Accuride Corporation Reports Third Quarter Results for 2004
EVANSVILLE, Ind.--Nov. 9, 2004--Accuride Corporation today announced net sales of $123.5 million for the third quarter ended September 30, 2004. This compares to net sales of $87.4 million for the third quarter of 2003, an increase of 41.3%. The improvement is primarily driven by an increase in Class 5-8 builds of 35.3% from a year ago and greater industry penetration of aluminum versus steel wheels. For the nine months ended September 30, 2004, net sales were $355.5 million compared to net sales of $269.9 million for the same nine-month period in 2003, an increase of 31.7%.Adjusted EBITDA of $27.3 million for the third quarter ended September 30, 2004, is up from $16.9 million for the third quarter of 2003, an increase of 61.5%. The resulting EBITDA margin has increased to 22.1% of net sales from 19.3% of net sales in last year's third quarter, primarily due to increased volume. For the first nine months of 2004, Adjusted EBITDA increased by $22.9 million, or 43.1%, to reach $76.0 million. The purpose and reconciliation of Adjusted EBITDA for the Company to the most directly comparable GAAP measure is set forth on pages 4-5 of this press release.
"We are pleased with our results for the quarter as revenue and EBITDA continue to grow driven by improving industry fundamentals," said Terry Keating, Accuride's President and CEO. "However, higher raw material prices continue to impact margins and are expected to remain challenging into 2005."
The Company's liquidity position remained strong at September 30, 2004, with $40.2 million in cash and revolver availability of $41.0 million.
Accuride had net income of $7.0 million, or 5.7% of net sales, for the third quarter ended September 30, 2004, compared to a net loss of $2.8 million, or a negative 3.2% of net sales, for the third quarter of 2003. For the nine months ended September 30, 2004, Accuride had net income of $16.5 million, or 4.6% of net sales, compared to a net loss of $9.3 million, or a negative 3.4% of net sales, for the same nine-month period in 2003.
The Company will conduct a conference call to review and discuss its third quarter results on Wednesday, November 10, 2004, at 1:30 p.m. (CDT). The phone number to access the conference call is (800) 450-0785 in the United States, or (612) 332-0634 internationally. A replay will be available beginning November 10, 2004, at 5 p.m. (CDT), through November 17, 2004, by calling (800) 475-6701 in the United States, or (320) 365-3844 internationally, access code 751809. The financial results for the three-month and nine-month period ended September 30, 2004, will also be archived at http://www.accuridecorp.com.
Accuride Corporation is North America's largest manufacturer and supplier of wheels for heavy/medium trucks and trailers. The Company offers the broadest product line in the North American heavy/medium wheel industry and is the only North American manufacturer and supplier of both steel and forged aluminum heavy/medium wheels. Accuride Corporation also produces wheels for buses, commercial light trucks, pick-up trucks, sport utility vehicles, and vans. Accuride Corporation has steel wheel operations in Henderson, Kentucky; London, Ontario, Canada; and Monterrey, Mexico. Accuride has aluminum wheel operations in Erie, Pennsylvania, and Cuyahoga Falls, Ohio. Accuride is also involved in a commercial tire and wheel assembly joint venture in Springfield, Ohio. For more information, visit Accuride's website at http://www.accuridecorp.com.
ACCURIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Three Months Ended
September 30,
-----------------------
2004 2003
----------- -----------
NET SALES $ 123,463 $ 87,439
COST OF GOODS SOLD 97,282 74,291
---------- ----------
GROSS PROFIT $ 26,181 $ 13,148
OPERATING EXPENSES:
Selling, General & Administrative 5,758 5,499
---------- ----------
INCOME FROM OPERATIONS 20,423 7,649
OTHER INCOME (EXPENSE):
Interest Income 55 49
Interest (Expense) (9,214) (10,256)
Refinancing Costs - (7)
Equity in Earnings of Affiliates 148 81
Other Income (Expense), Net 595 (77)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 12,007 (2,561)
INCOME TAX PROVISION (BENEFIT) 5,018 232
---------- ----------
NET INCOME (LOSS) $ 6,989 $ (2,793)
========== ==========
Nine Months Ended
September 30,
-----------------------
2004 2003
----------- -----------
NET SALES $ 355,495 $ 269,894
COST OF GOODS SOLD 282,207 222,608
---------- ----------
GROSS PROFIT $ 73,288 $ 47,286
OPERATING:
Selling, General & Administrative 18,547 17,693
---------- ----------
INCOME FROM OPERATIONS 54,741 29,593
OTHER INCOME (EXPENSE):
Interest Income 110 180
Interest (Expense) (27,490) (28,641)
Refinancing Costs - (11,264)
Equity in Earnings of Affiliates 441 461
Other (Expense), Net (942) (581)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 26,860 (10,252)
INCOME TAX PROVISION (BENEFIT) 10,326 (928)
---------- ----------
NET INCOME (LOSS) $ 16,534 $ (9,324)
========== ==========
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Three Months Ended
September 30,
-----------------------
2004 2003
----------- -----------
NET INCOME (LOSS) 6,989 (2,793)
Net Interest Expense 9,159 10,207
Income Taxes 5,018 232
Refinancing Costs - 7
Equity in Earnings of Affiliates (148) (81)
Other Expense (Income), Net (595) 77
---------- ----------
INCOME FROM OPERATIONS 20,423 7,649
Depreciation 6,164 7,190
Equity in Earnings of Affiliates 148 81
Restructuring, severance and other charges 593 1,969
---------- ----------
ADJUSTED EBITDA $ 27,328 $ 16,889
========== ==========
Nine Months Ended
September 30,
-----------------------
2004 2003
----------- -----------
NET INCOME (LOSS) 16,534 (9,324)
Net Interest Expense 27,380 28,461
Income Taxes 10,326 (928)
Refinancing Costs - 11,264
Equity in Earnings of Affiliates (441) (461)
Other Expense, Net 942 581
---------- ----------
INCOME FROM OPERATIONS 54,741 29,593
Depreciation 19,936 21,065
Equity in Earnings of Affiliates 441 461
Restructuring, severance and other charges 833 1,969
---------- ----------
ADJUSTED EBITDA $ 75,951 $ 53,088
========== ==========
a) For the three months ending September 30, 2004, Adjusted EBITDA
represents income from operations plus depreciation plus equity in
earnings of affiliates, plus (i) $0.1 million for costs associated
with the fire damage and resulting business interruption sustained at
our facility in Cuyahoga Falls, Ohio in August 2003, and (ii) $0.5 for
costs associated with roof damage and resulting business interruption
sustained at our facility in Cuyahoga Falls, Ohio. Items (i) and (ii)
affected gross profit in 2004. For the three months ending September
30, 2003, Adjusted EBITDA represents income from operations plus
depreciation plus equity in earnings of affiliates, plus (i) $0.4
million for strike contingency costs associated with recent renewal of
our labor contract at our facility in Erie, Pennsylvania, (ii) $0.3
million for pension related costs at our facility in London, Ontario,
and (iii) $1.2 million for costs associated with the fire damage and
resulting business interruption sustained at our facility in Cuyahoga
Falls, Ohio in August 2003. Items (i), (ii) and (iii) affected gross
profit in 2003.
For the nine months ending September 30, 2004, Adjusted EBITDA
represents income from operations plus depreciation plus equity in
earnings of affiliates, plus (i) $0.3 million for costs associated
with the fire damage and resulting business interruption sustained at
our facility in Cuyahoga Falls, Ohio in August 2003, and (ii) $0.5 for
costs associated with roof damage and resulting business interruption
sustained at our facility in Cuyahoga Falls, Ohio. Items (i) and (ii)
affected gross profit in 2004. For the nine months ending September
30, 2003, Adjusted EBITDA represents income from operations plus
depreciation plus equity in earnings of affiliates, plus (i) $0.4
million for strike contingency costs associated with recent renewal of
our labor contract at our facility in Erie, Pennsylvania, (ii) $0.3
million for pension related costs at our facility in London, Ontario,
and (iii) $1.2 million for costs associated with the fire damage and
resulting business interruption sustained at our facility in Cuyahoga
Falls, Ohio, in August 2003. Items (i), (ii) and (iii) affected gross
profit in 2003.
b) Adjusted EBITDA is not intended to represent cash flow as defined
by generally accepted accounting principles ("GAAP") and should not be
considered as an indicator of cash flow from operations. Adjusted
EBITDA represents income from operations plus depreciation plus equity
in earnings of affiliates plus non-recurring items. However, other
companies may calculate Adjusted EBITDA differently. Accuride has
included information concerning Adjusted EBITDA in this press release
because Accuride's management and our board of directors use it as
measure of our performance to internal business plans to which a
significant portion of management incentive programs are based. In
addition, future investment and capital allocation decisions are based
on Adjusted EBITDA. Investors and industry analysts use Adjusted
EBITDA to measure the Company's performance to historic results and to
the Company's peer group. The Company has historically provided the
measure in previous press releases and believes it provides
transparency and continuity to investors for comparable purposes.
Certain financial covenants in our borrowing arrangements are tied to
similar measures. Adjusted EBITDA margin represents Adjusted EBITDA as
a percentage of net sales.