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American Axle & Manufacturing Holdings, Inc: AAM Reports Second Quarter 2014 Financial Results

2014-08-01 14:00:00
Ticker Giełda ISIC Kraj Miasto
AXL XNYS U.S.A. Detroit, MI








 Total Sales are up 18% in the quarter on a year-over-year basis; non-GM sales

up 33%



Detroit, Michigan, August 1, 2014 -- American Axle & Manufacturing Holdings,

Inc. (AAM), which is traded as AXL on the NYSE, today reported its financial

results for the second quarter of 2014.

Second Quarter 2014 Results

Second quarter 2014 sales of $946.9 million, up approximately 18.4% on a year-

over-year basis

* Non-GM sales grew 33.2% on a year-over-year basis to $298.1 million

* Gross profit of $149.0 million, or 15.7% of sales

* Net income of $52.2 million, or $0.67 per share

* EBITDA (earnings before interest, income taxes, depreciation and

amortization) of $136.7 million, or 14.4% of sales

* Free cash flow (net cash provided by operating activities less capital

expenditures net of proceeds from the sale of property, plant, and

equipment) of $82.5 million



AAM's net income in the second quarter of 2014 was $52.2 million, or $0.67 per

share as compared to net income of $25.8 million, or $0.34 per share, in the

second quarter of 2013.



"AAM's financial results in the second quarter of 2014 reflect strong sales

growth and profitability driven by the favorable impact of increased production

volumes across many of our major product programs supporting the North American

light vehicle segment," said AAM's Chairman, President and Chief Executive

Officer, David C. Dauch.  "AAM is energized to continue supporting these and

other new global product and process launches during the remainder of this year

and continuing through the year 2015.  Many of these launches feature exciting

new advanced driveline technologies that are enhancing the diversification of

our business and positioning AAM for solid profitability and consistent free

cash flow generation."



AAM's sales in the second quarter of 2014 increased approximately 18.4% to

$946.9 million as compared to $799.6 million in the second quarter of 2013.  Led

by higher sales in support of Chrysler's all-new Jeep Cherokee and heavy-duty

Ram full-size pickup trucks and its derivatives, non-GM sales grew 33.2% on a

year-over-year basis to $298.1 million in the second quarter of 2014 as compared

to $223.8 million in the second quarter of 2013.



AAM's net sales in the first half of 2014 increased approximately 16.1% to $1.81

billion as compared to $1.56 billion in the first half of 2013.  Non-GM sales in

the first half of 2014 increased approximately 42.2% on a year-over-year basis

to $585.9 million as compared to $411.9 million in the first half of 2013.



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

second quarter of 2014, AAM's content-per-vehicle increased 5.5% to $1,640  as

compared to $1,554 in the second quarter of 2013.



AAM's gross profit in the second quarter of 2014 was $149.0 million, or 15.7% of

sales, as compared to $122.2 million, or 15.3% of sales, in the second quarter

of 2013.



AAM's gross profit for the first half of 2014 was $270.9 million as compared to

$226.5 million in the first half of 2013.  Gross margin was 15.0% in the first

half of 2014 as compared to 14.6%  in the first half of 2013.



In the second quarter of 2014, AAM's operating income increased nearly $26

million to $87.5 million, or 9.2% of sales, as compared to $61.7 million, or

7.7% of sales, in the second quarter of 2013.



AAM's operating income in the first half of 2014 was $152.3 million as compared

to $106.4 million in the first half of 2013.  Operating margin was 8.4% in the

first half of 2014 as compared to 6.8% in the first half of 2013.



AAM's SG&A spending in the second quarter of 2014 was $61.5 million, or 6.5% of

sales, as compared to $60.5 million, or 7.6% of sales, in the second quarter of

2013.  AAM's R&D spending in the second quarter of 2014 was $24.4 million as

compared to $27.3 million in the second quarter of 2013.



In the first half of 2014, AAM's SG&A spending was $118.6 million as compared to

$120.1 million in the first half of 2013.  AAM's R&D spending in the first half

of 2014 was $50.2 million as compared to $55.8 million in the first half of

2013.



In the second quarter of 2014, AAM's net income was $52.2 million, or $0.67 per

share as compared to $25.8 million, or $0.34 per share in the second quarter of

2013. AAM's net income in the first half of 2014 was $85.8 million, or $1.11 per

share as compared to $33.1 million, or $0.43 per share in the first half of

2013.



AAM defines EBITDA to be earnings before interest, income taxes, depreciation

and amortization.  In the second quarter of 2014, AAM's EBITDA increased over

$34.3 million to $136.7 million, or 14.4% of sales, as compared to $102.4

million, or 12.8% of sales, in the second quarter of 2013.



AAM defines free cash flow to be net cash provided by (used in) operating

activities less capital expenditures net of proceeds from the sale of property,

plant and equipment and the sale-leaseback of equipment.



Net cash provided by operating activities for the second quarter of 2014 was

$137.9 million.  Capital spending, net of proceeds from the sale of property,

plant and equipment, for the second quarter of 2014 was $55.4 million.

Reflecting the impact of this activity, AAM generated free cash flow of $82.5

million for the second quarter of 2014.



A conference call to review AAM's second quarter 2014 results is scheduled today

at 10:00 AM 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

(855) 681-2072 from the United States or (973) 200-3383 from outside the United

States.  A replay will be available from Noon ET on August 1, 2014 until 5:00

p.m. ET August 8, 2014 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 34605137.





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 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 light trucks, sport utility vehicles,

passenger cars, crossover vehicles and commercial vehicles.  In addition to

locations in the United States (Michigan, Ohio, Pennsylvania and Indiana), AAM

also has offices or facilities in Brazil, China, Germany, India, Japan,

Luxembourg, Mexico, Poland, Scotland, South Korea, Sweden and Thailand.



In this earnings release, we make statements concerning our expectations,

beliefs, plans, objectives, goals, strategies, and future events or 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," "target," and similar words or 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:

reduced purchases of our products by General Motors Company (GM), Chrysler Group

LLC (Chrysler) or other customers; reduced demand for our customers' products

(particularly light trucks and sport utility vehicles (SUVs) produced by GM and

Chrysler); our ability or our customers' and suppliers' ability to successfully

launch new product programs on a timely basis; our ability to realize the

expected revenues from our new and incremental business backlog; 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

attract new customers and programs for new products; our ability to respond to

changes in technology, increased competition or pricing pressures; our ability

to achieve the level of cost reductions required to sustain global cost

competitiveness; 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; global economic conditions, including the impact of the

continued market weakness in the Euro-zone; risks inherent in our international

operations (including adverse changes in political stability, taxes and other

law changes, potential disruptions of production and supply, and currency rate

fluctuations); liabilities arising from warranty claims, product recall or field

actions, product liability and legal proceedings to which we are or may become a

party, or the impact of product recall or field actions on our customers; price

volatility in, or reduced availability of, fuel; our ability to successfully

implement upgrades to our enterprise resource planning systems; 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; our ability to attract and retain key

associates; availability of financing for working capital, capital expenditures,

research and development (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; changes in liabilities arising from pension

and other postretirement benefit obligations; risks of noncompliance with

environmental laws and regulations or risks of environmental issues that could

result in unforeseen costs at our facilities; 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); our ability to consummate and integrate acquisitions and joint

ventures; our ability or our customers' and suppliers' ability to comply with

the Dodd-Frank Act and other regulatory requirements and the potential costs of

such compliance; and 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 & Marketing

(313) 758-4814

chris.son@aam.com





Vitalie V. Stelea

Manager, Investor Relations

(313) 758-4635

vitalie.stelea@aam.com







Or visit the AAM website at www.aam.com.





AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)





  Three months ended   Six months ended



  June 30,   June 30,

-------------------------- --------------------------

  2014     2013     2014     2013

----------- -------------- ------------- ------------

(in millions, except per (in millions, except per

  share data)   share data)







Net sales $ 946.9     $ 799.6     $ 1,805.7     $ 1,555.2







Cost of goods sold 797.9     677.4     1,534.8     1,328.7

----------- -------------- ------------- ------------





Gross profit 149.0     122.2     270.9     226.5







Selling, general and

administrative expenses 61.5   60.5   118.6   120.1

----------- -------------- ------------- ------------





Operating income 87.5     61.7     152.3     106.4







Interest expense (25.1)     (28.8)     (50.1)     (57.9)







Investment income 0.3     0.2     0.6     0.3







Other income (expense)



Debt refinancing and

redemption costs -   0.1   -   (11.2)



Other, net 0.8     (2.0)     1.3     (1.5)

----------- -------------- ------------- ------------





Income before income

taxes 63.5   31.2   104.1   36.1







Income tax expense 11.3     5.4     18.3     3.0

----------- -------------- ------------- ------------





Net income $ 52.2     $ 25.8     $ 85.8     $ 33.1

----------- -------------- ------------- ------------





Diluted earnings per

share $ 0.67   $ 0.34   $ 1.11   $ 0.43

----------- -------------- ------------- ------------





Diluted shares

outstanding 77.5      76.9      77.3      76.5

----------- -------------- ------------- ------------









AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)



  Three months ended   Six months ended



  June 30,   June 30,

--------------------- ---------------------

  2014     2013     2014     2013

---------- ---------- ----------- ---------

  (in millions)







Net income $ 52.2     $ 25.8     $ 85.8     $ 33.1







Other comprehensive income (loss),

net of tax



Defined benefit plans, net of

tax((a)) 0.6   1.7   5.7   0.6



     Foreign currency translation

adjustments 3.6   (21.7)     11.4   (16.8)



     Change in derivatives 0.5     (2.1)     1.4     (1.6)

---------- ---------- ----------- ---------

Other comprehensive income (loss) 4.7     (22.1)     18.5     (17.8)

---------- ---------- ----------- ---------





Comprehensive income $ 56.9     $ 3.7     $ 104.3     $ 15.3

---------- ---------- ----------- ---------



________________________________________

(a) Amounts are net of tax $(0.2) million and $(2.9) million for the three and

six months ended June 30, 2014, respectively, and $(0.8) million and $(0.1)

million for the three and six months ended June 30, 2013, respectively.







AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)





June December

  30,  2014   31, 2013

------------- --------------

  (in millions)



ASSETS



Assets



Cash and cash equivalents $ 128.9     $ 154.0



Accounts receivable, net 648.2     458.5



Inventories, net 255.7     261.8



Prepaid expenses and other current assets 114.0     123.5

------------- --------------

Total current assets 1,146.8     997.8







Property, plant and equipment, net 1,077.0     1,058.5



Deferred income taxes 333.0     341.8



Goodwill 156.2     156.4



GM postretirement cost sharing asset 234.9     242.0



Other assets and deferred charges 253.5     232.5

------------- --------------

Total assets $ 3,201.4     $ 3,029.0

------------- --------------





LIABILITIES AND STOCKHOLDERS' EQUITY



Liabilities and Stockholders' Equity



Accounts payable $ 509.7     $ 445.8



Accrued compensation and benefits 92.3     110.1



Deferred revenue 22.5     17.0



Accrued expenses and other current liabilities 97.0     94.2

------------- --------------

Total current liabilities 721.5     667.1







Long-term debt 1,545.7     1,559.1



Deferred revenue 106.4     76.4



Postretirement benefits and other long-term

liabilities 684.4   692.8

------------- --------------

Total liabilities 3,058.0     2,995.4







Total stockholders' equity 143.4     33.6

------------- --------------

Total liabilities and stockholders' equity $ 3,201.4     $ 3,029.0

------------- --------------





AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)









Three months Six months

    ended     ended



    June 30,   June 30,

---------------------- ----------------------

    2014     2013     2014     2013

----------- ---------- ----------- ----------

    (in millions)   (in millions)



Operating Activities



Net income   $ 52.2     $ 25.8     $ 85.8     $ 33.1



Adjustments to reconcile net

income to net cash provided by

operating activities



   Depreciation and

amortization   48.1   42.4   95.0   83.7



   Other   37.6     (8.2)     (98.4)     (83.6)

----------- ---------- ----------- ----------

Net cash provided by operating

activities   137.9   60.0   82.4   33.2

----------- ---------- ----------- ----------





Investing Activities



Purchases of property, plant &

equipment   (55.8)     (73.6)     (103.7)     (121.5)



Proceeds from sale of property,

plant & equipment   0.4   4.8   8.3   4.9



Proceeds from sale-leaseback of

equipment   -   12.1   -   16.0

----------- ---------- ----------- ----------

Net cash used in investing

activities   (55.4)     (56.7)     (95.4)     (100.6)

----------- ---------- ----------- ----------





Financing Activities



Net increase (decrease) in

long-term debt   (34.0)     (24.0)     (13.4)     90.7



Debt issuance costs   (0.1)     (0.4)     (0.3)     (6.6)



Employee stock option exercises   0.6     0.8     1.2     0.8



Purchase of treasury stock   -     (0.1)     (0.3)     (0.1)

----------- ---------- ----------- ----------

Net cash provided by (used in)

financing activities   (33.5)     (23.7)     (12.8)     84.8

----------- ---------- ----------- ----------





Effect of exchange rate changes

on cash   0.3   (1.5)     0.7   (0.9)

----------- ---------- ----------- ----------





Net increase (decrease) in cash

and cash equivalents   49.3   (21.9)     (25.1)     16.5







Cash and cash equivalents at

beginning of period   79.6   100.8   154.0   62.4

----------- ---------- ----------- ----------





Cash and cash equivalents at

end of period   $ 128.9   $ 78.9   $ 128.9   $ 78.9

----------- ---------- ----------- ----------







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   Six months ended



  June 30,   June 30,

----------------------- ----------------------

  2014     2013     2014     2013

----------- ----------- ----------- ----------

  (in millions)   (in millions)







Net income $ 52.2     $ 25.8     $ 85.8     $ 33.1



Interest expense 25.1     28.8     50.1     57.9



Income tax expense 11.3     5.4     18.3     3.0



Depreciation and amortization 48.1     42.4     95.0     83.7

----------- ----------- ----------- ----------





EBITDA 136.7     102.4     249.2     177.7







Debt refinancing and redemption

costs -   (0.1)     -   11.2

----------- ----------- ----------- ----------





ADJUSTED EBITDA $ 136.7     $ 102.3     $ 249.2     $ 188.9

----------- ----------- ----------- ----------





Net debt((b) )to capital



June December

  30, 2014   31, 2013

------------- --------------

(in millions, except

  percentages)







Total debt $ 1,545.7     $ 1,559.1



Less: cash and cash equivalents 128.9     154.0

------------- --------------





Net debt at end of period 1,416.8     1,405.1







Stockholders' equity 143.4     33.6

------------- --------------





Total invested capital at end of period $ 1,560.2     $ 1,438.7

------------- --------------





Net debt to capital((c)) 90.8%     97.7%

------------- --------------







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.







Free Cash Flow((d))



  Three months ended   Six months ended



  June 30,   June 30,

---------------------- ------------------------

  2014     2013     2014     2013

----------- ---------- ------------ -----------

  (in millions)   (in millions)







Net cash provided by operating

activities $ 137.9   $ 60.0   $ 82.4   $ 33.2







Less: Purchases of property,

plant & equipment, net of

proceeds from sale of property,

plant & equipment and

sale-leaseback of equipment (55.4)     (56.7)     (95.4)     (100.6)

----------- ---------- ------------ -----------





Free cash flow $ 82.5     $ 3.3     $ (13.0)     $ (67.4)

----------- ---------- ------------ -----------



________________________________________

(a) We define EBITDA to be earnings before interest, income taxes, depreciation

and amortization. We believe that EBITDA is a meaningful measure 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 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 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'

equity 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 capital expenditures net of proceeds from the sale of property,

plant and equipment and the sale-leaseback 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.















This announcement is distributed by GlobeNewswire on behalf of

GlobeNewswire 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 GlobeNewswire

[HUG#1844173]





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