DURA Automotive Reports Fourth Quarter and Full-Year 2005 Results and Announces Restructuring Plan

Business Wire, Feb 9, 2006

ROCHESTER HILLS, Mich. -- DURA Automotive Systems, Inc. (Nasdaq:DRRA), today reported revenues of $564.4 million for the fourth quarter ended December 31, 2005 compared to $582.8 million in the prior year quarter. Net income for the quarter was $10.3 million, or $0.54 per diluted share, compared to net income of $1.9 million, or $0.10 per diluted share, in the prior year quarter. DURA's adjusted income from continuing operations for the quarter, which excludes facility consolidation charges, a gain on retirement of debt and the favorable settlement of certain environmental matters totaled $0.9 million, or $0.05 per diluted share, compared to income of $4.8 million, or $0.26 per diluted share, in the prior year quarter. Adjusted EBITDA for the quarter was $46.6 million compared to $46.5 million in the prior year quarter. A reconciliation of adjusted income from continuing operations and adjusted EBITDA to the most directly comparable GAAP measures is set forth below.

"Although our fourth quarter and full year results came in within our expectations, these results are not acceptable and we need to continue to focus our efforts on changing DURA going forward," said Larry Denton, chairman and chief executive officer of DURA Automotive.

The decrease in fourth quarter revenue from the prior year was driven primarily by lower North American automotive production by the domestic OEM's and the negative impact of foreign currency exchange. Partially offsetting these decreases was the strength of the recreation vehicle industry. Fourth quarter income from continuing operations increased from the prior year as net raw material cost improvements and the favorable resolution of certain environmental matters offset the impact of the lower domestic OEM automotive volumes.

The $5.2 million pre tax facility consolidation charge for the quarter relates primarily to the previously announced headcount reductions associated with DURA's plan to migrate to one enterprise resource planning system and the continuation of the restructuring actions in North America and Germany.

During the fourth quarter of 2005, DURA took the opportunity to reduce its Subordinated Notes by $49 million. This decision is consistent with its long-term debt reduction strategy. DURA spent $31 million of cash, resulting in a gain on retirement of debt of $18 million in the quarter.

Full-Year Results

For the year ended December 31, 2005, revenue totaled $2.3 billion compared to $2.5 billion in 2004. Net income for the year ended December 31, 2005 was $1.8 million, or $0.10 per diluted share, compared to net income of $11.7 million, or $0.62 per diluted share, in the prior year. DURA's adjusted loss from continuing operations for the year ended December 31, 2005, which excludes facility consolidation charges, a net gain on retirement of debt and the favorable resolution of certain environmental matters, totaled $6.4 million, or $0.34 per diluted share; as compared to adjusted income from continuing operations of $29.4 million, or $1.56 per diluted share, in the same period last year. Adjusted EBITDA for the year ended December 31, 2005 was $170.9 million compared to $210.9 million in the prior year. This was within the range of DURA's previously released guidance.

Restructuring Plan

Denton continued, "We have made progress toward achieving our organic growth and worldwide cost leadership goals over the past three years, however, we are not moving fast enough. We must accelerate our growth and profitability enhancement plans to meet our strategic goals by 2008. Over the next two years, DURA will complete a significant restructuring of our worldwide operations designed to enhance performance optimization, worldwide efficiency and financial results."

The restructuring plan will impact over 50 percent of DURA's worldwide operations either through product movement or facility closures. DURA will complete this action by year end 2007. In addition, DURA's purchasing organization will aggressively cut costs throughout its supply chain resulting in a significant reduction of annual purchasing costs.

Cash costs for the restructuring plan are expected to be approximately $100 million. These costs will relate primarily to employee severance, capital investment, facility closure and product move costs. The majority of these expenditures will occur by year end 2007. DURA expects a three year payback on the investment. The savings are expected primarily through a lower average global wage rate, lower cost of purchased materials and operating efficiencies gained as a result of the facility consolidations and reorganizations.

"We will finance the restructuring plan with cash on hand and availability under our existing revolving credit facility," said Keith Marchiando, chief financial officer of DURA Automotive. "The liquidity package that we put in place in May 2005 gives us ample liquidity to fund this necessary restructuring plan along with our on going operating cash requirements."

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