News Column

AAM Posts Fourth Quarter and Full Year 2013 Financial Results

February 12, 2014

American Axle & Manufacturing Holdings (AAM), which is traded as AXL on the NYSE, reported its financial results for the fourth quarter and full year 2013.

In a release on February 7, the Company noted that fourth quarter 2013 results include:

-Fourth quarter 2013 sales of $831.3 million, up approximately 13 percent on a year-over-year basis

-Non-GM sales grew over 37.2 percent on a year-over-year basis to $280.1 million

-Gross profit of $126.9 million, or 15.3 percent of sales

-Net income of $29.8 million, or $0.39 per share

-AAM's quarterly results reflect the impact of $25.6 million (or $0.32 per share) of debt refinancing and redemption costs

-Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization, excluding the impact of debt refinancing and redemption costs) of $113.7 million, or 13.7 percent of sales

-Free cash flow (net cash provided by operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment) of $50.9 million

Full Year 2013 Results

-Full year 2013 sales of $3.21 billion, up approximately 9.4 percent on a year-over-year basis

-Non-GM sales grew 16.9 percent on a year-over-year basis to $926.7 million

-Gross profit of $478.7 million, or 14.9 percent of sales

-Net income of $94.5 million, or $1.23 per share

-AAM's full year results reflect the impact of $36.8 million (or $0.46 per share) of debt refinancing and redemption costs and $5.8 million (or $0.07 per share) of other special items

-Adjusted EBITDA of $421.8 million, or 13.2 percent of sales

-Free cash flow of $4.3 million

AAM's net income in the fourth quarter of 2013 was $29.8 million, or $0.39 per share. In the fourth quarter of 2013, AAM's results reflect the impact of $25.6 million (or $0.32 per share) of debt refinancing and redemption costs. This compares to net income of $319.9 million, or $4.21 per share, in the fourth quarter of 2012 which includes the favorable impact of a $337.5 million benefit (or $4.44 per share) related to the reversal of our valuation allowance against our net federal deferred tax assets for entities in the United States.

In the fourth quarter of 2012, AAM's results reflect the impact of $9.7 million (or $0.13 per share) of debt refinancing and redemption costs and $6.2 million (or $0.08 per share) of restructuring costs related to the closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.

For the full year 2013, AAM's net income was of $94.5 million, or $1.23 per share. This compares to net income of $367.7 million, or $4.87 per share in 2012.

On a full year basis in 2013, AAM incurred $36.8 million (or $0.46 per share) of debt refinancing and redemption costs and $5.8 million (or $0.07 per share) of other special items.

On a full year basis in 2012, AAM incurred $19.8 million (or $0.26 per share) of debt refinancing and redemption costs and $40.6 million (or $0.54 per share) of restructuring costs related to the closure of our Detroit Manufacturing Complex and Cheektowaga Manufacturing Facility.

"In 2013, AAM's financial performance was highlighted by sales growth that outpaced the industry and profitability that solidly rebounded versus our 2012 performance. AAM's foundational commitments to quality and operational excellence paved the way for these improved results, while our focus on technology leadership resulted in the expansion and diversification of our customer base and product portfolio on a global basis," said AAM's Chairman, President and Chief Executive Officer, David C. Dauch. "As we look to the future, we remain focused on optimizing our profitable growth opportunities through our global expansion, improving the diversification of our business, and achieving solid financial performance by executing our aligned business strategy. We are committed to achieving excellence in everything we do with the ultimate goal of making AAM a leader in every key market that we serve."

Net sales in the fourth quarter of 2013 increased approximately 12.8 percent to $831.3 million as compared to $736.7 million in the fourth quarter of 2012. Non-GM sales grew 37.2 percent on a year- over-year basis to $280.1 million in the fourth quarter of 2013 as compared to $204.1 million in the fourth quarter of 2012.

AAM's content-per-vehicle is measured by the dollar value of its product sales supporting its customers' North American light truck and SUV programs. In the fourth quarter of 2013, AAM's content-per- vehicle was $1,579 as compared to $1,514 in the fourth quarter of 2012. For the full year 2013, AAM's content-per-vehicle was $1,550 as compared to $1,473 in 2012.

Net sales for the full year 2013 increased by 9.4 percent to $3.21 billion as compared to $2.93 billion in 2012. Non-GM sales grew 16.9 percent on a year-over-year basis to $926.7 million in 2013 as compared to $792.6 million in 2012.

AAM's gross profit in the fourth quarter of 2013 was $126.9 million, or 15.3 percent of sales. For the full year 2013, AAM's gross profit was $478.7 million, or 14.9 percent of sales.

In the fourth quarter of 2013, AAM's operating income was $66.4 million, or 8.0 percent of sales. For the full year 2013, AAM's operating income was $240.3 million, or 7.5 percent of sales.

AAM's SG&A spending in the fourth quarter of 2013 was $60.5 million, or 7.3 percent of sales, as compared to $65.4 million, or 8.9 percent of sales, in the fourth quarter of 2012. AAM's R&D spending in the fourth quarter of 2013 was $24.0 million as compared to $33.1 million in the fourth quarter of 2012.

AAM's SG&A spending for the full year 2013 was $238.4 million, or 7.4 percent of sales, as compared to $243.3 million, or 8.3 percent of sales, for the full year 2012. AAM's R&D spending for the full year 2013 was $103.4 million as compared to $123.4 million in 2012.

In the fourth quarter of 2013, AAM's net income was $29.8 million, or 3.6 percent of sales. Diluted earnings per share (EPS) were $0.39 per share in the fourth quarter of 2013. For the full year 2013, AAM's net income was $94.5 million, or 2.9 percent of sales. Diluted earnings per share (EPS) were $1.23 per share for the full year 2013.

For 2013, AAM defines Adjusted EBITDA to be earnings before interest, taxes, depreciation and amortization excluding the impact of debt refinancing and redemption costs and other special charges and restructuring costs. In the fourth quarter of 2013, AAM's Adjusted EBITDA was $113.7 million or 13.7 percent of sales. For the full year 2013, AAM's Adjusted EBITDA was $421.8 million, or 13.2 percent of sales.

AAM defines free cash flow to be net cash provided by (or used in) operating activities less capital expenditures net of proceeds from the sale of property, plant and equipment and the sale- leaseback of equipment.

Net cash provided by operating activities for the full year 2013 was $223.0 million. Capital spending, net of proceeds from the sale of property, plant and equipment and the sale-leaseback of equipment, for the full year 2013 was $218.7 million. Reflecting the impact of this activity, AAM generated positive free cash flow of $4.3 million for the full year 2013.

AAM's free cash flow for the full year 2013 reflects the impact of cash payments for debt refinancing and redemption activities of approximately $36.8 million.

AAM is a company focusing on 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, passenger cars, crossover vehicles and commercial vehicles.

More information:

www.aam.com

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