Non-GM sales grow to $754 million, or 22% of total net sales in
2005 DETROIT, Feb. 3 /PRNewswire-FirstCall/ -- 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 2005. Fourth Quarter Highlights: * Fourth quarter
sales of $852.6 million * 4% year-over-year decline in production
volumes * Non-GM sales increased over 12% to $193.0 million, or
approximately 23% of total net sales * Net earnings of $4.5
million, or $0.09 per share * Fourth quarter results include an
$8.7 million charge ($0.12 per share in the quarter) for lump-sum
voluntary separation payments accepted by approximately 160 hourly
and salaried associates Full Year Highlights: * Net sales of $3.4
billion * 10% year-over-year decline in production volumes * Non-GM
sales increased to $754.4 million, or 22% of total net sales in
2005 * Net earnings of $56.0 million, or $1.10 per share *
Increased new and incremental business backlog by more than $1.0
billion to approximately $1.4 billion in future annual sales * New
customers include Nissan, Audi, Ssangyong, Hino, Jatco, Koyo and
Harley-Davidson AAM reported fourth quarter diluted earnings per
share of $0.09 compared to $0.61 per share in the fourth quarter of
2004. Earnings for the full year 2005 were $56.0 million as
compared to $159.5 million in 2004. Full year 2005 diluted earnings
per share were $1.10 as compared to $2.98 per share in 2004. "In a
year of challenge and change for the domestic automotive supply
industry, AAM continued to generate profits and invest in exciting
new and strategic business growth initiatives," said American Axle
& Manufacturing Co- Founder, Chairman of the Board & CEO,
Richard E. Dauch. "In 2005, we made significant progress on AAM's
long-term strategic goals of expanding our product portfolio,
served markets, customer base and global manufacturing footprint.
We are especially pleased with the growth in our backlog of orders
for our newest driveline technology supporting all-wheel-drive
applications for passenger cars and crossover vehicles. We are also
looking forward to the 2006 calendar year launch of our new
regional manufacturing facility in Changshu, China." Sales in the
fourth quarter of 2005 were $852.6 million as compared to $875.6
million in the fourth quarter of 2004. Sales to customers other
than GM represented approximately 23% of total sales in the quarter
versus 20% in the fourth quarter of 2004. AAM's sales for the full
year 2005 were $3.4 billion as compared to $3.6 billion in 2004.
Non-GM sales increased by more than $26 million in 2005 to $754.4
million, or 22% of total sales as compared to 20% in the prior
year. Lower GM light truck production volumes resulted in an
overall decrease in AAM's sales in 2005 as compared to 2004. Mix
shifts favoring four-wheel-drive (4WD) and all-wheel-drive (AWD)
versions of our full-size and mid-size light truck programs
favorably impacted content-per-vehicle in 2005. AAM defines its
4WD/AWD penetration rate as the total number of front axles
produced divided by the number of rear axles produced for the
vehicle programs on which it sells product. AAM sales content per
vehicle was $1,201 for the full year 2005 as compared to $1,173 for
the full year 2004. Gross margin in the fourth quarter of 2005 was
7.5% as compared to 11.1% in the fourth quarter of 2004. Operating
income was $8.1 million, or 1.0% of sales in the fourth quarter of
2005 versus $47.8 million, or 5.5% of sales for the fourth quarter
of 2004. Gross margin for the full year 2005 was 9.0% as compared
to 13.2% in 2004. Operating income was $105.1 million, or 3.1% of
sales in 2005 as compared to $284.8, or 7.9% of sales in 2004.
AAM's lower gross margin and operating income performance in 2005
reflects the impact of lower production volumes scheduled by our
customers; higher energy, steel and other metallic material prices;
and the increased cost of providing healthcare, pension and
supplemental unemployment benefits to our hourly associates. AAM
defines free cash flow to be net cash provided by (or used in)
operating activities less capital expenditures and dividends paid.
Net cash provided by operating activities in 2005 was $280.4
million. AAM's capital expenditures in support of new product
programs and other safety, quality and productivity initiatives
were $305.7 million in 2005. Pursuant to its quarterly cash
dividend program, AAM paid $30.4 million in dividends in 2005.
Reflecting the impact of this activity, AAM's free cash flow in
2005 was a use of $55.7 million. Net debt to capital at year-end
2005 was 32.8% as compared to 31.2% at year-end 2004. AAM's
research and development (R&D) spending increased over 7% in
2005 to $73.6 million versus $68.6 million in 2004. AAM continues
to emphasize the integration of electronics in its product
portfolio. AAM also continues to invest in the development of new
products targeted for growth segments of the global automotive
industry, especially rear-wheel-drive (RWD) and AWD driveline
systems for passenger cars and crossover vehicles. AAM's new and
incremental business backlog now totals approximately $1.4 billion
of future annual sales launching from 2006 - 2012. AAM's newest RWD
and AWD technologies are featured in seven driveline system awards
for passenger car and crossover vehicle programs being developed by
three global OEMs. Two of these awards support global RWD passenger
car programs and five are for global crossover vehicle programs. In
addition to GM and the Chrysler Group, AAM's expanded customer base
now includes Nissan, Audi, Ssangyong, Hino, Jatco, Koyo and
Harley-Davidson. A conference call to review AAM's fourth quarter
and full year 2005 results is scheduled today at 10:00 a.m. EST.
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 (706) 643-3736
from outside the United States. A replay will be available from
12:00 p.m. EST on February 3, 2006 until 5:00 p.m. EST February 10,
2006 by dialing (800) 642-1687 from the United States or (706)
645-9291 from outside the United States. When prompted, callers
should enter conference reservation number 3863879. Recent
developments On January 9, 2006, AAM announced that the 2007
Jeep(R) Wrangler Rubicon, awarded during 2005, will feature AAM's
patented electronically-controlled SmartBar(TM) stabilizer system.
On January 12, 2006, AAM announced that it will establish a
regional manufacturing facility in Changshu, China, near Shanghai.
It is anticipated that the groundbreaking for this facility will
occur in the spring of 2006, and preliminary production builds are
planned for late 2006. On January 12, 2006, AAM announced that its
backlog of new and incremental business launching from 2006 through
2012 is estimated at approximately $1.4 billion in future annual
sales. AAM also updated earnings guidance for 2005 and provided its
initial outlook for 2006 earnings and cash flow. 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 (SEC) 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 and passenger cars. In addition to locations in the United
States (in Michigan, New York and Ohio), AAM also has offices and
facilities in Brazil, China, England, Germany, India, Japan,
Mexico, Scotland and South Korea. Certain statements in this press
release are forward-looking in nature and relate to trends and
events that may affect our future financial position and operating
results. Such statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
The terms "will," "expect," "anticipate," "intend," "project," and
similar words or expressions are intended to identify
forward-looking statements. These statements speak only as of the
date of this press release. The statements are based on our current
expectations, are inherently uncertain, are subject to risks and
should be viewed with caution. Actual results and experience may
differ materially from the forward-looking statements as a result
of many factors, including but not limited to: reduced demand of
our customers' products (particularly light trucks and SUVs
produced by GM and DaimlerChrysler); reduced purchases of our
products by GM, DaimlerChrysler or other customers; supply
shortages or price fluctuations in raw materials, utilities or
other operating supplies; our ability to maintain satisfactory
labor relations and avoid work stoppages; our customers' and their
suppliers ability to maintain satisfactory labor relations and
avoid work stoppages; our ability to attract and retain key
associates; our ability and our customers' and their suppliers
ability to successfully launch new product programs; our ability to
respond to changes in technology or increased competition; adverse
changes in laws, government regulations or market conditions
affecting our products or our customers' products (including the
Corporate Average Fuel Economy regulations and fuel costs); adverse
changes in the economic conditions or political stability of our
principal markets (particularly North America, Europe, South
America and Asia); liabilities arising from legal proceedings to
which we are or may become a party or claims against us or our
products; risks of noncompliance with environmental regulations or
risks of environmental issues that could result in unforeseen costs
at our facilities; availability of financing for working capital,
capital expenditures, R&D or other general corporate purposes;
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 statements. For more information Media relations
contact: Investor relations contact: Carrie L.P. Gray Christopher
M. Son Director, Corporate Relations Director, Investor Relations
(313) 758-4880 (313) 758-4814 Or visit the AAM website at
http://www.aam.com/ AMERICAN AXLE & MANUFACTURING HOLDINGS,
INC. CONSOLIDATED STATEMENTS OF INCOME Three months ended Twelve
months ended December 31, December 31, ------------------
------------------ 2005 2004 2005 2004 -------- ------- ---------
------- (In millions, except per share data) Net sales $852.6
$875.6 $3,387.3 $3,599.6 Cost of goods sold 788.9 778.8 3,082.6
3,125.1 -------- ------- --------- ------ Gross profit 63.7 96.8
304.7 474.5 Selling, general and administrative expenses 55.6 49.0
199.6 189.7 -------- ------- --------- ------ Operating income 8.1
47.8 105.1 284.8 Net interest expense (7.2) (5.3) (27.2) (25.5)
Other income (expense) Debt refinancing and redemption costs - - -
(23.5) Other income (expense), net 2.3 (1.0) 2.1 - -------- -------
--------- ------ Income before income taxes 3.2 41.5 80.0 235.8
Income taxes (1.3) 10.2 24.0 76.3 -------- ------- --------- ------
Net income $4.5 $31.3 $56.0 $159.5 ======== ======= =========
====== Diluted earnings per share $0.09 $0.61 $1.10 $2.98 ========
======= ========= ====== Diluted shares outstanding 51.1 51.5 51.1
53.5 ======== ======= ========= ====== AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31, 2005 2004 --------------- ---------------
(In millions) ASSETS Current assets Cash and cash equivalents $3.7
$14.4 Accounts receivable, net 328.0 334.9 Inventories, net 207.2
196.8 Prepaid expenses and other 45.5 39.1 Deferred income taxes
17.0 7.4 --------------- --------------- Total current assets 601.4
592.6 Property, plant and equipment, net 1,836.0 1,713.0 Deferred
income taxes 3.0 6.8 Goodwill 147.8 147.8 Other assets and deferred
charges 78.4 78.6 --------------- --------------- Total assets
$2,666.6 $2,538.8 =============== =============== LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $381.1
$398.6 Other accrued expenses 168.1 187.0 ---------------
--------------- Total current liabilities 549.2 585.6 Long-term
debt 489.2 448.0 Deferred income taxes 116.1 114.5 Postretirement
benefits and other long-term liabilities 517.3 435.2
--------------- --------------- Total liabilities 1,671.8 1,583.3
Stockholders' equity 994.8 955.5 --------------- ---------------
Total liabilities and stockholders' equity $2,666.6 $2,538.8
=============== =============== AMERICAN AXLE & MANUFACTURING
HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months Twelve months ended ended December 31, December 31,
-------------- -------------- 2005 2004 2005 2004 ------ ------
------ ------ (In millions) Operating activities Net income $4.5
$31.3 $56.0 $159.5 Depreciation and amortization 50.1 45.7 185.1
171.1 Other 82.4 148.1 39.3 122.6 ------ ------ ------ ------ Net
cash flow provided by operating activities 137.0 225.1 280.4 453.2
Purchases of property, plant & equipment (62.1) (81.4) (305.7)
(240.2) ------ ------ ------ ------ Net cash flow after purchases
of property, plant & equipment 74.9 143.7 (25.3) 213.0 ------
------ ------ ------ Net cash flow provided by (used in) operations
74.9 143.7 (25.3) 213.0 Net increase (decrease) in long-term debt
(70.1) (88.1) 40.6 293.4 Redemption of 9.75% Notes - - - (314.6)
Debt issuance costs - - - (9.7) Employee stock option exercises 0.3
1.6 4.6 13.6 Dividends paid (7.7) (7.5) (30.4) (23.0) Purchase of
treasury stock - (40.0) - (171.0) ------ ------ ------ ------ Net
cash flow provided by (used in) financing activities (77.5) (134.0)
14.8 (211.3) Effect of exchange rate changes on cash (0.1) 0.2
(0.2) 0.3 ------ ------ ------ ------ Net increase (decrease) in
cash and cash equivalents (2.7) 9.9 (10.7) 2.0 Cash and cash
equivalents at beginning of period 6.4 4.5 14.4 12.4 ------ ------
------ ------ Cash and cash equivalents at end of period $3.7 $14.4
$3.7 $14.4 ====== ====== ====== ====== 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)(a) Three months
ended Twelve months ended December 31, December 31,
------------------ ------------------- 2005 2004 2005 2004 --------
-------- -------- -------- (In millions) Net income $4.5 $31.3
$56.0 $159.5 Interest expense 7.4 5.3 27.9 25.8 Income taxes (1.3)
10.2 24.0 76.3 Depreciation and amortization 50.1 45.7 185.1 171.1
-------- -------- -------- -------- EBITDA $60.7 $92.5 $293.0
$432.7 ======== ======== ======== ======== Net debt(b) to capital
December 31, December 31, 2005 2004 ------------ ------------ (In
millions, except percentages) Total debt $489.2 $448.0 Less: cash
and cash equivalents 3.7 14.4 ------------ ------------ Net debt at
end of period 485.5 433.6 Stockholders' equity 994.8 955.5
------------ ------------ Total invested capital at end of period
$1,480.3 $1,389.1 ============ ============ Net debt to capital(c)
32.8% 31.2% ============ ============ (a) 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. AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. SUPPLEMENTAL DATA
(CONTINUED) (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. Net Operating Cash Flow
and Free Cash Flow(d) Three months ended Twelve months ended
December 31, December 31, ------------------ -------------------
2005 2004 2005 2004 -------- -------- -------- -------- (In
millions) Net cash provided by operating activities $137.0 $225.1
$280.4 $453.2 Less: purchases of property, plant & equipment
(62.1) (81.4) (305.7) (240.2) -------- -------- -------- --------
Net operating cash flow 74.9 143.7 (25.3) 213.0 Less: dividends
paid (7.7) (7.5) (30.4) (23.0) -------- -------- -------- --------
Free cash flow $67.2 $136.2 $(55.7) $190.0 ======== ========
======== ======== After-Tax Return on Invested Capital (ROIC)(e)
Trailing Twelve Quarter Ended Months Ended
-------------------------------- March 31, June 30, Sept. 30, Dec.
31, Dec. 31, 2005 2005 2005 2005 2005 -------- ------- --------
------- -------------- (In millions, except percentages) Net income
$13.3 $18.9 $19.3 $4.5 $56.0 After-tax net interest expense (f) 4.1
4.4 4.9 5.6 19.0 -------- ------- -------- ------- --------------
After-tax return $17.4 $23.3 $24.2 $10.1 $75.0 ======== =======
======== ======= ============== Net debt at end of period $485.5
Stockholder's equity at end of period 994.8 -------------- Invested
capital at end of period 1,480.3 Invested capital at beginning of
period 1,389.1 -------------- Average invested capital(g) $1,434.7
============== After-Tax ROIC(h) 5.2% ============== (d) We define
net operating cash flow as net cash provided by operating
activities less purchases of property and equipment. Free cash flow
is defined as net operating cash flow less dividends paid. We
believe net operating cash flow and free cash flow are meaningful
measures as they are 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.
Net operating cash flow is also a key metric used in our
calculation of incentive compensation. Other companies may
calculate net operating cash flow and free cash flow differently.
(e) We believe that ROIC is a meaningful overall measure of
business performance because it reflects the company's earnings
performance relative to its investment level. ROIC is also a key
metric used in our calculation of incentive compensation. Other
companies may calculate ROIC differently. (f) After-tax net
interest expense is equal to multiplying net interest expense by
the applicable effective income tax rate for each presented
quarter. (g) Average invested capital is equal to the average of
invested capital at the beginning of the year and end of the year.
(h) After-tax ROIC is equal to after-tax return divided by average
invested capital. First Call Analyst: FCMN Contact: DATASOURCE:
American Axle & Manufacturing Holdings, Inc. CONTACT: Media
relations: Carrie L.P. Gray, Director, Corporate Relations,
+1-313-758-4880, , or Investor relations: Christopher M. Son,
Director, Investor Relations, +1-313-758-4814, , both of American
Axle & Manufacturing Web site: http://www.aam.com/ Company News
On-Call: http://www.prnewswire.com/comp/033813.html
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