American Axle & Manufacturing Reports Fourth Quarter and Full Year 2011 Financial Results
(Thomson Reuters ONE) -
Full-Year Non-GM sales increase by 25% on a year-over-year basis
Detroit, Michigan, February 3, 2012-- American Axle & Manufacturing Holdings,
Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial
results for the fourth quarter and full year 2011.
Fourth Quarter 2011 Results
· Fourth quarter 2011 sales of $605.6 million, up 4% on a year-over-year basis
· Non-GM sales grew by 11% on a year-over-year basis to $175.0 million
· Gross profit of $105.7 million, or 17.5% of sales
· Operating income of $48.5 million, or 8.0% of sales
· Net income of $31.1 million, or $0.41 per share
· Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization, excluding the impact of special charges, asset impairments, and
other non-recurring costs) of $90.7 million or 15.0% of sales
· AAM's quarterly results reflect the net adverse impact of special charges,
asset impairments and other non-recurring operating costs of $4.8 million, or
$0.06 per share, primarily related to the planned closure of our Detroit
Manufacturing Complex and Cheektowaga Manufacturing Facility
Full Year 2011 Results
· Full year 2011 sales of $2.6 billion, up 13% on a year-over-year basis
· Non-GM sales grew 25% on a year-over-year basis to $710 million
· Gross margin of 17.6% is a new company record
· Operating income of $223.4 million, or 8.6% of sales
· Net income of $142.8 million, or $1.89 per share
· Adjusted EBITDA of $386.3 million, or 14.9% of sales
· AAM's full year results reflect the net adverse impact of special charges,
asset impairments, debt refinancing costs and other non-recurring operating
costs of $19.2 million, or $0.26 per share, primarily related to the planned
closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing
Facility
AAM's net earnings in the fourth quarter of 2011 were $31.1 million, or $0.41
per share. This compares to net earnings of $34.9 million, or $0.47 per share,
in the fourth quarter of 2010.
In the fourth quarter of 2011, AAM's results reflect the net adverse impact of
special charges, asset impairments and other non-recurring operating costs of
$4.8 million, or $0.06 per share, primarily related to the planned closure of
our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
For the full year 2011, AAM's net earnings were $142.8 million, or $1.89 per
share. This compares to net earnings of $115.4 million, or $1.55 per share in
2010.
On a full year basis in 2011, AAM incurred special charges, asset impairments
and other non-recurring operating costs of $15.0 million, or $0.20 per share,
primarily related to the planned closure of our Detroit Manufacturing Complex
and Cheektowaga Manufacturing Facility. Also included in the year's special
charges were $3.1 million of debt refinancing costs and a $1.6 million asset
impairment recorded by our e-AAM joint venture related to the long-term supply
agreement with Saab Automobile AB.
"The fourth quarter of 2011 capped a successful year for AAM. AAM's full-year
sales growth of 13% was significantly higher than the industry growth rate and
our profitability was steady and strong throughout the year," said AAM's Co-
Founder, Chairman of the Board and Chief Executive Officer, Richard E. Dauch.
"AAM's continued leadership in the development of advanced driveline technology
has enabled us to grow our new business backlog to $1.1 billion in future annual
sales for programs launching from 2012 through 2014. Combined with AAM's
outstanding operational expertise and our focus on achieving and sustaining
market cost competitiveness in all of our global operations, we believe AAM is
well positioned for continued profitable growth, accelerated business
diversification and improved balance sheet strength."
Net sales in the fourth quarter of 2011 increased approximately 4% to $605.6
million as compared to $583.3 million in the fourth quarter of 2010. Non-GM
sales grew 11% on a year-over-year basis to $175.0 million in the fourth quarter
of 2011 as compared to $157.6 million in the fourth quarter of 2010.
AAM's content-per-vehicle is measured by the dollar value of its product sales
supporting our customers' North American light truck and SUV programs. In the
fourth quarter of 2011, AAM's content-per-vehicle was $1,498 as compared to
$1,508 in the fourth quarter of 2010. For the full year 2011, AAM's content-per-
vehicle was $1,487 as compared to $1,441 in 2010.
Net sales for the full year 2011 increased by 13% to $2.6 billion as compared to
$2.3 billion in 2010. Non-GM sales grew 25% on a year-over-year basis to $710.0
million in 2011 as compared to $567.7 million in 2010.
AAM's gross profit in the fourth quarter of 2011 was $105.7 million or 17.5% of
sales. For the full year 2011, AAM's gross profit was $455.1 million, or 17.6%
of sales.
AAM defines Adjusted EBITDA to be earnings before interest, taxes, depreciation
and amortization, excluding the impact of special charges, asset impairments,
and other non-recurring costs. In the fourth quarter of 2011, AAM's Adjusted
EBITDA was $90.7 million or 15.0% of sales. For the full year 2011, AAM's
Adjusted EBITDA was $386.3 million or 14.9% of sales.
AAM's SG&A spending in the fourth quarter of 2011 was $57.2 million, or 9.4% of
sales, as compared to $50.6 million, or 8.7% of sales, in the fourth quarter of
2010. AAM's R&D spending in the fourth quarter of 2011 was $28.2 million as
compared to $23.6 million in the fourth quarter of 2010.
AAM's SG&A spending for the full year 2011 was $231.7 million, or 9.0% of sales,
as compared to $197.6 million, or 8.7% of sales, for the full year 2010. AAM's
R&D spending for the full year 2011 was $113.6 million as compared to $82.5
million in 2010.
In the fourth quarter of 2011, AAM's operating income was $48.5 million or 8.0%
of sales. For the full year 2011, AAM's operating income was $223.4 million, or
8.6% of sales.
In the fourth quarter of 2011, AAM's net income was $31.1 million or 5.1% of
sales. Diluted earnings per share (EPS) were $0.41 per share in the fourth
quarter of 2011. For the full year 2011, AAM's net income was $142.8 million or
5.5% of sales. Diluted earnings per share (EPS) were $1.89 per share for the
full year 2011.
AAM defines free cash flow to be net cash provided by (or used in) operating
activities, less capital expenditures net of proceeds from the sale of
equipment. For purposes of calculating free cash flow, AAM excludes the impact
of purchase buyouts of leased equipment, if any.
Net cash used in operating activities for the full year 2011 was $56.3 million,
including $5.2 million of cash payments for purchase buyouts of leased
equipment. Capital spending, net of proceeds from the sale of equipment, for the
full year 2011 was $154.2 million. Reflecting the impact of this activity, AAM's
free cash flow was a use of $205.3 million for the full year 2011.
AAM's free cash flow in 2011 reflects a one-time use of cash in the third
quarter of approximately $190 million related to the termination of accelerated
payment terms with GM. As a result of this change, effective July 1, 2011 AAM
transitioned to GM's standard weekly payment terms, which average approximately
50 days.
AAM's free cash flow in 2011 also reflects the impact of $34.6 million of cash
payments for special charges and restructuring actions (principally related to
the planned closure of our Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility) and $52 million of total pension funding, $26 million of
which was pulled ahead into the fourth quarter of 2011 in excess of AAM's
minimum statutory funding requirements for the 2011 calendar year.
For the full year 2010, AAM generated $136.9 million of positive free cash flow.
As of December 31, 2011, AAM's total available liquidity was in excess of $475
million, consisting of available cash and borrowing capacity on AAM's global
credit facilities.
A conference call to review AAM's fourth quarter and full year 2011 results is
scheduled today at 10:00 a.m. ET. Interested participants may listen to the live
conference call by logging onto AAM's investor web site at
http://investor.aam.com or calling (877) 278-1452 from the United States or
(973) 200-3383 from outside the United States. A replay will be available from
5:00 p.m. ET on February 3, 2012 until 5:00 p.m. ET February 10, 2012 by dialing
(855) 859-2056 from the United States or (404) 537-3406 from outside the United
States. When prompted, callers should enter conference reservation number
42077280.
Non-GAAP Financial Information
In addition to the results reported in accordance with accounting principles
generally accepted in the United States of America (GAAP) included within this
press release, AAM has provided certain information, which includes non-GAAP
financial measures. Such information is reconciled to its closest GAAP measure
in accordance with the Securities and Exchange Commission rules and is included
in the attached supplemental data.
Management believes that these non-GAAP financial measures are useful to both
management and its stockholders in their analysis of the Company's business and
operating performance. Management also uses this information for operational
planning and decision-making purposes.
Non-GAAP financial measures are not and should not be considered a substitute
for any GAAP measure. Additionally, non-GAAP financial measures as presented by
AAM may not be comparable to similarly titled measures reported by other
companies.
AAM is a world leader in the manufacture, engineering, design and validation of
driveline and drivetrain systems and related components and modules, chassis
systems and metal-formed products for trucks, sport utility vehicles, passenger
cars and crossover utility vehicles. In addition to locations in the United
States (Indiana, Michigan, New York, Ohio, and Pennsylvania), AAM also has
offices or facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea, Sweden, Thailand and the United Kingdom.
Cautionary Statement Concerning Forward-Looking Statements
Certain statements contained in this press release are "forward-looking
statements" and relate to the Company's plans, projections, strategies or future
performance. Such statements, made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, are based on our current
expectations, are inherently uncertain, are subject to risks and should be
viewed with caution. Forward-looking statements should not be read as a
guarantee of future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or results will be
achieved. Forward-looking statements are based on information available at the
time those statements are made and/or management's good faith belief as of that
time with respect to future events and are subject to risks and may differ
materially from those expressed in or suggested by the forward-looking
statements. Important factors that could cause such differences include, but are
not limited to: global economic conditions, including the impact of the current
sovereign debt crisis in the Euro-zone; reduced purchases of our products by GM,
Chrysler or other customers; reduced demand for our customers' products
(particularly light trucks and SUVs produced by GM and Chrysler); our ability to
realize the expected revenues from our new and incremental business backlog; our
ability or our customers' and suppliers' ability to successfully launch new
product programs on a timely basis; our ability to achieve the level of cost
reductions required to sustain global cost competitiveness; our ability to
attract new customers and programs for new products; our ability to maintain
satisfactory labor relations and avoid work stoppages; our suppliers', our
customers' and their suppliers' ability to maintain satisfactory labor relations
and avoid work stoppages; supply shortages or price increases in raw materials,
utilities or other operating supplies as a result of natural disasters or
otherwise; risks inherent in our international operations (including adverse
changes in political stability, taxes and other law changes, potential
disruption of production and supply, and currency rate fluctuations);
liabilities arising from warranty claims, product recalls, product liability and
legal proceedings to which we are or may become a party; availability of
financing for working capital, capital expenditures, R&D or other general
corporate purposes, including our ability to comply with financial covenants;
our customers' and suppliers' availability of financing for working capital,
capital expenditures, R&D or other general corporate purposes; our ability to
develop and produce new products that reflect market demand; lower-than-
anticipated market acceptance of new or existing products; our ability to
respond to changes in technology, increased competition or pricing pressures;
price volatility in, or reduced availability of, fuel; our ability to consummate
and integrate acquisitions and joint ventures; adverse changes in laws,
government regulations or market conditions affecting our products or our
customers' products (such as the Corporate Average Fuel Economy ("CAFE")
regulations); changes in liabilities arising from pension and other
postretirement benefit obligations; risks of noncompliance with environmental
regulations or risks of environmental issues that could result in unforeseen
costs at our facilities; our ability to attract and retain key associates; other
unanticipated events and conditions that may hinder our ability to compete. For
additional discussion, see "Risk factors" in our most recent 10K filing.
It is not possible to foresee or identify all such factors and we assume no
obligation to update any forward-looking statements or to disclose any
subsequent facts, events or circumstances that may affect their accuracy.
# # #
For more information...
Christopher M. Son
Director, Investor Relations,
Corporate Communications & Marketing
(313) 758-4814
chris.son(at)aam.com
David Tworek
Manager, Communications
(313) 758-4883
david.tworek(at)aam.com
Or visit the AAM website atwww.aam.com.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------------------------------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
--------------------------------------- --------------------------------------
2011 2010 2011 2010
------------------ -------------------- ------------------ -------------------
(In millions, except per share data) (In millions, except per share data)
Net sales $ $ 583.3 $ $ 2,283.0
605.6 2,585.0
Cost of
goods sold 499.9 481.7 2,129.9 1881.3
------------------ -------------------- ------------------ -------------------
Gross
profit 105.7 101.6 455.1 401.7
Selling, general
and
administrative 57.2 50.6 231.7 197.6
expenses
------------------ -------------------- ------------------ -------------------
Operating
income 48.5 51.0 223.4 204.1
Interest
expense (22.4) (21.6) (83.9) (89.0)
Investment
income 0.3 2.4 1.2 3.8
Debt
refinancing and
redemption - - (3.1) -
costs
Other income
(expense), 0.4 1.6 0.5 (0.1)
net
------------------ -------------------- ------------------ -------------------
Income before
income taxes 26.8 33.4 138.1 118.8
Income tax
expense (3.2) (0.9) 1.0 4.3
(benefit)
------------------ -------------------- ------------------ -------------------
Net income
30.0 34.3 137.1 114.5
Net loss
attributable to
noncontrolling 1.1 0.6 5.7 0.9
interests
------------------ -------------------- ------------------ -------------------
Net income $ $ $ $
attributable 31.1 34.9 142.8 115.4
to AAM
------------------ -------------------- ------------------ -------------------
Diluted $ $ $ $
earnings per 0.41 0.47 1.89 1.55
share
------------------ -------------------- ------------------ -------------------
Diluted
shares 75.3 74.6 75.4 74.5
outstanding
------------------ -------------------- ------------------ -------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
--------------------------------------------------------------------------------
December 31, December 31,
2011 2010
----------------------------------------------
(In millions)
ASSETS
Current assets
Cash and cash equivalents $ 169.2 $ 244.6
Accounts receivable, net 333.3 146.6
Inventories, net 177.2 130.3
Deferred income taxes 11.3 8.0
Prepaid expenses and other 72.1 72.6
----------------------------------------------
Total current assets 763.1 602.1
Property, plant and equipment, 971.2 936.3
net 20.1 38.6
Deferred income taxes
Goodwill 155.9 155.8
GM postretirement cost sharing 260.2 244.4
asset
Other assets and deferred charges 158.2 137.5
----------------------------------------------
Total assets $ 2,328.7 $ 2,114.7
----------------------------------------------
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities
Accounts payable $ 337.1 $ 283.6
Accrued expenses and other 239.0 285.5
----------------------------------------------
Total current liabilities 576.1 569.1
Long-term debt 1,180.2 1,010.0
Deferred revenue 88.2 116.0
Postretirement benefits and other 903.8 887.7
long-term liabilities
----------------------------------------------
Total liabilities 2,748.3 2,582.8
Stockholders' deficit (419.6) (468.1)
----------------------------------------------
Total liabilities and $ 2,328.7 $ 2,114.7
stockholders' deficit
----------------------------------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
------------------------------------------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
------------------------------------------ -----------------------------------------
2011 2010 2011 2010
--------------------- -------------------- -------------------- --------------------
(In millions) (In millions)
Operating
activities
Net $ 30.0 $ 34.3 $ 137.1 $ 114.5
income
Depreciation 35.6 33.5 139.4 131.6
and
amortization
Other (56.5) (21.0) (332.8) (5.8)
--------------------- -------------------- -------------------- --------------------
Net cash flow
provided by
(used in) 9.1 46.8 (56.3) 240.3
operating
activities
Purchases of
property,
plant &
equipment (52.1) (46.6) (163.1) (108.3)
Proceeds from 1.0 3.7 8.9 4.9
sales of
propery, plant
& equipment
Purchase
buyouts of (13.4) - (13.4) (7.8)
leased
equipment
Acquisition, (16.5) (2.2) (16.5) (2.2)
net
Redemption of
short-term - 4.8 - 6.4
investments
--------------------- -------------------- -------------------- --------------------
Net cash flow
used in (81.0) (40.3) (184.1) (107.0)
investing
activities
Net increase
(decrease) in 133.0 (1.1) 173.6 (61.9)
long-term debt
Debt issuance (5.2) - (10.9) (2.2)
costs
Purchase of
noncontrolling - (2.1) - (2.1)
interest
Employee stock
option - 1.1 4.6 1.1
exercises
Purchase of - - (0.1) (1.3)
treasury stock
--------------------- -------------------- -------------------- --------------------
Net cash flow
used in 127.8 (2.1) 167.2 (66.4)
financing
activities
Effect of
exchange rate (1.1) - (2.2) (0.4)
changes on
cash
--------------------- -------------------- -------------------- --------------------
Net increase
(decrease) in 54.8 4.4 (75.4) 66.5
cash and cash
equivalents
Cash and cash
equivalents at 114.4 240.2 244.6 178.1
beginning of
period
--------------------- -------------------- -------------------- --------------------
Cash and cash
equivalents at $ 169.2 $ 244.6 $ 169.2 $ 244.6
end of period
--------------------- -------------------- -------------------- --------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
SUPPLEMENTAL DATA
(Unaudited)
-------------------------------------------------------------------------------------------------
The supplemental data presented below is a reconciliation of certain financial measures which is
intended
to facilitate analysis of American Axle & Manufacturing Holdings, Inc. business and operating
performance.
Earnings before interest expense, income taxes and depreciation and amortization (EBITDA) and
adjusted EBITDA((a))
Three months ended Twelve months ended
December 31, December 31,
------------------------------------ -------------------------------------
2011 2010 2011 2010
------------------ ----------------- ------------------- -----------------
(In millions) (In millions)
Net income $
attributable $ 31.1 $ 34.9 $ 142.8 115.4
to AAM
Interest 22.4 21.6 83.9
expense 89.0
Income tax
expense (3.2) (0.9) 1.0 4.3
(benefit)
Depreciation
and 35.6 33.5 139.4 131.6
amortization
------------------ ----------------- ------------------- -----------------
EBITDA $ 85.9 $ 89.1 $ 367.1 $
340.3
Debt
refinancing
and - - 3.1 -
redemption
costs
Other special
charges, asset
impairments and 4.8 16.1
other non-recurring - -
operating
costs((e))
------------------ ----------------- ------------------- -----------------
ADJUSTED $ 90.7 $ 89.1 $ 386.3 $
EBITDA 340.3
------------------ ----------------- ------------------- -----------------
Net debt((b)) to capital
December 31, December 31,
2011 2010
------------------- -----------------
(In millions, except percentages)
Total debt $ 1,180.2 $ 1,010.0
Less: cash
and cash 169.2 244.6
equivalents
------------------- -----------------
Net debt at 1,011.0 765.4
end of period
Stockholders' (419.6)
deficit (468.1)
------------------- -----------------
Total
invested $ 591.4 $ 297.3
capital at
end of period
------------------- -----------------
Net debt to 171.0% 257.5%
capital((c))
------------------- -----------------
Free Cash Flow((d))
Three months ended Twelve months ended
December 31, December 31,
------------------------------------ -------------------------------------
2011 2010 2011 2010
------------------ ----------------- ------------------- -----------------
(In millions) (In millions)
Net cash
provided by $ $
(used in) 9.1 46.8 $ (56.3) $ 240.3
operating
activities
Add: Portion of lease
buyouts included in Net
cash provided by (used 5.2 - 5.2 -
in) operating
activities
------------------ ----------------- ------------------- -----------------
Adjusted Net cash
provided by (used $ 14.3 $ $ (51.1) $ 240.3
in) operating 46.8
activities
Less: Purchases of
property, plant &
equipment, net of (51.1) (42.9) (154.2) (103.4)
proceeds from sale of
property, plant &
equipment
------------------ ----------------- ------------------- -----------------
Free cash $ $ $ (205.3) $ 136.9
flow (36.8) 3.9
------------------ ----------------- ------------------- -----------------
-------------------------------------------------------------------------------------------------
((a)) We define EBITDA to be earnings before interest, taxes, depreciation and amortization.
Adjusted EBITDA is defined as EBITDA excluding the impact of special charges and restructuring
costs, including debt refinancing and redemption costs and expenses related to the closure of the
Detroit Manufacturing Complex. We believe that EBITDA and adjusted EBITDA are meaningful
measures of performance as it is commonly utilized by management and investors to analyze
operating performance and entity valuation. Our management, the investment community and the
banking institutions routinely use EBITDA, together with other measures, to measure our operating
performance relative to other Tier 1 automotive suppliers. EBITDA and adjusted EBITDA should not
be construed as income from operations, net income or cash flow from operating activities as
determined under GAAP. Other companies may calculate EBITDA and adjusted EBITDA differently.
((b)) Net debt is
equal to total debt
less cash and cash
equivalents.
((c)) Net debt to capital is equal to net debt divided by the sum of stockholders' deficit and
net debt. We believe that net debt to capital is a meaningful measure of financial condition as
it is commonly utilized by management, investors and creditors to assess relative capital
structure risk. Other companies may calculate net debt to capital differently.
((d)) We define free cash flow as net cash provided by operating activities less purchases of
property and equipment net of proceeds from sales of equipment. For purposes of calculating free
cash flow, AAM excludes the impact of purchase buyouts of leased equipment, if any. We believe
free cash flow is a meaningful measures as it is commonly utilized by management and investors to
assess our ability to generate cash flow from business operations to repay debt and return
capital to our stockholders. Free cash flow is also a key metric used in our calculation of
incentive compensation. Other companies may calculate free cash flow differently
((e)) Special charges, asset impairments and other non-recurring operating costs include $0.5
million related to the noncontrolling interests portion of the $1.6 million asset impairments
recorded by e-AAM.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: American Axle & Manufacturing Holdings, Inc via Thomson Reuters ONE
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