American Axle & Manufacturing Announces Record Fourth Quarter Earnings
DETROIT, Jan. 24 American Axle & Manufacturing Holdings, Inc., which is traded as AXL on the NYSE, today reported record fourth quarter 2001 earnings per share of 62 cents, an increase of 22% versus 51 cents per share in the fourth quarter 2000. This was ahead of the 53 cents per share consensus analyst estimates by 17%. Earnings for the full year 2001 were $2.36 per share versus $2.60 per share last year.
The company generated $56.8 million of cash flow provided by operations in the fourth quarter of 2001, versus a use of $3.3 million in the similar period of 2000. This cash flow was used to reduce the company's net debt levels resulting in a 62% net debt to capital ratio at year-end versus the 68% level at December 31, 2000.
Record sales in the fourth quarter of 2001 were $791.6 million, up 7% as compared to $738.4 million in the fourth quarter of 2000. Sales in the quarter were positively impacted by increased General Motors light truck production and a 9% increase in AAM content per light truck to more than $1,100. This was offset by reductions in GM passenger car related products and 10% decreases with non-GM customers. For the full year 2001, sales were a record $3.1 billion, representing an increase of 1%. This compares to an estimated 10% reduction in N.A. light vehicle production for the year and a 4% decrease in General Motors light truck production. Content per light truck increased 14% for the full year 2001 to in excess of $1,100.
Operating income was $62.9 million, or 8.0% of sales in the quarter, as compared to $53.1 million or 7.2% of sales for the fourth quarter of 2000. This improvement was due to the content increases discussed above, continuing cost controls and significant productivity improvements. For the full year 2001, operating income was $241.3 million, or 7.8% of sales, versus $259.4 million, or 8.5% of sales for the full year 2000.
``AAM's record fourth quarter performance and strong free positive cash flow resulted from our focus on designing and manufacturing new technology- based products that meet customer needs. Additionally we are pleased to deliver on our commitment of positive free cash flow as capital expenditures continue to ramp down,'' said American Axle & Manufacturing Co-Founder, Chairman & CEO Richard E. Dauch.
The company took an $11.7 million pretax charge, included in cost of goods sold, in the fourth quarter of 2001 to consolidate its operations located in the United Kingdom. This adversely impacted earnings per share by approximately 15 cents in the quarter. These actions were taken primarily due to the unfavorable pound sterling/euro exchange rate, which has adversely impacted the long-term competitiveness of its U.K. component operations in addition to the overall reduction of volumes in the European vehicle market. This charge reflects the consolidation of three facilities into two facilities and downsizing of associate levels, while maintaining the competitiveness of our core driveline operations.
Research and development spending (R&D) rose approximately 11% to $51.7 million for the year 2001 versus $46.4 million in the same period of 2000. This increase is primarily focused on developing new technologies for future products, including a major focus on modules. As a result of the company's R&D commitment, AAM generated over 71% of its fourth quarter sales from new products introduced to the market since mid-1998. The company generated nearly 70 percent of its year 2001 sales from new products introduced since mid-1998. This compares to 48% for the year 2000 and 30% for 1999. Three of the new technology-based products contributing to this increase are the 11.5 inch rear axle system, (featured on Motor Trend magazine's 2001 Truck of the Year the Chevrolet Silverado HD), the Integrated Oil Pan (IOP) Front Axle with Electronic Disconnect, and the PowerLite(TM) aluminum rear-axle system. The last two products are featured on the GMC Envoy (Motor Trend magazine's 2002 SUV of the Year), Chevrolet TrailBlazer and Oldsmobile Bravada.
Recent developments
During the fourth quarter 2001, the company announced that it had been awarded contracts to provide front and rear driveshafts for two future model- year sport utility vehicles for DaimlerChrysler. The company also will supply front and rear driveshafts for the all-new, heavy duty Dodge Ram full-size pick-up truck program. AAM also was awarded the contract to produce all- wheel-drive front and rear-axle systems and front and rear driveshafts for a future General Motors light-duty sport utility truck.
AAM is a world leader in the manufacture, engineering, design and validation of driveline systems and related components and modules, chassis systems and forged products for trucks, buses, sport utility vehicles, and passenger cars. In addition to 14 locations in the United States (in Michigan, New York and Ohio), AAM has offices and facilities in Brazil, England, Germany, Japan, Mexico and Scotland.
Certain statements contained in this press release which are not
historical facts contain forward-looking information with respect to the
company's plans, projections or future performance, the occurrence of which
involve risks and uncertainties that could cause the company's actual results
or plans to differ materially from those expected by the company which include
risk factors described in the company's filings with the Securities and
Exchange Commission.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
December 31, December 31,
------------------- ------------------
2001 2000 2001 2000
-------- -------- -------- ---------
(In millions, except per share data)
Net sales $ 791.6 $ 738.4 $ 3,107.2 $ 3,069.5
Cost of goods sold 687.6 640.2 2,697.5 2,643.3
--------- --------- --------- ----------
Gross profit 104.0 98.2 409.7 426.2
Selling, general and
administrative
expenses 40.1 44.0 164.4 162.6
Goodwill amortization 1.0 1.1 4.0 4.2
--------- --------- --------- ---------
Operating income 62.9 53.1 241.3 259.4
Net interest expense (12.2) (15.1) (59.4) (58.8)
Other (expense) income,
net (1.3) 1.2 (1.0) 2.8
--------- --------- ---------- ---------
Income before income
taxes 49.4 39.2 180.9 203.4
Income taxes 18.0 14.3 66.0 74.2
--------- --------- --------- ---------
Net income $ 31.4 $ 24.9 $ 114.9 $ 129.2
========= ========= ========= =========
Diluted earnings per
share $ 0.62 $ 0.51 $ 2.36 $ 2.60
========= ========= ========= =========
Diluted shares
outstanding 51.1 49.2 48.7 49.7
========= ========= ========= =========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
2001 2000
------------- -------------
(In millions)
ASSETS
--------
Current assets:
Cash and equivalents $ 12.3 $ 35.2
Accounts receivable, net 270.7 247.3
Inventories 158.0 160.4
Prepaid expenses and other 37.0 57.7
---------- ----------
Total current assets 478.0 500.6
Property, plant and equipment, net 1,448.7 1,200.1
Goodwill and other assets 232.5 201.8
---------- ----------
Total assets $ 2,159.2 $ 1,902.5
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities $ 475.3 $ 510.3
Long-term debt 878.2 817.1
Postretirement benefits and other
long-term liabilities 271.0 203.1
---------- ----------
Total liabilities 1,624.5 1,530.5
Stockholders' equity 534.7 372.0
---------- ----------
Total liabilities and stockholders'
equity $ 2,159.2 $ 1,902.5
========== ==========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended Year ended
December 31, December 31,
------------------- --------------------
2001 2000 2001 2000
--------- -------- --------- ----------
(In millions)
Operating activities
Net income $ 31.4 $ 24.9 $ 114.9 $ 129.2
Depreciation and
amortization 32.7 30.9 126.6 107.9
Other 61.4 75.5 (8.7) 15.1
--------- --------- --------- ---------
Net cash provided by
operating activities 125.5 131.3 232.8 252.2
Capital expenditures (68.7) (134.6) (375.5) (381.0)
--------- --------- --------- ---------
Net cash flow provided by
(used in) operations 56.8 (3.3) (142.7) (128.8)
Net (decrease) increase in
long-term debt (49.8) 0.5 61.5 44.3
Issuance of common stock,
net - - 57.7 -
Stock option exercises 0.4 1.1 1.0 1.1
Purchase of treasury stock - (21.3) - (21.3)
Effect of exchange rate changes
on cash 0.3 (0.3) (0.4) (0.3)
--------- --------- --------- ---------
Net increase (decrease) in
cash and equivalents 7.7 (23.3) (22.9) (105.0)
Cash and equivalents at
beginning of period 4.6 58.5 35.2 140.2
--------- --------- --------- ---------
Cash and equivalents at
end of period $ 12.3 $ 35.2 $ 12.3 $ 35.2
========= ========= ========= =========
=======================================================================
EBITDA (a) $ 94.4 $ 86.6 $ 367.8 $ 377.0
========= ========= ========= =========
(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.