Federal-Mogul Corporation: Federal-Mogul Reports Improved Q3 2013 Results

  Federal-Mogul Corporation: Federal-Mogul Reports Improved Q3 2013 Results

           Sales up 9% to $1.7 billion; Net Income of $38 million;
     Operational EBITDA of $147 million and Free Cash Flow of $58 million

Q3 2013 Highlights

  *Sales of $1.7 billion  from continuing operations up  $145 million, or  9% 
    higher than Q3 2012.

  *Net Income of $38 million, a $49 million improvement from Q3 2012. EPS of
    $0.26 per share,  up from  a loss  of $(0.11)  per share  during the  same 
    period a year ago.

  *Operational EBITDA of $147 million or 8.7% of sales versus $103 million or
    6.6% in Q3  2012, with EBITDA  margin conversion on  incremental sales  of 

  *Free Cash Flow  of $58 million  demonstrating increased profitability  and 
    strong improvement in working capital management versus Q3 2012. 

  *Q3 2013 ending cash position of $960 million.

Southfield,  Michigan,   October   23,   2013...   Federal-Mogul   Corporation 
(NASDAQ:FDML) today reported  operating results  for the  third quarter  ended 
September 30, 2013. Total sales were $1,690 million, up 9% versus Q3 2012  on 
a continuing operations basis with negligible exchange impact.  Federal-Mogul 
sales in Europe were up  12% in Q3 2013 due  to market share gains, growth  in 
export engine production and the impact of the BERU^® ignition acquisition and
distribution agreements. The company's North  American revenue was up 6%  and 
Rest of the World was up 7% as these markets continued to increase  production 
rates  versus  Q3  2012.  Operating  Margin^(1)  improved  to  4.6%,  up  two 
percentage points from Q3 2012.  Net income attributable to Federal-Mogul  was 
$38 million  or  $0.26  EPS, versus  a  loss  of $(11)  million  in  Q3  2012. 
Operational EBITDA in Q3 2013 was $147 million or 8.7% of sales, versus  $103 
million or 6.6% of sales in Q3 2012. Free Cash Flow was $58 million. The  Q3 
ending cash balance of $960 million includes $500 million in proceeds from the
company's shareholder rights offering and $51 million from divestitures.

$ millions                      Q3 2013 Q3 2012  B/(W)
Net Sales                        $1,690  $1,545   $145
Gross Margin                        255     213     42
% of sales                       15.1%   13.8% 1.3pts
SG&A                              (177)   (173)   (4)
% of sales                      (10.5%) (11.2%) 0.7pts
Net Income (Loss)                    38    (11)     49
Attributable to Federal-Mogul
Earnings Per Share ^(2)            0.26  (0.11)   0.37
in dollars, diluted EPS
Operational EBITDA ^(3)             147     103     44
% of sales                         8.7%    6.6% 2.1pts
Free Cash Flow ^(4)                 $58  $(142)   $200

"The company's improved sales  in the third quarter  2013 were driven by  much 
stronger demand  for Federal-Mogul  products used  in European  light  vehicle 
production," said Rainer Jueckstock,  Federal-Mogul co-CEO and CEO  Powertrain 
Segment. "At the same time, we have experienced continued OE sales growth  in 
North America and Asia, especially China, versus Q3 2012. This improved light
vehicle demand helped  offset continued  softness in  the European  commercial 
vehicle and  industrial  markets in  Q3  2013. Our  Q3  earnings  performance 
continues to show that we are making good progress on restructuring in Western
Europe and  the  U.S.,  increasing  operational  efficiency  and  implementing 
ongoing cost reductions as we drive for growth and enhanced margins."

"We had improved aftermarket demand in  the U.S. and Canada and much  stronger 
sales in Europe during Q3 2013,"  said Kevin Freeland, co-CEO and CEO  Vehicle 
Components Segment. "Further, our  non-core business line divestiture  actions 
and ongoing footprint restructuring  combined with inventory and  distribution 
efficiency  improvements  continue  to  position  the  company  for   improved 

The company completed the divestiture of its OE and aftermarket fuel  delivery 
products business including an engineering center and manufacturing operations
in Logansport,  Indiana,  along  with  other  related  assets,  including  the 
Carter^® brand. The business had 2013 year-to-date sales of approximately  $80 
million and employed 380 associates.

Q3 Segment Revenue and Operational EBITDA

Powertrain Segment (PT)
Federal-Mogul's Powertrain (PT) Segment is a leader in the design, engineering
and manufacturing  of  combustion  chamber  and  other  powertrain  components 
serving  light,  medium  and  heavy-duty  vehicle  and  industrial  customers. 
Approximately 70% of PT Segment revenue is derived from passenger car vehicle
manufacturers. On a global basis, the  PT Segment had a 11% revenue  increase 
to $1,038 million, up from $935 million in Q3 2012, with strong light  vehicle 
market share gains. During the  same comparison period, global light  vehicle 
production increased 1%. Federal-Mogul's PT Segment market share gains during
the period  are due  to  its technology  leadership, market  penetration  with 
powertrain customers in the growing  luxury segment and increased presence  on 
emerging market mid-range vehicles. 

PT Segment revenue  in Q3 2013  was up 16%  in North America  versus Q3  2012. 
Light vehicle  production  increased 1%  in  North America  during  the  same 
period. The PT  Segment continued to  gain market share  in Europe, where  PT 
derives approximately 50% of  its revenue. In Europe  in Q3 2013, PT  revenue 
increased 8% due to higher volumes on new engine programs and revenue from the
BERU ignition  acquisition.  For  comparison,  in  the  European  market,  LV 
production was down 1% during the same period and CV production was 7%  lower. 

PT Segment revenue during Q3  2013 in the Rest of  the World was up 15%,  with 
revenue in the China market  up 37% versus Q3  2012. The PT Segment  regional 
revenue growth levels  in all regions  increased at a  higher percentage  than 
underlying market production growth rates.

The PT Segment in Q3  2013 had EBITDA of $94  million up $40 million from  $54 
million in Q3 2012 on a continuing  operations basis. EBITDA as a percent  of 
sales increased to  9% in Q3  2013 from  5.7% of sales  in Q3 2012  as the  PT 
Segment implemented cost reduction  measures, continued restructuring  actions 
and benefitted from higher sales volumes and more stable order flow,  allowing 
for greater operational efficiency. 

Vehicle Components Segment (VCS)
Federal-Mogul's VCS  business  sells  and distributes  a  broad  portfolio  of 
products through more  than 20 of  the world's most  recognized brands in  the 
global  aftermarket,   while   also   serving   original   equipment   vehicle 
manufacturers with  products  including  braking, chassis,  wipers  and  other 
vehicle components. VCS revenue in  Q3 2013 was $734  million, up 5% from  Q3 
2012. More  than 75%  of VCS  revenue  is derived  in the  global  automotive 

VCS revenue in the U.S. and Canada  aftermarket improved 2% in Q3 2013  versus 
Q3 2012. Revenue in the European aftermarket was up 28%, primarily due to  an 
aftermarket ignition  distribution agreement  and stronger  sales of  Ferodo^® 
braking and MOOG^® steering products.

The VCS Segment had EBITDA of $53 million or 7.3% of sales in Q3 2013, up from
$49 million or 7% in Q3 2012. Further, net working capital improved in Q3  as 
the VCS Segment  implemented inventory  and distribution  cost reductions  and 
fully absorbed the impact of previously agreed aftermarket accounts receivable
commercial terms.

"Recent market studies have  reinforced the importance of  trust in the  brand 
among service technicians  and installers,"  said Freeland.  "We are  placing 
stronger emphasis on building  customer preference for Federal-Mogul's  brands 
and have implemented several new programs in the third quarter. These include
new  marketing   partnerships,   mobile  catalog   and   product   information 
applications for  tablets  and  smart  phones,  new  technician  training  and 
attractive programs to drive selection of Federal-Mogul's products."

"At the  same  time,  we  are  also  improving  operational  and  distribution 
efficiency and reducing support  costs in order to  offset the expense of  new 
marketing programs and implementation of strategies to drive higher order fill
rates and customer satisfaction. This has allowed us to refocus our direction
while  maintaining  our  financial  performance  in  the  comparison  period," 
Freeland continued.

Federal-Mogul will conduct a conference call and audio webcast on October 23,
2013 at 10:00 a.m. EDT. To participate in the call:
Domestic calls:     888.713.4199
International calls:617.213.4861 
Passcode I.D.:  86647671
To facilitate rapid connection, please click here to pre-register.

The live audio webcast will be available in the Investor Relations section  of 
the corporate website by clicking here on October 23, beginning at 10:00 a.m.,

An audio replay of the call will be available two hours following the call and
will be accessible until November 23, 2013 at:
Domestic calls:   888.286.8010 
International calls:     617.801.6888
Passcode I.D.:56154657

(1) Operating margin is defined as gross margin less SG&A expense.

(2) Earnings Per Share  (EPS) for Q3  2013 is calculated on  the basis of  the 
weighted daily average total share count  during the third quarter 2013.  The 
share count increased from approximately 99 million to 150 million during  the 
third quarter 2013 as  a result of a  shareholder rights offering. The  share 
count during Q3 2012 was approximately 99 million.

(3)  Management  believes  that   Operational  EBITDA  provides   supplemental 
information for management and investors to evaluate the operating performance
of its business.  Management uses,  and believes that  investors benefit  from 
referring to Operational EBITDA in assessing the Company's operating  results, 
as well  as in  planning, forecasting  and analyzing  future periods  as  this 
financial measure approximates the cash  flow associated with the  operational 
earnings of the Company. Additionally, Operational EBITDA presents measures of
corporate performance exclusive  of the  Company's capital  structure and  the 
method by which assets were acquired and financed. During the third quarter of
2013, the Company adjusted its definition of Operational EBITDA to exclude the
income  statement   impacts  associated   with  stock   appreciation   rights. 
Accordingly,  Operational  EBITDA  is  defined  as  earnings  from  continuing 
operations before interest, income  taxes, depreciation and amortization,  and 
certain items such  as restructuring  and impairment charges,  Chapter 11  and 
U.K. Administration-related reorganization  expenses, gains or  losses on  the 
sales of businesses, the non-service  cost component of the U.S.-based  funded 
pension plan,  OPEB  curtailment gains  or  losses and  the  income  statement 
impacts associated with  stock appreciation  rights. Prior  periods have  been 
reclassified to conform to the presentation used in this filing.

(4) Free Cash Flow is  defined as net cash  provided from (used by)  operating 
activities less capital investment for plant, property and equipment.

About Federal-Mogul

Federal-Mogul Corporation  (NASDAQ:FDML)  is  a  leading  global  supplier  of 
products and services to the  world's manufacturers and servicers of  vehicles 
and equipment  in the  automotive, light,  medium and  heavy-duty  commercial, 
marine,  rail,  aerospace,  power  generation  and  industrial  markets.   The 
company's  products  and  services  enable  improved  fuel  economy,   reduced 
emissions and enhanced vehicle safety.

Federal-Mogul operates two  independent business segments,  each with a  chief 
executive  officer   reporting   to  Federal-Mogul's   Board   of   Directors. 
Federal-Mogul's Powertrain segment designs and manufactures original equipment
powertrain  components  and  systems   protection  products  for   automotive, 
heavy-duty, industrial  and  transport applications.  Federal-Mogul's  Vehicle 
Components segment sells and distributes a broad portfolio of products through
more than  20 of  the world's  most recognized  brands in  the global  vehicle 
aftermarket, while also serving original equipment vehicle manufacturers  with 
products including braking, chassis, wipers and other vehicle components. The
company's aftermarket  brands include  ANCO^® wiper  blades; Champion^®  spark 
plugs, wipers and  filters; AE^®, Fel-Pro^®,  FP Diesel^®, Goetze^®,  Glyco^®, 
Nüral^®, Payen^®  and  Sealed Power^®  engine  products; MOOG^®  steering  and 
suspension parts; and Ferodo^® and Wagner^® brake products.

Federal-Mogul was  founded in  Detroit  in 1899.  The company  employs  44,500 
people in  34 countries,  and  its worldwide  headquarters is  in  Southfield, 
Michigan,   United    States.    For   more    information,    please    visit 

Forward-Looking Statements
Statements contained in  this press  release, which are  not historical  fact, 
constitute "Forward-Looking Statements." Actual results may differ  materially 
due to numerous important factors  that are described in Federal-Mogul's  most 
recent report to the SEC on Form 10-K, which may be revised or supplemented in
subsequent reports to the  SEC on Forms 10-Q  and 8-K. Such factors  include, 
among  others,  fluctuations  in  domestic  or  foreign  vehicle   production; 
fluctuations in the demand for  vehicles containing our products; the  ability 
to refinance the Company's outstanding indebtedness on commercially reasonable
terms  or  at  all;  the  Company's  ability  to  generate  cost  savings   or 
manufacturing efficiencies to offset or exceed contractually or  competitively 
required price  reductions or  price reductions  to obtain  new business;  the 
costs, timing and success of  the Company's restructuring actions;  conditions 
in the  automotive industry;  the success  of the  Company's segmentation  and 
corresponding effects; and  general global and  regional economic  conditions. 
Federal-Mogul  does  not  intend  or  assume  any  obligation  to  update  any 
Forward-Looking Statements. 

                                   # # #

Steve Gaut steven.gaut@federalmogul.com
(248) 354-7826

Federal-Mogul Press Release Financials


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Source: Federal-Mogul Corporation via Thomson Reuters ONE
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