DETROIT, July 29, 2011 /PRNewswire/ -- American Axle &
Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the
NYSE, today reported its financial results for the second quarter
of 2011.
Second Quarter 2011 Results
- Second quarter 2011 sales of $686.2
million, up 23% from the second quarter of 2010
- Non-GM sales in the quarter grew approximately 35% on a
year-over-year basis to $182.7
million
- Gross profit of $130.5 million,
or 19.0% of sales
- Operating income of $71.7
million, or 10.4% of sales
- Net income of $49.2 million, or
$0.65 per share
- EBITDA (earnings before interest, taxes, depreciation and
amortization) of $104.4 million, or
15.2% of sales
- Net cash provided by operating activities of $115.5 million
- Free cash flow (net cash provided by operating activities less
capital expenditures net of proceeds from the sale of equipment) of
$81.7 million
AAM's results in the second quarter were net earnings of
$49.2 million or $0.65 per share. This compares to net
earnings of $25.4 million or
$0.34 per share in the second quarter
of 2010.
"AAM is pleased to report strong sales, earnings and cash flow
results in the second quarter of 2011," said AAM's Co-Founder,
Chairman of the Board and Chief Executive Officer, Richard E. Dauch. "AAM continues to
benefit from increased production volumes across many of our major
product programs and sustained improvements in capacity utilization
and fixed cost burdens. As a result of these favorable
trends, we are again increasing AAM's full year 2011 sales and
earnings outlook, with sales now expected to range from
$2.5 billion to $2.6 billion."
Net sales in the second quarter of 2011 increased approximately
23% to $686.2 million as compared to
$559.6 million in the second quarter
of 2010. On a sequential basis, net sales in the second
quarter of 2011 increased approximately 6% as compared to the first
quarter of 2011.
Customer production volumes for the major North American light
truck and SUV programs that AAM currently supports for GM, Chrysler
and Nissan were up approximately 15% in the second quarter of 2011
as compared to the second 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 second quarter of 2011, AAM's
content-per-vehicle increased approximately 7% to $1,504 as compared to $1,408 in the second quarter of 2010.
AAM's net sales of $1.33 billion
in the first half of 2011 increased approximately 23%, as compared
to $1.08 billion in the first half of
2010.
Non-GM sales in the first half of 2011 increased approximately
39% on a year-over-year basis to $361.1
million or 27% of AAM's total sales, up from 24% of total
sales in the first half of 2010.
AAM's gross profit in the second quarter of 2011 increased
$31.6 million on a year-over-year
basis to $130.5 million as compared
to $98.9 million in the second
quarter of 2010. Gross margin improved to 19.0% in the
quarter as compared to 17.7% in the second quarter of 2010.
On a sequential basis, gross profit in the quarter increased
approximately 13% as compared to the first quarter of 2011.
AAM's gross profit of $245.9
million in the first half of 2011 increased by nearly
$60 million, or 32%, as compared to
$186.2 million in the first half of
2010. Gross margin improved to 18.5% in the first half of
2011 as compared to 17.2% in the first half of 2010.
AAM's SG&A spending in the second quarter of 2011 was
$58.8 million as compared to
$48.5 million in the second quarter
of 2010. AAM's R&D spending (which in 2011 includes costs
related to the e-AAM joint venture for the development of electric
all-wheel-drive and hybrid driveline applications for passenger
cars and crossover vehicles) increased by approximately
$8.7 million in the second quarter of
2011 on a year-over-year basis to $27.3
million as compared to $18.6
million in the second quarter of 2010.
In the first half of 2011, AAM's SG&A spending was
$115.5 million as compared to
$93.8 million in the first half of
2010. AAM's R&D spending increased approximately
$16 million in the first half of 2011
on a year-over-year basis to $53.6
million as compared to $37.7
million in the first half of 2010.
AAM's operating income in the second quarter of 2011 increased
$21.3 million on a year-over-year
basis to $71.7 million as compared to
$50.4 million in the second quarter
of 2010. Operating margin improved to 10.4% in the quarter as
compared to 9% in the second quarter of 2010. On a sequential
basis, operating income in the quarter increased approximately 22%
as compared to the first quarter of 2011.
AAM's operating income in the first half of 2011 increased by
approximately $40 million, or 41% to
$130.4 million, as compared to
$92.4 million in the first half of
2010. Operating margin improved to 9.8% in the first half of
2011 as compared to 8.5% in the first half of 2010.
AAM defines EBITDA to be earnings before interest, taxes,
depreciation and amortization. AAM's EBITDA in the second
quarter of 2011 was $104.4 million,
or 15.2% of sales. In the first half of 2011, AAM's EBITDA
was $199.4 million, or 15.0% of
sales.
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. Net cash provided by operating
activities in the second quarter of 2011 was $115.5 million. Capital spending, net of
proceeds from the sale of equipment for the second quarter of 2011
was $33.8 million. Reflecting
the impact of this activity, AAM generated $81.7 million of positive free cash flow in the
second quarter of 2011.
In the second quarter of 2010, AAM generated $68.1 million of positive free cash flow.
As of June 30, 2011, AAM's total
available liquidity was approximately $595
million, consisting of available cash and committed
borrowing capacity on AAM's amended and restated revolving credit
facility.
AAM's Updated 2011 Outlook
Based on updated customer production schedules and other
pertinent information, AAM is again raising its full year 2011
sales and earnings outlook, with sales now expected to range from
$2.5 billion to $2.6 billion.
AAM's updated 2011 outlook is based on the anticipated launch
schedule for AAM's new business backlog, the continued recovery in
market demand for full-size pickups and SUVs and the assumption
that the U.S. Seasonally Adjusted Annual Rate ("SAAR") of light
vehicle sales will approximate 13.0 million vehicle units in
2011.
AAM expects to be profitable and generate adjusted earnings
before interest expense, income taxes and depreciation and
amortization (Adjusted EBITDA) in the range of 14.5% - 15.0% of
sales in 2011. For purposes of calculating Adjusted EBITDA,
AAM excludes the impact of special charges and restructuring costs,
including debt refinancing costs and expenses related to the
closure of the Detroit Manufacturing Complex.
In the first half of 2011, AAM incurred $3.1 million of debt refinancing and redemption
costs.
The Detroit Manufacturing Complex is expected to close on or
after February 26, 2012, the
expiration of AAM's current collective bargaining agreement with
the International UAW. AAM currently expects to incur
approximately $15 million - $20
million of expenses related to the closure of the Detroit
Manufacturing Complex beginning in the second half of 2011 and
continuing through the first half of 2012, including costs to
relocate assets from the Detroit Manufacturing Complex to other
market competitive AAM facilities in the state of Michigan.
A conference call to review AAM's second quarter 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 Noon ET
on July 29, 2011 until 5:00 p.m. ET August 5,
2011 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 81986956.
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.
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; our ability to comply with
the definitive terms and conditions of various commercial and
financing arrangements with GM; reduced purchases of our products
by GM, Chrysler or other customers, including as a result of supply
shortages related to the events in Japan; reduced demand for our customers'
products (particularly light trucks and SUVs produced by GM and
Chrysler); 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 achieve cost reductions through ongoing
restructuring actions; our ability to achieve the level of cost
reductions required to sustain global cost competitiveness; our
ability to maintain satisfactory labor relations and avoid future
work stoppages; our ability, our suppliers' ability and our
customers' ability to avoid supply shortages as a result of recent
events in Japan or otherwise; our
suppliers', our customers' and their suppliers' ability to maintain
satisfactory labor relations and avoid work stoppages; additional
restructuring actions that may occur; our ability to continue to
implement improvements in our U.S. labor cost structure; supply
shortages or price increases in raw materials, utilities or other
operating supplies; our ability to consummate and integrate
acquisitions and joint ventures; 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 attract new
customers and programs for new products; 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; 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); 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 liability and legal proceedings to which
we are or may become a party; 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@aam.com
David Tworek
Manager, Communications
(313) 758-4883
david.tworek@aam.com
Or visit the AAM website at www.aam.com.
|
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(In
millions, except per share data)
|
|
(In
millions, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$ 686.2
|
|
$ 559.6
|
|
$ 1,331.8
|
|
$ 1,081.5
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold
|
555.7
|
|
460.7
|
|
1,085.9
|
|
895.3
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
130.5
|
|
98.9
|
|
245.9
|
|
186.2
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
58.8
|
|
48.5
|
|
115.5
|
|
93.8
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
|
71.7
|
|
50.4
|
|
130.4
|
|
92.4
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
(20.5)
|
|
(22.6)
|
|
(41.8)
|
|
(45.3)
|
|
|
Investment income
|
0.3
|
|
0.6
|
|
0.6
|
|
1.0
|
|
|
Debt refinancing and redemption
costs
|
(3.1)
|
|
-
|
|
(3.1)
|
|
-
|
|
|
Other income (expense),
net
|
(0.7)
|
|
(0.7)
|
|
0.3
|
|
(2.2)
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
47.7
|
|
27.7
|
|
86.4
|
|
45.9
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
(0.2)
|
|
2.4
|
|
1.9
|
|
4.4
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
47.9
|
|
25.3
|
|
84.5
|
|
41.5
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to noncontrolling interests
|
1.3
|
|
0.1
|
|
2.4
|
|
0.2
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to
AAM
|
$ 49.2
|
|
$ 25.4
|
|
$
86.9
|
|
$
41.7
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$ 0.65
|
|
$ 0.34
|
|
$
1.15
|
|
$
0.56
|
|
|
|
|
|
|
|
|
|
|
|
Diluted shares
outstanding
|
75.4
|
|
74.5
|
|
75.4
|
|
74.5
|
|
|
|
|
|
|
|
|
|
|
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
|
2011
|
|
2010
|
|
|
|
(In
millions)
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 250.3
|
|
$
244.6
|
|
|
Accounts
receivable, net
|
|
199.0
|
|
146.6
|
|
|
Inventories,
net
|
|
148.5
|
|
130.3
|
|
|
Prepaid expenses
and other
|
|
80.8
|
|
80.6
|
|
|
Total current assets
|
|
678.6
|
|
602.1
|
|
|
|
|
|
|
|
|
Property, plant and equipment,
net
|
|
960.4
|
|
936.3
|
|
|
GM postretirement cost sharing
asset
|
|
240.5
|
|
244.4
|
|
|
Goodwill
|
|
156.6
|
|
155.8
|
|
|
Other assets and deferred
charges
|
|
159.3
|
|
176.1
|
|
|
Total assets
|
|
$ 2,195.4
|
|
$
2,114.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 355.0
|
|
$
283.6
|
|
|
Accrued expenses
and other
|
|
273.5
|
|
285.5
|
|
|
Total current
liabilities
|
|
628.5
|
|
569.1
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
964.6
|
|
1,010.0
|
|
|
Deferred revenue
|
|
97.7
|
|
116.0
|
|
|
Postretirement benefits and
other long-term liabilities
|
|
862.5
|
|
887.7
|
|
|
Total liabilities
|
|
2,553.3
|
|
2,582.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' deficit
|
|
(357.9)
|
|
(468.1)
|
|
|
Total liabilities and
stockholders' deficit
|
|
$ 2,195.4
|
|
$
2,114.7
|
|
|
|
|
|
|
|
AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
Six months
ended
|
|
|
June
30,
|
|
June
30,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
(In
millions)
|
|
(In
millions)
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
Net
income
|
$ 47.9
|
|
$ 25.3
|
|
$ 84.5
|
|
$ 41.5
|
|
|
Depreciation and
amortization
|
34.9
|
|
32.8
|
|
68.8
|
|
64.4
|
|
|
Other
|
32.7
|
|
27.8
|
|
(36.8)
|
|
59.0
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow provided by
operating activities
|
115.5
|
|
85.9
|
|
116.5
|
|
164.9
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant
& equipment
|
(40.1)
|
|
(18.1)
|
|
(71.6)
|
|
(36.9)
|
|
|
Purchase buyouts of leased
equipment
|
-
|
|
(3.4)
|
|
-
|
|
(7.4)
|
|
|
Proceeds from sales of
equipment
|
6.3
|
|
0.3
|
|
7.8
|
|
1.2
|
|
|
Redemption of short-term
investments
|
-
|
|
0.2
|
|
-
|
|
1.6
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow used in investing
activities
|
(33.8)
|
|
(21.0)
|
|
(63.8)
|
|
(41.5)
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in long-term
debt
|
(44.1)
|
|
(2.0)
|
|
(47.4)
|
|
(57.5)
|
|
|
Debt issuance costs
|
(5.3)
|
|
-
|
|
(5.3)
|
|
(2.2)
|
|
|
Repurchase of treasury
stock
|
-
|
|
(0.1)
|
|
(0.1)
|
|
(1.3)
|
|
|
Employee stock option
exercises
|
-
|
|
-
|
|
4.6
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net cash flow used in financing
activities
|
(49.4)
|
|
(2.1)
|
|
(48.2)
|
|
(61.0)
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
on cash
|
0.6
|
|
(0.7)
|
|
1.2
|
|
(1.8)
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash and cash
equivalents
|
32.9
|
|
62.1
|
|
5.7
|
|
60.6
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period
|
217.4
|
|
176.6
|
|
244.6
|
|
178.1
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end
of period
|
$ 250.3
|
|
$ 238.7
|
|
$ 250.3
|
|
$ 238.7
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AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC.
SUPPLEMENTAL
DATA
(Unaudited)
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The
supplemental data presented below is a reconciliation of certain
financial measures which is intended
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to
facilitate analysis of American Axle & Manufacturing Holdings,
Inc. business and operating performance.
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Earnings
before interest expense, income taxes and depreciation and
amortization (EBITDA) and adjusted EBITDA(a)
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Three months
ended
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Six months
ended
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June
30,
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June
30,
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2011
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2010
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2011
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2010
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(In
millions)
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(In
millions)
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Net income attributable to
AAM
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$ 49.2
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$ 25.4
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$ 86.9
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$ 41.7
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Interest expense
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20.5
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22.6
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41.8
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45.3
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Income tax expense
(benefit)
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(0.2)
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2.4
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1.9
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4.4
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Depreciation and
amortization
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34.9
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32.8
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68.8
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64.4
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EBITDA
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$ 104.4
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$ 83.2
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$ 199.4
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$ 155.8
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Debt refinancing and redemption
costs
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3.1
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-
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3.1
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-
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ADJUSTED EBITDA
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$ 107.5
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$ 83.2
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$ 202.5
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$ 155.8
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Net debt(b)
to capital
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June
30,
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December
31,
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2011
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2010
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(In
millions, except percentages)
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Total debt
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$ 964.6
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$1,010.0
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Less: cash and cash
equivalents
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250.3
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244.6
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Net debt at end of
period
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714.3
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765.4
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Stockholders' deficit
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(357.9)
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(468.1)
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Total invested capital at end of
period
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$ 356.4
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$ 297.3
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Net debt to
capital(c)
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200.4%
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257.5%
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Net
Operating Cash Flow and Free Cash Flow(d)
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Three months
ended
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Six months
ended
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June
30,
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June
30,
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2011
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2010
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2011
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2010
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(In
millions)
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(In
millions)
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Net cash provided by operating
activities
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$ 115.5
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$ 85.9
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$ 116.5
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$ 164.9
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Less: Purchases of property,
plant & equipment, net of proceeds from sale of
equipment
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(33.8)
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(17.8)
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(63.8)
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(35.7)
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Free cash flow
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$ 81.7
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$ 68.1
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$ 52.7
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$ 129.2
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(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.
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(b) Net debt is equal to
total debt less cash and cash equivalents.
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(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.
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(d) We define net
operating cash flow as net cash provided by operating activities
less purchases of property and equipment net of proceeds from sales
of assets. 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.
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SOURCE American Axle & Manufacturing Holdings, Inc.