American Axle & Manufacturing Reports First Quarter 2012 Earnings of $0.68 Per Share
(Thomson Reuters ONE) -
Total sales up 16% year-over-year; Net income increases 36% year-over-year
Detroit, Michigan, April 27, 2012-- American Axle & Manufacturing Holdings, Inc.
(AAM), which is traded as AXL on the NYSE, today reported its financial results
for the first quarter 2012.
First Quarter 2012 Results
-First quarter 2012 sales of $751.5 million, up 16.4% on a year-over-year basis
-Non-GM sales grew 8.5% on a year-over-year basis to $193.6 million
-Gross profit of $139.2 million, or 18.5% of sales
-Operating income of $77.4 million, or 10.3% of sales
-Net income of $51.2 million, or $0.68 per share
-Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization, excluding the impact of curtailment gains, special charges, and
other non-recurring costs) of $108.8 million or 14.5% of sales
-AAM's quarterly results reflect the favorable impact of postretirement benefit
curtailment gains of $21.8 million (or $0.29 per share); these gains were
partially offset by special charges and restructuring costs of $16.5 million (or
$0.22 per share), primarily related to the closure of our Detroit Manufacturing
Complex and Cheektowaga Manufacturing Facility
AAM's net earnings in the first quarter of 2012 were $51.2 million, or $0.68 per
share. This compares to net earnings of $37.7 million, or $0.50 per share, in
the first quarter of 2011.
In the first quarter of 2012, AAM's results reflect the favorable impact of
other postretirement benefit curtailment gains of $21.8 million (or $0.29 per
share); these gains were partially offset by special charges and restructuring
costs of $16.5 million (or $0.22 per share), primarily related to the closure of
our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.
"AAM achieved solid financial results in the first quarter of 2012, with strong
sales growth driving higher earnings. These results reflect the favorable impact
of increased production volumes across many of our major product programs and
sustained improvements in capacity utilization," said AAM's Co-Founder, Chairman
of the Board and Chief Executive Officer, Richard E. Dauch. "During 2012 and
continuing through the year 2013, AAM is energized to support numerous new
global product and process launches, many of which feature exciting new advanced
driveline technologies and enhance the diversification of our customer base,
product profile and global market concentrations."
Net sales in the first quarter of 2012 increased approximately 16.4% to $751.5
million as compared to $645.6 million in the first quarter of 2011. Non-GM sales
were up 8.5% to $193.6 million in the first quarter of 2012 as compared to
$178.4 million in the first quarter of 2011.
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
first quarter of 2012, AAM's content-per-vehicle was $1,475.
AAM's gross profit in the first quarter of 2012 was $139.2 million or 18.5% of
sales. For the first quarter of 2011, AAM's gross profit was $115.4 million, or
17.9% of sales.
AAM defines Adjusted EBITDA to be earnings before interest, taxes, depreciation
and amortization, excluding the impact of curtailment gains or losses, special
charges, and other non-recurring costs. In the first quarter of 2012, AAM's
Adjusted EBITDA was $108.8 million or 14.5% of sales. AAM's Adjusted EBITDA in
the first quarter of 2012 was also adversely impacted by $2.1 million of foreign
exchange losses. For the first quarter of 2011, AAM's Adjusted EBITDA was $95.0
million or 14.7% of sales.
AAM's SG&A spending in the first quarter of 2012 was $61.8 million, or 8.2% of
sales, as compared to $56.7 million, or 8.8% of sales, in the first quarter of
2011. AAM's R&D spending in the first quarter of 2012 was $30.1 million as
compared to $27.2 million in the first quarter of 2011.
In the first quarter of 2012, AAM's operating income was $77.4 million or 10.3%
of sales.
In the first quarter of 2012, AAM's net income was $51.2 million or 6.8% of
sales. Diluted earnings per share (EPS) were $0.68 per share in the first
quarter of 2012. For the first quarter 2011, AAM's net income was $37.7 million
or 5.8% of sales. Diluted earnings per share (EPS) were $0.50 per share for the
first quarter 2012.
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 first quarter 2012 was $71.5
million. Capital spending, net of proceeds from the sale of equipment, for the
first quarter 2012 was $43.6 million. Reflecting the impact of this activity,
AAM's free cash flow was a use of $115.1 million for the first quarter 2012.
AAM's free cash flow in the first quarter 2012 also reflects the impact of
approximately $21 million of cash payments for special charges and restructuring
actions (principally related to the closure of our Detroit Manufacturing Complex
and Cheektowaga Manufacturing Facility).
A conference call to review AAM's first quarter 2012 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 April 27, 2012 until
5:00 p.m. ET May 4, 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 69159478.
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, 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 are "forward-looking" statements within the meaning
of the Private Securities Litigation Reform Act of 1995 and relate to trends and
events that may affect our future financial position and operating results. The
terms such as "will," "may," "could," "would," "plan," "believe," "expect,"
"anticipate," "intend," "project," and similar words of expressions, as well as
statements in future tense, are intended to identify forward-looking statements.
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 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; supply shortages or price increases in raw materials,
utilities or other operating supplies for us or our customers as a result of
natural disasters or otherwise; our ability to respond to changes in technology,
increased competition or pricing pressures; price volatility in, or reduced
availability of, fuel; 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; 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 recall, 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 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. It is not possible to foresee or identify all such factors
and we make no commitment to update any forward-looking statement or to disclose
any facts, events or circumstances after the date hereof that may affect the
accuracy of any forward-looking statement.
# # #
For more information...
Christopher M. Son
Director, Investor Relations, Corporate Communications and Marketing
(313) 758-4814
chris.son(at)aam.com
David Tworek
Manager, Communications
(313) 758-4883
david.tworek(at)aam.com
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
-------------------------------------------------------------------------------
Three months ended
March 31,
--------------------------------------------
2012 2011
---------------------- ---------------------
(In millions, except per share data)
Net sales $ 751.5 $ 645.6
Cost of goods 612.3 530.2
sold
---------------------- ---------------------
Gross profit 139.2 115.4
Selling, general and 61.8 56.7
administrative expenses
---------------------- ---------------------
Operating 77.4 58.7
income
Interest (24.0) (21.3)
expense
Investment 0.3 0.3
income
Other income (1.2) 1.0
(expense), net
---------------------- ---------------------
Income before income 52.5 38.7
taxes
Income tax expense 2.2 2.1
---------------------- ---------------------
Net income 50.3 36.6
Net loss attributable to 0.9 1.1
noncontrolling interests
---------------------- ---------------------
Net income $ 51.2 $ 37.7
attributable to AAM
---------------------- ---------------------
Diluted earnings per $ 0.68 $ 0.50
share
---------------------- ---------------------
Diluted shares 75.0 75.3
outstanding
---------------------- ---------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
-------------------------------------------------------------------------------
Three months ended
March 31,
-------------------------------------------
2012 2011
---------------------- --------------------
(In millions)
Net income $ 50.3 $ 36.6
Other comprehensive income,
net of tax
Defined benefit plans (14.0) 3.1
Foreign currency 10.7 5.2
translation adjustments
Change in derivatives 5.6 1.2
---------------------- --------------------
Other comprehensive income 2.3 9.5
---------------------- --------------------
Comprehensive Income 52.6 46.1
Net attributable to 0.9 1.1
noncontrolling interests
Foreign currency
translation adjustments
attributable to (0.2) (0.8)
noncontrolling
interests
---------------------- --------------------
Comprehensive income $ 53.3 $ 46.4
attributable to AAM
---------------------- --------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
-------------------------------------------------------------------------------
March 31, December 31,
2012 2011
------------------------- ---------------------
(In millions)
ASSETS
Current assets
Cash and cash $ 112.8 $ 169.2
equivalents
Accounts receivable, net 501.1 333.3
Inventories, net 203.0 177.2
Prepaid expenses and 89.8 83.4
other
------------------------- ---------------------
Total current assets 906.7 763.1
Property, plant and 998.1 971.2
equipment, net
GM postretirement cost 156.3 155.9
sharing asset
Goodwill 257.9 260.2
Other assets and deferred 183.3 178.3
charges
------------------------- ---------------------
Total assets $ 2,502.3 $ 2,328.7
------------------------- ---------------------
LIABILITIES AND STOCKHOLDERS'
DEFICIT
Current liabilities
Accounts payable $ 433.8 $ 337.1
Accrued compensation and 98.2 110.6
benefits
Deferred revenue 22.8 32.9
Other accrued expenses 87.3 95.5
------------------------- ---------------------
Total current liabilities 642.1 576.1
Long-term debt 1248.7 1,180.2
Deferred revenue 85.1 88.2
Postretirement benefits and 902.8 903.8
other long-term liabilities
------------------------- ---------------------
Total liabilities 2,878.7 2748.3
Stockholders' deficit (376.4) (419.6)
------------------------- ---------------------
Total liabilities and $ 2,502.3 $ 2,328.7
stockholders' deficit
------------------------- ---------------------
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
-------------------------------------------------------------------------------
Three months ended
March 31,
-----------------------------------------
2012 2011
--------------------- -------------------
(In millions)
Operating activities
Net income $ 50.3 $ 36.6
Depreciation and 36.7 33.9
amortization
Other (158.5) (69.5)
--------------------- -------------------
Net cash flow provided by (used (71.5) 1.0
in) operating activities
Purchases of property, (44.5) (31.5)
plant & equipment
Purchase buyouts of 0.9 1.5
leased equipment
--------------------- -------------------
Net cash flow used in (43.6) (30.0)
investing activites
Net decrease in long-term 66.8 (3.3)
debt
Employee stock option 0.1 4.6
exercise
Repurchase of treasury (5.9) (0.1)
stock
Purchase of (4.0) -
noncontrolling interest
--------------------- -------------------
Net cash flow provided by 57.0 1.2
financing activities
Effect of exchange rate 1.7 0.6
changes on cash
--------------------- -------------------
Net decrease in cash and (56.4) (27.2)
cash equivalents
Cash and cash equivalents at 169.2 244.6
beginning of period
--------------------- -------------------
Cash and cash equivalents $ 112.8 $ 217.4
at 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
March 31,
-----------------------------------------------------
2012 2011
--------------------------- -------------------------
(In millions)
Net income
attributable $ 51.2 $ 37.7
to AAM
Interest 24.0 21.3
expense
Income taxes 2.2 2.1
Depreciation
and 36.7 33.9
amortization
--------------------------- -------------------------
EBITDA $ 114.1 $ 95.0
Other special
charges,
curtailment
gains and (5.3) -
other non-
recurring
operating
costs((e))
--------------------------- -------------------------
ADJUSTED $ 108.8 $ 95.0
EBITDA
--------------------------- -------------------------
Net debt((b)) to capital
March 31, December 31,
2012 2011
--------------------------- -------------------------
(In millions, except percentages)
Total debt $ 1,248.7 $ 1,180.2
Less: cash
and cash 112.8 169.2
equivalents
--------------------------- -------------------------
Net debt at 1,135.9 1,011.0
end of period
Stockholders' (376.4) (419.6)
deficit
--------------------------- -------------------------
Total
invested $ 759.5 $ 591.4
capital at
end of period
--------------------------- -------------------------
Net debt to 149.6% 171.0%
capital((c))
--------------------------- -------------------------
Free Cash Flow((d))
Three months ended
March 31,
-----------------------------------------------------
2012 2011
--------------------------- -------------------------
(In millions)
Net cash provided
by (used $ (71.5) $ 1.0
in) operating
activities
Less: Purchases of
property, plant & (43.6) (30.0)
equipment, net of
proceeds
--------------------------- -------------------------
Free cash $ (115.1) $ (29.0)
flow
--------------------------- -------------------------
-------------------------------------------------------------------------------
((a)) We define EBITDA to be earnings before interest, taxes, depreciation
and amortization. Adjusted EBITDA is defined as EBITDA excluding the impact of
curtailment gains or losses, special charges, and other non-recurring costs
related to the closure of the Detroit Manufacturing Complex and Cheektowaga
Manufacturing Facility, and debt refinancing and redemption costs. We believe
that EBITDA and adjusted EBITDA are meaningful measures of performance as they
are 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 (used in) operating
activities less purchases of property, plant 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 measure 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 reflect the favorable impact of postretirement benefit curtailment gains
of $21.8 million (or $0.29 per share); these gains were partially offset by
speical charges and restructuring costs of $16.5 million (or $0.22 per share),
primarily related to the closure of our Detroit Manufacturing Complex and
Cheektowaga Manufacturing Facility.
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
[HUG#1605225]
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