursed for purchases of property, plant and equipment.  We use adjusted EBITDA, adjusted EBITDA margin, adjusted earnings per share, and free cash flow as supplements to information provided in accordance with generally accepted accounting principles ("GAAP") in evaluating our business and they are included in this press release because they are principal factors upon which our management assesses performance and in certain instances in measuring performance for compensation purposes.  Reconciliations of these non-GAAP financial measures to the most directly comparable financial measures calculated in accordance with GAAP are set forth below.  The non-GAAP measures presented above are not measures of performance under GAAP.  These measures should not be considered as alternatives for the most directly comparable financial measures calculated in accordance with GAAP.  Other companies in our industry may define these non-GAAP measures differently than we do and, as a result, these non-GAAP measures may not be comparable to similarly titled measures used by other companies in our industry; and certain of our non-GAAP financial measures exclude financial information that some may consider important in evaluating our performance.  Given the inherent uncertainty regarding mark to market adjustments of financial instruments, potential gain or loss on our Discontinued Operations, potential restructuring expenses, and expenses related to our long-term incentive compensation programs in any future period, a reconciliation of forward-looking financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is not feasible.  Consequently, any attempt to disclose such reconciliations would imply a degree of precision that could be confusing or misleading to investors. The magnitude of these items, however, may be significant.

Forward-Looking Statements and Risk Factors