News Column

Accuride Reports Strong Second Quarter Results; Increases Full-Year Guidance

July 28, 2014

• Operating income doubles year-over year; first half is positive net income for first time since 2007• Second Quarter 2014 results from continuing operations included: • Net sales of $181.6 million, up 0.9 percent from Q2 2013• Operating income of $12.3 million, up from $6.0 million in Q2 2013• Net income of $5.1 million, or $0.11 per share, up from a loss of $5.1 million, or $0.11 per share, in Q2 2013• Adjusted EBITDA of $23.2 million, up 30.3 percent from Q2 2013• On improving results and outlook, Company raises full-year 2014 estimates for: • Revenues of $675 million$700 million, representing an increase of $25 million• Adjusted EBITDA of $70 million$80 million, representing an increase of $10 million

EVANSVILLE, Ind., July 28, 2014 (GLOBE NEWSWIRE) -- Accuride Corporation (NYSE:ACW) – a leading supplier of components to the North American commercial vehicle industry – today reported strong financial results for the second quarter ended June 30, 2014, as its Fix & Grow strategy supports delivery of continued margin and profitability improvement.

Second Quarter 2014 Results

Second quarter 2014 net sales from continuing operations were $181.6 million, compared with $179.9 million in the same period in 2013, an increase of 0.9 percent. The Company achieved operating income of $12.3 million for the quarter, compared to operating income of $6.0 million in the second quarter of 2013. The Company reported net income from continuing operations of $5.1 million, or $0.11 per share, during the quarter, compared to a 2013 second-quarter net loss of $5.1 million, or $0.11 per share. Net income in second quarter of 2014 included a benefit of $2.2 million, or 0.04 per share, related to Mexico tax reform and a reduction in our long-term income tax payable. Second quarter Adjusted EBITDA improved year-over-year to $23.2 million, or 12.8 percent of net sales, compared to $17.8 million, or 9.9 percent of net sales, in the same quarter of 2013. As of June 30, 2014, Accuride had $31.9 million of cash plus $40.1 million in availability under its ABL Credit Facility, for total liquidity of $72.0 million.

Commenting on Accuride's second quarter results and business conditions, President and CEO Rick Dauch said, "We are pleased with our overall results for the quarter, which again demonstrated the return on our strategic investments to 'Fix & Grow' Accuride in anticipation of the commercial vehicle industry recovery now underway. Equipment orders were higher each month this quarter over the prior year, extending backlogs and filling build schedules in the segments we serve, while freight demand and the aftermarket stayed healthy. As the industry outlook solidified this quarter, so did Accuride's profit-generation power. We doubled operating income, aiding further expansion of net income and Adjusted EBITDA margins. Accuride was net income positive on a year-to-date basis through June for the first time since the onset of the industry recession in 2007. Wheels and, particularly, Gunite saw continued incremental margin expansion in the quarter due to reduced costs and improved operating efficiency."

Industry Conditions

Commercial vehicle OEMs further increased production in the second quarter in line with net order growth within each segment Accuride serves. Carriers continue to replace older equipment and expand fleets to meet rising freight demand. Class 8 net orders for the entire quarter increased 19 percent year-over-year for the strongest showing in eight years. Class 5-7 and Trailer net orders also improved, with year-over-year increases of 7 percent and 35 percent, respectively. Production also grew at a healthy pace in the quarter, with Class 8 and 5-7 truck builds both increasing 10 percent, and Trailers up by 11 percent year over year. Based on continued order strength, we anticipate strong, steady equipment builds across all segments in the second half of 2014. Demand in Brillion's core industrial end markets remains essentially flat this year due to global economic forces, with a sustained recovery not expected until 2015-16.

Second Quarter Business Segment Results

Accuride Wheels

Accuride Wheels segment net sales were $101.2 million, up $1.7 million, or 1.7 percent, from the same period in 2013, primarily due to stronger OEM truck and trailer demand that was partially offset by market share changes between truck OEMs and lower OEM light duty and military demand. Wheels' Adjusted EBITDA was $20.9 million, an increase of $0.2 million, or 1.0 percent, from the second quarter of 2013. Wheels continued its pace of product innovation by introducing its new Accu-FlangeTM treatment to limit flange wear in aluminum wheels. Also during the quarter, we reached a new four-year collective bargaining agreement with the UAW Local 1186 at our Erie, Pa., plant.

Gunite

Gunite segment net sales were $48.3 million, down $2.9 million, or 5.7 percent, from the second quarter of 2013, primarily due to weaker-than-expected aftermarket demand for brake drums. Gunite's Adjusted EBITDA was $8.3 million, or 17.2 percent of net sales, up from $4.6 million in the second quarter of 2013. Gunite's continued margin expansion reflects its normal seasonally higher mix of aftermarket business and reduced breakeven point, and supports our target for Gunite to become a 10 to 12 percent Adjusted EBITDA business in 2014.

Brillion Iron Works

Brillion Iron Works' second quarter net sales were $32.1 million, up $2.8 million, or 9.6 percent, from the second quarter of 2013. Brillion's Adjusted EBITDA was $1.6 million, a decrease of $1.7 million from the second quarter of 2013. Brillion's results were impacted by $1.0 million in non-cash inventory adjustments and higher-than-expected maintenance costs.

Liquidity and Debt

As of June 30, 2014, total debt was $340.7 million, consisting of $305.7 million of our outstanding 9.5% senior secured notes, net of discount, and a $35.0 million draw on our ABL Credit Facility. Accuride had $31.9 million of cash plus $40.1 million in availability under its ABL Credit Facility, for total liquidity of $72.0 million.        

Business and Market Outlook

"Our 'Fix & Grow' strategy has repositioned Accuride as an agile, competitive and more operationally disciplined supplier today, with a reduced cost structure that drives higher profitability," Rick Dauch said. "We are providing products that provide real value to customers, whether by extending service life and reducing maintenance costs, or lowering weight and improving fuel economy. Nearly all of our facilities are supplying these products at world-class levels on the metrics that matter most to our customers: quality, warranty, lead times, competitive pricing and on-time delivery. This dependability and value is restoring customer confidence and enabling us to secure additional new business. As the economy and industry continue to strengthen, we have adequate and competitive capacity to meet customer demand and recapture additional share in the process."

2014 Financial Guidance

Accuride Chief Financial Officer Greg Risch stated, "Based on the expectation of continued strengthening in our commercial vehicle end markets and additional incremental new business, we are increasing our guidance range for 2014 net sales to $675 million to $700 million. We also are increasing our full-year Adjusted EBITDA guidance range by $10 million to $70 million to $80 million, due primarily to the impact of expected increase in net sales and business unit operating improvements."

This revised 2014 guidance is based on projected North American Class 8 production levels in the range of 280,000 to 290,000 units, North American Class 5-7 production levels in the range of 210,000 to 215,000 units and North American Trailer production in the range of 250,000 to 260,000 units. Accuride expects net sales for its Brillion business unit to be approximately five percent higher than 2013, while its end markets are still not expected to recover until 2015-16.

Second Quarter Earnings Conference Call

Accuride will host a conference call to discuss the financial and operational results of its Second Quarter 2014 on Monday, July 28, 2014, beginning at 9:00 a.m. Central Time. Analysts and investors may participate on the conference call by dialing (800) 708-4539 in the United States, or (847) 619-6396 internationally, and using participant code 37693480. A live webcast of the conference call can be accessed via the Investors section of the company's website – www.AccurideCorp.com/investors. Digital playback of the call will be available from July 28, 2014, at 11:30 a.m. CDT until 11:59 p.m. CDT, August 4, 2014, by calling (888) 843-7419 in the United States, or (630) 652-3042 internationally, using access code 37693480.

About Accuride Corporation

With headquarters in Evansville, Ind., USA, Accuride Corporation is a leading supplier of components to the North American commercial vehicle industry. The company's products include commercial vehicle wheels; wheel-end components and assemblies; and specialty cast-iron components for a range of agricultural, construction and mining, and oil and gas equipment applications. The company's products are marketed under its brand names, which include Accuride®, Accuride Wheel End SolutionsTM, Gunite®, and BrillionTM.  Accuride's common stock trades on the New York Stock Exchange under the ticker symbol ACW.  For more information, visit the Company's website at http://www.accuridecorp.com.

Forward-Looking Statements

Statements contained in this news release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding Accuride's expectations, hopes, beliefs, and intentions with respect to future results. Such statements are subject to the impact on Accuride's business and prospects generally of, among other factors, market demand in the commercial vehicle industry, general economic, business and financing conditions, labor relations, governmental action, competitor pricing activity, expense volatility and other risks detailed from time to time in Accuride'sSecurities and Exchange Commission filings, including those described in Item 1A of Accuride's Annual Report on Form 10-K for the fiscal year ended December 31, 2013. Any forward-looking statement reflects only Accuride's belief at the time the statement is made. Although Accuride believes that the expectations reflected in these forward-looking statements are reasonable, it cannot guarantee its future results, levels of activity, performance or achievements. Except as required by law, Accuride undertakes no obligation to update any forward-looking statements to reflect events or developments after the date of this news release.

Three Months Operating Results
(UNAUDITED)
 Three Months Ended June 30,
(Dollars in thousands)20142013
         
Net sales:        
Wheels   $ 101,155 55.7%  $ 99,468 55.3%
Gunite  48,304 26.6% 51,207 28.4%
Brillion Iron Works  32,116 17.7% 29,266 16.3%
Total net sales   $ 181,575 100.0%  $ 179,941 100.0%
         
Gross Profit   $ 22,422 12.3%  $ 18,706 10.4%
         
Income (Loss) from Operations:        
Wheels   $ 11,857 11.7%  $ 11,751 11.8%
Gunite  7,243 15.0% 3,323 6.5%
Brillion Iron Works  489 1.5% 1,855 6.3%
Corporate / Other   (7,285)  (10,970)
Consolidated Total   $ 12,304 6.8%  $ 5,959 3.3%
         
Net Income (Loss)   $ 5,295 2.9%  $ (5,362) (3.0)%
         
Adjusted EBITDA:        
Wheels   $ 20,934 20.7%  $ 20,686 20.8%
Gunite  8,304 17.2% 4,588 9.0%
Brillion Iron Works  1,605 5.0% 3,289 11.2%
Corporate / Other   (7,609)  (10,778)
Continuing Operations   $ 23,234 12.8%  $ 17,785 9.9%
         
Imperial Group  117 0.4%
Consolidated Total   $ 23,234 12.8%  $ 17,902 8.5%
 
Six Months Operating Results
(UNAUDITED)
 Six Months Ended June 30,
(Dollars in thousands)20142013
         
Net sales:        
Wheels   $ 193,373 55.5%  $ 192,630 56.2%
Gunite  92,277 26.5% 90,603 26.4%
Brillion Iron Works  62,709 18.0% 59,695 17.4%
Total net sales   $ 348,359 100.0%  $ 342,928 100.0%
         
Gross Profit   $ 39,445 11.3%  $ 24,984 7.3%
         
Income (Loss) from Operations:        
Wheels   $ 21,599 11.2%  $ 17,494 9.1%
Gunite  10,521 11.4% 1,546 1.7%
Brillion Iron Works  1,764 2.8% 2,430 4.1%
Corporate / Other   (15,011)  (20,308)
Consolidated Total   $ 18,873 5.4%  $ 1,162 0.3%
         
Net Income (Loss)   $ 1,722 0.5%  $ (21,309) (6.2)%
         
Adjusted EBITDA:        
Wheels   $ 40,130 20.8%  $ 36,726 19.1%
Gunite  12,621 13.7% 4,024 4.4%
Brillion Iron Works  4,019 6.4% 5,009 8.4%
Corporate / Other   (15,580)  (19,747)
Continuing Operations   $ 41,190 11.8%  $ 26,012 7.6%
         
Imperial Group   —   (704) (1.2)%
Consolidated Total   $ 41,190 11.8%  $ 25,308 6.3%
         
ACCURIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
         
 Three Months EndedSix Months Ended
 June 30,June 30,
(In thousands except per share data)2014201320142013
         
NET SALES   $ 181,575  $ 179,941  $ 348,359  $ 342,928
COST OF GOODS SOLD  159,153 161,235 308,914 317,944
GROSS PROFIT  22,422 18,706 39,445 24,984
OPERATING EXPENSES:         
Selling, general and administrative  10,118 12,747 20,572 23,822
INCOME FROM OPERATIONS  12,304 5,959 18,873 1,162
OTHER INCOME (EXPENSE):         
Interest expense, net   (8,487)  (9,157)  (16,907)  (17,851)
Other income (loss), net   (169)  (441)  (699)  (296)
INCOME (LOSS) BEFORE INCOME TAXES FROM CONTINUING OPERATIONS   3,648  (3,639)  1,267  (16,985)
INCOME TAX (BENEFIT) PROVISION   (1,461)  1,464  (557)  2,873
INCOME (LOSS) FROM CONTINUING OPERATIONS   5,109  (5,103)  1,824  (19,858)
DISCONTINUED OPERATIONS, NET OF TAX   186  (259)  (102)  (1,451)
NET INCOME (LOSS)   $ 5,295  $ (5,362)  $ 1,722  $ (21,309)
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX:        
Defined benefit plans  140 417 473 748
COMPREHENSIVE INCOME (LOSS)   $ 5,435  $ (4,945)  $ 2,195  $ (20,561)
Weighted average common shares outstanding—basic  47,737 47,563 47,667 47,508
Basic income (loss) per share-continuing operations   0.11  (0.11)  0.04  (0.42)
Basic income (loss) per share-discontinued operations   —   —   —   (0.03)
Basic income (loss) per share   $ 0.11  $ (0.11)  $ 0.04  $ (0.45)
Weighted average common shares outstanding—diluted  49,003 47,563 48,299 47,508
Diluted income (loss) per share-continuing operations   0.11  (0.11)  0.04  (0.42)
Diluted income (loss) per share-discontinued operations   —   —   —   (0.03)
Diluted income (loss) per share   $ 0.11  $ (0.11)  $ 0.04  $ (0.45)
 
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(UNAUDITED)
 
 Three Months Ended June 30,
(In thousands)20142013
   
Net income (loss)$ 5,295$ (5,362)
Income tax (benefit) expense (1,461) 1,464
Interest expense, net 8,487 9,157
Depreciation and amortization 10,230 10,952
Restructuring, severance and other charges1 591
Other items related to our credit agreement2 683 1,100
Adjusted EBITDA$ 23,234$ 17,902


Note:

1) For the three months ended June 30, 2014, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization. For the three months ended June 30, 2013, Adjusted EBITDA represents net income before net interest expense, income tax benefit, depreciation and amortization, plus $0.6 million in costs associated with restructuring items.

2) Items related to our credit agreement refer to amounts utilized in the calculation of financial covenants in Accuride's senior credit facility. For the three months ended June 30, 2014, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $0.7 million. For the three months ended June 30, 2013, items related to our credit agreement consisted of foreign currency income and other income or expenses of $1.1 million.

 Six Months Ended June 30,
(In thousands)20142013
   
Net income (loss)$1,722$ (21,309)
Income tax (benefit) expense (557) 2,873
Interest expense, net 16,907 17,851
Depreciation and amortization 20,502 22,383
Restructuring, severance and other charges1 627 1,002
Other items related to our credit agreement2 1,989 2,508
Adjusted EBITDA$41,190$ 25,308


Note:

1) For the six months ended June 30, 2014, Adjusted EBITDA represents net income before net interest expense, income tax expense, depreciation and amortization, plus $0.6 million in costs associated with restructuring items. For the six months ended June 30, 2013, Adjusted EBITDA represents net income before net interest expense, income tax benefit, depreciation and amortization, plus $1.0 million in costs associated with restructuring items.

2) Items related to our credit agreement refer to amounts utilized in the calculation of financial covenants in Accuride's senior credit facility. For the six months ended June 30, 2014, items related to our credit agreement consisted of foreign currency losses and other income or expenses of $2.0 million. For the six months ended June 30, 2013, items related to our credit agreement consisted of foreign currency income and other income or expenses of $2.5 million.

ACCURIDE CORPORATION
SEGMENT ADJUSTED EBITDA RECONCILIATION
(UNAUDITED)
 
 Three Months Ended June 30, 2014
(In thousands)Income (loss)

from

Operations
Depreciation and

Amortization
OtherAdjusted

EBITDA
Wheels$ 11,857$ 7,877$ 1,200$ 20,934
Gunite 7,243 811 250 8,304
Brillion Iron Works 489 1,086 30 1,605
Corporate / Other (7,285) 446 (770) (7,609)
Continuing Operations$ 12,304$ 10,220$ 710$ 23,234
         
Imperial Group (10) 10
Consolidated Total$ 12,294$ 10,230$ 710$ 23,234
   
 Three Months Ended June 30, 2013
(In thousands)Income (loss)

from

Operations
Depreciation and

Amortization
OtherAdjusted

EBITDA
Wheels$ 11,751$ 7,735$1,200$ 20,686
Gunite 3,323 1,015 250 4,588
Brillion Iron Works 1,855 1,068 366 3,289
Corporate / Other (10,970) 758 (566) (10,778)
Continuing Operations$ 5,959$ 10,576$1,250$ 17,785
         
Imperial Group (259) 376 117
Consolidated Total$ 5,700$ 10,952$1,250$ 17,902
   
 Six Months Ended June 30, 2014
(In thousands)Income (loss)

from Operations
Depreciation and

Amortization
OtherAdjusted

EBITDA
Wheels$ 21,599$ 15,784$ 2,747$ 40,130
Gunite 10,521 1,600 500 12,621
Brillion Iron Works 1,764 2,195 60 4,019
Corporate / Other (15,011) 902 (1,471) (15,580)
Continuing Operations$ 18,873$ 20,481$ 1,836$ 41,190
         
Imperial Group (21) 21
Consolidated Total$ 18,852$ 20,502$ 1,836$ 41,190
   
 Six Months Ended June 30, 2013
(In thousands)Income (loss)

from Operations
Depreciation and

Amortization
OtherAdjusted

EBITDA
Wheels$ 17,494$ 15,973$ 3,259$ 36,726
Gunite 1,546 1,978 500 4,024
Brillion Iron Works 2,430 2,183 396 5,009
Corporate / Other (20,308) 1,502 (941) (19,747)
Continuing Operations$ 1,162$ 21,636$3,214$ 26,012
         
Imperial Group (1,451) 747 (704)
Consolidated Total$ (289)$ 22,383$ 3,214$ 25,308


We define Adjusted EBITDA as our net income or loss before income tax expense or benefit, interest expense, net, depreciation and amortization, restructuring, severance, and other charges, impairment, and currency losses, net. Adjusted EBITDA has been included because we believe that it is useful for us and our investors to measure our ability to provide cash flows to meet debt service. Adjusted EBITDA should not be considered an alternative to net income (loss) or other traditional indicators of operating performance and cash flows determined in accordance with accounting principles generally accepted in the United States ("GAAP"). We present the table of Adjusted EBITDA because covenants in the agreements governing our material indebtedness contain ratios based on this measure on a quarterly basis. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculations.

ACCURIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
 June 30,December 31,
(In thousands)20142013
   
ASSETS    
CURRENT ASSETS:    
Cash and cash equivalents$ 31,903$ 33,426
Customer and other receivables 81,171 59,520
Inventories 46,216 39,329
Other current assets 15,773 16,993
Total current assets 175,063 149,268
PROPERTY, PLANT AND EQUIPMENT, net 217,741 219,624
OTHER ASSETS:    
Goodwill and other assets 243,764 242,885
TOTAL$ 636,568$ 611,777
LIABILITIES AND STOCKHOLDERS' EQUITY    
CURRENT LIABILITIES:    
Accounts payable$ 63,786$ 47,527
Other current liabilities 41,895 42,472
Total current liabilities 105,681 89,999
LONG-TERM DEBT 340,709 330,183
OTHER LIABILITIES 125,194 129,711
STOCKHOLDERS' EQUITY:    
Total stockholders' equity 64,984 61,884
TOTAL$ 636,568$ 611,777

CONTACT: Investor Relations: Todd Taylor Email: ttaylor@accuridecorp.com Phone: (812) 962-5105 Media Relations: Timothy G. Weir, APR Email: tweir@accuridecorp.com Phone: (812) 962-5128



Accuride Corporation

Source: Accuride Corporation


For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: GlobeNewswire


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters