Form 8-K TENNECO INC For: Jan 17
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 17, 2018
TENNECO INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 1-12387 | 76-0515284 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
| 500 NORTH FIELD DRIVE, LAKE FOREST, ILLINOIS | 60045 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (847) 482-5000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 7.01 | REGULATION FD DISCLOSURE |
On January 17, 2018, Tenneco Inc. announced its expectations regarding 2018, 2019 and 2020 revenue growth, which it is providing at the Deutsche Bank Global Auto Industry Conference. The expectations are described in the company’s press release, dated January 17, 2018, and in the following slides that are excerpted from the presentation the company is delivering at the Deutsche Bank Global Auto Industry Conference. The company’s press release and the excerpted slides are incorporated herein by reference and are furnished as Exhibits 99.1 and 99.2, respectively, to this Current Report on Form 8-K. In addition, a complete copy of the slides presented at the conference is available on the financial section of the Tenneco website at www.tenneco.com. The contents of the company’s website are not, however, a part of this report.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
| (d) | Exhibits |
| Exhibit |
Description | |
| 99.1 | Press release issued January 17, 2018 | |
| 99.2 | Excerpts from January 17, 2018 Presentation | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TENNECO INC. | ||||||
| Date: January 17, 2018 | By: | /s/ Brandon B. Smith | ||||
| Brandon B. Smith | ||||||
| Interim General Counsel | ||||||
| and Corporate Secretary | ||||||
Exhibit 99.1
TENNECO PROVIDES REVENUE GROWTH OUTLOOK
Expects Continued Revenue Growth Outpacing Industry Production
Detroit, MI, January 17, 2018 – Tenneco Inc. (NYSE: TEN) announced today that in 2018 the company expects to outpace light vehicle industry production* by 3 percentage points, in line with last year’s estimate for 2018 revenue growth. In total, the company expects 2018 revenue growth of 5 percent, driven by increases in both the Ride Performance and Clean Air product lines. This growth assumes current industry production forecasts and is at 2017 constant currency.
In 2018, the company expects 5% organic growth driven by:
| • | Content growth on light and commercial vehicle platforms; |
| • | The continued industry recovery in regulated off-highway regions. |
2018 Revenue Outlook (in 2017 constant currency)
Assumptions for the 2018 revenue outlook include:
| • | Global industry light vehicle production +2%* |
| • | Global commercial truck production about flat** |
| • | Off-highway engine production in regulated regions up by low double-digits*** |
| • | Organic growth is net of OE price downs |
| • | Substrates estimated at 24% - 25% of total revenue |
Tenneco also announced its revenue guidance for 2019 and 2020. In those years, the company expects to outperform industry production by:
| • | 4% to 6% in 2019 |
| • | 3% to 5% in 2020 |
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Tenneco will report its fourth quarter and full-year 2017 financial results on February 9, 2018.
| * | IHS Automotive December 2017 global light vehicle production and Tenneco estimates. |
| ** | Power Systems Research (PSR) January 2018 global commercial truck and bus production and Tenneco estimates. |
| *** | Customer schedules and Tenneco estimates for off-highway engine production in North America and Europe. |
Tenneco is an $8.6 billion global manufacturing company with headquarters in Lake Forest, Illinois and approximately 31,000 employees worldwide. Tenneco is one of the world’s largest designers, manufacturers and marketers of clean air and ride performance products and systems for automotive and commercial vehicle original equipment markets and the aftermarket. Tenneco’s principal brand names are Monroe®, Walker®, XNOx™ and Clevite®Elastomers.
Revenue estimates in this release are based on OE manufacturers’ programs that have been formally awarded to the company; programs where Tenneco is highly confident that it will be awarded business based on informal customer indications consistent with past practices; and Tenneco’s status as supplier for the existing program and its relationship with the customer. These revenue estimates are also based on anticipated vehicle production levels and pricing, including precious metals pricing and the impact of material cost changes. Unless otherwise indicated, our revenue estimate methodology does not attempt to forecast currency fluctuations, and accordingly, reflects constant currency. For certain additional assumptions upon which these estimates are based, see the slides accompanying the January 17, 2018 webcast, which will be available on the financial section of the Tenneco website at www.tenneco.com.
This press release contains forward-looking statements. Words such as “may,” “expects,” “anticipate,” “projects,” “will,” “outlook” and similar expressions identify forward-looking statements. These forward-looking statements are based on the current expectations of the company (including its subsidiaries). Because these forward-looking statements involve risks and uncertainties, the company’s plans, actions and actual results could differ materially. Among the factors that could cause these plans, actions and results to differ materially from current expectations are:(i) general economic, business and market conditions; (ii) changes in consumer demand, prices and the company’s ability to have our products included on top selling vehicles, including any shifts in consumer preferences to lower margin vehicles, for which we may or may not have supply arrangements; (iii) changes in automotive and commercial vehicle manufacturers’ production rates and their actual and forecasted requirements for the company’s products such as significant production cuts that automotive manufacturers may take in response to difficult economic conditions; (iv) the overall highly competitive nature of the automobile and commercial vehicle parts industries, and any resultant inability to realize the sales represented by the company’s awarded book of business which is based on anticipated pricing and volumes over the life of the applicable program; and (v) the loss of any of our large original equipment manufacturer (“OEM”) customers (on whom we depend for a substantial portion of our revenues), or the loss of market shares by these customers if we are unable to achieve increased sales to other OEMs or any change in customer demand due to delays in the adoption or enforcement of worldwide emissions regulations. The company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date of this press release. Additional information regarding these and other risk factors and uncertainties is detailed from time to time in the company’s SEC filings, including but not limited to its annual report on Form 10-K/A for the year ended December 31, 2016.
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| Contacts: | ||||
| Bill Dawson | Linae Golla | |||
| Media inquiries | Investor inquires | |||
| 847 482-5807 | 847 482-5162 | |||
| [email protected] | [email protected] |
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Focused Priorities Revenue Outlook Strong organic revenue growth outpacing industry production Organic Growth 5% 2018 Revenue Outlook (in 2017 constant currency) Expecting organic growth of 5%, outpacing industry production by 3% driven by content growth in light and commercial vehicles and continued recovery in regulated off-highway regions * IHS Automotive December 2017 global light vehicle production and Tenneco estimates. ** Power Systems Research (PSR) January 2018 global commercial truck and bus production and Tenneco estimates. ***Customer schedules and Tenneco estimates for off-highway engine production in North America and Europe. See slide 18 for further key assumptions related to our revenue projections. Impact vs. 2017 Euro/USD RMB/USD Real/USD + 2.5% 1.20 0.156 0.328 - 1.14 0.149 0.313 - 2.5% 1.08 0.141 0.297 2018 Assumptions Global light vehicle production +2%* Global commercial truck production about flat** Off-highway engine production for regulated regions expected up low double-digits*** Organic growth is net of OE price downs Substrates estimated at 24% - 25% of total revenue 2018 Currency Sensitivity Mid-term Revenue Outlook Expect to outperform industry production by: 4% - 6% in 2019 3% - 5% in 2020 Exhibit 99.2
Tenneco Projections In addition to the information set forth on this slide and slide 10 and 13, Tenneco’s revenue projections are based on the type of information set forth under “Outlook” in Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations” as set forth in Tenneco’s Annual Report on Form 10-K/A for the year ended December 31, 2016. Please see that disclosure for further information. Key additional assumptions and limitations described in that disclosure include: Revenue projections are based on original equipment manufacturers’ programs that have been formally awarded to the company; programs where the company is highly confident that it will be awarded business based on informal customer indications consistent with past practices; and Tenneco’s status as supplier for the existing program and its relationship with the customer. Revenue projections are based on the anticipated pricing of each program over its life. Revenue projections assume a fixed foreign currency value. This value is used to translate foreign business to the U.S. dollar. Revenue projections are subject to increase or decrease due to changes in customer requirements, customer and consumer preferences, the number of vehicles actually produced by our customers, and pricing. No inflation assumed. Certain elements of our GAAP revenue cannot be forecasted accurately over long periods of time on account of the variability and volatility of precious metal pricing in the substrates that we pass through to our customers. In this respect, we are not able to forecast GAAP revenue on a forward-looking basis for the time periods provided herein on slide 10 without unreasonable efforts. Tenneco’s revenue projection constitutes a forward-looking statement. We also refer you to the cautionary language regarding our forward-looking statements set forth in the Safe Harbor statement on slide 2.