American Axle & Manufacturing Reports First Quarter 2005 Financial Results
29 Aprile 2005 - 3:00PM
PR Newswire (US)
American Axle & Manufacturing Reports First Quarter 2005
Financial Results DETROIT, April 29 /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 2005. First Quarter 2005 highlights * First
quarter sales of $818.9 million * 19% year-over-year decline in
production volumes * Non-GM sales were 21% of total sales, totaling
$169.2 million * Net earnings of $13.3 million or $0.26 per share
First quarter earnings were $13.3 million or $0.26 per share. This
compares to earnings of $36.5 million or $0.66 per share in the
first quarter of 2004. AAM's earnings in the first quarter of 2004
included the impact of a one-time charge of $23.5 million or $0.28
per share related to debt refinancing and redemption activities.
"This was a very challenging quarter for AAM due to the impact of
lower production levels and higher steel and metallic material
prices," said AAM's Co-Founder, Chairman of the Board & CEO
Richard E. Dauch. "Despite these tough industry conditions, AAM
remains focused on its operations to flawlessly execute thirteen
product and process launches during 2005. More importantly, AAM is
continuing to make significant investments in product, process and
system technology to further expand our product offerings, customer
diversification and global manufacturing presence." Net sales in
the first quarter of 2005 were $818.9 million as compared to $952.8
million in the first quarter of 2004. Sales to non-GM customers for
the quarter were $169.2 million and now represent 21% of AAM's
total sales. AAM sales for the quarter reflect an estimated 19%
year-over-year decline in its customers' production volumes for the
major North American light truck programs it currently supports.
AAM's content per vehicle in the quarter of $1,183 was
approximately the same as $1,182 in the first quarter of 2004.
Gross margin in the first quarter of 2005 was 8.8% as compared to
14.3% in the first quarter of 2004. Operating income was $25.7
million or 3.1% of sales in the quarter as compared to $86.9
million or 9.1% of sales in the first quarter of 2004. AAM's
research and development spending (R&D) in the first quarter of
2005 was $17.6 million as compared to $16.9 million in the first
quarter of 2004. In addition to supporting the 2005 calendar year
launch of products supporting the all-new HUMMER H3, Dodge Ram
Power Wagon, Dodge Ram Mega Cab and vehicles for Ssangyong Motor
Corporation, AAM continues to invest in the development and
validation of products supporting rear wheel drive and all-wheel
drive driveline systems for passenger cars and crossover vehicles.
Products supporting this growth segment of the market, such as
independent front drive axles (IFDA), power transfer units (PTU)
and rear drive modules (RDM) now represent approximately 25% of
AAM's $1 billion new business backlog. AAM defines free cash flow
to be net cash provided by (or used in) operating activities less
capital expenditures and dividends paid. AAM's free cash flow in
the first quarter of 2005 was a use of $116.3 million. AAM's free
cash flow deficit of $42.3 million in the first quarter of 2004
included a $36.3 million lump-sum bonus payment to its hourly
associates represented by the UAW in connection with the
ratification of the current four-year master agreement. It is
normal for the company to use cash in the first quarter due to
seasonal differences in sales activity. Net cash flow used in
operating activities was $34.1 million in the first quarter of 2005
as compared to $4.4 million of cash provided by operating
activities in the first quarter of 2004. AAM's working capital
investment in accounts receivable in the first quarter of 2005
reflects the impact of higher metal market pass-throughs as
compared to the first quarter of 2004. AAM's inventories have
increased in the first quarter of 2005 versus the first quarter of
2004 due to higher steel and metallic material prices, higher
amounts of inventory in transit associated with an expansion in
global sourcing activities and higher levels of on-hand raw
material stocks to protect against supply interruption. Capital
spending in the first quarter of 2005 was $74.8 million as compared
to $46.7 million for the same period in 2004. AAM's quarterly cash
dividend, which commenced in the second quarter of 2004, was $7.4
million in the current quarter. AAM also updated its full-year 2005
earnings outlook. On January 13, 2005, AAM announced earnings
guidance for 2005 based on its assumption that its customers'
production volumes for the major North American light truck
programs it currently supports would be approximately 8% lower than
in 2004. Due to the impact of additional production cuts scheduled
by its customers, AAM now estimates that such production volumes
will be down approximately 15% in 2005, as compared to the prior
year. Based on this revised production outlook and the assumed
continuation of steel and metallic material cost increases, AAM now
expects its earnings in 2005 to range from $1.40 to $1.55 per
share. On April 14, 2005, the Securities and Exchange Commission
adopted a new rule that amends the compliance dates for FASB
Statement No. 123 (revised 2004), Share-Based Payment (Statement
No. 123R). As a result, AAM now intends to adopt this accounting
standard on January 1, 2006. AAM also announced revised estimates
for its capital spending and free cash flow in 2005. Due to
additional productive capacity made available by lower anticipated
production volumes, changes in program timing requirements and the
favorable cost impact of various ongoing productivity initiatives,
AAM now expects its capital spending to range from $260 million -
$280 million in 2005. Reflecting the impact of these revisions to
earnings and capital spending estimates, AAM now expects its free
cash flow to be approximately break-even in 2005. A conference call
to review AAM's first quarter 2005 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 29, 2005 until 5:00
p.m. EDT May 6, 2005 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
5189382. 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
systems and related components and modules, chassis systems and
metal formed products for light trucks, sport utility vehicles,
passenger cars and crossover vehicles. 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' ability to maintain satisfactory labor relations and
avoid work stoppages; our ability to attract and retain key
associates; our ability and our customers' 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. AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three months ended
March 31, ------------------------------------ 2005 2004
---------------- ---------------- (In millions, except per share
data) Net sales $818.9 $952.8 Cost of goods sold 746.6 816.4
---------------- ---------------- Gross profit 72.3 136.4 Selling,
general and administrative expenses 46.6 49.5 ----------------
---------------- Operating income 25.7 86.9 Net interest expense
(6.1) (8.4) Debt refinancing and redemption costs - (23.5) Other
income, net 0.3 0.7 ---------------- ---------------- Income before
income taxes 19.9 55.7 Income taxes 6.6 19.2 ----------------
---------------- Net income $13.3 $36.5 ================
================ Diluted earnings per share $0.26 $0.66
================ ================ Diluted shares outstanding 51.1
55.3 ================ ================ AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31, 2005 2004 ---------------- ----------------
(Unaudited) (In millions) ASSETS Current assets: Cash and cash
equivalents $3.3 $14.4 Accounts receivable, net 367.2 334.9
Inventories, net 210.9 196.8 Prepaid expenses and other 49.7 39.1
Deferred income taxes 6.0 7.4 ---------------- ----------------
Total current assets 637.1 592.6 Property, plant and equipment, net
1,743.6 1,713.0 Deferred income taxes 8.1 6.8 Goodwill 147.8 147.8
Other assets and deferred charges 75.5 78.6 ----------------
---------------- Total assets $2,612.1 $2,538.8 ================
================ LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable $367.5 $398.6 Other accrued expenses
151.8 181.9 ---------------- ---------------- Total current
liabilities 519.3 580.5 Long-term debt 550.6 448.0 Deferred income
taxes 116.5 114.5 Postretirement benefits and other long-term
liabilities 460.1 435.2 ---------------- ---------------- Total
liabilities 1,646.5 1,583.3 Stockholders' equity 965.6 955.5
---------------- ---------------- Total liabilities and
stockholders' equity $2,612.1 $2,538.8 ================
================ AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three
months ended March 31, ------------------------------------ 2005
2004 ---------------- ---------------- (In millions) Operating
activities Net income $13.3 $36.5 Depreciation and amortization
43.4 41.3 Other (90.8) (73.4) ---------------- ---------------- Net
cash provided by (used in) operating activities (34.1) 4.4
Purchases of property, plant & equipment (74.8) (46.7)
---------------- ---------------- Net cash used in investing
activities (74.8) (46.7) Net increase in long-term debt 103.1 419.9
Redemption of 9.75% Notes - (314.6) Debt issuance costs - (9.7)
Employee stock option exercises 2.2 3.1 Dividends paid (7.4) -
Purchase of treasury stock - (63.0) ----------------
---------------- Net cash provided by financing activities 97.9
35.7 Effect of exchange rate changes on cash (0.1) 0.2
---------------- ---------------- Net decrease in cash and cash
equivalents (11.1) (6.4) Cash and cash equivalents at beginning of
period 14.4 12.4 ---------------- ---------------- Cash and cash
equivalents at end of period $3.3 $6.0 ================
================ 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,
------------------------------------ 2005 2004 ----------------
---------------- (In millions) Net income $13.3 $36.5 Interest
expense 6.3 8.6 Income taxes 6.6 19.2 Depreciation and amortization
43.4 41.3 ---------------- ---------------- EBITDA $69.6 $105.6
================ ================ Net debt(b) to capital March 31,
December 31, 2005 2004 ---------------- ---------------- (In
millions, except percentages) Total debt $550.6 $448.0 Less: cash
and cash equivalents 3.3 14.4 ---------------- ---------------- Net
debt at end of period 547.3 433.6 Stockholders' equity 965.6 955.5
---------------- ---------------- Total invested capital at end of
period $1,512.9 $1,389.1 ================ ================ Net debt
to capital(c) 36.2% 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 March 31,
-------------------------- 2005 2004 (In millions) Net cash
provided by operating activities $(34.1) $4.4 Less: purchases of
property, plant & equipment (74.8) (46.7) ------------
------------ Net operating cash flow (108.9) (42.3) Less: dividends
(7.4) - ------------ ------------ Free cash flow $(116.3) $(42.3)
============ ============ After-Tax Return on Invested Capital
(ROIC)(e) Quarter Ended Trailing Twelve
------------------------------------------------ Months Ended June
30, September 30, December 31, March 31, March 31, 2004 2004 2004
2005 2005 ----------- ----------- ----------- -----------
------------ (In millions, except percentages) Net income $55.3
$36.4 $31.3 $13.3 $136.3 After-tax net interest expense (f) 3.9 4.0
3.8 4.1 15.8 ----------- ----------- ----------- -----------
------------ After-tax return $59.2 $40.4 $35.1 $17.4 $152.1
=========== =========== =========== =========== ============ Net
debt at end of period $547.3 Stockholder's equity at end of period
965.6 ------------ Invested capital at end of period 1,512.9
Invested capital at beginning of period 1,498.4 ------------
Average invested capital(g) $1,505.7 ============ After-Tax ROIC(h)
10.1% ============ (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. 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 tax effecting net interest expense by
the applicable effective income tax rate for each presented
quarter. (g) Average invested capital is equal to the average of
beginning and ending invested capital. (h) After-tax ROIC is equal
to after-tax return divided by average invested capital. 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/ DATASOURCE: American Axle
& Manufacturing Holdings, Inc. CONTACT: Media relations
contact: Carrie L.P. Gray, Director, Corporate Relations,
+1-313-758-4880, , 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/ http://investor.aam.com/ Company News On-Call:
http://www.prnewswire.com/comp/033813.html
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