Cooper Tire & Rubber Company Reports Third Quarter Results

Third Quarter Highlights * Basic earnings per share of 32 cents * Net sales increased by 6 percent * Tire unit sales outpace the industry * Automotive Group sales up 14 percent * Automotive Group operating margins up sharply

FINDLAY, Ohio, Oct. 16, 2002 Cooper Tire & Rubber Company today reported net income of $23 million, or earnings per share of 32 cents, for the quarter ended September 30, 2002. This result compares favorably to the loss of $20 million the Company recorded in the third quarter of 2001, due to charges relating to a proposed settlement of class action litigation.

Net sales for the quarter rose 6 percent to $839 million compared to $791 million last year while operating profit for the third quarter of 2002 was $55 million and cash flow from operations was $112 million.

For the first nine months of the year, Cooper generated net sales of $2.5 billion and net income of $88 million.

The net income of $23 million for the third quarter of 2002 was up 28 percent compared to the $18 million recorded, excluding class action charges, in the same period last year. Operating profit was $55 million in the third quarter compared to $52 million last year.

For the first nine months, on the same basis, net income was $88 million, up 87 percent compared to $47 million in the same period last year, while operating profit was $195 million compared to $137 million last year.

Commenting on the quarter's results, Cooper's chairman, president and chief executive officer Thomas A. Dattilo said, "Our automotive components business is really beginning to come together, just as we planned and as we have been saying. We have a steady flow of significant new business coming on stream now and continuing through 2003 and 2004. All our hard work and preparation over the past 18 months is allowing us to launch and deliver that business successfully and profitably."

"On the other hand, the tire industry is facing tougher conditions from both a manufacturing and a marketing perspective," Dattilo continued. "Manufacturing costs, including raw materials, have been increasing steadily while product demand for the industry overall is down. Our unit sales performance continues to outpace the industry. Combined, Cooper's North American passenger and light truck tire sales declined just 1 percent during the quarter compared to an overall replacement tire industry decline of nearly 8 percent, but the growth this quarter has been in lower margin products."

The Company's Tire Group reported net sales of $464 million in the quarter compared to $462 in the third quarter of 2001. Third quarter operating profit for the Tire Group was $27 million compared to an operating loss of $9 million in the third quarter of 2001. Excluding non-recurring charges for the class action litigation settlement, operating profit for the third quarter of 2001 was $52 million while the current quarter result was unaffected at $27 million. The decline was the result of a combination of difficult operating conditions including slower sales in North America, rising raw material costs, much weaker customer and product mix, and operating inefficiencies.

Cooper-Standard Automotive sales totaled $381 million, up 14 percent compared to last year's third quarter total. New business launches and increasing content per vehicle magnified the impact of production increases implemented by most of the global light vehicle manufacturers. In North America, Cooper-Standard Automotive sales increased by approximately 11 percent while light vehicle production increased by an estimated 9 percent. The Company's international automotive component sales increased by 20 percent during the quarter.

The Automotive Group generated operating profit of $27 million during the quarter compared to breakeven results a year ago. Continuing operating improvements from restructuring, the implementation of Cooper's lean manufacturing practices, increased production volume and reductions in compensation-related costs contributed to the results in the quarter.

"We are clearly a stronger company today because of the expansion of our automotive business. We are more diversified and better able to sustain growth during seasonal or cyclical slowdowns in one business or the other," Dattilo added. "Moving forward, this will allow us to continue to generate strong cash flows and pay down our debt, generating value for our shareholders."