American Axle & Manufacturing Reports First Quarter 2006 Financial Results
28 Aprile 2006 - 3:00PM
PR Newswire (US)
Non-GM sales increase 20% year-over-year to $203.6 million, or 24%
of sales DETROIT, April 28 /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 2006. First Quarter 2006 highlights * First quarter sales of
$834.8 million * 4% decline in production volumes as compared to
fourth quarter 2005 * Non-GM sales increased by more than 20% to
$203.6 million, totaling 24% of net sales * Net earnings of $8.6
million or $0.17 per share * Net cash provided by operating
activities improved by more than $40 million versus prior year
AAM's earnings in the first quarter of 2006 were $8.6 million or
$0.17 per share. This compares to earnings of $13.3 million or
$0.26 per share in the first quarter of 2005. AAM's earnings in the
first quarter of 2006 include 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. AAM's first quarter
results also reflect a $10.4 million increase in non-cash expenses
related to depreciation and amortization, pension and
postretirement benefits and stock-based compensation. Net sales in
the first quarter of 2006 were $834.8 million as compared to $818.9
million in the first quarter of 2005. Non-GM sales increased by
more than 20% to $203.6 million in the first quarter of 2006 as
compared to the first quarter of 2005. Non-GM sales represented 24%
of AAM's total sales in the first quarter of 2006. "AAM is on track
to deliver significant cash flow gains in 2006," said AAM's
Co-Founder, Chairman of the Board & CEO Richard E. Dauch.
"AAM's new product launches in 2006 are progressing very well. We
are encouraged by the initial market acceptance of GM's new
full-size SUVs and look forward to supporting the launch of GM's
new full-size pick-ups later this year. AAM is also supporting the
launch of new products for The Chrysler Group, Ssangyong Motors,
Hino, Jatco, Koyo and Harley Davidson in 2006. These important new
relationships are quickly expanding AAM's customer base and product
diversification." AAM sales in the quarter reflect an estimated 8%
increase in customer production volumes for the major full-size
truck and SUV programs it currently supports for GM and The
Chrysler Group. AAM estimates that customer production volumes for
its mid-sized light truck and SUV programs were down 11% in the
quarter on a year-over-year basis. AAM's content per vehicle
increased by nearly 2% to $1,205 in the first quarter of 2006 as
compared to $1,183 in the first quarter of 2005. Production mix
shifts favoring AAM's axles and driveline systems for the full-
size light truck and SUV market and the four-wheel-drive HUMMER H3
in the mid- size SUV segment were the primary drivers of content
growth in the quarter. Gross margin in the first quarter of 2006
was 7.6% as compared to 8.8% in the first quarter of 2005.
Operating income was $15.1 million or 1.8% of sales in the quarter
as compared to $25.7 million or 3.1% of sales in the first quarter
of 2005. AAM's lower gross margin and operating income performance
in the first quarter of 2006 primarily reflects the impact of
higher non-cash expenses related to depreciation and amortization,
pension and postretirement benefits and stock-based compensation.
Higher fringe benefit costs, including supplemental unemployment
benefits paid to certain of AAM's hourly associates, also pressured
margins in the quarter. AAM's SG&A spending was up $1.8 million
in the first quarter of 2006 to $48.4 million as compared to $46.6
million in the first quarter of 2005. AAM increased its R&D
spending in the quarter by 9.7% on a year-over-year basis.
Increased spending to support its expanded foreign business and
technical offices, as well as higher non-cash expenses related to
pension and postretirement benefits and stock-based compensation
also increased AAM's SG&A costs in the quarter. 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 2006 was
$7.0 million as compared to a use of $34.1 million in the first
quarter of 2005. Capital spending was up $6.0 million in the first
quarter of 2006 on a year-over-year basis to $80.8 million.
Reflecting the impact of this activity and dividend payments of
$7.7 million, AAM's free cash flow in the first quarter of 2006
improved by nearly $35 million as compared to the first quarter of
2005. A conference call to review AAM's first quarter 2006 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 28, 2006
until 5:00 p.m. EDT May 5, 2006 by dialing (800) 642-1687 from the
United States or (706) 645-9291 from outside the United States.
When prompted, callers should enter conference reservation number
7348620. Recent Developments On April 11, 2006, AAM reconfirmed
that it expects its earnings for the full year 2006 to be in the
range of $1.20 to $1.30 per share. On March 28, 2006, AAM announced
that it broke ground for Changshu Gear & Axle, a regional
manufacturing facility in the Jiangsu Province of China. Non-GAAP
Financial Information In addition to the results reported in
accordance with accounting principles generally accepted in the
United States of America (GAAP) included within this press release,
AAM has provided certain information, which includes non-GAAP
financial measures. Such information is reconciled to its closest
GAAP measure in accordance with the Securities and Exchange
Commission (SEC) rules and is included in the attached supplemental
data. Management believes that these non-GAAP financial measures
are useful to both management and its stockholders in their
analysis of the Company's business and operating performance.
Management also uses this information for operational planning and
decision-making purposes. Non-GAAP financial measures are not and
should not be considered a substitute for any GAAP measure.
Additionally, non-GAAP financial measures as presented by AAM may
not be comparable to similarly titled measures reported by other
companies. AAM is a world leader in the manufacture, engineering,
design and validation of driveline and drivetrain systems and
related components and modules, chassis systems and metal-formed
products for light trucks, sport utility vehicles and passenger
cars. In addition to locations in the United States (in Michigan,
New York and Ohio), AAM also has offices or facilities in Brazil,
China, England, Germany, India, Japan, Mexico, Scotland and South
Korea. Certain statements contained in this press release are
"forward-looking statements" and relate to the Company's plans,
projections 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, particularly 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; 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; 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. It is not
possible to foresee or identify all such factors and we make no
commitment to update any forward-looking statement or to disclose
any facts, events or circumstances after the date hereof that may
affect the accuracy of any forward-looking statements. For more
information: Media relations contact: Investor relations contact:
Carrie L.P. Gray Christopher M. Son Director, Corporate Relations
Director, Investor Relations (313) 758-4880 (313) 758-4814 Or visit
the AAM website at http://www.aam.com/ AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
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Three months ended March 31, -------------------------------------
2006 2005 ----------------- ------------------ (In millions, except
per share data) Net sales $834.8 $818.9 Cost of goods sold 771.3
746.6 ------- ------- Gross profit 63.5 72.3 Selling, general and
administrative expenses 48.4 46.6 ------- ------- Operating income
15.1 25.7 Net interest expense (7.4) (6.1) Other income (expense),
net 0.6 0.3 ------- ------- Income before income taxes 8.3 19.9
Income taxes (0.3) 6.6 ------- ------- Net income $8.6 $13.3
======= ======= Diluted earnings per share $0.17 $0.26 =======
======= Diluted shares outstanding 51.1 51.1 ======= =======
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
------------------------------------------------------------- March
31, December 31, 2006 2005 ----------- ------------ (In millions)
ASSETS Current assets Cash and cash equivalents $7.1 $3.7 Accounts
receivable, net 410.1 328.0 Inventories, net 222.4 207.2 Prepaid
expenses and other 61.5 45.5 Deferred income taxes 18.3 17.0
-------- -------- Total current assets 719.4 601.4 Property, plant
and equipment, net 1,857.8 1,836.0 Deferred income taxes 4.2 3.0
Goodwill 147.8 147.8 Other assets and deferred charges 75.1 78.4
-------- -------- Total assets $2,804.3 $2,666.6 ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts
payable $415.2 $381.1 Other accrued expenses 157.2 168.1 --------
-------- Total current liabilities 572.4 549.2 Long-term debt 574.5
489.2 Deferred income taxes 116.7 116.1 Postretirement benefits and
other long-term liabilities 538.1 517.3 -------- -------- Total
liabilities 1,801.7 1,671.8 Stockholders' equity 1,002.6 994.8
-------- -------- Total liabilities and stockholders' equity
$2,804.3 $2,666.6 ======== ======== AMERICAN AXLE &
MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (Unaudited)
---------------------------------------------------------------
Three months ended March 31, --------------------------- 2006 2005
------------- ------------- (In millions) Operating activities Net
income $8.6 $13.3 Depreciation and amortization 49.4 43.4 Other
(51.0) (90.8) -------- -------- Net cash flow provided by (used in)
operating activities 7.0 (34.1) Purchases of property, plant &
equipment (80.8) (74.8) -------- -------- Net cash flow after
purchases of property, plant & equipment (73.8) (108.9)
-------- -------- Net cash flow provided by (used in) operations
(73.8) (108.9) Net increase in long-term debt 84.8 103.1 Employee
stock option exercises 0.1 2.2 Dividends paid (7.7) (7.4) --------
-------- Net cash flow provided by financing activities 77.2 97.9
Effect of exchange rate changes on cash - (0.1) -------- --------
Net increase (decrease) in cash and cash equivalents 3.4 (11.1)
Cash and cash equivalents at beginning of period 3.7 14.4 --------
-------- Cash and cash equivalents at end of period $7.1 $3.3
======== ========
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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 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, ------------------------- 2006 2005 ------------
------------ (In millions) Net income $8.6 $13.3 Interest expense
7.4 6.3 Income taxes (0.3) 6.6 Depreciation and amortization 49.4
43.4 ------- ------- EBITDA $65.1 $69.6 ======= ======= Net debt(b)
to capital March 31, December 31, 2006 2005 ---------------
--------------- (In millions, except percentages) Total debt $574.5
$489.2 Less: cash and cash equivalents 7.1 3.7 -------- --------
Net debt at end of period 567.4 485.5 Stockholders' equity 1,002.6
994.8 -------- -------- Total invested capital at end of period
$1,570.0 $1,480.3 ======== ======== Net debt to capital(c) 36.1%
32.8% ======== ========
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(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.
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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,
-------------------- 2006 2005 ---------- --------- (In millions)
Net cash provided by operating activities $7.0 $(34.1) Less:
purchases of property, plant & equipment (80.8) (74.8) -------
------- Net operating cash flow (73.8) (108.9) Less: dividends paid
(7.7) (7.4) ------- ------- Free cash flow $(81.5) $(116.3) =======
======= After-Tax Return on Invested Capital (ROIC)(e) Quarter
Ended Trailing Twelve ---------------------------------------
Months Ended June 30, Sept. 30, Dec. 31, March 31, March 31, 2005
2005 2005 2006 2006 -------- ---------- ---------- ---------
-------------- (In millions, except percentages) Net income $18.9
$19.3 $4.5 $8.6 $51.3 After-tax net interest expense(f) 4.4 4.9 5.6
4.9 19.8 ------ ------ ------ ------ ------ After-tax return $23.3
$24.2 $10.1 $13.5 $71.1 ====== ====== ====== ====== ====== Net debt
at end of period $567.4 Stockholders' equity at end of period
1,002.6 ------- Invested capital at end of period 1,570.0 Invested
capital at beginning of period 1,512.9 ------- Average invested
capital(g) $1,541.5 ======== After-Tax ROIC(h) 4.6% ========
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(d) We define net operating cash flow as net cash provided by
operating activities less purchases of property and equipment. Free
cash flow is defined as net operating cash flow less dividends
paid. We believe net operating cash flow and free cash flow are
meaningful measures as they are commonly utilized by management and
investors to assess our ability to generate cash flow from business
operations to repay debt and return capital to our stockholders.
Net operating cash flow is also a key metric used in our
calculation of incentive compensation. Other companies may
calculate net operating cash flow and free cash flow differently.
(e) We believe that ROIC is a meaningful overall measure of
business performance because it reflects the company's earnings
performance relative to its investment level. ROIC is also a key
metric used in our calculation of incentive compensation. Other
companies may calculate ROIC differently. (f) After-tax net
interest expense is equal to 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: Carrie L.P.
Gray, Director, Corporate Relations, +1-313-758-4880, , Investor
relations: 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:
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