GM May Finally Be Serious About Electric Vehicles

Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy

Cars

Published on November 27th, 2018 |

by Frugal Moogal

GM May Finally Be Serious About Electric Vehicles

Twitter
Google+
LinkedIn
Pinterest
Facebook

November 27th, 2018 by Frugal Moogal

When I saw the news yesterday that GM is closing five plants and laying off nearly 15,000 employees, I was surprised. Not because it was happening, but because this could be an extremely forward looking move by the company.

Before I go on, I feel it’s important to present this article from a business perspective. In other words, what does this mean for GM as a company. The personal story of the people who are losing their jobs aren’t really a consideration in that case, even though obviously they should be.

Having said that, GM like all companies, is in a fight to stay ahead in its industry. Companies don’t make decisions to lay off those people without thinking them through. Even beyond any potential feelings of empathy for the workers, layoffs usually spur poor publicity, and in the case of GM will also create a battle with the auto workers union, neither of which is something the company wants. Yet, the decision to cut positions ultimately is connected to a business strategy that management feels makes the most sense at that given point in time. Sometimes it works, and sometimes it doesn’t.

It still negatively impacts those who lost their jobs. But that isn’t the focus of the rest of this article.

With all of that having been said, let’s dig in here for the reasons that GM may have made this move and why now was the right time.

GM Sales: Dropping?
The majority of the articles written about GM’s announcement talk about how GM sales have been dropping, and that’s the reason for the closures. And it’s true, sales dropped 11.1% in Q3 2018 compared to Q3 2017.

But there are a few problems with that. The first is that Q3 2017 was affected by higher than normal sales due to the effects of Hurricane Harvey.

Additionally, the results that GM posted for Q3 2018 were … well, I’m just going to let this article from Automotive News describe it:

“Stronger-than-expected results in China and North America propelled General Motors to a 25 percent increase in pretax profit in the third quarter and net income of $2.5 billion.”

So, sales dropped, but those drops were expected due to unique circumstances, were less of a drop than was anticipated, and GM still managed to improve its profitability. That’s not exactly the sort of results that cause businesses to lay off thousands and discontinue large segments of their market.

It does, however, work as a good scapegoat to changing your business strategy to try to meet a new market.

The SUV is King?
The media seems to have adopted recently that SUVs and crossovers are all that anyone wants now, and I hate it. I could have devoted an entire article to just this, but there are again factors at work here that I feel are driving the shift, so I’m going to try to encapsulate them here.

First, automobiles are lasting longer than ever before. When gas prices rose significantly, the majority of automobiles that were sold were smaller vehicles, many of which are still on the road today and nearly as good as the newer models. As a simple, single data point, the car that I traded in for my Model 3 was a 2008 Nissan Sentra. The 2015 Nissan Sentra looks physically the exact same as my car did.

Right along with this, a dealership makes the majority of its money on used car sales and service, incentivizing dealerships to sell consumers on these cheaper, new-looking sedans instead of directing them into the most recent 100% new model.

On the flip side, if you want a crossover or SUV, there are far fewer old, used options. Remember that when gas prices rose quickly about 10 years ago, people were dumping their SUVs because they could no longer afford to fuel them. Sedans made up the majority of new sales, and the used market had a glut of SUVs that dealers couldn’t give away.

Those used SUVs have aged out of the market — how often do you see Hummers driving around now, for instance — meaning if a driver wants to move into that vehicle segment, chances are she or he is going to be opting for a new vehicle or paying a lot for a used one.

At the same time, 2010 fuel standards are based on the vehicle’s footprint, or size. Thus, a larger vehicle needs to achieve less stringent fuel efficiency than a small vehicle. This example from Wikipedia’s article on Corporate Average Fuel Economy (CAFE) explains it perfectly:

“For example, the fuel economy target for the 2012 Honda Fit with a footprint of 40 sq ft (3.7 m2) is 36 miles per US gallon (6.5 l/100 km), equivalent to a published fuel economy of 27 miles per US gallon (8.7 l/100 km), and a Ford F-150 with its footprint of 65–75 sq ft (6.0–7.0 m2) has a fuel economy target of 22 miles per US gallon (11 l/100 km), i.e., 17 miles per US gallon (14 l/100 km) published.”

This gives automakers a few incentives to sell larger vehicles — not just can they charge more for them, but the technology to get them to be CAFE compliant is cheaper.

These two factors I think often go overlooked in the SUV “boom,” and it may be less of a boom than a temporary realignment. The narrative of an SUV surge and changing car buyers tastes is a good excuse by car companies, however, to hold off costly development into new cars.

Electric Vehicles Are A Material Risk to Legacy Automakers
This can’t be understated, yet it seems that the majority of investors haven’t grasped this. Electric vehicles are a material risk to legacy automakers.

The gasoline car market is extremely well developed and competitive. Margins are difficult to come by. GM achieved a $2.5 billion profit based on a margin of about 10% on its vehicles. While $2.5 billion seems like a huge number, GM pays shareholders a significant dividend, hovering near 25% of its expected profits in a year. (Ford’s is around 45%!)

Here’s a weird yet true fact — GM “burned” more cash in Q1 2018 than Tesla did. GM reported an adjusted automotive free cash flow of negative $3.464 billion. Tesla, which pundits were lined up to declare as a cash burning machine after Q1 2018, reported free cash flow of negative $785 million.

I’m highlighting this for a reason. Legacy automakers are having a difficult time creating a compelling electric vehicle that they make money on, and they have to spend significantly more money than Tesla does just to retain their position in the gas car business, a business which is expected to decline as electric vehicle sales increase.

Instead, GM (and every legacy automaker) has been forced into a difficult corner. Developing proper EV tech is not as easy as dropping a battery and electric motor into a car and calling it a day, as Tesla has clearly shown us. In 2010, it was estimated that bringing a new car model to market costs an automaker around $1 billion to $6 billion. I can only assume a whole new architecture would be even more.

Invest too much too soon, accidentally kill your gas car business, and you’ll burn so much money that the company will go bankrupt within a year or two.

Invest too little, and if the market shifts to electric cars that you haven’t yet developed, your margins crash and you burn all your money trying to quickly catch up and create a compelling, high-volume EV.

Is the Model 3 to Blame?
This may sound crazy on the surface, but I don’t think we would have been here without the Model 3 doing what it has done. To keep their smaller cars CAFE compliant, GM has to spend more money to develop better technology, which leads to smaller margins on those cars. A smaller margin on these vehicles means even a minor drop in sales could lead to significant losses.

What could have led to a drop in smaller sedan demand? According to AAA earlier this year, one in five drivers wants an electric car as their next vehicle.

I don’t think it’s a coincidence that both Ford and GM have discontinued huge segments of their sedans in the past seven months. Both companies see mounting development costs for a product that could be rapidly replaced. Ford seems to have no real plan, but GM seems to be trying to meet the challenge head on.

And, it’s going to get worse for legacy automakers soon. By 2020, Tesla will have the $35,000 Model 3 and could be spooling up production for the Model Y and truck. If a large number of buyers hear about these new electric models and decide to hold off purchasing a new gas car to see what is brought to market, that drop alone could be enough to put a legacy automaker that hasn’t created compelling electric options of their own into a tailspin.

Back to Yesterday’s News
This is what makes yesterday’s news so interesting. Most reporters stated that GM is responding to falling sales by focusing on its larger and more popular models.

Looking at the numbers, that isn’t what seemed to happen. GM is discontinuing the Chevy Cruze (31,971 Q3 sales), Impala (16,290), and Volt (5,429), the Buick LaCrosse (2,290), and the Cadillac XTS (4,101) and CT6 (2,281). Of these, both the Volt and XTS actually had increasing sales in Q3.

The Cruze, even with a 27% decrease in sales, was still Chevy’s fifth best selling model, and it accounted for over 6% of all Chevys sold.

We could contribute the decrease in Cruze sales to a lot of things, but if an automaker were to believe that the decrease in sales came partially from buyers holding off until they found a compelling electric car, this might be the time to ditch those models before they bleed too much money. This might be the time to quickly rush the new electric vehicles to market. When automakers suddenly find a luxury-priced sedan is all of a sudden competing on the best selling car list, it may be a wake-up call of sorts.

There isn’t a compelling, reasonably affordable SUV or truck option. Yet. But with the Tesla M..

Tower International Reports First Quarter Results and Affirms Earnings and Free Cash Flow Outlook for 2018

Tower International Reports First Quarter Results and Affirms Earnings and Free Cash Flow Outlook for 2018

LIVONIA, Mich., May 3, 2018 /PRNewswire/ — Tower International, Inc. (NYSE: TOWR), a leading global manufacturer of engineered automotive structural metal components and assemblies, today announced first quarter 2018 results and affirmed its earnings and free cash flow outlook for 2018.

Revenue for the first quarter was $564 million compared with $498 million in the first quarter of 2017 representing a 13 percent increase.

Net income was $17.3 million or $0.83 per share essentially equal to the first quarter last year. As detailed below, this year's first quarter included certain items that, in aggregate, increased results by $27 thousand. Excluding these items and comparable items in the first quarter of 2017, adjusted earnings per share amounted to $0.82, an increase of 8 percent from the $0.76 reported a year ago.

Adjusted EBITDA for the quarter was $53.1 million slightly ahead of the Company's outlook and up 16 percent from $45.7 million a year ago.

For the quarter, net cash used by continuing operating activities was $16 million. Cash disbursed for purchases of equipment totaled $29 million resulting in Free Cash Flow of negative $45 million. This compares with negative Free Cash Flow of $72 million in the first quarter 2017.

Full year 2018 outlook includes:

Revenue of $2.15 billion, reflecting primarily net new business of $125 million and favorable foreign exchange;

Adjusted EBITDA of $230 million;

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 second quarter 2018 includes revenue of $560 million, Adjusted EBITDA of $58 million and Diluted Adjusted Earnings Per Share of $1.08.

“Tower delivered solid financial results in the first quarter as Adjusted EBITDA and Adjusted EPS were slightly ahead of our previous outlook,” said CEO Jim Gouin. “Revenue for the quarter increased 13 percent as Tower continues to benefit from the secular trends of outsourcing and a continued production mix shift from cars to trucks and SUVs. This mix shift helped Tower's North American revenue to grow by 16 percent while the industry production declined by 3 percent. These trends, in combination with our solid backlog of net new business, gives us further confidence that we will continue to grow our revenue faster than the industry in total.”

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

Tower will discuss its first quarter 2018 results and other related matters in a conference call at 11 a.m. EDT 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. #6385526. 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

This press release contains statements which constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company's projected full year earnings, cash flow and revenues, net new business backlog, business growth, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The forward-looking statements can be identified by words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “project,” “target,” and other similar expressions. Forward-looking statements are made as of the date of this press release and are based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, as well as risk factors described in our reports filed with the SEC, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements:

global automobile production volumes;

the financial condition of our customers and suppliers;

our ability to make scheduled payments of principal or interest on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;

our ability to refinance our indebtedness;

risks associated with our non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions;

any increase in the expense and funding requirements of our pension and other postretirement benefits;

our customers' ability to obtain equity and debt financing for their businesses;

our dependence on our largest customers;

pricing pressure from our customers;

work stoppages or other labor issues affecting us or our customers or suppliers;

our ability to integrate acquired businesses;

our ability to take advantage of emerging secular trends;

risks associated with business divestitures; and

costs or liabilities relating to environmental and safety regulations.

We do not assume any obligation to update or revise the forward-looking statements contained in this press release.

Contact:
Derek Fiebig
Executive Director, Investor & External Relations
(248) 675-6457
fiebig.derek@towerinternational.com

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts – unaudited)

Three Months Ended March 31,

2018

2017

Revenues

$ 563,506

$ 497,590

Cost of sales

503,660

441,290

Gross profit

59,846

56,300

Selling, general, and administrative expenses

32,234

29,225

Amortization expense

112

103

Restructuring and asset impairment charges, net

1,548

3,911

Operating income

25,952

23,061

Interest expense

5,162

453

Interest income

157

47

Net periodic benefit income

558

479

Other expense

575

Income before provision for income taxes and income from discontinued operations

21,505

22,559

Provision for income taxes

5,067

6,496

Income from continuing operations

16,438

16,063

Income from discontinued operations, net of tax

862

1,350

Net income

17,300

17,413

Less: Net income attributable to the noncontrolling interests

68

Net income attributable to Tower International, Inc.

$ 17,300

$ 17,345

Weighted average basic shares outstanding

20,556,613

20,425,216

Weighted average diluted shares outstanding

20,951,973

20,820,457

Basic income per share attributable to Tower International, Inc.:

Income per share from continuing operations

$ 0.80

$ 0.78

Income per share from discontinued operations

0.04

0.07

Income per share

0.84

0.85

Diluted income per share attributabl..

Extensive engine range for new Audi Q3

Audi is extending its engine range for the Audi Q3 to include a 2.0 TFSI in two output ratings and two other versions of the 2.0 TDI. As such, buyers can now choose from seven engine/transmission variants for the compact family SUV. The quattro permanent all-wheel drive provides additional traction, stability and dynamic handling. The… Continue reading Extensive engine range for new Audi Q3

“Open Source Lab” sets course for the mobility of the future

Yesterday, the “Open Source Lab for Sustainable Mobility” has started dialogue as a platform for sustainable mobility in Berlin. It is funded by the Volkswagen Group Sustainability Council, is independent in its research agenda and is obliged to publish all research results and other results. “Our idea on the Sustainability Council was to create an… Continue reading “Open Source Lab” sets course for the mobility of the future

Tesla Partners With Auction Companies To Manage Used Car Market

Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy

Cars

Published on November 27th, 2018 |

by Steve Hanley

Tesla Partners With Auction Companies To Manage Used Car Market

Twitter
Google+
LinkedIn
Pinterest
Facebook

November 27th, 2018 by Steve Hanley

Car auctions move billions of dollars a year and are essential to the US automobile industry, yet operate out of the public eye. Every week, tens of thousands of used cars get redistributed from dealers and leasing companies to wholesalers and other dealers. The auctions are not open to the public, so very few people know about them, but they provide a means of turning cars in inventory into cash for sellers, and they provide a steady supply of fresh inventory for used car dealers.

Until now, Tesla has been managing its own used car inventory, but as sales of new cars ramp up, there are more Teslas being traded in. As much as Tesla likes to be a vertically integrated company that controls every aspect of its business, established auction houses like Adessa and Manheim are very good at what they do, and so Tesla has contracted with them to help manage its burgeoning supply of used cars, according to CNBC.

The majority of cars that go through the auction process are off-lease vehicles — something that Tesla is starting to have a lot of as leases from 2016 and earlier are just starting to mature. To handle the influx of more used cars — some of which may be trade-ins from other manufacturers or repossessions — Tesla now has postings on Glassdoor for used vehicle quality specialists, a remarketing manager, and used vehicle sales advisors. The company is targeting a “30-day or less turn-rate in the sale of pre-owned inventory.”

Many people have a negative attitude toward cars purchased from auction houses, but in truth, the supply of off-lease cars is the lifeblood of the used car industry. They are typically 2 to 3 model years old with between 30,000 and 50,000 miles on them. They are professionally reconditioned by the auction staff and often cannot be told from new. If you think all 300 used cars in inventory down at your local dealer are local trade-ins, you don’t understand how the used car business in America works.

Because Teslas will now be available at major auctions, that means they will soon start showing up on dealer lots alongside other cars in the used car inventory, meaning people interested in buying a used Tesla will have more options and possibly somewhat lower prices.

The secret to the used car business is turning the inventory. Many of the top used car retailers set 30 days as the maximum time a car can remain on the books. After that, it goes back up for auction. The theory is that it is better to lose a little money now if the proceeds can be reinvested in fresh inventory that will sell quickly and generate a profit later.

When your children ask you for career advice, tell them to become an auctioneer. Those who make it are typically some of the wealthiest people in the community. They get paid a fee by sellers to include their cars in the auction and another fee by buyers when the car sells. Most operate finance companies that loan buyers the money to purchase the cars. They operate inspection and reconditioning services that generate income as well.

Forget being a lawyer or a doctor or even a Wall Street trader. Being an auctioneer is where it’s at. You own nothing and have little overhead. No one dies or goes to jail if you make a mistake. It’s the perfect business for anyone who wants to make a lot of money with minimal headaches.

And it’s addicting. Once a week, the cars start rolling across the auction block at 9:00 am at a rate of 2 per minute until well into the afternoon. The bigger auctions have up to 15 lines running simultaneously and sell as many as 1,500 cars in a day. It’s insane, and crazy good fun. Way better than playing video games in your mom’s basement.

Support CleanTechnica’s work by becoming a Member, Supporter, or Ambassador.
Or you can buy a cool t-shirt, cup, baby outfit, bag, or hoodie or make a one-time donation on PayPal.

About the Author

Steve Hanley Steve writes about the interface between technology and sustainability from his home in Rhode Island and anywhere else the Singularity may take him. His muse is Charles Kuralt — “I see the road ahead is turning. I wonder what's around the bend?”

You can follow him on Google + and on Twitter.

Back to Top ↑

Advertisement

CleanTechnica Clothing & Cups

Advertise with CleanTechnica to get your company in front of our readers.

Top News On CleanTechnica

Advertisement

Follow @cleantechnica
Join CleanTechnica Today!

EV Charging Guidelines for Cities

Share our free report on EV charging guidelines for cities, “Electric Vehicle Charging Infrastructure: Guidelines For Cities.”
Advertisement

Cleantech Press Releases

New Research Shows That Only Two Large Petroleum Companies Have Meaningful Emission Reduction Targets

Koben Announces EVOLVE EVSF —Grid-Friendly Modular EV Store & Forward System

The New Danish Climate Plan — Together For A Greener Future

The EV Safety Advantage

Read & share our free report on EV safety, “The EV Safety Advantage.”

The State of EV Charging

Our 93-Page EV Driver Report

30 Electric Car Benefits

Blockchain × Cleantech

Our Electric Vehicle Reviews

Tesla News

Correcting the Cleantech Record

38 Anti-Cleantech Myths

Wind & Solar Prices Beat Fossils

Cost of Solar Panels Collapses

© 2018 Sustainable Enterprises Media, Inc.

Electric Cars
Electric Car Benefits
Electric Car Sales
Solar Energy Rocks
RSS
Advertise
Privacy Policy

This site uses cookies: Find out more.Okay, thanks

Workhorse Group Inc. Signs Cooperative Research and Development Agreement with U.S. Military to Test SureFly eVTOL

CINCINNATI, Nov. 27, 2018 /PRNewswire/ — Workhorse Group Inc. (NASDAQ:WKHS) announced today that it entered into a CRADA (Cooperative Research and Development Agreement) with a branch of the U.S. Military. The CRADA will enable a collaborative R&D program focused on military applications of the Workhorse’s SureFly eVTOL personal air vehicle. “This CRADA will enable Workhorse… Continue reading Workhorse Group Inc. Signs Cooperative Research and Development Agreement with U.S. Military to Test SureFly eVTOL

Tower International to Announce Second Quarter 2018 Financial Results

Tower International to Announce Second Quarter 2018 Financial Results

LIVONIA, Mich., July 18, 2018 /PRNewswire/ — Tower International, Inc. (NYSE: TOWR), a leading global manufacturer of engineered automotive structural metal components and assemblies, will report second quarter 2018 financial results before the market opens on Tuesday, July 31, 2018, via PR Newswire. At 11:00 a.m. EDT on that date, a conference call is scheduled to discuss the results in further detail, as well as other related matters.

To participate in the conference call:

Domestic calls: (866) 393-4576

International calls: (706) 679-1462

Tower will provide a broadcast of the conference call for the general public via a live audio webcast. The conference call, along with the financial results release, presentation material and other supplemental information, can be accessed through Tower's Web site at www.towerinternational.com.

The audio replay will be available two hours following the call at:

Domestic calls: (855) 859-2056

International calls: (404) 537-3406

The audio replay will be available until August 31, 2018 (Conference I.D. 5089747).

Investor & Media Contact:
Derek Fiebig
(248) 675-6457
fiebig.derek@towerinternational.com

View original content:http://www.prnewswire.com/news-releases/tower-international-to-announce-second-quarter-2018-financial-results-300683011.html

SOURCE Tower International, Inc.

Tower International Reports Second Quarter Results and Affirms Earnings and Free Cash Flow Outlook for 2018

Tower International Reports Second Quarter Results and Affirms Earnings and Free Cash Flow Outlook for 2018

LIVONIA, Mich., July 31, 2018 /PRNewswire/ — Tower International, Inc. (NYSE: TOWR), a leading global manufacturer of engineered automotive structural metal components and assemblies, today announced second quarter 2018 results and affirmed its earnings and free cash flow outlook for 2018.

Revenue for the second quarter was $556 million compared with $490 million in the second quarter of 2017 representing a 13 percent increase.

Net income was $22.4 million or $1.07 per share increasing from $19.2 million or $0.92 per share in the second quarter last year. As detailed below, this year's second quarter included certain items that, in aggregate, decreased results by $468 thousand. Excluding these items and comparable items in the second quarter of 2017, adjusted earnings per share amounted to $1.09, an increase of 12 percent from the $0.97 reported a year ago.

Adjusted EBITDA for the quarter was $58.2 million slightly ahead of the Company's outlook and up 10 percent from $52.8 million a year ago.

For the quarter, net cash provided by continuing operating activities was $49 million. Cash disbursed for purchases of equipment totaled $40 million resulting in Free Cash Flow of $9 million.

Full year 2018 outlook includes

Revenue of $2.17 billion, reflecting primarily net new business of $125 million, favorable foreign exchange and higher steel prices;

Adjusted EBITDA of $230 million;

Diluted Adjusted EPS of $4.10 per share; and

Free Cash Flow of $50 million, with strong free cash flow in the second half of the year more than offsetting the cash outflow in the first half of the year.

The Company's outlook for third quarter 2018 includes revenue of $525 million, Adjusted EBITDA of $57 million and Diluted Adjusted Earnings Per Share of $1.04.

“We remain balanced in our approach of growing profitably, reducing leverage – as evidenced by our July pay down of $50 million of Term Loan debt, and returning capital to shareholders,” said CEO Jim Gouin. “Tower delivered solid financial results in the second quarter as Adjusted EBITDA and Adjusted EPS both increased by more than 10 percent. Revenue for the quarter increased 13 percent as Tower continues to benefit from the secular trends of outsourcing and a continued production mix shift from cars to trucks and SUVs. Tower's North American revenue continued to significantly outpace the market, growing by 16 percent while the industry production declined by 2 percent. These trends, in combination with our solid backlog of net new business, gives us further confidence that we will continue to grow our revenue faster than the industry in total.”

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

Tower will discuss its second quarter 2018 results and other related matters in a conference call at 11 a.m. EDT 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. #5089747. 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 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

This press release contains statements which constitute forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding the Company's projected third quarter earnings and revenues, full year earnings, cash flow and revenues, net new business backlog, business growth, adjusted EBITDA, adjusted EBITDA margin and free cash flow. The forward-looking statements can be identified by words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “project,” “target,” and other similar expressions. Forward-looking statements are made as of the date of this press release and are based upon management's current expectations and beliefs concerning future developments and their potential effects on us. Such forward-looking statements are not guarantees of future performance. The following important factors, as well as risk factors described in our reports filed with the SEC, could cause our actual results to differ materially from estimates or expectations reflected in such forward-looking statements:

global automobile production volumes;

the financial condition of our customers and suppliers;

our ability to make scheduled payments of principal or interest on our indebtedness and comply with the covenants and restrictions contained in the instruments governing our indebtedness;

our ability to refinance our indebtedness;

risks associated with our non-U.S. operations, including foreign exchange risks and economic uncertainty in some regions;

any increase in the expense and funding requirements of our pension and other postretirement benefits;

our customers' ability to obtain equity and debt financing for their businesses;

our dependence on our largest customers;

pricing pressure from our customers;

changes to U.S. trade and tariff policies and the reaction of other countries thereto;

work stoppages or other labor issues affecting us or our customers or suppliers;

our ability to integrate acquired businesses;

our ability to take advantage of emerging secular trends;

risks associated with business divestitures; and

costs or liabilities relating to environmental and safety regulations.

We do not assume any obligation to update or revise the forward-looking statements contained in this press release.

Contact:
Derek Fiebig
Executive Director, Investor & External Relations
(248) 675-6457
fiebig.derek@towerinternational.com

TOWER INTERNATIONAL, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except share and per share amounts – unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017

Revenues

$ 556,007

$ 489,925

$ 1,119,513

$ 987,515

Cost of sales

491,948

428,807

995,608

870,097

Gross profit

64,059

61,118

123,905

117,418

Selling, general, and administrative expenses

30,869

29,007

63,103

58,232

Amortization expense

108

113

220

216

Restructuring and asset impairment charges, net

269

3,337

1,817

7,248

Operating income

32,813

28,661

58,765

51,722

Interest expense

5,255

1,807

10,417

2,260

Interest income

112

86

269

133

Net periodic benefit income

559

479

1,117

958

Other expense

977

977

575

Income before provision for income taxes and income / (loss) from

discontinued operations

27,252

27,419

48,757

49,978

Provision for income taxes

5,539

7,672

10,606

14,168

Income from continuing operations

21,713

19,747

38,151

35,810

Income / (loss) from discontinued operations, net of tax

663

(489)

1,525

861

Net income

22,376

19,258

39,676

36,..

Profitability of auto companies: Toyota ahead of BMW, Daimler and VW – but German carmakers invest more in the future

Global car sales decline for the first time since the financial crisis. The profit margin of the 16 leading auto companies has fallen to its lowest level since the financial crisis. Toyota and Suzuki work more profitably than the German carmaker: But that the profit margin of VW, Daimler and BMW is shrinking, is mainly… Continue reading Profitability of auto companies: Toyota ahead of BMW, Daimler and VW – but German carmakers invest more in the future

Europcar Mobility Group Makes Leadership Changes

Photo courtesy of Europcar.  Europcar Mobility Group announced that changes will be coming to its leadership group.  As of January 1, the Group management board will be composed of: Caroline Parot, Group CEO Fabrizio Ruggiero, Group deputy CEO, head of business units (cars, vans & trucks, low cost, new mobility and international coverage) Olivier Baldassari,… Continue reading Europcar Mobility Group Makes Leadership Changes