American Axle & Manufacturing Announces Record Q4 And 1999 Earnings
26 January 2000
American Axle & Manufacturing Announces Record Fourth-Quarter And Full-Year 1999 Earnings
1999 net sales, net income and EPS at all-time highs
DETROIT, Jan. 26 -- American Axle & Manufacturing Holdings,
Inc. today reported fourth-quarter 1999 net income of $27.5
million, an increase of $12.8 million over the $14.7 million reported in the
fourth quarter of 1998. Earnings per share increased 65% to 56 cents on a
diluted basis, versus 34 cents per share during the same period the prior
year.
Overall revenues increased 17% to $735.8 million for the fourth quarter of
1999 as compared to $629.6 million in the fourth quarter of 1998. The primary
factors for this growth are continued strong demand for the company's
automotive products, higher average dollar content per vehicle and the impact
of 1999 acquisitions (Colfor Manufacturing, Inc. and MSP Industries
Corporation).
For the year ended December 31, 1999, sales revenue was $2.953 billion,
representing an increase of $912.5 million, or 45%, from the $2.041 billion
generated in 1998. Net income for 1999 was $115.6 million, or $2.34 per share
on a diluted basis, versus net income of $3.5 million, or 8 cents per share,
for 1998.
Operating income improved to $59.5 million, or 8.1% of sales in the
quarter, as compared to $35.9 million or 5.7% for the fourth quarter of 1998.
For the year ended December 31, 1999, operating income was $242.1 million, or
8.2% of revenue, versus $50.2 million, or 2.5%, for the same period in 1998.
"We are delighted to continue our solid earnings performance with a strong
fourth quarter and an excellent full year 1999," said American Axle &
Manufacturing Chairman, CEO & President Richard E. Dauch. "We expect this
earnings strength to continue into the year 2000."
Recent developments
The company is making significant progress on its strategies of
diversifying and strengthening its customer base and expanding its product
offerings. During the fourth quarter, AAM announced that it had been selected
as the supplier of front and rear axles for a DaimlerChrysler Dodge Ram full-
size pick-up truck program beginning model year 2003 with annual volumes
expected to exceed 200,000. This is AAM's first opportunity to produce axles
for DaimlerChrysler for the North American market. It follows AAM's third-
quarter announcement that it will provide rear axles to DaimlerChrysler for
its six-ton Mercedes transporter van, model year 2001, for the European
market.
The Company also announced that it had established a majority-owned joint
venture with Hubner Industria Mecanica Ltda. of Curitiba, Parana in Southern
Brazil. The joint venture, AAM do Brasil, gives AAM a manufacturing and
operations presence in South America. This joint venture machines a wide
variety of components for automotive OEMs from around the world.
These new programs and actions further diversify the company's product
portfolio and customer base. Taking into account the company's recent
acquisitions and its ability to secure new customers, GM revenues comprised
approximately 84% of the company's total revenues for the fourth quarter 1999
and approximately 86% for the full year 1999 versus 93% for the year ended
December 31, 1998.
Richard E. Dauch added: "We are delighted to have made this progress in
achieving our key initiatives to diversify our customer base, expand our
product portfolio, increase our technological capabilities, and expand our
geographic presence."
AAM is a world leader in the manufacture, engineering and design of
driveline systems, chassis systems and forged products for trucks, buses,
sport utility vehicles, and passenger cars. In addition to 13 locations in
the United States (in Michigan, Ohio and New York), 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.
Media relations contact: Investor relations contact:
Karen J. Manardo Robert A. Krause
Manager, Media Relations Vice President & Treasurer
& Communications 313-974-3074
313-974-2945 krauser@aam.com
ManardK@aam.com
Or visit the AAM website at http://www.aam.com
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
Three months ended Year ended
December 31, December 31,
------------------ ----------------
1999 1998 1999 1998
-------- --------- -------- -------
(unaudited) (unaudited)
(In millions, except per share data)
Net sales $735.8 $629.6 $2,953.1 $2,040.6
Cost of goods sold 636.9 559.2 2,564.3 1,884.2
-------- --------- -------- --------
Gross profit 98.9 70.4 388.8 156.4
Selling, general and
administrative expenses 38.3 34.4 143.3 106.1
Goodwill amortization 1.1 0.1 3.4 0.1
-------- --------- -------- --------
Operating income 59.5 35.9 242.1 50.2
Net interest expense (13.2) (11.9) (54.6) (44.3)
Other expense, net (2.7) (0.5) (4.1) (0.3)
-------- --------- -------- --------
Income before income taxes 43.6 23.5 183.4 5.6
Income taxes 16.1 8.8 67.8 2.1
-------- --------- -------- --------
Net income $27.5 $14.7 $115.6 $3.5
======== ========= ======== ========
Diluted earnings per share $0.56 $0.34 $2.34 $0.08
======== ========= ======== ========
Diluted shares outstanding 49.9 43.3 49.5 43.3
======== ========= ======== ========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, December 31,
1999 1998
------------- -------------
(Unaudited)
(In millions)
ASSETS
Current assets:
Cash and equivalents $140.2 $4.5
Accounts receivable, net 194.0 123.8
Inventories 133.3 137.1
Prepaid expenses and other 42.0 28.6
---------- ----------
Total current assets 509.5 294.0
Property, plant and equipment, net 929.0 829.3
Goodwill and other assets 238.6 102.9
---------- ----------
Total assets $1,677.1 $1,226.2
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $446.7 $362.9
Long-term debt 774.9 693.4
Postretirement benefits and
other long-term liabilities 191.8 129.5
---------- ----------
Total liabilities 1,413.4 1,185.8
Stockholders' equity 263.7 40.4
---------- ----------
Total liabilities and
stockholders' equity $1,677.1 $1,226.2
========== ==========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
1998 PRO FORMA CONDENSED CONSOLIDATED
STATEMENTS OF INCOME (a)
Pro forma
--------------------------------------
Three months
ended Year ended
December 31, 1998 December 31, 1998
----------------- -----------------
(unaudited)
(In millions, except per share data)
Net sales $642.3 $2,279.8
Cost of goods sold 559.2 2,000.7
--------- ---------
Gross profit 83.1 279.1
Selling, general and
administrative expenses 34.4 106.1
Goodwill amortization 0.1 0.1
--------- ---------
Operating income 48.6 172.9
Net interest expense (11.9) (44.3)
Other expense, net (0.5) (0.3)
--------- ---------
Income before income taxes 36.2 128.3
Income taxes 13.4 47.5
--------- ---------
Net income $22.8 $80.8
========= =========
Diluted earnings per share $0.53 $1.87
========= =========
Diluted shares outstanding 43.3 43.3
========= =========
Note a: As adjusted for the adverse impact of the GM/UAW work stoppage
and the temporary payment reductions as described more fully in the
Company's filings with the Securities and Exchange Commission.