Accuride Corporation Reports First Quarter Results for 2006; Revenue Increased by 10.1% on a Pro Forma Basis to $359.9 Million; EBITDA Increased by 15.7% on a Pro Forma Basis to $54.5 Million; Net Income Rises to $20.0 Million
EVANSVILLE, Ind.--May 3, 2006--Accuride Corporation today announced net sales of $359.9 million for the first quarter ended March 31, 2006. This compares to net sales of $272.6 million for the first quarter of 2005. Net income was $20.0 million, or $0.58 per diluted share, for the quarter compared to $0.2 million, or $0.01 per diluted share, for the first quarter of 2005. The results reflect continuing strength in the commercial vehicle industry, with Class 5-8 truck and trailer builds up 7.0% over the prior year, and the acquisition of Transportation Technologies Industries, Inc. ("TTI") on January 31, 2005.Pro Forma Results for the Acquisition of TTI
The Company's net sales were $359.9 million for the first quarter of 2006 compared to pro forma net sales of $326.9 million for the first quarter of the prior year, an increase of 10.1%. Pro forma results for the first quarter of 2005 give effect to the Company's acquisition of TTI and related financings as if these events occurred on January 1, 2005.
Adjusted EBITDA was $54.5 million for the first quarter of 2006 compared to pro forma Adjusted EBITDA of $47.1 million for the prior year, an increase of 15.7%. The purpose and reconciliation of Adjusted EBITDA for the Company to the most directly comparable GAAP measure is set forth in the accompanying schedules.
Net income was $20.0 million, or $0.58 per diluted share, for the first quarter of 2006 compared to the pro forma net income of $1.5 million, or $0.06 per diluted share, for the first quarter of 2005. Net income for the first quarter of 2006 includes pre-tax cost of $0.1 million related to SFAS No. 123(R), Share-Based Payment. Pro forma net income for first quarter of 2005 includes pre-tax costs of $19.4 million in refinancing costs and loss on extinguishment of debt and $1.8 million in other non-operating/non-recurring items.
Liquidity and Cash Flow
At March 31, 2006, the Company had $25.4 million of cash and $697.7 million of total debt for net debt of $672.3 million, which increased as anticipated by $23.0 million in the first quarter. For the first quarter of 2006, cash used from operating activities was $17.3 million and capital expenditures totaled $6.5 million, resulting in negative free cash flow of $23.8 million.
Review and Outlook
"We are pleased with the results for the quarter as revenue and EBITDA remained strong due to record production levels by our customers and continued operational improvements from our components business," said Terry Keating, Accuride's CEO. "For the remainder of the calendar year, we expect revenue to be driven by strong market demand, but we expect to experience some margin pressure from rising raw material costs."
The Company will conduct a conference call to review its first quarter results and preview the remainder of 2006 on Thursday, May 4, 2006, at 2:30 p.m. CST. The phone number to access the conference call is (800) 659-1966 in the United States, or (617) 614-2711 internationally, access code 38785153. A replay will be available beginning May 4, 2006, at 4:30 p.m. CST, through May 1, 20061, 2006, by calling (888) 286-8010 in the United States, or (617) 801-6888 internationally, access code 14487230. The financial results for the three-month period ended March 31, 2006, will be also archived at http://www.accuridecorp.com.
Accuride Corporation is one of the largest and most diversified manufacturers and suppliers of commercial vehicle components in North America. Accuride's products include commercial vehicle wheels, wheel-end components and assemblies, truck body and chassis parts, seating assemblies and other commercial vehicle components. Accuride's products are marketed under its brand names, which include Accuride, Gunite, Imperial, Bostrom, Fabco and Brillion. For more information, visit Accuride'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 the Private Securities Litigation Reform Act of 1995, including statements regarding the Company's expectations, hopes, beliefs and intentions on strategies regarding the future and statements related to the effect of the TTI acquisition on Accuride's future results. It is important to note that the Company's actual future results could differ materially from those projected in such forward-looking statements because of a number of factors, including but not limited to, the ability to successfully integrate the above described acquisition, 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 the Company's Securities and Exchange Commission filings. Accuride assumes no obligation to update the information included in this release.
The unaudited pro forma consolidated statement of operations has been adjusted to give effect to acquisition of TTI and related financings as if these events occurred on January 1, 2005. The unaudited pro forma financial data is for informational purposes only and do not purport to present what our results of operations and financial condition would have been had the acquisition and related financing actually occurred on these earlier dates, nor do they project our results of operations for any future period or our financial condition in the future. In addition, the pro forma adjustments, as described herein, may differ from preliminary estimates when the respective transactions occur or the purchase accounting analysis is complete.
ACCURIDE CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Historical Results Pro Forma Results(1)
------------------------ ------------------------
Three Months Ended March Three Months Ended March
31, 31,
------------------------ ------------------------
2006 2005(2) 2006 2005(3)
------------ ----------- ------------ -----------
NET SALES $359,925 $272,616 $359,925 $326,946
COST OF GOODS SOLD 303,911 229,733 303,911 278,543
------------ ----------- ------------ -----------
GROSS PROFIT 56,014 42,883 56,014 48,403
OPERATING EXPENSES:
Selling, General &
Administrative 13,689 11,976 13,689 14,786
------------ ----------- ------------ -----------
INCOME FROM
OPERATIONS 42,325 30,907 42,325 33,617
OTHER INCOME
(EXPENSE):
Interest Income 49 81 49 81
Interest (Expense) (11,679) (12,548) (11,679) (13,331)
Refinancing Costs
and Loss on
extinguishment of
debt - (19,438) - (19,438)
Equity in Earnings
of Affiliates 215 179 215 179
Other Income, Net 602 (134) 602 (138)
------------ ----------- ------------ -----------
INCOME (LOSS) BEFORE
INCOME TAXES 31,512 (953) 31,512 970
INCOME TAX PROVISION
(BENEFIT) 11,477 (1,141) 11,477 (520)
------------ ----------- ------------ -----------
NET INCOME $20,035 $188 $20,035 $1,490
============ =========== ============ ===========
Weighted average
common shares
outstanding - Basic 33,982 19,968 33,982 22,623
Basic income per
share $0.59 $0.01 $0.59 $0.07
Weighted average
common shares
outstanding -
Diluted 34,526 20,676 34,526 23,331
Diluted income per
share $0.58 $0.01 $0.58 $0.06
Note:
1) Pro forma results have been adjusted to give effect to the
acquisition of TTI and related financings as if these events
occurred on January 1, 2005.
2) Certain amounts in the first quarter of 2005 consolidated financial
statements have been reclassified to conform to the 2006
presentation. Included in these reclassifications are certain costs
totaling $3.4 million for the three months ended March 31, 2005
that have been reclassified from selling, general, and
administrative expenses to cost of goods sold. These
reclassifications do not have any impact on net income and are
immaterial to the consolidated statements of income.
3) Certain amounts in the first quarter of 2005 pro forma
consolidated financial statements have been reclassified to conform
to the 2006 presentation. Included in these reclassifications are
certain costs totaling $5.0 million for the three months ended
March 31, 2005 that have been reclassified from selling, general,
and administrative expenses to cost of goods sold. These
reclassifications do not have any impact on pro forma net income
and are immaterial to the pro forma consolidated statements of
income.
ACCURIDE CORPORATION
CONSOLIDATED ADJUSTED EBITDA
(DOLLARS IN THOUSANDS)
(UNAUDITED)
Historical Results Pro Forma Results(1)
------------------------ ------------------------
Three Months Ended March Three Months Ended March
31, 31,
------------------------ ------------------------
2006 2005 2006 2005
------------ ----------- ------------ -----------
NET INCOME $20,035 $188 $20,035 $1,490
Net Interest Expense 11,630 31,905 11,630 32,688
Income Tax Expense
(Benefit) 11,477 (1,141) 11,477 (520)
Depreciation and
Amortization 11,810 9,917 11,810 11,521
------------ ----------- ------------ -----------
EBITDA 54,952 40,869 54,952 45,179
Restructuring,
severance and other
charges(2) - 1,753 - 1,753
Items related to our
credit agreement(3) (425) 134 (425) 138
------------ ----------- ------------ -----------
ADJUSTED EBITDA $54,527 $42,756 $54,527 $47,070
============ =========== ============ ===========
Note:
1) Pro forma results have been adjusted to give effect to the
acquisition of TTI and related financings as if these events
occurred on January 1, 2005.
2) For the three months ended March 31, 2005, Adjusted EBITDA and pro
forma Adjusted EBITDA represent net income before net interest
expense, income tax expense, depreciation and amortization, plus
(i) $1.8 million for costs related to the sale of inventory that
has been adjusted to fair value. Item (i) affected gross profit.
3) 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 March 31, 2006, items related
to our credit agreement consist of foreign currency income and
other income or expenses of $0.4 million. For the three months
ended March 31, 2005, items related to our credit agreement consist
of foreign currency loss and other income or expenses of $0.1
million.
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 net income before net interest expense, income tax
(expense) benefit, depreciation and amortization 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 a 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.
ACCURIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
March 31, December 31,
ASSETS 2006 2005
----------- ------------
CURRENT ASSETS
Cash and cash equivalents $25,378 $48,415
Customer and other receivables, net 194,912 141,921
Inventories, net 117,644 118,896
Supplies 18,278 17,426
Other current assets 27,980 25,599
----------- ------------
TOTAL CURRENT ASSETS 384,192 352,257
PROPERTY, PLANT AND EQUIPMENT, NET 314,024 317,972
Goodwill and other assets 548,763 550,125
----------- ------------
TOTAL $1,246,979 $1,220,354
=========== ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $118,592 $114,990
Current portion of long-term debt - -
Other current liabilities 81,143 82,596
----------- ------------
TOTAL CURRENT LIABILITIES 199,735 197,586
LONG-TERM DEBT, less current portion 697,725 697,725
OTHER LIABILITIES 152,908 149,300
TOTAL STOCKHOLDERS' EQUITY 196,611 175,743
----------- ------------
TOTAL $1,246,979 $1,220,354
=========== ============