Tecumseh Products Company Reports Third Quarter 2013 Results

         Tecumseh Products Company Reports Third Quarter 2013 Results

-- Net sales in the third quarter of 2013 decreased $14.2 million, or 6.8%,
versus the same period of 2012.

-- Excluding the effect of unfavorable changes in foreign currency translation
of $7.0 million, net sales decreased by 3.5% compared to the third quarter of
2012.

-- Net loss for the quarter was $5.7 million, or $0.30 per share, compared to
a net loss of $3.8 million, or $0.21 per share, for the third quarter of 2012.

-- Operating loss was $3.4 million compared to an operating loss of $3.3
million in the third quarter of 2012.

-- EBITDAR from continuing operations for the third quarter of 2013 was $12.6
million compared to $6.1 million in the third quarter of 2012 (EBITDAR is
defined below).

PR Newswire

ANN ARBOR, Mich., Nov. 5, 2013

ANN ARBOR, Mich., Nov.5, 2013 /PRNewswire/ --Tecumseh Products Company
(Nasdaq: TECUA, TECUB), a leading global manufacturer of compressors and
related products, today reported an operating loss of $3.4 million and a net
loss of $5.7 million, or a net loss per share of $0.30, on net sales of $194.4
million for the quarter ended September30, 2013. This compares with an
operating loss of $3.3 million and a net loss of $3.8 million, or $0.21 per
share, on net sales of $208.6 million for the third quarter of 2012.

"We had some favorable manufacturing, commodity and foreign currency impacts
in the third quarter that have given us favorable margins; although, this was
partially offset by some warranty issues,"said Jim Connor, President and CEO.
"We continue to focus on our core business as we navigate through this
uncertain economy and position ourselves to increase shareholder value."

REVIEW OF OPERATIONS

Revenue: Net sales in the third quarter of 2013 decreased $14.2 million, or
6.8%, versus the same period of 2012. Excluding the decrease in sales due to
the effect of unfavorable changes in foreign currency translation of $7.0
million, net sales decreased by 3.5% compared to the third quarter of 2012,
primarily due to lower net volume and unfavorable changes in sales mix,
partially offset by price increases. Volume declines partially related to
lower volumes in India as we were producing units primarily to replace
compressors related to a warranty claim that originated in the second quarter
of 2013. 

Sales of compressors used in commercial refrigeration and aftermarket
applications represented 62% of our total sales and decreased 2.4% compared to
the third quarter of 2012 to $120.1 million.

Sales of compressors for air conditioning applications and all other
applications represented 21% of our total sales and decreased 7.0% compared to
the third quarter of 2012 to $41.3 million.

Sales of compressors used in household refrigeration and freezer ("R&F")
applications represented 17% of our total sales and decreased 19.9% compared
to the third quarter of 2012 to $33.0 million.

Gross profit: Gross profit increased $5.8 million from $18.2 million in the
third quarter of 2012 to $24.0 million in the third quarter of 2013. Our
gross profit margin increased from 8.7% to 12.3% in the third quarter of 2012
and 2013, respectively. This improvement primarily related to favorable
changes in currency exchange effects, manufacturing costs, commodity costs and
price increases, partially offset by expenses related to two warranty claims.

Impairments, restructuring charges, and other items: We recorded $7.4 million
of expense in impairments, restructuring charges, and other items in the third
quarter of 2013, compared to $0.6 million in the same period of 2012. In the
third quarter of 2013, this expense mainly related to severance and business
process re-engineering costs of $6.8 million at our French location.

Loss from Continuing Operations: Net loss from continuing operations for the
quarter ended September30, 2013 was $5.4 million, or a net loss per share of
$0.29, as compared to a net loss from continuing operations of $3.9 million,
or $0.22 per share, in the same period of 2012. The change was primarily
related to higher impairments, restructuring charges, and other items and a
lower income tax benefit, partially offset by higher gross profit in the third
quarter of 2013. In addition, S&A expense decreased by $2.0 million including
a decrease of $1.7 million for professional services and a decrease of $1.1
million in expense relating to our incentive compensation awards.

Cash Flow: Cash and cash equivalents were $40.0 million at the end of the
third quarter 2013 while cash balances were $55.3 million and $53.2 million at
December 31, 2012 and September30, 2012, respectively. In the first nine
months of 2013, cash used in operations was $9.7 million as compared to $4.3
million of cash provided by operations in the first nine months of 2012. This
change primarily related to increased inventory levels, partially offset by
decreases in accounts receivable and increases in accounts payable and accrued
expenses.

Cash used in investing activities was $6.1 million in the first nine months of
2013 as compared to $4.4 million for the same period of 2012. The 2013 cash
used in investing activities is primarily related to capital expenditures of
$8.2 million.

Cash provided by financing activities was $0.1 million in the first nine
months of 2013 compared to cash provided by financing activities of $4.2
million in the first nine months of 2012.

BUSINESS OUTLOOK

We are adjusting our revenue, cash flow and capital spending projections for
the full year of 2013:

  oFor 2013, we currently expect net sales to remain flat or decrease up to 5
    percent from 2012 levels due to the lack of economic improvements in key
    markets and lower volumes in India as most of our third quarter production
    levels went to replace compressors to satisfy a warranty claim that
    originated in the second quarter of 2013.
  oFor 2013, we currently expect our operating cash flow to be flat to
    positive.
  oWe expect capital spending in 2013 to be approximately $15.0 million to
    $20.0 million.

NON-GAAP FINANCIAL MEASURES

While the Generally Accepted Accounting Principles in the United States of
America ("GAAP") results provide significant insight into our operations and
financial position, Tecumseh management supplements its analysis of the
business using Earnings Before Interest, Taxes, Depreciation and Amortization
from Continuing Operations ("EBITDA") and Earnings Before Interest, Taxes,
Depreciation, Amortization, and Impairments, restructuring charges, and other
items from Continuing Operations ("EBITDAR"); both of these are non-GAAP
financial measures. Management believes that these non-GAAP financial
measures, when taken together with the corresponding GAAP measure, provide
incremental insight into the underlying factors and trends affecting our
performance. However, EBITDA from Continuing Operations and EBITDAR from
Continuing Operations, as defined below, should be viewed as supplemental
data, rather than as a substitute or an alternative to the comparable GAAP
measure. The table below presents a reconciliation of EBITDA from Continuing
Operations and EBITDAR from Continuing Operations from our Net income (loss).



RECONCILIATION OF EBITDA FROM CONTINUING OPERATIONS AND EBITDAR FROM
CONTINUING OPERATIONS FROM NET INCOME (LOSS)
(in millions)
                                            Three Months Ended September 30,
                                            2013                      2012
Net (loss)                                  $              $ (3.8)
                                            (5.7)
Loss (income) from discontinued operations, 0.3                       (0.1)
net of tax
Tax expense (benefit)                       0.1                       (1.6)
Interest expense                            2.2                       2.5
Interest income                             (0.3)                     (0.3)
Operating (loss)                            (3.4)                     (3.3)
Depreciation and amortization               8.6                       8.8
EBITDA FROM CONTINUING OPERATIONS           $          5.2            $ 5.5
Impairments, restructuring charges and      7.4                       0.6
other items
EBITDAR FROM CONTINUING OPERATIONS          $          12.6           $ 6.1



CONFERENCE CALL INFORMATION

Tecumseh will broadcast its financial results conference call live over the
Internet on Wednesday, November 6, 2013, at 11:00 a.m. eastern time, and it
expects to post, before the conference call, a slide presentation to be used
in connection with the conference call. Webcast information can be found in
the Investor Relations section of our website at www.tecumseh.com.

About Tecumseh Products Company

Tecumseh Products Company is a global manufacturer of hermetically sealed
compressors for residential and specialty air conditioning, household
refrigerators and freezers, and commercial refrigeration applications,
including air conditioning and refrigeration compressors, as well as
condensing units, heat pumps and complete refrigeration systems. Press
releases and other investor information can be accessed via the Investor
Relations section of Tecumseh Products Company's Website at www.tecumseh.com.

Cautionary Statements Relating to Forward-Looking Statements

This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act that are subject to the safe harbor
provisions created by that Act. In addition, forward-looking statements may be
made orally in the future by or on behalf of us. Forward-looking statements
can be identified by the use of terms such as "expects," "should," "may,"
"believes," "anticipates," "will," and other future tense and forward-looking
terminology, or by the fact that they appear under the caption "Business
Outlook." Our forward-looking statements generally relate to our future
performance, including our anticipated operating results and liquidity sources
and requirements, our business strategies and goals, and the effect of laws,
rules, regulations, new accounting pronouncements and outstanding litigation,
on our business, operating results, and financial condition.

Readers are cautioned that actual results may differ materially from those
projected as a result of certain risks and uncertainties, including, but not
limited to, i) current and future global or regional economic conditions,
including housing starts, and the condition of credit markets, which may
magnify other risk factors; ii) loss of, or substantial decline in sales to,
any of our key customers; iii) our history of losses and our ability to
maintain adequate liquidity in total and within each foreign operation; iv)
our ability to restructure or reduce our costs and increase productivity and
quality and develop successful new products in a timely manner; v) actions of
competitors in highly competitive markets with intense competition; vi) the
ultimate cost of defending and resolving legal and environmental matters,
including any liabilities resulting from the regulatory antitrust
investigations commenced by the United States Department of Justice Antitrust
Division and the Secretariat of Economic Law of the Ministry of Justice of
Brazil, both of which could preclude commercialization of products or
adversely affect profitability and/or civil litigation related to such
investigations; vii) availability and volatility in the cost of materials,
particularly commodities, including steel, copper and aluminum, whose cost can
be subject to significant variation; viii) financial market changes, including
fluctuations in foreign currency exchange rates and interest rates; ix)
default on covenants of financing arrangements and the availability and terms
of future financing arrangements; x) reduction or elimination of credit
insurance; xi) significant supply interruptions or cost increases; xii)
potential political and economic adversities that could adversely affect
anticipated sales and production; xiii) in India, potential military conflict
with neighboring countries could adversely affect anticipated sales and
production; xiv) local governmental, environmental, trade and energy
regulations; xv) increased or unexpected warranty claims; xvi) the extent of
any business disruption caused by work stoppages initiated by organized labor
unions; xvii) the extent of any business disruption that may result from the
restructuring and realignment of our manufacturing operations and personnel or
system implementations, the ultimate cost of those initiatives and the amount
of savings actually realized; xviii) the success of our ongoing effort to
bring costs in line with projected production levels and product mix; xix)
weather conditions affecting demand for replacement products; and xx) the
effect of terrorist activity and armed conflict. These forward-looking
statements are made only as of the date of this release, and we undertake no
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise.

Contact: Janice Stipp
         Tecumseh Products Company
         734-585-9507
         Investor.relations@tecumseh.com

SOURCE Tecumseh Products Company

Website: http://www.tecumseh.com
 
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