American Axle & Manufacturing Announces Q1 Earnings Per
Share
Significant gains in new-technology sales
DETROIT, May 1 American Axle & Manufacturing Holdings,
Inc. ("AAM") today reported first quarter 2001 earnings per share
of 51 cents, beating the consensus analyst earnings estimate of 43 cents per
share by 19%.
Despite an estimated 18% decrease in light truck production by AAM's
largest customer, General Motors, sales in the first quarter of 2001 were down
only 9% to $761.1 million as compared to $835.9 million in the first quarter
of 2000. GM revenues comprised approximately 85.5% of the company's total
revenues in the quarter.
Content per light truck increased 17% for the quarter to in excess of
$1,100 to help offset customer vehicle production declines. This content
increase is primarily a result of sales of higher value-added technology
products, particularly AAM's new 11.5" rear axle system, and additional four-
wheel-drive and all-wheel-drive penetration. The company expects that content
per light truck comparisons for the remainder of the year will moderate as
industry volumes increase, and that the full year content increase will be in
the 5% to 7% range.
Operating income was $53.5 million, or 7.0% of sales in the first quarter
of 2001, as compared to $76.5 million or 9.2% of sales for the first quarter
of 2000. Net income was $24.0 million for the first quarter of 2001 versus
$40.1 million for the same period of 2000.
"Our investment in new product technology is helping our top line sales
while our management team is proactively adjusting our costs to deal with the
changing industry volumes. This enabled us to beat analyst estimates in what
was a tough quarter for the automotive supplier industry," said American Axle
& Manufacturing Co-Founder, Chairman & CEO Richard E. Dauch.
Research and development spending (R&D) rose 12% to $11.7 million in the
first quarter of 2001 versus $10.4 million in the same period of 2000. This
increase is a continuation of the investments AAM is making to develop new
technologies for future products, including a major focus on modules. As a
result of the company's R&D commitment, AAM generated approximately 70% of its
first quarter 2001 sales from new products introduced to the market since mid-
1998. This compares to approximately 40% for the first quarter of 2000.
This increase was impacted by the mix of products sold during the first
quarter and is expected to represent approximately 67% of AAM's sales for the
full year 2001 versus 47% for the full year 2000.
During the first quarter of 2001, AAM supported the launch of the all-new
GM mid-sized SUVs, the Chevrolet TrailBlazer, the GMC Envoy and the Oldsmobile
Bravada. These products feature AAM's Integrated Oil Pan (IOP) front axle
module with electronic disconnect and the PowerLite(TM) rear-axle system.
The IOP front axle module was completely designed and developed by AAM
engineers to meet customer needs for improved performance, durability, weight
reduction, operating temperature control, and vehicle system electrical
interface compatibility and control with a particular focus on unique vehicle
packaging. The PowerLite(TM) rear-axle system incorporates advanced
materials, long-life sealing technologies, advanced noise reduction systems,
and power-dense hypoid and differential gear design and world-class
manufacturing techniques. It also utilizes an aluminum carrier which has the
load-bearing capacity of a cast-iron carrier but provides significant weight
savings over traditional rear-axle systems.
The company used $172.3 million of cash flow in operations in the first
quarter of 2001. This use was primarily a result of the final change in
contractual payment terms agreed to with GM in 1994 and a significant amount
of capital expenditures to support new product and customer programs required
to replace a substantial portion of our product portfolio with newer
technology-based products. We expect a significant portion of our 2001
capital expenditures to be made in the first half of the year. The lower
capital expenditure level in the last half of the year is expected to result
in AAM generating positive cash flow from operations for the last half of
2001.
Based on current industry trends and expectations, AAM is still
comfortable with the current analyst consensus estimates of approximately 55
cents per share in the second quarter of 2001.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months ended
March 31,
----------
2001 2000
------- ------
(In millions, except per share data)
Net sales $ 761.1 $ 835.9
Cost of goods sold 665.2 717.1
---------- ----------
Gross profit 95.9 118.8
Selling, general and administrative expenses 41.4 41.3
Goodwill amortization 1.0 1.0
---------- ----------
Operating income 53.5 76.5
Net interest expense (15.6) (13.2)
Other (expense) income, net (0.5) 0.3
---------- ----------
Income before income taxes 37.4 63.6
Income taxes 13.4 23.5
---------- ----------
Net income $ 24.0 $ 40.1
========== ==========
Diluted earnings per share $ 0.51 $ 0.80
========== ==========
Diluted shares outstanding 46.6 50.1
========== ==========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
------- -------
(Unaudited)
(In millions)
ASSETS
------
Current assets:
Cash and equivalents $ 5.9 $ 35.2
Accounts receivable, net 351.4 247.3
Inventories 166.2 160.4
Prepaid expenses and other 53.1 57.7
---------- ----------
Total current assets 576.6 500.6
Property, plant and equipment, net 1,270.9 1,200.1
Goodwill and other assets 197.9 201.8
---------- ----------
Total assets $ 2,045.4 $ 1,902.5
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
---------------------------------------
Current liabilities $ 483.2 $ 510.3
Long-term debt 959.1 817.1
Postretirement benefits and other
long-term liabilities 209.5 203.1
---------- ----------
Total liabilities 1,651.8 1,530.5
Stockholders' equity 393.6 372.0
---------- ----------
Total liabilities and
stockholders' equity $ 2,045.4 $ 1,902.5
========== ==========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended
March 31,
2001 2000
------- -------
(Unaudited - in millions)
Operating activities
Net income $ 24.0 $ 40.1
Depreciation and amortization 31.1 24.6
Other (123.0) (72.7)
---------- ----------
Net cash used in operating activities (67.9) (8.0)
Capital expenditures (104.4) (90.2)
---------- ----------
Net cash flow used in operations (172.3) (98.2)
Net increase (decrease) in long-term debt 143.2 (8.2)
Stock option exercises 0.1 -
Effect of exchange rate changes on cash (0.3) -
---------- ----------
Net decrease in cash and equivalents (29.3) (106.4)
Cash and equivalents at
beginning of period 35.2 140.2
---------- ----------
Cash and equivalents at end of period $ 5.9 $ 33.8
========== ==========
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EBITDA (a) $ 84.6 $ 104.1
========== ==========
(a) EBITDA represents income from continuing operations before interest
expense, income taxes, depreciation and amortization. EBITDA should not be
construed as income from operations, net income or cash flow from operating
activities as determined by generally accepted accounting principles. Other
companies may calculate EBITDA differently.
