Net cash provided by operating activities nearly doubles to $367.9
million for full year 2007 DETROIT, Feb. 1 /PRNewswire-FirstCall/
-- American Axle & Manufacturing Holdings, Inc. (AAM), which is
traded as AXL on the NYSE, today reported its financial results for
the fourth quarter and full year 2007. Full Year 2007 Results --
Full year sales of $3.25 billion -- Net earnings of $37.0 million,
or $0.70 per share -- Special charges and other non-recurring
operating costs of $88.4 million, or $1.11 per share, primarily
related to attrition programs, asset impairments, the redeployment
of machinery and equipment and other actions to rationalize
underutilized capacity -- Debt refinancing costs of $5.5 million,
or $0.07 per share -- Net cash provided by operating activities of
$367.9 million, nearly double the prior year -- 3.5% year-over-year
decline in total light truck production volumes as compared to the
full year 2006 -- Content-per-vehicle of $1,293, approximately 5%
higher than the previous year -- Non-GM sales of $712.3 million, or
22% of total net sales AAM's results in the fourth quarter of 2007
were a net loss of $25.5 million or $0.50 per share. This compares
to a net loss of $188.6 million, or $3.74 per share, in the fourth
quarter of 2006. AAM's earnings for the full year 2007 were $37.0
million, or $0.70 per share. This compares to a net loss of $222.5
million, or $4.42 per share, in 2006. In the third and fourth
quarter of 2007, AAM recorded special charges relating to a
voluntary separation program accepted by 558 UAW represented
associates at the Buffalo Gear, Axle & Linkage facility in
Buffalo, New York. Production at this facility was idled in
December 2007. Also in 2007, AAM incurred additional special
charges and non-recurring operating costs relating to other
attrition programs, asset impairments, the redeployment of
machinery and equipment and other actions to rationalize
underutilized capacity. In total, AAM's 2007 results reflect the
impact of charges amounting to $88.4 million, or $1.11 per share,
relating to these items, including pension and other postretirement
benefit curtailments and special termination benefits. In the
fourth quarter of 2007, AAM recorded $70.6 million, or $0.92 per
share, of these total restructuring charges. AAM's full year 2007
earnings also reflect the impact of an additional $5.5 million
charge, or $0.07 per share, for the write-off of unamortized debt
issuance costs and other costs related to the prepayment of the
$250 million term loan due 2010. In the fourth quarter of 2006, AAM
recorded special charges relating to a special attrition program
(SAP) accepted by approximately 1,500 UAW represented associates at
AAM's master agreement facilities. AAM also recorded a special
charge in 2006 for supplemental unemployment benefits (SUB)
estimated to be payable to UAW associates who were expected to be
permanently idled through the end of the current collective
bargaining agreement that expires in February 2008. AAM recorded
additional special charges associated with salaried workforce
reductions and other attrition programs offered to its associates.
In total, these special charges increased AAM's operating costs in
2006 by $181.4 million. In addition to these special charges, AAM
also recorded asset impairment charges of $196.5 million in the
fourth quarter of 2006 associated with plans to idle a portion of
AAM's production capacity in the U.S. dedicated to its mid-size
light truck product range and other capacity reduction initiatives.
"In 2007, AAM made excellent progress in our plan to achieve
sustainable market cost competitiveness in our global operations,"
said AAM's Co-Founder, Chairman of the Board & CEO Richard E.
Dauch. "AAM has a strong balance sheet and will continue to focus
on the appropriate cost structure adjustments, technology
innovations, new business launches and an accelerated expansion of
our global manufacturing and sourcing footprint to gain momentum in
2008. We are excited about what AAM can, and will, accomplish in
what is sure to be a most difficult, demanding and tough year for
the entire domestic automotive industry." Net sales in the fourth
quarter of 2007 were $755.3 million as compared to $781.1 million
in the fourth quarter of 2006. Customer production volumes for the
full-size truck and SUV programs AAM currently supports for GM and
Chrysler were down approximately 5% in the fourth quarter of 2007
as compared to the prior year. AAM estimates that customer
production volumes for its mid-sized truck and SUV programs were
down approximately 1.4% in the fourth quarter of 2007 on a
year-over-year basis. Non-GM sales represented 20% of total sales
in the fourth quarter of 2007. Net sales for the full year 2007
were $3.25 billion as compared to $3.19 billion in 2006. Customer
production volumes for the full-size truck and SUV programs AAM
currently supports for GM and Chrysler were down approximately 1.5%
in 2007 as compared to the prior year. AAM estimates that customer
production volumes for its mid-sized truck and SUV programs were
down approximately 11% in 2007 on a year-over-year basis. Non-GM
sales represented 22% of total sales in 2007. AAM's
content-per-vehicle is measured by the dollar value of its product
sales supporting GM's North American truck and SUV platforms and
Chrysler's heavy duty Dodge Ram pickup trucks. For the full year
2007, AAM's content-per- vehicle increased approximately 5% to
$1,293 as compared to $1,225 in 2006. Gross margin in for the full
year 2007 was 8.6% as compared to a negative 4.0% in 2006.
Operating income was $75.6 million or 2.3% of sales in 2007 as
compared to an operating loss of $326.0 million or negative 10.2%
of sales in 2006. In addition to the impact of the special charges
and other non-recurring operating costs described above, AAM's
improved gross margin and operating income performance in 2007
primarily reflects the impact of higher sales, productivity gains
and structural cost reductions resulting from the attrition
programs and other ongoing restructuring actions. AAM defines free
cash flow to be net cash provided by (or used in) operating
activities less capital expenditures and dividends paid. As
compared to the prior year, net cash provided by operating
activities for the full year 2007 nearly doubled to $367.9 million.
Capital spending for the full year 2007 was $186.5 million as
compared to $286.6 million in 2006. Reflecting the impact of this
activity and dividend payments of $31.8 million, AAM's free cash
flow of $149.6 million in 2007 represents an improvement of $281.5
million as compared to the full year 2006. A conference call to
review AAM's fourth quarter and full year 2007 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 (706) 643-3736 from outside the United States. A replay
will be available from 5:00 p.m. ET on February 1, 2008 until 5:00
p.m. ET February 8, 2008 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
29997749. 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 (Michigan, New York,
Ohio and Indiana), AAM also has offices or facilities in Brazil,
China, Germany, India, Japan, Luxembourg, Mexico, Poland, South
Korea and the United Kingdom. Certain statements contained in this
press release are "forward-looking statements" and relate to the
Company's plans, projections, strategies or future performance.
Such statements are made pursuant to the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995 and are based
on our current expectations, are inherently uncertain, are subject
to risks and should be viewed with caution. Actual results and
experience may differ materially from the forward-looking
statements as a result of many factors, including but not limited
to: adverse changes in the economic conditions or political
stability of our principal markets (particularly North America,
Europe and South America); reduced demand of our customers'
products or volume reductions, particularly for light trucks and
SUVs produced by GM and Chrysler LLC's heavy-duty Dodge Ram
full-size pickup trucks, or the Dodge Ram program; our ability to
maintain satisfactory labor relations and avoid work stoppages; our
ability to achieve cost reductions through accelerated attrition
programs; reduced purchases of our products by GM, Chrysler LLC 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; work stoppages at GM or Chrysler LLC or a key supplier to
GM or Chrysler LLC; risks of noncompliance with environmental
regulations or risks of environmental issues that could result in
unforeseen costs at our facilities; liabilities arising from legal
proceedings to which we are or may become a party or claims against
us or our products; availability of financing for working capital,
capital expenditures, research and development or other general
corporate purposes, including our ability to comply with financial
covenants; adverse changes in laws, government regulations or
market conditions affecting our products or our customers' products
(including the Corporate Average Fuel Economy regulations); our
ability to attract and retain key associates; and other
unanticipated events and conditions that may hinder our ability to
compete. For additional discussion, see "Item 1A. Risk Factors" in
our most recent annual report on Form 10-K and quarterly reports on
Form 10-Q. It is not possible to foresee or identify all such
factors and we assume no obligation to update any forward-looking
statements or to disclose any subsequent facts, events or
circumstances that may affect their accuracy. For additional
information: Media relations contact: Investor relations contact:
Renee B. Rogers Jamie M. Little Manager, Corporate Communications
Director, Investor Relations and Media Relations (313) 758-4831
(313) 758-4882 Or visit the AAM website at http://www.aam.com/
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
--------------------------------------------------------------------------
Three months ended Twelve months ended December 31, December 31,
-------------------- ------------------- 2007 2006 2007 2006
-------- -------- -------- -------- (In millions, except (In
millions, except per share data) per share data) Net sales $755.3
$781.1 $3,248.2 $3,191.7 ---------- ---------- ----------
---------- Cost of goods sold 755.4 1,001.1 2,969.8 3,320.3
---------- ---------- ---------- ---------- Gross profit (loss)
(0.1) (220.0) 278.4 (128.6) Selling, general and administrative
expenses 47.7 51.6 202.8 197.4 ---------- ---------- ----------
---------- Operating income (loss) (47.8) (271.6) 75.6 (326.0)
Interest expense (14.9) (11.9) (61.6) (39.0) Interest income 3.3
0.1 9.3 0.2 Other income (expense), net Debt refinancing cost - -
(5.5) (2.7) Other, net (0.3) 0.6 (0.2) 12.0 ---------- ----------
---------- ---------- Income (loss) before income taxes (59.7)
(282.8) 17.6 (355.5) Income taxes (34.2) (94.2) (19.4) (133.0)
---------- ---------- ---------- ---------- Net income (loss)
$(25.5) $(188.6) $37.0 $(222.5) ========== ========== ==========
========== Diluted earnings (loss) per share $(0.50) $(3.74) $0.70
$(4.42) ========== ========== ========== ========== Diluted shares
outstanding 51.5 50.5 52.7 50.4 ========== ========== ==========
==========
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
--------------------------------------------------------------------------
December 31, December 31, 2007 2006 ------------ ------------ (In
millions) ASSETS Current assets Cash and cash equivalents $343.6
$13.5 Accounts receivable, net 264.0 327.6 Inventories, net 229.0
198.4 Prepaid expenses and other 73.4 69.2 Deferred income taxes
24.6 30.7 ---------- ---------- Total current assets 934.6 639.4
Property, plant and equipment, net 1,696.2 1,731.7 Deferred income
taxes 78.7 35.7 Goodwill 147.8 147.8 Other assets and deferred
charges 57.4 42.9 ---------- ---------- Total assets $2,914.7
$2,597.5 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $313.8 $328.9 Other accrued
expenses 197.8 212.4 ---------- ---------- Total current
liabilities 511.6 541.3 Long-term debt 858.1 672.2 Deferred income
taxes 6.6 6.8 Postretirement benefits and other long-term
liabilities 647.7 563.5 ---------- ---------- Total liabilities
2,024.0 1,783.8 Stockholders' equity 890.7 813.7 ----------
---------- Total liabilities and stockholders' equity $2,914.7
$2,597.5 ========== ==========
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AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
--------------------------------------------------------------------------
Three months ended Twelve months ended December 31, December 31,
-------------------- ------------------- 2007 2006 2007 2006
-------- -------- -------- -------- (In millions) (In millions)
Operating activities Net income (loss) $(25.5) $(188.6) $37.0
$(222.5) Depreciation and amortization 58.4 52.7 229.4 206.0 Other
3.4 159.9 101.5 202.2 -------- -------- -------- -------- Net cash
flow provided by operating activities 36.3 24.0 367.9 185.7
Purchases of property, plant & equipment (53.5) (43.1) (186.5)
(286.6) -------- -------- -------- -------- Net cash flow after
purchases of property, plant & equipment (17.2) (19.1) 181.4
(100.9) -------- -------- -------- -------- Purchase buyouts of
leased equipment - (17.5) - (37.0) -------- -------- --------
-------- Net cash flow provided by (used in) operations (17.2)
(36.6) 181.4 (137.9) Net increase (decrease) in long-term debt 4.8
43.0 172.3 180.5 Debt issuance costs - (1.3) (7.5) (4.4) Employee
stock option exercises 0.9 0.9 13.5 1.3 Tax benefit on stock
options 1.2 1.0 3.8 1.0 Dividends paid (8.0) (7.7) (31.8) (31.0)
Purchase of treasury of stock (0.1) - (2.0) (0.1) -------- --------
-------- -------- Net cash flow provided by (used in) financing
activities (1.2) 35.9 148.3 147.3 Effect of exchange rate changes
on cash (0.1) 0.3 0.4 0.4 -------- -------- -------- -------- Net
increase in cash and cash equivalents (18.5) (0.4) 330.1 9.8 Cash
and cash equivalents at beginning of period 362.1 13.9 13.5 3.7
-------- -------- -------- -------- Cash and cash equivalents at
end of period $343.6 $13.5 $343.6 $13.5 ======== ======== ========
======== 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 Twelve months ended December 31, December 31,
-------------------- ------------------- 2007 2006 2007 2006
-------- -------- -------- -------- (In millions) (In millions) Net
income (loss) $(25.5) $(188.6) $37.0 $(222.5) Interest expense 14.9
11.9 61.6 39.0 Income taxes (34.2) (94.2) (19.4) (133.0)
Depreciation and amortization 58.4 52.7 229.4 206.0 --------
-------- -------- -------- EBITDA $13.6 $(218.2) $308.6 $(110.5)
======== ======== ======== ======== Net debt(b) to capital December
31, December 31, 2007 2006 ------------ ------------ (In millions,
except percentages) Total debt $858.1 $672.2 Less: cash and cash
equivalents 343.6 13.5 ---------- ---------- Net debt at end of
period 514.5 658.7 Stockholders' equity 890.7 813.7 ----------
---------- Total invested capital at end of period $1,405.2
$1,472.4 ========== ========== Net debt to capital(c) 36.6% 44.7%
========== ==========
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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. 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 Twelve months ended December 31,
December 31, -------------------- ------------------- 2007 2006
2007 2006 -------- -------- -------- -------- (In millions) (In
millions) Net cash provided by operating activities $36.3 $24.0
$367.9 $185.7 Less: purchases of property, plant & equipment
(53.5) (43.1) (186.5) (286.6) -------- -------- -------- --------
Net operating cash flow (17.2) (19.1) 181.4 (100.9) Less: dividends
paid (8.0) (7.7) (31.8) (31.0) -------- -------- -------- --------
Free cash flow $(25.2) $(26.8) $149.6 $(131.9) ======== ========
======== ======== After-Tax Return on Invested Capital (ROIC)(e)
Trailing Twelve Quarter Ended Months
---------------------------------------- Ended March 31, June 30,
Sept. 30, Dec. 31, Dec. 31, 2007 2007 2007 2007 2007 Net income
(loss) $15.4 $34.0 $13.1 $(25.5) $37.0 After-tax net interest
expense (f) 12.8 14.1 10.5 10.6 48.0 -------- -------- --------
-------- -------- After-tax return $28.2 $48.1 $23.6 $(14.9) $85.0
======== ======== ======== ======== ======== Net debt at end of
period $514.5 Stockholders' equity at end of period 890.7
---------- Invested capital at end of period 1,405.2 Invested
capital at beginning of period 1,472.4 ---------- Average invested
capital(g) $1,438.8 ========== After-Tax ROIC(h) 5.9%
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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. 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 (excluding one-time items). (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, Renee B. Rogers, Manager, Corporate Communications
and Media Relations, +1-313-758-4882, , or Investors, Jamie M.
Little, Director, Investor Relations, +1-313-758-4831, , 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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