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National Press Release
 | American Axle & Manufacturing Reports Fourth Quarter and Full Year 2008 Financial ResultsPublished 2009-01-30 08:02By American Axle & Manufacturing Holdings, Inc. |
Full Year 2008 Results
-- Full year sales of $2.1 billion
-- Net loss of $1.2 billion, or $23.73 per share
-- AAM's full year results reflect the adverse impact of approximately
$1.0 billion of special charges, asset impairments and other non-
recurring operating costs; approximately three-quarters of these
charges and costs were non-cash in the period and relate to the
implementation of new labor agreements, hourly and salaried attrition
program activity, plant closures and other actions to rationalize
capacity, redeploy underutilized assets and align AAM's business to
current and projected market requirements
-- 43% year-over-year decline in total light truck production volumes as
compared to the full year 2007
-- Content-per-vehicle of $1,391, approximately 8% higher than the
previous year
-- Non-GM sales of $544.6 million, or 26% of total net sales
AAM's results in the fourth quarter of 2008 were a net loss of
AAM's net loss for the full year 2008 was
"The year 2008 was a turbulent and transformational year for AAM," said
AAM Co-Founder, Chairman of the Board & Chief Executive Officer
"In 2008, we achieved historic gains in the market cost competitiveness
and operating flexibility of AAM's U.S. manufacturing base. We developed and
implemented a comprehensive restructuring, resizing and profit recovery plan
designed to increase capacity utilization and rebuild AAM's balance sheet
strength. We continued to invest in AAM's advanced product, process and
systems technology and expanded AAM's global manufacturing and sourcing
footprint. We provided exceptional value to our customers through AAM's
outstanding daily performance on product development, quality, reliability,
warranty, delivery and launch support. We grew AAM's new business backlog to
In 2008, AAM recorded approximately
These charges and costs are summarized in the following table:
Asset impairments, lease accruals and (in millions) EPS Impact
indirect inventory write-downs $603.7 $11.70
Attrition programs and benefit reductions
for U.S. hourly and salary associates 206.9 4.01
Accelerated Buydown Program (BDP) expense 51.9 1.01
Lump-sum signing bonus paid to UAW and IAM
associates at original U.S. locations 19.5 0.38
Accrual for Supplemental Unemployment
Benefits (SUB) 18.0 0.35
Valuation allowance for deferred tax assets 62.7 1.21
Other (primarily plant closure accruals
and asset redeployment costs) 22.7 0.44
Total special charges and non-recurring
operating costs recurring operating costs $985.4 $19.10
-- Asset impairment charges, operating lease accruals and indirect
inventory write-downs of
-- Special charges of
-- Special charge of
-- Special charges of
-- Special charge of
-- Special charges of
-- Other special charges and non-operating costs of
In 2007, AAM recorded special charges and non-recurring operating costs
related to a voluntary separation program at the Buffalo Gear, Axle & Linkage
facility in
In the fourth quarter of 2007, AAM recorded
Net sales for the full year 2008 were
Net sales in the fourth quarter of 2008 were
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 2008, AAM's content-per-
vehicle increased approximately 8% to
AAM's SG&A spending for the full year 2008 was
AAM defines free cash flow to be net cash provided by (or used in)
operating activities less capital expenditures net of proceeds from the sales
of equipment and dividends paid. Net cash used by operating activities for
the full year 2008 was
A conference call to review AAM's fourth quarter and full year 2008
results is scheduled today at
Non-GAAP Financial Information
In addition to the results reported in accordance with accounting
principles generally accepted in
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
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: GM and Chrysler LLC's
ability to comply with the terms of the Secured Term Loan Facility provided by
the U. S. Treasury as well as any additional requirements of the Troubled
Asset Relief Program (TARP) applicable to our customers, the impact on our
business of requirements imposed on, or actions taken by, any of our customers
in response to TARP or similar programs, global economic conditions, reduced
purchases of our products by General Motors Corporation (GM), Chrysler LLC
(Chrysler) or other customers; reduced demand for our customers' products
(particularly light trucks and SUVs produced by GM and Chrysler); 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' and suppliers' availability of financing for working capital,
capital expenditures, R&D and other general corporate purposes; our ability to
achieve cost reductions through ongoing restructuring actions; our ability to
achieve the level of cost reductions required to sustain global cost
competitiveness; adverse changes in the economic conditions or political
stability of our principal markets (particularly
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 additional information:
Media relations contact:
Renee B. Rogers
Manager, Corporate Communications and Media Relations
(313) 758-4882
renee.rogers@aam.com
Investor relations contact:
Christopher M. Son
Director, Investor Relations and Corporate Communications
(313) 758-4814
chris.son@aam.com
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,
-------------------- --------------------
2008 2007 2008 2007
---------- --------- --------- ----------
(In millions, except (In millions, except
per share data) per share data)
Net sales $503.0 $755.2 $2,109.2 $3,248.2
Cost of goods sold 474.6 757.0 2,974.4 2,969.8
-------- -------- -------- --------
Gross profit (loss) 28.4 (1.8) (865.2) 278.4
Selling, general and
administrative expenses 48.1 47.7 185.4 202.8
-------- -------- -------- --------
Operating income (loss) (19.7) (49.5) (1,050.6) 75.6
Interest expense (22.0) (14.8) (70.4) (61.6)
Investment income (loss) 2.0 3.3 2.5 9.3
Other income (expense), net
Debt refinancing cost - - - (5.5)
Other, net (3.0) (0.3) (2.8) (0.2)
-------- -------- -------- --------
Income (loss) before income taxes (42.7) (61.3) (1,121.3) 17.6
Income tax expense (benefit) 69.5 (34.5) 103.3 (19.4)
Minority interest 0.1 - 0.3 -
-------- -------- -------- --------
Net income (loss) $(112.1) $(26.8) $(1,224.3) $37.0
======== ======== ======== ========
Diluted earnings (loss) per share $(2.17) $(0.52) $(23.73) $0.70
======== ======== ======== ========
Diluted shares outstanding 51.6 51.5 51.6 52.7
======== ======== ======== ========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, December 31,
2008 2007
------------ ------------
(In millions)
ASSETS
Current assets
Cash and cash equivalents $198.8 $343.6
Short-term investments 77.1 -
Accounts receivable, net 186.9 264.0
AAM/GM agreement receivable 60.0 -
Inventories, net 111.4 242.8
Prepaid expenses and other 59.2 73.4
Deferred income taxes 5.5 19.5
------------ -----------
Total current assets 698.9 943.3
Property, plant and equipment, net 1,064.2 1,696.2
Deferred income taxes 20.7 78.7
Goodwill 147.8 147.8
Other assets and deferred charges 98.6 57.4
------------ -----------
Total assets $2,030.2 $2,923.4
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Accounts payable $250.9 $313.8
Accrued expenses and other 288.1 197.8
------------ -----------
Total current liabilities 539.0 511.6
Long-term debt 1,139.9 858.1
Deferred income taxes 4.8 6.6
Deferred revenue 178.2 66.0
Postretirement benefits and other
long-term liabilities 600.4 581.7
------------ -----------
Total liabilities 2,462.3 2,024.0
Stockholders' equity (deficit) (432.1) 899.4
------------ -----------
Total liabilities and stockholders'
equity (deficit) $2,030.2 $2,923.4
============ ===========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three months ended Twelve months ended
December 31, December 31,
------------------- ------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(In millions) (In millions)
Operating activities
Net income (loss) $(112.1) $(26.8) $(1,224.3) $37.0
Depreciation and
amortization 34.3 58.4 199.5 229.4
Other 12.0 4.7 861.7 101.5
--------- --------- --------- ---------
Net cash flow provided by
(used in) operating
activities (65.8) 36.3 (163.1) 367.9
Purchases of property,
plant & equipment (37.4) (53.5) (140.2) (186.5)
Payment of deposits for
acquisition of property
and equipment (7.1) - (7.1) -
Acquisition, net (10.7) - (10.7)
Proceeds from sales of assets 1.1 - 3.4 -
Reclass of short-term investments 40.1 - (77.1) -
--------- --------- --------- ---------
Net cash flow provided by
(used in) operations (79.8) (17.2) (394.8) 181.4
Net increase (decrease) in
long-term debt (157.5) 4.8 285.4 172.3
Debt issuance costs (13.4) - (13.4) (7.5)
Repurchase of treasury stock - (0.1) (0.1) (2.0)
Employee stock option exercises,
including tax benefit - 2.1 0.9 17.3
Dividends paid (1.0) (8.0) (18.3) (31.8)
--------- --------- --------- ---------
Net cash flow provided by
(used in) financing activities (171.9) (1.2) 254.5 148.3
Effect of exchange rate changes
on cash (3.7) (0.1) (4.5) 0.4
--------- --------- --------- ---------
Net increase (decrease) in cash
and cash equivalents (255.4) (18.5) (144.8) 330.1
Cash and cash equivalents at
beginning of period 454.2 362.1 343.6 13.5
--------- --------- --------- ---------
Cash and cash equivalents at
end of period $198.8 $343.6 $198.8 $343.6
========= ========= ========= =========
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 Twelve months ended
December 31, December 31,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(In millions) (In millions)
Net income (loss) $(112.1) $(26.8) $(1,224.3) $37.0
Interest expense 22.0 14.8 70.4 61.6
Income taxes 69.5 (34.5) 103.3 (19.4)
Depreciation and amortization 34.3 58.4 199.5 229.4
--------- --------- --------- ---------
EBITDA $13.7 $11.9 $(851.1) $308.6
========= ========= ========= =========
Net debt(b) to capital
December 31, December 31,
2008 2007
(In millions, except percentages)
Total debt $1,139.9 $858.1
Less: cash and cash equivalents 198.8 343.6
Net debt at end of period 941.1 514.5
Stockholders' equity (deficit) (432.1) 899.4
Total invested capital at end of period $509.0 $1,413.9
Net debt to capital(c) 184.9% 36.4%
Net Operating Cash Flow and Free Cash Flow(d)
Three months ended Twelve months ended
December 31, December 31,
------------------- -------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(In millions) (In millions)
Net cash provided by operating
activities $(65.8) $36.3 $(163.1) $367.9
Less: Purchases of property, plant
& equipment and proceeds from sale
of equipment (36.3) (53.5) (136.8) (186.5)
Payment of deposits for
acquisition of property
and equipment (7.1) - (7.1) -
--------- --------- --------- ---------
Net operating cash flow (109.2) (17.2) (307.0) 181.4
Less: dividends paid (1.0) (8.0) (18.3) (31.8)
--------- --------- --------- ---------
Free cash flow $(110.2) $(25.2) $(325.3) $149.6
========= ========= ========= =========
(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 (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 operating
activities 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.
SOURCE American Axle & Manufacturing Holdings, Inc.
