TECUMSEH, Mich., May 15 /PRNewswire-FirstCall/ -- Tecumseh Products
Company (Nasdaq: TECUA; TECUB) announced today its 2007 first
quarter consolidated results as summarized in the following
Consolidated Condensed Statements of Operations. CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED) Three Months Ended
(Dollars in millions except per share amounts) March 31, 2007 2006
Net sales $460.5 $446.1 Cost of sales 422.5 411.6 Selling and
administrative expenses 44.1 45.2 Impairments, restructuring
charges and other items --- 0.6 Operating loss (6.1) (11.3)
Interest expense (13.3) (8.4) Interest income and other, net 1.7
5.0 Loss from continuing operations before taxes (17.7) (14.7) Tax
benefit (0.9) (2.6) Loss from continuing operations (16.8) (12.1)
Loss from discontinued operations, net of tax --- (0.5) Net loss
($16.8) ($12.6) Basic and diluted loss per share: Continuing
operations ($0.91) ($0.65) Discontinued operations --- ($0.03) Net
loss per share ($0.91) ($0.68) Weighted average shares (in
thousands of shares) 18,480 18,480 Consolidated net sales from
continuing operations in the first quarter of 2007 increased to
$460.5 million from $446.1 million in 2006. $13.2 million of the
$14.4 million increase in sales was due to the effects of currency
translation. Sales increases attributable to the Compressor segment
($37.8 million) were offset by a slight decline in the Electrical
Components segment ($5.8 million) and a substantial decline ($17.9
million) in sales in the Engine & Power Train segment. The
remainder of the changes are attributable to businesses not
associated with any of our three major business segments.
Consolidated net loss from continuing operations for the first
quarter of 2007 was $16.8 million ($0.91 per share) compared to net
loss of $12.1 million ($0.65 per share) in the first quarter of
2006. The change in loss from continuing operations, excluding
impairments, restructuring charges, and other items, reflected a
$4.6 million improvement in operating loss. Increases in selling
price successfully offset the escalation in commodity pricing,
particularly copper, and improved results by $17.7 million when
compared to the 2006 first quarter. Improvements in productivity
and purchasing costs, reductions in fixed costs primarily
associated with plant closures, and favorable pension credits also
contributed $14.4 million to 2007 first quarter results. However,
unfavorable trends in foreign currency exchange resulted in a $16.2
million decline when compared to the prior year. Profit margins and
changes in product mix reduced operating income by $11.2 million.
Although volumes improved in the Compressor segment, lower sales
volumes in the Electrical Components and Engine & Power train
segments, combined with a greater percentage of sales concentrated
in the less-profitable automotive product lines, drove the
decrease. Included in the variances discussed above were
improvements in Selling, General & Administrative expense of
$1.1 million. Reductions in SG & A were primarily attributable
to overhead cost improvements that resulted from our restructuring
efforts over the past year, particularly at the Engine & Power
Train group, although these advances were somewhat offset by costs
associated with professional fees. Fees paid to AlixPartners were
reduced over the prior year; $4.0 million was incurred in the first
quarter of 2007 for AlixPartners services, including the services
of James Bonsall, while $9.0 million was incurred in the first
quarter of 2006 for their consulting services provided to our
Engine & Power Train business. However, professional fees for
the business as a whole were $10.4 million in the first quarter of
2007, which included $4.6 million in fees in excess of those
incurred in the ordinary course of business. These costs were
associated with the amendments to our First and Second Lien credit
agreements, the legal proceedings relating to governance issues,
and our efforts to market portions of the business. There were no
impairments, restructuring charges or other items in the three
months ended March 31, 2007, compared to $0.6 million in the three
months ended March 31, 2006. Interest expense amounted to $13.3
million in the first quarter of 2007 compared to $8.4 million in
the first quarter of 2006. The increase was primarily related to
the higher average interest rates associated with our current
borrowing arrangements. The consolidated condensed statement of
operations reflects a $0.9 million income tax benefit for the first
quarter 2007 and a $2.6 million income tax benefit for the first
quarter 2006. The first quarters of both years reflected a tax
benefit in continuing operations offset by tax expense in other
comprehensive income and, at March 31, 2006, for discontinued
operations as well. During the second quarter of 2006, we completed
the sale of 100% of our ownership in Little Giant Pump Company. The
operating results of Little Giant Pump Company for 2006 have been
reclassified from continuing operations to income from discontinued
operations. Under accounting rules, we have also allocated the
portion of our interest expense associated with this operation to
the discontinued operations line item. As required by our lending
agreements, the proceeds were utilized to repay a portion of our
debt. Compressor Business First quarter 2007 sales in the
Compressor segment increased to $289.3 million from $251.5 million
in the prior year. $12.0 million of the $37.8 million increase in
sales was due to the effects of foreign currency translation. Sales
increases in this segment were led by the refrigeration and freezer
product lines (up $21.4 million), an increase of 24.7%. Consistent
with the trends we experienced in 2006, the sales increase in
refrigeration and freezer compressors was led by growth in new
markets in India. Sales were also higher for the commercial
compressor product lines (up $11.8 million). This sales increase
was attributable to pricing advances rather than unit volumes.
Compressor business operating results for the first quarter of 2007
were income of $10.5 million compared to income of $6.6 million in
the first quarter of 2006. The higher operating income was
attributable to pricing adjustments and greater sales volumes
($23.3 million) and productivity and other improvements ($6.8
million). These year-on-year improvements were partially offset by
unfavorable foreign currency exchange rates ($16.2 million). For
the first quarter, the Brazilian Real was on average 4.9% stronger
against the U.S. Dollar in 2007 versus 2006. The price of copper
and other commodities also contributed unfavorably to results in
the first quarter of 2007. Including the effects of hedging
activities, the Company estimates that the continued escalation in
commodity pricing decreased operating income by approximately $10.8
million compared to the first quarter of 2006. Electrical
Components Business Electrical Components business sales were
$103.3 million for the first quarter of 2007, a decrease of 5.3%
compared to sales of $109.1 million in the same quarter last year.
Sales increases of $2.4 million in the automotive product lines
reflected the implementation of new programs with our customers and
their respective OEM's. Increases of $2.3 million were reported in
the Asia Pacific markets as well. Sales increases in the Asia
Pacific markets were primarily due to favorable impacts of currency
exchange, but also reflected the addition of new product in
Thailand. These advances were offset by declines of $9.5 million in
residential & commercial motors; these declines were primarily
due to the mild winter, which reduced sales of components for gas
furnaces and other heating products. Electrical Components
operating results for the first quarter of 2007 were income of $1.1
million compared to income of $4.9 million in the first quarter of
2006. The differences were primarily related to volume declines and
a less favorable product mix ($10.1 million), as automotive product
lines carry substantially lower margins than residential &
commercial motors. On the other hand, productivity and other
improvements increased operating income by $3.5 million. In
addition, due to better hedging positions on our copper needs in
the first quarter of 2007, and pricing adjustments implemented to
offset the escalation in commodity pricing, commodity cost impacts
improved results by $3.1 million compared to the first quarter of
2006. Engine & Power Train Business Engine & Power Train
business sales were $63.0 million in the first quarter of 2007
compared to $80.9 million for the same period a year ago. Declines
were led by engines for walk behind mowers (down $5.2 million), a
decline of 14.6%. Engines for generators were also down by $4.7
million, declining by 68.1%, consistent with an overall market
trend due to the lack of significant hurricane or other storm
activity in recent months. Engines for riding mowers were also down
by $2.6 million or 21.2%. Reductions in both walk behind and riding
mower engines were a result of lower sales volumes with certain key
customers. To a lesser extent, the declines also reflected timing
of purchases, as customers delayed purchases into the second
quarter of 2007. The remaining decreases in the Engine & Power
Train Group were spread across multiple product lines. Engine &
Power Train business operating loss for the first quarter of 2007
was $8.0 million compared to a loss of $18.5 million during the
same period a year ago. Included in the results were AlixPartners'
fees of $1.3 million in 2007 and $9.0 million in 2006. Operating
loss in the first quarter of 2006 was reduced due to a gain of $3.5
million in 2006 from the sale of the segment's Douglas, Georgia
facility. The improvement in the first quarter results reflected
lower fixed costs, primarily associated with the segment's
restructuring efforts ($5.9 million), and price increases ($2.8
million), offset by lost margins from reductions in sales volume
($1.7 million). Impairments and Other Restructuring Items There
were no impairments, restructuring charges or other items in the
three months ended March 31, 2007, compared to $0.6 million in the
three months ended March 31, 2006. Legal Proceedings On March 28,
2007, our Brazilian engine subsidiary, TMT Motoco, was granted
permission by the Brazilian court to pursue a judicial
restructuring, which is similar to U.S. Chapter 11 bankruptcy
protection. TMT Motoco has sixty days from the date the judicial
restructuring was granted to submit its restructuring plan,
although that deadline may, under certain circumstances, be
extended. The facility suspended operations on the date it filed
for the judicial restructuring, and it has not been determined
whether or when it will re-open in the future. The assets and
liabilities of TMT Motoco at March 31, 2007 have been removed from
our consolidated balance sheets. The following is a summary of the
assets, liabilities and equity of TMT Motoco at March 31, 2007:
March 31, (Dollars in millions) 2007 Accounts receivable, net $0.6
Inventories 24.6 Other current assets 8.5 Property, plant and
equipment, net 63.6 Total Assets $97.3 Accounts payable, trade $8.0
Other current liabilities 25.7 Noncurrent Liabilities 67.7 Total
Liabilities 101.4 Shareholders' Deficit (4.1) Total Liabilities and
Shareholders' Equity $97.3 Adequacy of Liquidity Sources
Historically, cash flows from operations and borrowing capacity
under previous credit facilities were sufficient to meet our
long-term debt maturities, projected capital expenditures and
anticipated working capital requirements. However, in 2006 and the
first quarter of 2007 cash flows from operations were negative and
we have had to rely on existing cash balances, proceeds from credit
facilities and asset sales to fund its needs. Throughout the first
quarter, our main domestic credit facilities were provided under a
$250 million First Lien Credit Agreement and a $100 million Second
Lien Credit Agreement. Both agreements provide for security
interests in substantially all of the Company's assets and specific
financial covenants related to EBITDA (as defined under the
agreements and hereafter referred to as our "Adjusted EBITDA"),
capital expenditures, fixed charge coverage, and limits on
additional foreign borrowings. During the first quarter, the
weighted average annual interest rate on our borrowings under these
agreements was 10.1%. Under the terms of the First Lien Credit
Agreement, as of March 31, 2007 we had the capacity for additional
borrowings under the borrowing base formula of $32.1 million in the
U.S. and $43.4 million in foreign jurisdictions. Both the First
Lien Credit Agreement and the Second Lien Credit Agreement have
three year terms, expiring in November, 2009. In March of 2007, our
Brazilian engine subsidiary, TMT Motoco, was granted permission by
the Brazilian courts to pursue a judicial restructuring, similar to
a U.S. filing for Chapter 11 bankruptcy protection. The TMT Motoco
filing in Brazil constituted an event of default with our domestic
lenders. On April 9, 2007 we obtained amendments to our First and
Second Lien Credit Agreements that cured the cross-defaults
triggered by the filing in Brazil. As part of the April 9, 2007
amendments to our First and Second Lien Credit Agreements, the
minimum cumulative Adjusted EBITDA levels (measured from October 1,
2006) for the 2007 quarterly periods (in millions) were set at:
Quarterly Period Ending First Lien Agreement Second Lien Agreement
March 31, 2007 ($8.0) ($10.0) June 30, 2007 $17.0 $15.0 September
30, 2007 $42.0 $40.0 December 31, 2007 $62.0 $60.0 As defined by
the credit agreements, as of March 31, 2007 our cumulative Adjusted
EBITDA was $13.3 million or $21.3 million in excess of the covenant
levels. These levels of Adjusted EBITDA are subject to further
adjustment if certain business units or product lines are sold
during the period. In addition, other terms of the amendments
included limitations on the amounts of capital expenditures and
professional fees during the term of the agreements. If a permanent
Chief Executive Officer was not hired by May 1, 2007, the amendment
to our Second Lien credit agreement also included a 2.5% per annum
step-up in cash interest rate from that day forward until such time
as a permanent CEO was hired. However, the agreement provided that
the additional interest would not be assessed beginning May 1 if
the CEO candidate had not assumed his or her duties due either to a
personal emergency or inability to reach agreement on terms of
employment. Since this condition was met, the additional interest
is not being assessed, and will not be assessed as long as we
continue to apply our best efforts to engaging a permanent CEO as
soon as possible. We paid $625,000 in fees, plus expenses, to the
First Lien lender upon execution of the agreement. In addition to
fees paid of $750,000, plus expenses, to the Second Lien lender, we
also granted warrants to purchase a number of shares of Class A
Common Stock equal to 7% of our fully diluted common stock. These
warrants, valued at $7.7 million, expire five years from the date
of the execution of this amendment to the Second Lien credit
agreement. The sum of these costs will be recorded as interest
expense in the second quarter of 2007. Interest on the Second Lien
Agreement is equal to LIBOR plus 6.75% plus paid in kind ("PIK")
interest of 1.5%. PIK interest accrues monthly on the outstanding
debt balance and is paid when the associated principal is repaid.
The Second Lien Credit Agreement provides for additional PIK
interest at the rate of 5.0% if outstanding debt balances are not
reduced by certain specified dates. This additional PIK interest
would apply to the difference between a target amount of aggregate
reduction in debt and the actual amount of first and second lien
debt reduction according to the following milestones: Milestone
Date Aggregate Reduction June 30, 2007 $20.0 million September 30,
2007 $40.0 million December 31, 2007 $60.0 million The new Second
Lien Credit Agreement also provides for an additional 2.5% in PIK
interest if certain assets are not sold by December 31, 2007.
Sources of funds to make the principal reductions could include,
but are not limited to, cash from operations, reductions in working
capital, or asset sales. After giving effect to the refinancing,
waivers and amendments discussed above, we are currently in
compliance with the covenants of our domestic debt agreements.
Achieving the level of future financial performance required by our
lending arrangements will depend on a variety of factors, including
customer price increases to cover increases in commodity costs,
further employee headcount reductions, consolidation of productive
capacity and rationalization of various product platforms. While we
are currently moving forward with these actions, there can be no
assurance that any of these initiatives will be sufficient. In the
event that we fail to improve performance through these measures,
our ability to raise additional funds through debt financing will
be limited. We are also concerned about the amount of debt we are
carrying in this challenging operating environment and as we seek
to improve our company's financial performance. As a result, we are
evaluating the feasibility of asset sales as a means to reduce our
total indebtedness and to increase liquidity. Outlook Information
in this "Outlook" section should be read in conjunction with the
cautionary statements and discussion of risk factors included
elsewhere in this report. The outlook for 2007 is subject to the
same variables that have negatively impacted us throughout 2006.
Commodity costs, key currency rates, weather and the overall growth
rates of the respective economies around the world are all
important to future performance. Overall, we do not expect these
factors to become any more favorable in the foreseeable future.
Certain key commodities, including copper and aluminum, continue to
trade at elevated levels compared to recent history. From January
1, 2006 through April 30, 2007, the price of aluminum increased
approximately 22%, and the price of copper increased over 64% in
the same time frame. In the first quarter of 2007 alone, copper
prices escalated by over 10%. However, due to copper forward
purchase contracts obtained prior to the cost increase, we were
able to maintain costs consistent with, or slightly better than,
our 2007 business plan. We currently hold approximately 75% of our
total projected copper requirements for 2007 in the form of forward
purchase contracts, which will provide us with substantial (though
not total) protection from further price increases during the year
but also will detract from our ability to benefit from any price
decreases. In any case, the cost of copper to the business will
continue to run significantly higher than in 2005 and prior years,
and continued escalation of copper prices through 2007 and into
2008 and beyond could have a long-term unfavorable impact on our
results of operations, if adequate pricing increases cannot be
obtained from our customers. Lack of storm activity has
significantly reduced sales of engines used for generators and
snowthrowers, and has left us and the industry with above normal
inventory levels. The Brazilian Real continues to strengthen
against the dollar, and strengthened 13.1% from January 1, 2006 to
April 30, 2007. From January 1 through March 31, 2007, the Real
strengthened by 4.1%. Net of currency hedging activities, this
continued strengthening of the Real affected our operating results
unfavorably by approximately $2.4 million when compared to our 2007
plan. Nonetheless, we expect the operating results of all three of
our business segments to improve in the second quarter of 2007 when
compared to the results of the comparable 2006 period. Pricing
adjustments in the Compressor group, implemented to offset the
escalating price of copper, are the most significant improvement
expected in that segment when compared to the prior year. In
addition, for both the Compressor group and the Electrical
Components group, operational efficiencies and productivity
improvements are expected to improve operational margins when
compared to the second quarter of 2006. Despite the expectation of
continued lower levels of sales in the Engine & Power Train
group because of unfavorable market conditions, results in that
group are expected to improve over the second quarter of 2006
excluding restructuring charges. The improvement continues to be
driven by the overall restructuring efforts undertaken by
AlixPartners. As part of these efforts, as previously mentioned, we
have recently announced the upcoming closure of our engine facility
in New Holstein, Wisconsin. Although the impairments taken in the
fourth quarter of 2006 represent substantially all of the expected
charges related to the Engine & Power Train Group
restructuring, some charges, expected to be relatively minor, will
be incurred in 2007 in order to account for employee severance
costs at the New Holstein facility. The restructuring plan for our
Brazilian engine subsidiary, TMT Motoco, is currently being
developed. It is uncertain at this point whether or when the
facility will re-open. In the interim, we are continuing to meet
the needs of our customers for lawn and garden engines, as a
substantial portion of 2007 summer season requirements had already
been produced prior to suspension of operations. We will consider
multiple factors in determining the future viability of TMT Motoco,
including (i) customer requirements, (ii) the willingness of
Brazilian lenders to support continued manufacturing operations in
that country, (iii) the impact to profitability from any further
strengthening of the Brazilian Real, and (iv) the cost to retool
operations to address upcoming changes in environmental
regulations. The range of potential outcomes of the restructuring
plan include resuming full scale production, minimal production
and/or rental of the facility, or a controlled liquidation. As
further continuous improvement initiatives are executed across all
our business segments, it is possible that additional assets will
become impaired. While no such actions have been approved, they
could have a significant effect on our consolidated financial
position and future results of operations. As part of our efforts
to improve profitability and reduce the consumption of capital
resources, we continue to seek price increases to cover our
increased input costs, and expect that further employee headcount
reductions, consolidation of productive capacity and
rationalization of product platforms will be necessary. As part of
these efforts, we announced certain operational actions and staff
reductions on April 27, 2007 at the Compressor and Engine &
Power Train business units. While no specific further actions have
been approved, we believe that such actions will contribute to
restoring our profitability, will help to mitigate such negative
external factors as currency fluctuation and increased commodity
costs, and will result in improved operating performance in all
business segments in 2007. These actions also could result in
restructuring and/or asset impairment charges in the foreseeable
future and accordingly, could have a significant effect on our
consolidated financial position and future results of operations.
In addition, we are also concerned about the amount of debt we are
carrying during this period of unfavorable operating environment.
Our weighted average interest rate for long-term debt at March 31,
2007 was approximately 1.3% higher than the same period a year ago,
resulting in higher interest expense on approximately similar
levels of debt. As well, the Second Lien Credit Agreement provides
for additional paid in kind ("PIK") interest at the rate of 5.0% if
outstanding debt balances are not reduced by certain specified
dates. The Second Lien Credit Agreement also provides for an
additional 2.5% in PIK interest if certain assets are not sold by
December 31, 2007. Sources of funds to make the principal
reductions could include, but are not limited to, cash from
operations, reductions in working capital, or asset sales. Our
success in generating cash flow will depend, in part, on our
ability to efficiently manage working capital. Seasonal patterns
and the need to build inventories to manage production transfers
during restructuring programs have recently caused higher working
capital needs. As we complete these restructuring programs, we
expect our need for these higher working capital levels to be
reduced. As part of addressing the company's liquidity needs, we
are planning substantially lower levels of capital expenditures in
2007. Capital expenditures in 2007 are projected to be
approximately $28 million less than in 2006 and $80 million less
than in 2005. This reduction in capital expenditures will further
conserve our cash flows, allowing for additional potential to
reduce our outstanding debt. We are also evaluating the potential
sale of product lines or divisions of the Company. The proceeds
from any such sales would be used to reduce our indebtedness.
Finally, we are in the process of executing a conversion of our
Salaried Retirement Plan to a new Plan. The existing Plan is
substantially over- funded. We expect that this conversion will
make net cash available in late 2007 or 2008 to the Company of
approximately $55 million, while still fully securing the benefits
under the old Plan and funding the new Plan, without additional
annual contributions, for six to eight future years. RESULTS BY
BUSINESS SEGMENTS (UNAUDITED) Three Months Ended (Dollars in
millions) March 31, 2007 2006 Net sales: Compressor Products $289.3
$251.5 Electrical Components Products 103.3 109.1 Engine &
Power Train Products 63.0 80.9 Other (a) 4.9 4.6 Total net sales
$460.5 $446.1 Operating income (loss): Compressor Products $10.5
$6.6 Electrical Components Products 1.1 4.9 Engine & Power
Train Products (8.0) (18.5) Other (a) 0.3 0.3 Corporate expenses
(10.0) (4.0) Impairments, restructuring charges, and other items
--- (0.6) Total operating income (loss) from continuing operations
(6.1) (11.3) Interest expense (13.3) (8.4) Interest income and
other, net 1.7 5.0 Loss from continuing operations before taxes
($17.7) ($14.7) (a) "Other" consists of non-reportable business
segments. CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED) March
31, December 31, (Dollars in millions) 2007 2006 Assets Current
assets: Cash and cash equivalents $48.7 $81.9 Accounts receivable,
net 257.6 219.5 Inventories 321.6 353.4 Other current assets 84.1
78.6 Total current assets 712.0 733.4 Property, plant and equipment
- net 487.8 552.4 Goodwill and other intangibles 179.4 180.0 Other
assets 327.0 316.9 Total assets $1,706.2 $1,782.7 Liabilities and
Stockholders' Equity Current liabilities: Accounts payable, trade
$221.7 $216.0 Short-term borrowings 78.5 163.2 Accrued liabilities
132.1 130.1 Total current liabilities 432.3 509.3 Long-term debt
228.0 217.3 Deferred income taxes 31.5 28.6 Pension and
postretirement benefits 177.3 180.9 Product warranty and
self-insured risks 14.4 13.6 Other non-current liabilities 32.9
34.6 Total liabilities 916.4 984.3 Stockholders' equity 789.8 798.4
Total liabilities and stockholders' equity $1,706.2 $1,782.7
CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED) Three Months Ended (Dollars in millions) March 31, 2007
2006 Total Stockholders' Equity Beginning balance $798.4 $814.4
Impact of the adoption of FIN 48 (0.4) --- Comprehensive income
(loss): Net loss (16.8) (12.6) Other comprehensive income (loss)
8.6 18.4 Total comprehensive income (loss) (8.2) 5.8 Total
stockholders' equity Ending balance $789.8 $820.2 CONSOLIDATED
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended
(Dollars in millions) March 31, 2007 2006 Cash flows from operating
activities: Cash used by operating activities ($50.8) ($44.5) Cash
flows from investing activities: Cash effect of deconsolidation of
TMT Motoco (0.3) --- Proceeds from sale of assets --- 9.0 Capital
expenditures (1.9) (20.0) Business acquisition --- (2.0) Cash
provided by (used in) investing activities (2.2) (13.0) Cash flows
from financing activities: Repayment of Senior Guaranteed Notes ---
(250.0) Repayment of Industrial Development Revenue Bonds ---
(10.5) Proceeds from First Lien Credit Agreement 8.3 168.3
Repayments of First Lien Credit Agreement --- --- Proceeds from
Second Lien Credit Agreement --- 100.0 Other proceeds (repayments),
net 8.8 16.2 Cash provided by (used in) financing activities 17.1
24.0 Effect of exchange rate changes on cash 2.7 (0.3) Decrease in
cash and cash equivalents (33.2) (33.8) Cash and cash equivalents:
Beginning of period 81.9 116.6 End of period $48.7 $82.8 Cautionary
Statement Relating to Forward-Looking Statements This report
contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 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 the Company. 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. 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)
changes in business conditions and the economy in general in both
foreign and domestic markets; ii) the effect of terrorist activity
and armed conflict; iii) weather conditions affecting demand for
air conditioners, lawn and garden products, portable power
generators and snow throwers; iv) the success of our ongoing effort
to bring costs in line with projected production levels and product
mix; v) financial market changes, including fluctuations in
interest rates and foreign currency exchange rates; vi) economic
trend factors such as housing starts; vii) emerging governmental
regulations; viii) availability and cost of materials, particularly
commodities, including steel, copper and aluminum, whose cost can
be subject to significant variation; ix) actions of competitors; x)
the ultimate cost of resolving environmental and legal matters; xi)
our ability to profitably develop, manufacture and sell both new
and existing products; xii) the extent of any business disruption
that may result from the restructuring and realignment of our
manufacturing operations or system implementations, the ultimate
cost of those initiatives and the amount of savings actually
realized; xiii) the extent of any business disruption caused by
work stoppages initiated by organized labor unions; xiv) our
ability to maintain adequate liquidity in total and within each
foreign operation; xv) potential political and economic adversities
that could adversely affect anticipated sales and production in
Brazil; xvi) potential political and economic adversities that
could adversely affect anticipated sales and production in India,
including potential military conflict with neighboring countries;
xvii) our ability to reduce a substantial amount of costs in the
Engine & Power Train group associated with excess capacity, and
xviii) the ongoing financial health of major customers. These
forward-looking statements are made only as of the date of this
report, and we undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information,
future events or otherwise. Tecumseh Products Company will host a
conference call to report on the first quarter 2007 results on
Wednesday, May 16, 2007 at 11:00 a.m. ET. The call will be
broadcast live over the Internet and then available for replay
through the Investor Relations section of Tecumseh Products
Company's website at http://www.tecumseh.com/. Press releases and
other investor information can be accessed via the Investor
Relations section of Tecumseh Products Company's Internet web site
at http://www.tecumseh.com/. Contact: Teresa Hess Director,
Investor Relations Tecumseh Products Company 517-423-8455
DATASOURCE: Tecumseh Products Company CONTACT: Teresa Hess,
Director, Investor Relations of Tecumseh Products Company,
+1-517-423-8455 Web site: http://www.tecumseh.com/ Company News
On-Call: http://www.prnewswire.com/comp/842875.html
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