American Axle & Manufacturing Reports First Quarter 2007 Financial Results of $0.30 Per Share
27 Aprile 2007 - 3:00PM
PR Newswire (US)
Updates Full-year 2007 Earnings Guidance DETROIT, April 27
/PRNewswire-FirstCall/ -- American Axle & Manufacturing
Holdings, Inc. (AAM), which is traded as AXL on the NYSE, today
reported sales and earnings for the first quarter of 2007. First
Quarter 2007 highlights -- First quarter sales of $802.2 million --
9% year-over-year decline in production volumes as compared to the
first quarter of 2006 -- 4% sequential increase in production
volumes as compared to fourth quarter of 2006 -- Gross profit
increased $21.3 million, or 34% to $84.8 million as compared to the
prior year -- Operating income more than doubled to $35.9 million
as compared to the prior year -- Net earnings were $15.4 million or
$0.30 per share AAM's earnings in the first quarter of 2007 were
$15.4 million or $0.30 per share. This compares to earnings of $8.6
million or $0.17 per share in the first quarter of 2006. AAM's
earnings in the first quarter of 2007 reflect the impact of special
charges and other non-recurring operating costs of $2.9 million, or
$0.04 per share, primarily related to incremental attrition program
activity. AAM's earnings in the first quarter of 2006 included a
favorable tax adjustment of $3.1 million, or $0.06 per share,
related to the settlement of federal and state tax liabilities from
prior years. "In the first quarter of 2007, AAM benefited from
structural cost reductions relating to the special attrition
program and other restructuring actions we initiated in 2006," said
AAM's Co-Founder, Chairman of the Board & CEO Richard E. Dauch.
"AAM is on track to deliver significant gains in profitability and
cash flow in 2007, while at the same time reducing debt levels,
improving our balance sheet strength and enhancing stockholder
value." Net sales in the first quarter of 2007 were $802.2 million
as compared to $834.8 million in the first quarter of 2006. Sales
in the quarter reflect an approximate 2% decrease in customer
production volumes for the major full-size truck and SUV programs
AAM currently supports for GM and The Chrysler Group as compared to
the prior year. AAM estimates that customer production volumes for
its mid-sized truck and SUV programs were down 32% in the quarter
on a year-over-year basis. Non-GM sales represented 20% of AAM's
total sales in the first quarter of 2007. AAM's content per vehicle
increased by nearly 4% to $1,252 in the first quarter of 2007 as
compared to $1,205 in the first quarter of 2006. This increase is
due primarily to the impact of new AAM content appearing on GM's
all-new, award-winning full-size pickup trucks. Gross margin in the
first quarter of 2007 was 10.6% as compared to 7.6% in the first
quarter of 2006. Operating income was $35.9 million or 4.5% of
sales in the quarter as compared to $15.1 million or 1.8% of sales
in the first quarter of 2006. AAM's improved gross margin and
operating income performance in the first quarter of 2007 reflects
the impact of productivity gains, purchased material cost savings
and structural cost reductions resulting from the special attrition
program and other restructuring actions initiated in 2006. AAM's
SG&A spending in the first quarter of 2007 was $48.9 million as
compared to $48.4 million in the first quarter of 2006. AAM
increased its R&D spending by 4%, to $20.1 million in the
quarter as compared to $19.3 million in the first quarter of 2006.
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 the first quarter of
2007 was $9.8 million as compared to $7.0 million in the first
quarter of 2006. Capital spending was down $38.3 million in the
first quarter of 2007 on a year-over-year basis to $42.5 million.
Reflecting the impact of this activity and dividend payments of
$7.8 million, AAM's free cash flow use of $40.5 million in the
first quarter of 2007 improved by over $40 million as compared to
the first quarter of 2006. 2007 Outlook AAM increased its full-year
2007 earnings guidance to a range of $1.30 - $1.55 per share. This
updated outlook is based on the assumption that its customers'
production volumes for the major North American light truck
programs AAM currently supports will be approximately 2% lower as
compared to 2006. AAM's 2007 earnings outlook also reflects its
plans to incur an additional $25 million of additional special
charges and other non-recurring operating costs related to
incremental attrition program activity, the redeployment of
machinery and equipment and other steps to rationalize
underutilized production capacity. Reflecting the impact of its
updated 2007 earnings outlook, a reduction in AAM's capital
spending in 2007 to a range of $225 million to $230 million and the
continuation of its quarterly cash dividend program, AAM also
reconfirmed that it expects free positive cash flow to exceed $100
million in 2007. "AAM's plan to generate more than $100 million of
free positive cash flow in 2007 will enhance our ability to invest
in the continuing diversification of our product portfolio,
customer base and global manufacturing footprint," said AAM's
Co-Founder, Chairman of the Board & CEO Richard E. Dauch. "With
the addition of our new low-cost, high-quality regional
manufacturing facilities in Changshu, China and Olawa, Poland, as
well as the continuing development of new products supporting
passenger car and crossover vehicle applications, AAM is well
positioned for profitable growth and diversification in 2007 and
beyond." A conference call to review AAM's first quarter 2007
results is scheduled today at 10:00 a.m. EDT. 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 5:00
p.m. EDT on April 27, 2007 until 5:00 p.m. EDT May 4, 2007 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 2819284. 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 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 or
facilities in Brazil, China, Germany, India, Japan, Luxembourg,
Mexico, Poland, South Korea and the United Kingdom. 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 made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995 and 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: adverse changes in the economic
conditions or political stability of our principal markets
(particularly North America, Europe and South America); reduced
demand of our customers' products or volume reductions,
particularly for light trucks and SUVs produced by GM and
DaimlerChrysler's heavy-duty Dodge Ram full-size pickup trucks, or
the Dodge Ram program; work stoppages at GM or DaimlerChrysler or a
key supplier to GM or DaimlerChrysler; our ability to achieve cost
reductions through accelerated attrition programs; reduced
purchases of our products by GM, DaimlerChrysler or other
customers; our ability and our customers' ability to successfully
launch new product programs; our ability to respond to changes in
technology or increased competition; supply shortages or price
fluctuations in raw materials, utilities or other operating
supplies; our ability to maintain satisfactory labor relations and
avoid work stoppages; risks of noncompliance with environmental
regulations or risks of environmental issues that could result in
unforeseen costs at our facilities; liabilities arising from legal
proceedings to which we are or may become a party or claims against
us or our products; availability of financing for working capital,
capital expenditures, research and development or other general
corporate purposes, including our ability to comply with financial
covenants; adverse changes in laws, government regulations or
market conditions affecting our products or our customers' products
(including the Corporate Average Fuel Economy regulations); our
ability to attract and retain key associates; and other
unanticipated events and conditions that may hinder our ability to
compete. For additional discussion, see "Item 1A. Risk Factors" in
our most recent annual report on Form 10-K and quarterly reports on
Form 10-Q. 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:
Media relations contact: Investor relations contact: Renee B.
Rogers Christopher M. Son Manager, Corporate Communications and
Director, Investor Relations Media Relations (313) 758-4814 (313)
758-4882 Or visit the AAM website at http://www.aam.com/ AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. CONSOLIDATED STATEMENTS OF
INCOME (Unaudited) Three months ended March 31,
---------------------------- 2007 2006 ---------- ---------- (In
millions, except per share data) Net sales $802.2 $834.8 Cost of
goods sold 717.4 771.3 ---------- ---------- Gross profit 84.8 63.5
Selling, general and administrative expenses 48.9 48.4 ----------
---------- Operating income 35.9 15.1 Net interest expense (14.0)
(7.4) Other income (expense), net 0.1 0.6 ---------- ----------
Income before income taxes 22.0 8.3 Income taxes 6.6 (0.3)
---------- ---------- Net income $15.4 $8.6 ========== ==========
Diluted earnings per share $0.30 $0.17 ========== ==========
Diluted shares outstanding 52.1 51.1 ========== ========== AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED
BALANCE SHEETS (Unaudited) March 31, December 31, 2007 2006
---------- ---------- (In millions) ASSETS Current assets Cash and
cash equivalents $141.9 $13.5 Accounts receivable, net 422.1 327.6
Inventories, net 216.4 198.4 Prepaid expenses and other 79.7 69.2
Deferred income taxes 31.1 30.7 ---------- ---------- Total current
assets 891.2 639.4 Property, plant and equipment, net 1,712.2
1,731.7 Deferred income taxes 41.0 35.7 Goodwill 147.8 147.8 Other
assets and deferred charges 45.7 42.9 ---------- ---------- Total
assets $2,837.9 $2,597.5 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities Accounts payable $378.3
$328.9 Other accrued expenses 184.7 212.4 ---------- ----------
Total current liabilities 563.0 541.3 Long-term debt 842.4 672.2
Deferred income taxes 8.9 6.8 Postretirement benefits and other
long-term liabilities 603.2 563.5 ---------- ---------- Total
liabilities 2,017.5 1,783.8 Stockholders' equity 820.4 813.7
---------- ---------- Total liabilities and stockholders' equity
$2,837.9 $2,597.5 ========== ========== AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited) Three months ended March 31,
---------------------------- 2007 2006 ---------- ---------- (In
millions) Operating activities Net income $15.4 $8.6 Depreciation
and amortization 56.4 49.4 Other (62.0) (51.0) ----------
---------- Net cash flow provided by (used in) operating activities
9.8 7.0 Purchases of property, plant & equipment (42.5) (80.8)
---------- ---------- Net cash flow after purchases of property,
plant & equipment (32.7) (73.8) ---------- ---------- Net cash
flow used in operations (32.7) (73.8) Net increase in long-term
debt 169.4 84.8 Debt issuance costs (5.2) - Employee stock option
exercises 4.4 0.1 Dividends paid (7.8) (7.7) ---------- ----------
Net cash flow provided by financing activities 160.8 77.2 Effect of
exchange rate changes on cash 0.3 - ---------- ---------- Net
increase in cash and cash equivalents 128.4 3.4 Cash and cash
equivalents at beginning of period 13.5 3.7 ---------- ----------
Cash and cash equivalents at end of period $141.9 $7.1 ==========
========== 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 March 31,
---------------------------- 2007 2006 ---------- ---------- (In
millions) Net income $15.4 $8.6 Interest expense 14.6 7.4 Income
taxes 6.6 (0.3) Depreciation and amortization 56.4 49.4 ----------
---------- EBITDA $93.0 $65.1 ========== ========== Net debt(b) to
capital March 31, December 31, 2007 2006 ---------- ---------- (In
millions, except percentages) Total debt $842.4 $672.2 Less: cash
and cash equivalents 141.9 13.5 ---------- ---------- Net debt at
end of period 700.5 658.7 Stockholders' equity 820.4 813.7
---------- ---------- Total invested capital at end of period
$1,520.9 $1,472.4 ========== ========== Net debt to capital(c)
46.1% 44.7% ========== ========== (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 March 31,
---------------------------- 2007 2006 ---------- ---------- (In
millions) Net cash provided by operating activities $9.8 $7.0 Less:
purchases of property, plant & equipment (42.5) (80.8)
---------- ---------- Net operating cash flow (32.7) (73.8) Less:
dividends paid (7.8) (7.7) ---------- ---------- Free cash flow
$(40.5) $(81.5) ========== ========== After-Tax Return on Invested
Capital (ROIC)(e) Trailing Twelve Quarter Ended Months
--------------------------------------------- Ended June 30,
September 30, December 31, March 31, March 31, 2006 2006 2006 2007
2007 --------- --------- --------- --------- --------- (In
millions, except percentages) Net income $20.4 $(62.9) $(188.6)
$15.4 $(215.7) After-tax net interest expense(f) 5.2 6.6 7.8 9.8
29.4 --------- --------- --------- --------- --------- After-tax
return $25.6 $(56.3) $(180.8) $25.2 $(186.3) ========= =========
========= ========= ========= Net debt at end of period $700.5
Stockholders' equity at end of period 820.4 --------- Invested
capital at end of period 1,520.9 Invested capital at beginning of
period 1,570.0 --------- Average invested capital(g) $1,545.5
========= After-Tax ROIC(h) -12.1% ========= (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 (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 (f) After-tax net interest expense
is equal to tax effecting net interest expense by the effective
income tax rate (excluding one-time items) 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. DATASOURCE: American Axle & Manufacturing
Holdings, Inc. CONTACT: Media relations contact: Renee B. Rogers,
Manager, Corporate Communications and Media Relations,
+1-313-758-4882, , or Investor relations contact: Christopher M.
Son, Director, Investor Relations, +1-313-758-4814, , both of
American Axle & Manufacturing Holdings, Inc. Web site:
http://www.aam.com/ Company News On-Call:
http://www.prnewswire.com/comp/033813.html
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