DETROIT, Oct. 30, 2020 /PRNewswire/ -- American Axle
& Manufacturing Holdings, Inc. (AAM), (NYSE: AXL) today
reported its financial results for the third quarter of 2020 and
updated its full year 2020 financial outlook.
Third Quarter 2020 Results
- Sales of $1.41 billion
- Net income attributable to AAM of $117.2
million, or 8.3% of sales
- Adjusted EBITDA of $297.1
million, or 21.0% of sales
- Diluted earnings per share of $0.99; Adjusted earnings per share of
$1.15
- Net cash provided by operating activities of $249.5 million; Adjusted free cash flow of
$217.2 million
"AAM's strong third quarter operating financial results and free
cash flow generation reflect the benefits of recovering global
production volumes and our cost saving actions," said AAM's
Chairman and Chief Executive Officer, David
C. Dauch. "Despite the global challenges we have faced
this year, our performance demonstrates AAM's ability to adjust our
business and deliver solid results in a dynamic market
environment."
AAM's sales in the third quarter of 2020 were $1.41 billion as compared to $1.68 billion in the third quarter of 2019.
AAM estimates sales for the third quarter of 2020 were unfavorably
impacted by COVID-19 by approximately $87
million. In addition, third quarter of 2019 sales
included $155 million related to our
U.S. iron casting operations, which were sold in December 2019.
AAM's net income in the third quarter of 2020 was $117.2 million, or $0.99 per share, as compared to a net loss of
$(124.2) million, or $(1.10) per share in the third quarter of
2019. AAM's financial results in the third quarter of 2019
included the impact of a pre-tax impairment charge of $225.0 million.
AAM defines Adjusted earnings per share to be diluted earnings
per share excluding the impact of restructuring and
acquisition-related costs, debt refinancing and redemption costs,
loss on sale of business, impairment charges and non-recurring
items, including the tax effect thereon. Adjusted earnings
per share in the third quarter of 2020 was $1.15 compared to Adjusted earnings per share of
$0.58 in the third quarter of
2019.
AAM defines EBITDA to be earnings before interest expense,
income taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA excluding the impact of restructuring and
acquisition-related costs, debt refinancing and redemption costs,
loss on sale of business, impairment charges and non-recurring
items. In the third quarter of 2020, Adjusted EBITDA was
$297.1 million, or 21.0% of sales, as
compared to $265.8 million, or 15.8%
of sales, in the third quarter of 2019. AAM estimates
Adjusted EBITDA in the third quarter of 2020 was unfavorably
impacted by lower sales as a result of COVID-19 by approximately
$16 million. In addition, third
quarter of 2019 Adjusted EBITDA included $6
million related to our U.S. iron casting operations.
AAM's net cash provided by operating activities for the
third quarter of 2020 was $249.5
million. AAM defines free cash flow to be net cash
provided by operating activities less capital expenditures net of
proceeds from the sale of property, plant and equipment. Adjusted
free cash flow is defined as free cash flow excluding the impact of
cash payments for restructuring and acquisition-related costs.
AAM's Adjusted free cash flow for the third quarter of 2020
was $217.2 million.
AAM's 2020 Financial Outlook
AAM's updated full year 2020 financial targets are as
follows:
- Sales of approximately $4.6
billion
- Adjusted EBITDA in the range of $665 - $680
million
- Adjusted free cash flow in the range of $220 - $235
million
AAM's updated 2020 full year financial targets are based on
current customer schedules and assume that there are no significant
impacts to our expected production or costs related to COVID-19 or
the recent fire at our Malvern Manufacturing Facility through the
remainder of 2020.
Third Quarter 2020 Conference Call Information
A conference call to review AAM's third quarter 2020 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) 883-0383 from the United
States or (412) 902-6506 from outside the United States with access code 0666195. A
replay will be available one hour after the call is completed until
November 6, 2020 by dialing (877)
344-7529 from the United States or
(412) 317-0088 from outside the United
States. When prompted, callers should enter replay access
code 10147154.
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 as Adjusted EBITDA,
Adjusted earnings per share and Adjusted free cash flow. 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.
Certain of the forward-looking financial measures included in
this earnings release are provided on a non-GAAP basis. A
reconciliation of non-GAAP forward-looking financial measures to
the most directly comparable forward-looking financial measures
calculated and presented in accordance with GAAP has been provided.
The amounts in these reconciliations are based on our current
estimates and actual results may differ materially from these
forward-looking estimates for many reasons, including potential
event driven transactional and other non-core operating items and
their related effects in any future period, the magnitude of which
may be significant.
Management believes that these non-GAAP financial measures are
useful to management, investors, and banking institutions 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.
Company Description
AAM (NYSE: AXL) delivers POWER that moves the world. As a
leading global tier 1 automotive supplier, AAM designs, engineers
and manufactures driveline and metal forming technologies that are
making the next generation of vehicles smarter, lighter, safer and
more efficient. Headquartered in Detroit, AAM has approximately 20,000
associates operating at nearly 80 facilities in 17 countries to
support our customers on global and regional platforms with a focus
on quality, operational excellence and technology leadership.
To learn more, visit aam.com.
Forward-Looking Statements
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:
significant disruptions in production, sales and/or supply as a
result of public health crises, including pandemic or epidemic
illness such as Novel Coronavirus (COVID-19), or otherwise; global
economic conditions; reduced purchases of our products by General
Motors Company (GM), FCA US LLC (FCA), Ford Motor Company (Ford) or
other customers; our ability to respond to changes in technology,
increased competition or pricing pressures; 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; reduced demand for our customers' products (particularly
light trucks and sport utility vehicles (SUVs) produced by GM, FCA
and Ford); risks inherent in our global operations (including
tariffs and the potential consequences thereof to us, our
suppliers, and our customers and their suppliers, adverse changes
in trade agreements, such as USMCA, immigration policies, political
stability, taxes and other law changes, potential disruptions of
production and supply, and currency rate fluctuations); a
significant disruption in operations at one or more of our key
manufacturing facilities; negative or unexpected tax consequences;
risks related to a failure of our information technology systems
and networks, and risks associated with current and emerging
technology threats and damage from computer viruses, unauthorized
access, cyber attack and other similar disruptions; supply
shortages or price increases in raw material and/or freight,
utilities or other operating supplies for us or our customers as a
result of pandemics, natural disasters or otherwise; availability
of financing for working capital, capital expenditures, research
and development (R&D) or other general corporate purposes
including acquisitions, as well as 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; an impairment of our goodwill,
other intangible assets, or long-lived assets if our business or
market conditions indicate that the carrying values of those assets
exceed their fair values; 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; our ability or
our customers' and suppliers' ability to successfully launch new
product programs on a timely basis; 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 achieve the level of cost reductions required to sustain global
cost competitiveness; our ability to realize the expected revenues
from our new and incremental business backlog; price volatility in,
or reduced availability of, fuel; our ability to protect our
intellectual property and successfully defend against assertions
made against us; risks of noncompliance with environmental laws and
regulations or risks of environmental issues that could result in
unforeseen costs at our facilities, or reputational damage; adverse
changes in laws, government regulations or market conditions
affecting our products or our customers' products; our ability or
our customers' and suppliers' ability to comply with regulatory
requirements and the potential costs of such compliance; changes in
liabilities arising from pension and other postretirement benefit
obligations; our ability to attract and retain key associates; 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 any or all of the foregoing factors may be
exacerbated by COVID-19. Further, 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:
Investor Contact
Jason P.
Parsons
Director, Investor
Relations
(313)
758-2404
jason.parsons@aam.com
Media Contact
Christopher M. Son
Vice President, Marketing & Communications
(313) 758-4814
chris.son@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
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in millions,
except per share data)
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
1,414.1
|
|
|
$
|
1,677.4
|
|
|
$
|
3,272.9
|
|
|
$
|
5,100.9
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
1,164.3
|
|
|
1,428.7
|
|
|
2,926.7
|
|
|
4,381.7
|
|
|
|
|
|
|
|
|
|
Gross
profit
|
249.8
|
|
|
248.7
|
|
|
346.2
|
|
|
719.2
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
66.5
|
|
|
92.7
|
|
|
230.6
|
|
|
274.7
|
|
|
|
|
|
|
|
|
|
Amortization of
intangible assets
|
21.6
|
|
|
23.7
|
|
|
65.0
|
|
|
73.6
|
|
|
|
|
|
|
|
|
|
Impairment
charges
|
—
|
|
|
225.0
|
|
|
510.0
|
|
|
225.0
|
|
|
|
|
|
|
|
|
|
Restructuring and
acquisition-related costs
|
9.7
|
|
|
11.7
|
|
|
38.6
|
|
|
36.0
|
|
|
|
|
|
|
|
|
|
Loss on sale of
business
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
152.0
|
|
|
(104.4)
|
|
|
(499.0)
|
|
|
109.9
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(53.9)
|
|
|
(54.3)
|
|
|
(160.0)
|
|
|
(163.9)
|
|
|
|
|
|
|
|
|
|
Interest
income
|
3.4
|
|
|
2.2
|
|
|
9.2
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Debt refinancing and
redemption costs
|
(5.2)
|
|
|
(5.1)
|
|
|
(6.7)
|
|
|
(7.5)
|
|
Other expense,
net
|
(1.6)
|
|
|
(2.9)
|
|
|
(3.8)
|
|
|
(9.0)
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
94.7
|
|
|
(164.5)
|
|
|
(660.3)
|
|
|
(67.1)
|
|
|
|
|
|
|
|
|
|
Income tax
benefit
|
(22.5)
|
|
|
(40.4)
|
|
|
(63.1)
|
|
|
(37.4)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
117.2
|
|
|
(124.1)
|
|
|
(597.2)
|
|
|
(29.7)
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
—
|
|
|
(0.1)
|
|
|
(0.1)
|
|
|
(0.4)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to AAM
|
$
|
117.2
|
|
|
$
|
(124.2)
|
|
|
$
|
(597.3)
|
|
|
$
|
(30.1)
|
|
|
|
|
|
|
|
|
|
Diluted earnings
(loss) per share
|
$
|
0.99
|
|
|
$
|
(1.10)
|
|
|
$
|
(5.28)
|
|
|
$
|
(0.27)
|
|
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
September 30,
2020
|
|
December 31,
2019
|
|
(in
millions)
|
ASSETS
|
|
|
|
Current
assets
|
|
Cash and cash
equivalents
|
$
|
537.3
|
|
|
$
|
532.0
|
|
Accounts receivable,
net
|
900.8
|
|
|
815.4
|
|
Inventories,
net
|
315.8
|
|
|
373.6
|
|
Prepaid expenses and
other
|
158.7
|
|
|
136.8
|
|
Total current
assets
|
1,912.6
|
|
|
1,857.8
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,157.9
|
|
|
2,358.4
|
|
Deferred income
taxes
|
104.6
|
|
|
64.1
|
|
Goodwill
|
183.6
|
|
|
699.1
|
|
Other intangible
assets, net
|
801.5
|
|
|
864.5
|
|
GM postretirement
cost sharing asset
|
221.9
|
|
|
223.3
|
|
Other assets and
deferred charges
|
560.0
|
|
|
577.4
|
|
Total
assets
|
$
|
5,942.1
|
|
|
$
|
6,644.6
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Current portion of
long-term debt
|
$
|
26.5
|
|
|
$
|
28.7
|
|
Accounts
payable
|
622.0
|
|
|
623.5
|
|
Accrued compensation
and benefits
|
163.5
|
|
|
154.4
|
|
Deferred
revenue
|
22.8
|
|
|
18.9
|
|
Accrued expenses and
other
|
189.5
|
|
|
200.9
|
|
Total current
liabilities
|
1,024.3
|
|
|
1,026.4
|
|
|
|
|
|
Long-term debt,
net
|
3,555.4
|
|
|
3,612.3
|
|
Deferred
revenue
|
75.6
|
|
|
83.7
|
|
Deferred income
taxes
|
19.7
|
|
|
19.6
|
|
Postretirement
benefits and other long-term liabilities
|
923.6
|
|
|
922.2
|
|
Total
liabilities
|
5,598.6
|
|
|
5,664.2
|
|
|
|
|
|
Total AAM
stockholders' equity
|
340.9
|
|
|
977.6
|
|
Noncontrolling
interests in subsidiaries
|
2.6
|
|
|
2.8
|
|
Total stockholders'
equity
|
343.5
|
|
|
980.4
|
|
Total liabilities
and stockholders' equity
|
$
|
5,942.1
|
|
|
$
|
6,644.6
|
|
AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
(in
millions)
|
Operating
activities
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
117.2
|
|
|
$
|
(124.1)
|
|
|
$
|
(597.2)
|
|
|
$
|
(29.7)
|
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
125.0
|
|
|
134.2
|
|
|
393.7
|
|
|
411.5
|
|
Impairment
charge
|
|
—
|
|
|
225.0
|
|
|
510.0
|
|
|
225.0
|
|
Other
|
|
7.3
|
|
|
6.6
|
|
|
(60.1)
|
|
|
(228.2)
|
|
Net cash provided
by operating activities
|
|
249.5
|
|
|
241.7
|
|
|
246.4
|
|
|
378.6
|
|
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
|
Purchases of
property, plant and equipment
|
|
(40.7)
|
|
|
(97.8)
|
|
|
(146.3)
|
|
|
(335.3)
|
|
Proceeds from sale of
property, plant and equipment
|
|
0.2
|
|
|
0.3
|
|
|
1.6
|
|
|
2.0
|
|
Other
|
|
0.1
|
|
|
—
|
|
|
(4.5)
|
|
|
(2.2)
|
|
Net cash used in
investing activities
|
|
(40.4)
|
|
|
(97.5)
|
|
|
(149.2)
|
|
|
(335.5)
|
|
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
|
Net debt
activity
|
|
(566.9)
|
|
|
(12.4)
|
|
|
(84.3)
|
|
|
(132.6)
|
|
Other
|
|
(0.9)
|
|
|
—
|
|
|
(3.3)
|
|
|
(7.5)
|
|
Net cash used in
financing activities
|
|
(567.8)
|
|
|
(12.4)
|
|
|
(87.6)
|
|
|
(140.1)
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash
|
|
2.7
|
|
|
(5.5)
|
|
|
(4.3)
|
|
|
(4.3)
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
|
(356.0)
|
|
|
126.3
|
|
|
5.3
|
|
|
(101.3)
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at beginning of
period
|
|
893.3
|
|
|
251.3
|
|
|
532.0
|
|
|
478.9
|
|
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents and restricted cash at end of period
|
|
$
|
537.3
|
|
|
$
|
377.6
|
|
|
$
|
537.3
|
|
|
$
|
377.6
|
|
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 (loss)
before interest expense, income taxes and depreciation and
amortization (EBITDA) and Adjusted
EBITDA(a)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
millions)
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
117.2
|
|
|
$
|
(124.1)
|
|
|
$
|
(597.2)
|
|
|
$
|
(29.7)
|
|
Interest
expense
|
53.9
|
|
|
54.3
|
|
|
160.0
|
|
|
163.9
|
|
Income tax expense
(benefit)
|
(22.5)
|
|
|
(40.4)
|
|
|
(63.1)
|
|
|
(37.4)
|
|
Depreciation and
amortization
|
125.0
|
|
|
134.2
|
|
|
393.7
|
|
|
411.5
|
|
EBITDA
|
273.6
|
|
|
24.0
|
|
|
(106.6)
|
|
|
508.3
|
|
Restructuring and
acquisition-related costs
|
9.7
|
|
|
11.7
|
|
|
38.6
|
|
|
36.0
|
|
Debt refinancing and
redemption costs
|
5.2
|
|
|
5.1
|
|
|
6.7
|
|
|
7.5
|
|
Impairment
charges
|
—
|
|
|
225.0
|
|
|
510.0
|
|
|
225.0
|
|
Loss on sale of
business
|
—
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
Non-recurring
items:
|
|
|
|
|
|
|
|
Malvern fire charges,
net of recoveries(b)
|
8.6
|
|
—
|
|
|
8.6
|
|
—
|
|
Adjusted
EBITDA
|
$
|
297.1
|
|
|
$
|
265.8
|
|
|
$
|
458.3
|
|
|
$
|
776.8
|
|
|
Adjusted earnings
(loss) per share(c)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Diluted earnings
(loss) per share
|
$
|
0.99
|
|
|
$
|
(1.10)
|
|
|
$
|
(5.28)
|
|
|
$
|
(0.27)
|
|
Restructuring and
acquisition-related costs
|
0.08
|
|
|
0.10
|
|
|
0.34
|
|
|
0.32
|
|
Debt refinancing and
redemption costs
|
0.05
|
|
|
0.05
|
|
|
0.06
|
|
|
0.07
|
|
Impairment
charges
|
—
|
|
|
2.00
|
|
|
4.51
|
|
|
2.00
|
|
Loss on sale of
business
|
—
|
|
|
—
|
|
|
0.01
|
|
|
—
|
|
Non-recurring
items:
|
|
|
|
|
|
|
|
Malvern fire charges,
net of recoveries
|
0.07
|
|
|
—
|
|
|
0.08
|
|
|
—
|
|
Adjustment to
liability for unrecognized tax benefits
|
—
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
Tax adjustments
related to the CARES Act and Tax Cuts and Jobs Act
|
—
|
|
|
—
|
|
|
(0.07)
|
|
|
(0.08)
|
|
Other(d)
|
—
|
|
|
—
|
|
|
0.14
|
|
|
—
|
|
Tax effect of
adjustments
|
(0.04)
|
|
|
(0.45)
|
|
|
(0.12)
|
|
|
(0.50)
|
|
Adjustment for
anti-dilutive effect
|
—
|
|
|
(0.02)
|
|
|
—
|
|
|
(0.05)
|
|
Adjusted earnings
(loss) per share
|
$
|
1.15
|
|
|
$
|
0.58
|
|
|
$
|
(0.39)
|
|
|
$
|
1.49
|
|
|
Adjusted earnings
(loss) per share are based on weighted average diluted shares
outstanding of 118.4 million and 115.8 million for the
three months ended on September 30, 2020 and 2019,
respectively, and 113.0 million and 115.6 million
for the nine months ended on September 30, 2020 and 2019,
respectively.
|
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 and
Adjusted free cash flow(e)
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
millions)
|
Net cash provided by
operating activities
|
$
|
249.5
|
|
|
$
|
241.7
|
|
|
$
|
246.4
|
|
|
$
|
378.6
|
|
Capital expenditures
net of proceeds from the sale of property, plant and
equipment
|
(40.5)
|
|
|
(97.5)
|
|
|
(144.7)
|
|
|
(333.3)
|
|
Free cash
flow
|
209.0
|
|
|
144.2
|
|
|
101.7
|
|
|
45.3
|
|
Cash payments for
restructuring and acquisition-related costs
|
8.2
|
|
|
16.3
|
|
|
37.0
|
|
|
46.0
|
|
Adjusted free cash
flow
|
$
|
217.2
|
|
|
$
|
160.5
|
|
|
$
|
138.7
|
|
|
$
|
91.3
|
|
Segment Financial
Information
|
|
In the fourth quarter
of 2019 we completed the sale of our U.S. iron casting
operations. The sale did not include the entities that
conduct AAM's casting operations in El Carmen, Mexico, which are
now included in our Driveline segment.
|
|
As a result, our
business is now organized into Driveline and Metal Forming.
The Casting segment shown below is comprised entirely of the U.S.
casting operations that were sold. The amounts previously
reported in our Casting segment for the retained operations in El
Carmen, Mexico have been reclassified to our Driveline Segment for
the periods presented.
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
September
30,
|
|
September
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
(in
millions)
|
Segment
Sales
|
|
|
|
|
|
|
|
Driveline
|
$
|
1,094.5
|
|
|
$
|
1,186.8
|
|
|
$
|
2,529.9
|
|
|
$
|
3,534.6
|
|
Metal
Forming
|
433.2
|
|
|
476.6
|
|
|
1,005.8
|
|
|
1,444.1
|
|
Casting
|
—
|
|
|
168.4
|
|
|
—
|
|
|
541.6
|
|
Total
Sales
|
1,527.7
|
|
|
1,831.8
|
|
|
3,535.7
|
|
|
5,520.3
|
|
Intersegment
Sales
|
(113.6)
|
|
|
(154.4)
|
|
|
(262.8)
|
|
|
(419.4)
|
|
Net External
Sales
|
$
|
1,414.1
|
|
|
$
|
1,677.4
|
|
|
$
|
3,272.9
|
|
|
$
|
5,100.9
|
|
|
|
|
|
|
|
|
|
Segment Adjusted
EBITDA(a)
|
|
|
|
|
|
|
|
Driveline
|
$
|
207.4
|
|
|
$
|
181.0
|
|
|
$
|
315.5
|
|
|
$
|
485.9
|
|
Metal
Forming
|
89.7
|
|
|
79.3
|
|
|
142.8
|
|
|
250.2
|
|
Casting
|
—
|
|
|
5.5
|
|
|
—
|
|
|
40.7
|
|
Total Segment
Adjusted EBITDA
|
$
|
297.1
|
|
|
$
|
265.8
|
|
|
$
|
458.3
|
|
|
$
|
776.8
|
|
Full Year 2020
Financial Outlook
|
|
|
Adjusted
EBITDA
|
|
Low
End
|
|
High
End
|
|
(in
millions)
|
Net loss
|
$
|
(617)
|
|
|
$
|
(602)
|
|
Income tax
benefit
|
(70)
|
|
|
(70)
|
|
Interest
expense
|
215
|
|
|
215
|
|
Depreciation and
amortization
|
525
|
|
|
525
|
|
Full year 2020
targeted EBITDA
|
53
|
|
|
68
|
|
Impairment
charges
|
510
|
|
|
510
|
|
Restructuring and
acquisition-related costs
|
85
|
|
|
85
|
|
Debt refinancing and
redemption costs
|
7
|
|
|
7
|
|
Non-recurring charges
and other
|
10
|
|
|
10
|
|
Full year 2020
targeted Adjusted EBITDA
|
$
|
665
|
|
|
$
|
680
|
|
|
|
Adjusted Free Cash
Flow
|
|
Low
End
|
|
High
End
|
|
|
|
|
|
(in
millions)
|
Net cash provided by
operating activities
|
$
|
405
|
|
|
$
|
420
|
|
Capital expenditures
net of proceeds from the sale of property,
plant and equipment
|
(250)
|
|
|
(250)
|
|
Full year 2020
targeted Free Cash Flow
|
155
|
|
|
170
|
|
Cash payments for
restructuring and acquisition-related costs
|
65
|
|
|
65
|
|
Full year 2020
targeted Adjusted Free Cash Flow
|
$
|
220
|
|
|
$
|
235
|
|
|
|
(a)
|
We define EBITDA to
be earnings (loss) before interest expense, income taxes,
depreciation and amortization. Adjusted EBITDA is defined as
EBITDA excluding the impact of restructuring and
acquisition-related costs, debt refinancing and redemption costs,
loss on sale of a business, impairment charges, and non-recurring
items. We believe that EBITDA and Adjusted EBITDA are meaningful
measures of performance as they are commonly utilized by management
and investors to analyze operating performance and entity
valuation. Our management, the investment community and the banking
institutions routinely use EBITDA and Adjusted EBITDA, together
with other measures, to measure our operating performance relative
to other Tier 1 automotive suppliers. We also use Segment Adjusted
EBITDA as the measure of earnings to assess the performance of each
segment and determine the resources to be allocated to the
segments. EBITDA and Adjusted EBITDA should not be construed as
income from operations, net income or cash flow from operating
activities as determined under GAAP. Other companies may
calculate EBITDA and Adjusted EBITDA differently.
|
|
|
(b)
|
In the third quarter
of 2020, AAM recorded charges related to a fire at our Malvern
Manufacturing Facility. These charges are
primarily related to the write-down of property, plant and
equipment as a result of damage from the fire, net of estimated
insurance recoveries less our applicable deductible.
|
|
|
(c)
|
We define Adjusted
earnings (loss) per share to be diluted earnings (loss) per share
excluding the impact of restructuring and acquisition-related
costs, debt refinancing and redemption costs, loss on sale of a
business, impairment charges, and non-recurring items, including
the tax effect thereon. We believe Adjusted earnings (loss)
per share is a meaningful measure as it is commonly utilized by
management and investors in assessing ongoing financial performance
that provides improved comparability between periods through the
exclusion of certain items that management believes are not
indicative of core operating performance and which may obscure
underlying business results and trends. Other companies may
calculate Adjusted earnings (loss) per share
differently.
|
|
|
(d)
|
Other includes the
accelerated depreciation for certain assets that will be idled as a
result of our largest customer exiting their operations in
Thailand, which they announced in 2020.
|
|
|
(e)
|
We define 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. Adjusted free cash flow is defined as
free cash flow excluding the impact of cash payments for
restructuring and acquisition-related costs. We believe free
cash flow and Adjusted 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. Free cash flow
and Adjusted free cash flow are also key metrics used in our
calculation of incentive compensation. Other companies may
calculate free cash flow and Adjusted free cash flow
differently.
|
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SOURCE American Axle & Manufacturing Holdings, Inc.