Cooper Tire & Rubber Company Reports Strong First Quarter 2014 Profit

  Cooper Tire & Rubber Company Reports Strong First Quarter 2014 Profit

  *First quarter net sales of $796 million
  *First quarter operating profit of $81 million or 10.2% of net sales;
    second-best first quarter profit result in company history
  *First quarter net income of $0.71 per share attributable to Cooper Tire &
    Rubber Company

Business Wire

FINDLAY, Ohio -- May 2, 2014

Cooper Tire & Rubber Company (NYSE: CTB) today reported results for the first
quarter of 2014. Net sales were $796 million, a decrease of $65 million
compared with the same period a year ago. Operating profit for the quarter was
$81 million, which is $16 million lower than the first quarter of 2013 and
10.2% of net sales. The company reported net income attributable to Cooper
Tire & Rubber Company of $0.71 per share, or $45 million, in the first
quarter. This compares with $56 million, or $0.87 per share, for the same
period last year.

“Cooper is off to a strong start in 2014, which is our 100^th year in the tire
business,” said Chairman, Chief Executive Officer and President Roy Armes.
“Our first quarter operating profit is the second-best for a first quarter in
our company’s history, topped only by last year’s first quarter, when we set
an all-time profit record,” he said. “We are pleased with the way our
employees around the globe have remained focused on our goals as they continue
to execute our strategic plan. Going forward, we will build on our successes
and address the opportunities we have to further strengthen our business and
deliver shareholder value across a wide range of economic and industry

Factors impacting operating profit in the first quarter of 2014 included
unfavorable pricing and mix of $96 million, which was partially offset by
lower raw material costs of $67 million, manufacturing cost efficiencies of
$11 million, higher unit volumes of $8 million and lower products liability
costs of $2 million. Compared with the first quarter of 2013, selling, general
and administrative costs were $5 million higher, and other operating costs
increased $3 million, including distribution costs that were higher than a
year ago.

Cooper ended the first quarter with a strong balance sheet, including $336
million in cash and cash equivalents, which was an increase of $64 million
compared with March 31, 2013. Cash was down $62 million from December 31, 2013
consistent with typical seasonal patterns for working capital.

A summary presentation of information related to the quarter is posted on the
company’s website at

North America Tire Operations

North America Tire Operations achieved net sales of $563 million during the
first quarter, down 6% from first quarter 2013 net sales of $602 million. Unit
shipments for the North American segment increased 5% compared with the same
period a year ago, despite extremely limited shipments of Roadmaster^™ truck
and bus radial (TBR) tires, which did not begin reaching the market until late
in the first quarter. Cooper’s total light vehicle tire shipments in the
United States increased 7% during the quarter compared with Rubber
Manufacturers Association (RMA) member shipments, which were up approximately
1%, and total industry shipments (including an estimate for non-RMA members),
which increased 5%, as reported by the RMA.

The segment’s operating profit was $69 million for the first quarter, or 12.2%
of net sales. This represents a decrease of $3 million compared with the first
quarter of 2013. The lower operating profit reflects unfavorable pricing and
mix of $70 million, which was offset by lower raw material costs of $50
million, higher unit volumes of $10 million, manufacturing cost efficiencies
of $10 million, and lower products liability costs of $2 million. Selling,
general and administrative costs were $1 million higher than the first quarter
of 2013, and other costs were $4 million higher, including increased
distribution costs.

International Tire Operations

International Tire Operations generated first quarter 2014 net sales of $310
million, a decrease of $31 million, or 9%, compared with the same period a
year ago. Lower pricing and mix of $35 million and reduced unit volumes of $7
million were partially offset by favorable exchange effects of $11 million.
Unit shipments for the International segment decreased 2% compared with the
first quarter of 2013, with declines in both Asia and Europe. Lower sales
volumes in Asia were driven by reduced passenger car tire and medium truck
tire shipments, including intercompany shipments. The reduced shipments were
largely attributable to the lingering effects of the earlier labor disruptions
at our Cooper Chengshan (Shandong) Tire Company Ltd. (CCT) joint venture in
Rongcheng, China. The decline in European sales volumes was primarily due to
reduced sales of lower priced tires, driven in part by the end of an
arrangement to sell an entry-level tire brand exclusively through a large
retail chain.

The International segment achieved first quarter operating profit of $23
million, or 7.5% of net sales, compared with $30 million, or 8.8% of net
sales, for the same period a year ago. The lower operating profit was
primarily due to unfavorable pricing and mix of $30 million and lower unit
volumes of $2 million, which were largely driven by the lingering effects of
the earlier CCT labor disruptions. Partially offsetting these impacts were
lower raw material costs of $22 million, manufacturing cost efficiencies of $2
million and lower selling, general and administrative costs of $1 million.


Raw material prices declined about 4% from the fourth quarter of 2013 to the
first quarter of 2014. Management anticipates that second quarter raw material
prices will be roughly flat sequentially compared to the first quarter. The
long-term raw material outlook is for prices to generally trend higher with
periods of volatility. Capital expenditures for 2014 are expected to be
between $165 million and $175 million.

“We have strong momentum moving into the second quarter,” said Armes. “It is
expected that our TBR volumes in the United States will rebound as Roadmaster
truck tire production resumed earlier this year at CCT. While we anticipate
that global tire markets will remain highly competitive, and that underlying
economic conditions will likely continue to vary widely across markets, our
exciting line up of new products and demonstrated ability to execute our
strategic plan makes us optimistic about the future,” Armes added. “We have
successfully moved our business forward and believe Cooper is well positioned
to meet or exceed industry unit volume growth rates in our largest markets
this year.”

“Importantly, Cooper continues to move forward on the path to determine the
long-term ownership of CCT per the process set forth in the agreement with our
joint venture partner, as announced on January 31, 2014. Regardless of who
owns CCT, China is and will remain an important part of Cooper’s long-term
growth strategy. CCT and our wholly-owned Cooper Kunshan Tire (CKT) subsidiary
are continuing to operate well and contribute to Cooper’s overall
performance,” Armes concluded.

First Quarter 2014 Conference Call Today at 11 a.m. Eastern

Management will discuss the financial and operating results for the first
quarter of 2014 on a conference call for analysts and investors today at 11
a.m. EDT. The call may be accessed on the investor relations page of the
company’s website at or at Within two hours following the
conference call, the webcast will be archived and available for 30 days at
these websites.

Cooper Investor Day Live Webcast May 15

Cooper will host an Investor Day event on May 15, 2014 in New York for invited
analysts and investors. Presenters will include Chairman, Chief Executive
Officer and President Roy Armes and Chief Financial Officer Brad Hughes, as
well as other members of the company’s executive leadership team, who will
review business operations, company financials and Cooper’s long-term
strategic plan for growth.

A live audio webcast of Cooper Investor Day, with related presentation
materials, will begin at 8:30 a.m. EDT and conclude at approximately 12:30
p.m. EDT. The webcast will be accessible to all interested parties at or via the Cooper investor relations
website at An archive of the webcast
will be available at both sites beginning approximately two hours after the
conclusion of the live webcast and will be accessible for 30 days.

Forward Looking Statements

This release contains what the Company believes are “forward-looking
statements,” as that term is defined under the Private Securities Litigation
Reform Act of 1995, regarding projections, expectations or matters that the
Company anticipates may happen with respect to the future performance of the
industries in which the Company operates, the economies of the United States
and other countries, or the performance of the Company itself, which involve
uncertainty and risk. Such “forward-looking statements” are generally, though
not always, preceded by words such as “anticipates,” “expects,” “will,”
“should,” “believes,” “projects,” “intends,” “plans,” “estimates,” and similar
terms that connote a view to the future and are not merely recitations of
historical fact. Such statements are made solely on the basis of the Company’s
current views and perceptions of future events, and there can be no assurance
that such statements will prove to be true.

It is possible that actual results may differ materially from those
projections or expectations due to a variety of factors, including but not
limited to:

  *volatility in raw material and energy prices, including those of rubber,
    steel, petroleum based products and natural gas and the unavailability of
    such raw materials or energy sources;
  *the failure of the Company’s suppliers to timely deliver products in
    accordance with contract specifications;
  *changes in economic and business conditions in the world;
  *failure to implement information technologies or related systems,
    including failure by the Company to successfully implement an ERP system;
  *increased competitive activity including actions by larger competitors or
    lower-cost producers;
  *the failure to achieve expected sales levels;
  *changes in the Company’s customer relationships, including loss of
    particular business for competitive or other reasons;
  *the ultimate outcome of litigation brought against the Company, including
    stockholders lawsuits relating to the Apollo merger as well as products
    liability claims, in each case which could result in commitment of
    significant resources and time to defend and possible material damages
    against the Company or other unfavorable outcomes;
  *changes to tariffs or the imposition of new tariffs or trade restrictions;
  *changes in pension expense and/or funding resulting from investment
    performance of the Company’s pension plan assets and changes in discount
    rate, salary increase rate, and expected return on plan assets
    assumptions, or changes to related accounting regulations;
  *government regulatory and legislative initiatives including environmental
    and healthcare matters;
  *volatility in the capital and financial markets or changes to the credit
    markets and/or access to those markets;
  *changes in interest or foreign exchange rates;
  *an adverse change in the Company’s credit ratings, which could increase
    borrowing costs and/or hamper access to the credit markets;
  *the risks associated with doing business outside of the United States;
  *the failure to develop technologies, processes or products needed to
    support consumer demand;
  *technology advancements; the inability to recover the costs to develop and
    test new products or processes;
  *the impact of labor problems, including labor disruptions at the Company,
    its joint ventures, including CCT, or at one or more of its large
    customers or suppliers;
  *failure to attract or retain key personnel;
  *consolidation among the Company’s competitors or customers;
  *inaccurate assumptions used in developing the Company’s strategic plan or
    operating plans or the inability or failure to successfully implement such
  *failure to successfully integrate acquisitions into operations or their
    related financings may impact liquidity and capital resources;
  *the ability to sustain operations at CCT, including obtaining financial
    and other operational data of CCT;
  *changes in the Company’s relationship with its joint-venture partners, or
    changes in the ownership structure of its joint ventures, including
    changes resulting from the previously announced agreement between the
    Company and the CCT joint-venture partner;
  *the inability to obtain and maintain price increases to offset higher
    production or material costs;
  *inability to adequately protect the Company’s intellectual property
  *inability to use deferred tax assets; and
  *the ultimate outcome of legal actions brought by the Company against
    wholly-owned subsidiaries of Apollo Tyres Ltd.

It is not possible to foresee or identify all such factors. Any
forward-looking statements in this release are based on certain assumptions
and analyses made by the Company in light of its experience and perception of
historical trends, current conditions, expected future developments and other
factors it believes are appropriate in the circumstances. Prospective
investors are cautioned that any such statements are not a guarantee of future
performance and actual results or developments may differ materially from
those projected.

The Company makes no commitment to update any forward-looking statement
included herein or to disclose any facts, events or circumstances that may
affect the accuracy of any forward-looking statement. Further information
covering issues that could materially affect financial performance is
contained in the Company’s periodic filings with the U. S. Securities and
Exchange Commission (“SEC”).

About Cooper Tire & Rubber Company

Cooper Tire & Rubber Company (NYSE: CTB)  is the parent company of a global
family of companies that specialize in the design, manufacture, marketing, and
sales of passenger car and light truck tires. Cooper has joint ventures,
affiliates and subsidiaries that also specialize in medium truck, motorcycle
and racing tires. Cooper's headquartersis in Findlay, Ohio, with
manufacturing, sales, distribution, technical and design facilities within its
family of companies located in 11 countries around the world. For more
information on Cooper, visit,

Cooper Tire & Rubber Company
Consolidated Statements of Income
(Dollar amounts in thousands except per share amounts)
                                                     Quarter Ended
                                                     March 31
                                                     2013            2014
Net sales                                          $ 861,681       $ 796,458
Cost of products sold                                703,763        649,116 
Gross profit                                         157,918         147,342
Selling, general and administrative                  61,254         66,431  
Operating profit                                     96,664          80,911
Interest expense                                     (7,101  )       (7,118  )
Interest income                                      296             513
Other income (expense)                               595            (11     )
Income before income taxes                           90,454          74,295
Income tax expense                                   27,617         22,567  
Net income                                           62,837          51,728
Net income attributable to noncontrolling            6,757          6,294   
shareholders' interests
Net income attributable to Cooper Tire &           $ 56,080       $ 45,434  
Rubber Company
Basic earnings per share:
Net income attributable to Cooper Tire &           $ 0.89          $ 0.72
Rubber Company common stockholders
Diluted earnings per share:
Net income attributable to Cooper Tire &           $ 0.87          $ 0.71
Rubber Company common stockholders
Weighted average shares outstanding (000s):
Basic                                                63,226          63,399
Diluted                                              64,184          64,338
Depreciation and amortization                      $ 32,121        $ 34,885
Capital expenditures                               $ 49,347        $ 39,772
Segment information
Net sales
North American Tire                                $ 602,274       $ 563,494
International Tire                                   341,031         309,946
Eliminations                                         (81,624 )       (76,982 )
Segment profit (loss)
North American Tire                                $ 71,406        $ 68,629
International Tire                                   30,010          23,148
Eliminations                                         1,047           382
Unallocated corporate charges                        (5,799  )       (11,248 )

                                                     March 31
                                                     2013            2014
Current assets:
Cash and cash equivalents                          $ 272,172       $ 335,944
Notes receivable                                     41,641          78,628
Accounts receivable                                  477,536         461,648
Inventories                                          658,903         621,988
Other current assets                                 75,100          91,189
Total current assets                                 1,525,352       1,589,397
Net property, plant and equipment                    941,262         974,883
Goodwill                                             18,851          18,851
Restricted cash                                      5,071           1,169
Deferred income tax assets                           221,991         107,367
Intangibles and other assets                         171,741         172,271
                                                   $ 2,884,268     $ 2,863,938
Liabilities and Equity
Current liabilities:
Notes payable                                      $ 34,257        $ 25,001
Trade payables and accrued liabilities               593,160         589,571
Income taxes                                         39,101          15,348
Current portion of long-term debt                    16,791          19,419
Total current liabilities                            683,309         649,339
Long-term debt                                       334,798         327,755
Postretirement benefits other than pensions          292,771         239,337
Pension benefits                                     423,824         285,466
Other long-term liabilities                          173,859         149,729
Deferred income tax liabilities                      8,109           6,463
Redeemable noncontrolling shareholder interest       -               155,554
Total parent stockholders' equity                    815,889         1,005,691
Noncontrolling shareholder interest in               151,709         44,604
consolidated subsidiary
                                                   $ 2,884,268     $ 2,863,938

These interim statements are subject to year-end adjustments.


Cooper Tire & Rubber Company
Investor Contact:
Media Contact:
Anne Roman, 419-429-7189
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