DETROIT, October 30 /PRNewswire-FirstCall/ -- American Axle &
Manufacturing Holdings, Inc. (AAM), which is traded as AXL on the
NYSE, today reported its financial results for the third quarter of
2009. Third Quarter 2009 Results -- Third quarter sales of $409.6
million is AAM's highest quarterly sales total in 2009 -- Net
income of $19.6 million, or $0.35 per share, marks AAM's first
quarterly profit in two years -- AAM's quarterly results reflect
the favorable impact of pension and postretirement benefit
curtailment gains of $42.3 million (or $0.76 per share); these
gains were partially offset by special charges and restructuring
costs of $13.0 million (or $0.23 per share), primarily relating to
salaried workforce reductions, capacity rationalization activities
and the successful closing of a settlement and commercial agreement
with GM and amendment of AAM's Revolving Credit Facility and Term
Loan agreements that position AAM to complete its restructuring
outside of a bankruptcy process -- 18% year-over-year decline in
total light truck production volumes as compared to the third
quarter of 2008 -- Content-per-vehicle of $1,396, approximately the
same as in the second quarter of 2009 -- Non-GM sales of $75.1
million, or approximately 18.3% of total net sales AAM's net income
in the third quarter of 2009 was $19.6 million (or $0.35 per
share). This compares to a net loss of $440.9 million (or $8.54 per
share) in the third quarter of 2008. AAM's third quarter of 2009
net profit is the first profitable quarterly result AAM has
reported since the third quarter of 2007. AAM's results in the
third quarter of 2009 were adversely impacted by the extended
production shutdowns of General Motors Company (GM) and Chrysler
Group LLC (Chrysler). AAM estimates the reduction in sales and
operating income resulting from these shutdowns to be approximately
$100.6 million and approximately $29.3 million (or $0.52 per
share), respectively. In the third quarter of 2009, AAM recorded
pension and postretirement benefit curtailment gains of $42.3
million (or $0.76 per share). These gains were partially offset by
special charges and restructuring costs of $13.0 million (or $0.23
per share), primarily relating to salaried attrition programs,
capacity rationalization activities and the successful closing of a
settlement and commercial agreement with GM and amendment of AAM's
Revolving Credit Facility and Term Loan agreements that position
AAM to complete its restructuring outside of a bankruptcy process.
In the third quarter of 2008, AAM recorded $398.0 million (or $7.71
per share), of special charges, asset impairments and non-recurring
operating costs, primarily related to hourly and salaried attrition
programs and benefit reductions (including pension and other
postretirement benefit curtailments and special and contractual
termination benefits), plant closures and other capacity
rationalization activities. "We believe the third quarter of 2009
marks a positive turning point for AAM," said AAM's Co-Founder,
Chairman of the Board and Chief Executive Officer, Richard E.
Dauch. "By finalizing new business agreements with General Motors
Company and amending our senior credit agreements, we have
successfully resolved the short-term liquidity concerns that were
facing AAM. We have also preserved the significant value inherent
in AAM's unparalleled manufacturing and engineering expertise;
product, process and systems technology; and expanding new business
backlog for our many key stakeholders. With these important
objectives successfully achieved and AAM's operational
restructuring now nearly complete, we can once again focus on
delivering outstanding value to our customers on a daily basis,
profitably growing AAM's global businesses and continuing to
diversify AAM's customer base, product portfolio and global
manufacturing and sourcing footprint." Net sales in the third
quarter of 2009 were $409.6 million as compared to $528.1 million
in the third quarter of 2008. On a sequential basis, AAM's sales in
the quarter were up 67% as compared to $245.6 million in the second
quarter of 2009. Customer production volumes for the North American
light truck and SUV programs AAM currently supports for GM and
Chrysler were down approximately 18% in the third quarter of 2009
as compared to the third quarter of 2008, substantially all of
which is attributable to lower customer production of mid-sized
light truck programs. Non-GM sales represented approximately 18.3%
of total sales in the third quarter of 2009. On a year-to-date
basis, AAM's non-GM sales represented approximately 21.6% of total
sales. AAM's content-per-vehicle is measured by the dollar value of
its product sales supporting GM's North American light truck and
SUV programs and Chrysler's Heavy Duty Dodge Ram pickup trucks. For
the third quarter of 2009, AAM's content-per-vehicle was $1,396,
approximately the same as the second quarter of 2009. AAM's
content-per-vehicle was $1,453 in the third quarter of 2008. Net
sales in the first three quarters of 2009 were $1.1 billion as
compared to $1.6 billion in the first three quarters of 2008. AAM's
net loss in the first three quarters of 2009 was $301.7 million as
compared to a net loss of $1.1 billion in the first three quarters
of 2008. AAM's results in the first three quarters of 2009 were
adversely impacted by the extended production shutdowns of GM and
Chrysler. AAM estimates the reduction in sales and operating income
resulting from these shutdowns to be approximately $304.3 million
and approximately $95.0 million (or $1.83 per share), respectively.
AAM's SG&A spending in the third quarter of 2009 was $44.0
million as compared to $43.0 million in the third quarter of 2008.
Included in AAM's SG&A spending in the third quarter of 2009
was $6.3 million of special charges and restructuring costs. In the
third quarter of 2008, AAM recorded a $1.4 million special gain in
SG&A. AAM's R&D spending in the third quarter of 2009 was
approximately $15.1 million as compared to $21.2 million in the
third quarter of 2008. On a year-to-date basis, AAM's R&D
spending for the first three quarters of 2009 was approximately
$50.7 million as compared to $63.4 million in the first three
quarters of 2008. AAM defines free cash flow to be net cash
provided by (or used in) operating activities and proceeds from the
issuance of warrants to GM, less capital expenditures net of
proceeds from the sales of equipment and dividends paid. Net cash
used in operating activities in the first three quarters of 2009
was $19.7 million as compared to $97.3 million used in operating
activities during the first three quarters of 2008. In conjunction
with the settlement and commercial agreement with GM, AAM received
a $110 million cash payment from GM in the quarter, $79.7 million
of which was recorded in operating activities and $30.3 million of
which was recognized as a financing activity. For purposes of
measuring free cash flow in 2009, AAM includes the entire $110
million cash payment. Capital spending and deposits for the
acquisition of property and equipment, net of proceeds from the
sale of equipment in the first three quarters of 2009 was $115.0
million as compared to $100.5 million in the first three quarters
of 2008. Reflecting the impact of this activity, AAM's free cash
flow was a use of $104.4 million in the first three quarters of
2009. In the first three quarters of 2008, AAM's free cash flow was
a use of $215.1 million. Included in the first three quarters of
2009 cash flow results, AAM paid $119.7 million for special charges
and restructuring costs, which primarily related to hourly and
salaried attrition programs and related statutory benefits. A
conference call to review AAM's third quarter 2009 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 5:00 p.m. ET on October 30, 2009
until 5:00 p.m. ET November 6, 2009 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
34808987. 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, Thailand and the United Kingdom. Certain statements
contained in this press release are forward-looking statements
related 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. Actual
results and experience may differ materially as a result of many
factors, including but not limited to: our ability to comply with
the definitive terms and conditions of various commercial and
financing arrangements with GM; global economic conditions;
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' (including GM and Chrysler) and suppliers' availability
of financing for working capital, capital expenditures, R&D or
other general corporate purposes; reduced purchases of our products
by GM, Chrysler or other customers; reduced demand for our
customers' products (particularly light trucks and SUVs produced by
GM and Chrysler); the impact on us and our customers of
requirements imposed on, or actions taken by, our customers in
response to the U.S. government's ownership interest, including the
Troubled Asset Relief Program or similar programs; our ability to
achieve cost reductions through ongoing restructuring actions;
additional restructuring actions that may occur; 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 suppliers' ability
to maintain satisfactory labor relations and avoid work stoppages;
our customers' and their suppliers' ability to maintain
satisfactory labor relations and avoid work stoppages; our ability
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 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; continued or increased
high prices for 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 regulations); adverse changes in the economic
conditions or political stability of our principal markets
(particularly North America, Europe, South America and Asia);
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. 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 statement. For more information... Christopher
M. Son David Tworek Director, Investor Relations and Manager,
Communications Corporate Communications (313) 758-4883 (313)
758-4814 Or visit the AAM website at http://www.aam.com/. AMERICAN
AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited) Three months ended Nine months
ended September 30, September 30, ------------- ------------- 2009
2008 2009 2008 ---- ---- ---- ---- (In millions, except (In
millions, except per share data) per share data) Net sales $409.6
$528.1 $1,057.6 $1,606.2 Cost of goods sold 321.1 906.5 1,157.1
2,499.8 ----- ----- ------- ------- Gross profit (loss) 88.5
(378.4) (99.5) (893.6) Selling, general and administrative expenses
44.0 43.0 133.3 137.3 ---- ---- ----- ----- Operating income (loss)
44.5 (421.4) (232.8) (1,030.9) Interest expense (20.3) (18.0)
(60.4) (48.4) Investment income 0.8 (3.7) 2.8 0.5 Other income
(expense), net 0.1 (1.4) (3.6) 0.2 --- ---- ---- --- Income (loss)
before income taxes 25.1 (444.5) (294.0) (1,078.6) Income tax
expense (benefit) 5.5 (3.4) 7.8 33.8 --- ---- --- ---- Net income
(loss) 19.6 (441.1) (301.8) (1,112.4) Add: Net loss attributable to
noncontrolling interest - 0.2 0.1 0.2 --- --- --- --- Net income
(loss) attributable to AAM $19.6 $(440.9) $(301.7) $(1,112.2) =====
======= ======= ========= Diluted earnings (loss) per share $0.35
$(8.54) $(5.83) $(21.55) ===== ====== ====== ======= Diluted shares
outstanding 55.8 51.6 51.8 51.6 ==== ==== ==== ==== AMERICAN AXLE
& MANUFACTURING HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) September 30, December 31, 2009 2008 ---- ----
(In millions) ASSETS ------ Current assets Cash and cash
equivalents $173.1 $198.8 Short-term investments 9.1 77.1 Accounts
receivable, net 151.2 186.9 AAM/GM agreement receivable - 60.0
Inventories, net 88.0 111.4 Prepaid expenses and other 60.6 61.1
---- ---- Total current assets 482.0 695.3 Property, plant and
equipment, net 950.3 1,064.2 GM postretirement cost sharing asset
240.9 221.2 Goodwill 147.8 147.8 Other assets and deferred charges
132.0 119.2 ----- ----- Total assets $1,953.0 $2,247.7 ========
======== LIABILITIES AND STOCKHOLDERS' DEFICIT
------------------------------------- Current liabilities Current
portion of long-term debt $36.3 $- Accounts payable 189.3 250.9
Accrued expenses and other 223.3 266.8 ----- ----- Total current
liabilities 448.9 517.7 Long-term debt 1,142.8 1,139.9 Deferred
revenue 209.3 178.2 Postretirement benefits and other long-term
liabilities 891.6 847.4 ----- ----- Total liabilities 2,692.6
2,683.2 Stockholders' deficit (739.6) (435.5) ------ ------ Total
liabilities and stockholders' deficit $1,953.0 $2,247.7 ========
======== AMERICAN AXLE & MANUFACTURING HOLDINGS, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three months
ended Nine months ended September 30, September 30, -------------
------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In millions)
(In millions) Operating activities Net income (loss) $19.6 $(441.1)
$(301.8) $(1,112.4) Depreciation and amortization 30.3 52.6 102.8
165.2 Other (43.2) 367.1 179.3 849.9 ----- ----- ----- ----- Net
cash flow provided by (used in) operating activities 6.7 (21.4)
(19.7) (97.3) Purchases of property, plant & equipment (32.4)
(35.9) (112.0) (102.8) Payment of deposits for acquisition of
property and equipment (2.1) - (3.5) - Investment in joint venture
- - (10.2) - Proceeds from sales of assets - - 0.5 2.3 Redemption
(reclass) of short-term investments 2.0 (117.2) 68.0 (117.2) ---
------ ---- ------ Net cash flow used in investing activities
(32.5) (153.1) (57.2) (217.7) Net increase in debt (90.8) 435.0
32.8 442.9 Debt issuance costs (15.5) - (18.2) - Repurchase of
treasury stock (0.2) - (0.3) (0.1) Employee stock option exercises,
including tax benefit 1.0 - 1.0 0.9 Proceeds from the issuance of
warrants to GM 30.3 - 30.3 - Dividends paid - (1.1) - (17.3) ---
---- --- ----- Net cash flow provided by (used in) financing
activities (75.2) 433.9 45.6 426.4 Effect of exchange rate changes
on cash 1.7 (1.3) 5.6 (0.8) --- ---- --- ---- Net increase
(decrease) in cash and cash equivalents (99.3) 258.1 (25.7) 110.6
Cash and cash equivalents at beginning of period 272.4 196.1 198.8
343.6 ----- ----- ----- ----- Cash and cash equivalents at end of
period $173.1 $454.2 $173.1 $454.2 ====== ====== ====== ======
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)(a) Three months ended Nine months ended September 30,
September 30, -------------- -------------- 2009 2008 2009 2008
---- ---- ---- ---- (In millions) (In millions) Net income (loss)
$19.6 $(440.9) $(301.7) $(1,112.2) Interest expense 20.3 18.0 60.4
48.4 Income taxes 5.5 (3.4) 7.8 33.8 Depreciation and amortization
30.3 52.6 102.8 165.2 ---- ---- ----- ----- EBITDA $75.7 $(373.7)
$(130.7) $(864.8) ===== ======= ======= ======= Net debt(b) to
capital September 30, December 31, 2009 2008 ---- ---- (In
millions, except percentages) Total debt $1,179.1 $1,139.9 Less:
cash and cash equivalents 173.1 198.8 ----- ----- Net debt at end
of period 1,006.0 941.1 Stockholders' deficit (739.6) (435.5)
------ ------ Total invested capital at end of period $266.4 $505.6
====== ====== Net debt to capital(c) 377.6% 186.1% ===== ===== Net
Operating Cash Flow and Free Cash Flow(d) Three months ended Nine
months ended September 30, September 30, --------------
-------------- 2009 2008 2009 2008 ---- ---- ---- ---- (In
millions) (In millions) Net cash provided by (used in) operating
activities $6.7 $(21.4) $(19.7) $(97.3) Add: Proceeds from the
issuance of warrants to GM 30.3 - 30.3 - Less: Purchases of
property, plant & equipment and proceeds from sale of equipment
(32.4) (35.9) (111.5) (100.5) Payment of deposits for acquisition
of property and equipment (2.1) - (3.5) - ---- --- ---- --- Net
operating cash flow 2.5 (57.3) (104.4) (197.8) Less: dividends paid
- (1.1) - (17.3) --- ---- --- ----- Free cash flow $2.5 $(58.4)
$(104.4) $(215.1) ==== ====== ======= ======= (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' 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. (d)
We define net operating cash flow as net cash provided by (used in)
operating activities and proceeds from the issuance warrants to GM,
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.
DATASOURCE: American Axle & Manufacturing Holdings, Inc.
CONTACT: Christopher M. Son, Director, Investor Relations and
Corporate Communications, +1-313-758-4814, , or David Tworek,
Manager, Communications, +1-313-758-4883, Web Site:
http://www.aam.com/
Copyright
