American Axle & Manufacturing Announces Record Full Year 2000
31 January 2001
American Axle & Manufacturing Announces Record Full Year 2000 Sales, Net Income and EPS
Fourth Quarter EPS Beats Consensus Estimates
DETROIT, Jan. 31 American Axle & Manufacturing Holdings,
Inc. today reported full year 2000 record earnings of $129.2
million or $2.60 per share on a diluted basis. This reflects an increase of
over 11% as compared to the $115.6 million or $2.34 per share reported for the
prior year.
Sales grew 4% for the year and approximated $3.1 billion, as compared to
$3.0 billion in 1999. This increase was due to strong demand for AAM's newer
technology products related to GM's new full-size truck and SUV programs.
Products introduced to the market within the last two and a half years
accounted for 47% of the company's total year 2000 sales.
Gross profit increased 10% in the year 2000 to $426.2 million, or 13.9% of
sales, as compared to $388.8 million, or 13.2% of sales for the year 1999.
Operating income grew 9% to $259.4 million, or 8.5% of sales in 2000 versus
$237.8 million, or 8.1% of sales in 1999. These increases are primarily due
to increased sales of higher value-added technology products, productivity
improvements and the successful start-ups of production in the new Guanajuato,
Mexico and Cheektowaga, New York manufacturing facilities.
"We are pleased to deliver record earnings for the year 2000 and beat
consensus earnings estimates in what was a difficult fourth quarter for the
industry. Increased margins and strong earnings resulted from our new,
innovative products and were enhanced by continuing productivity
improvements," said American Axle & Manufacturing (AAM) Co-Founder, Chairman &
CEO Richard E. Dauch.
Sales for the fourth quarter of 2000 were $738.4 million as compared to
$735.8 million in the fourth quarter of 1999. Gross profit was $97.3 million
in the fourth quarter of 2000 versus $98.9 million in the same period of 1999.
Net income was $24.9 million, or 51 cents per diluted share in the fourth
quarter of 2000 as compared to $27.5 million, or 56 cents per diluted share
for the 1999 period. The fourth quarter of 2000 was primarily impacted by the
OEMs easing North American light vehicle production.
GM revenues comprised approximately 86% of the company's total sales for
the fourth quarter and approximately 84.5% for the year ended December 31,
2000. Sales to customers other than GM grew 14% for the year while sales to
GM grew approximately 2%.
Research and development spending (R&D) rose 19% to $46.4 million in 2000
versus $39.1 million during 1999. R&D spending rose 5% to $13.1 million in
the fourth quarter of 2000 as compared to $12.5 million in the fourth quarter
of 1999. These increases are primarily related to new product programs
awarded to AAM in the past year and other efforts to develop new technology
for future products. The company continues to focus on the development of new
systems, products and processes particularly in the areas of mass reduction,
noise, vibration and harshness improvements, durability enhancements and new
product offerings such as systems and modules. Recent innovative product
introductions include the Integrated Oil Pan (IOP) Front Axle with Electronic
Disconnect and the PowerLite(TM) rear-axle system, (both of which will be
featured on the new mid-size SUVs presently being introduced by General
Motors), the SmartBar(TM) electronic roll control system which will be
featured on a 2003 model year SUV, and the TracRite(TM) EL electronically
controlled locking differential.
Net cash flow from operations in the fourth quarter of 2000 was relatively
flat as the Company's cash generated from operating activities of $131.3
million covered a significant portion of the $134.6 million capital
expenditures in the quarter.
Other developments
AAM has continued to improve its quality performance during 2000. AAM's
quality has improved over 99% since 1994 and further improved 33% during the
year 2000 to approximately 89 discrepant parts per million for the six months
ended December 31, 2000 (as measured by AAM's customers). The Company uses a
"Shainin" process to improve product quality, which incorporates six-sigma
practices and techniques to identify root causes of quality variances.
In December 2000, AAM's Co-Founder, Chairman & CEO, Richard E. Dauch
agreed to extend his employment relationship with the Company by two years
through December 31, 2006. In conjunction with this extension, AAM purchased
approximately 3.1 million shares of the Company's common stock from him, at
current market prices, with a total cost of approximately $21.3 million. This
sale, and the resulting proceeds allowed him to pay off a personal loan
incurred to pay taxes in connection with an earlier investment in the Company.
In January 2001, the Company announced that it had been awarded
approximately $60 million in contracts to provide forging, machining and other
components for 10 customers. These components will appear in future
automotive and light truck applications.
Year 2001 Outlook
It is expected that North American light vehicle production will moderate
from the year 2000 levels. Although the industry entered the quarter on a
declining volume level, industry experts expect that economic growth is
expected to improve later in the year. OEMs have announced production cuts,
which are expected to impact results for AAM in the first six months of 2001.
Based on these industry trends and expectations, AAM is comfortable with the
current analyst consensus estimates of approximately 47 cents per share in the
first quarter of 2001 and $2.02 for the full year 2001.
"While we are working hard on introducing innovative new products and in
assisting our customers with their new vehicle launches in the year 2001, we
are also highly focused on reducing our cost structure to meet the forecasted
demands and shareholder earnings expectations," said Joel D. Robinson, AAM's
President & COO.
AAM is a world leader in the manufacture, engineering, design and
validation of driveline systems, 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, 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.
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
------------------------------------------------------------------------
Three months ended Year ended
---------------------- ------------------
December 31, December 31,
---------------------- ------------------
2000 1999 2000 1999
-------- ------- ------- --------
(In millions, except per share data)
Net sales $ 738.4 $ 735.8 $ 3,069.5 $ 2,953.1
Cost of goods sold 641.1 636.9 2,643.3 2,564.3
--------- ------- -------- --------
Gross profit 97.3 98.9 426.2 388.8
Selling, general and
administrative expenses 43.1 40.6 162.6 147.6
Goodwill amortization 1.1 1.1 4.2 3.4
--------- -------- -------- --------
Operating income 53.1 57.2 259.4 237.8
Net interest expense (15.1) (13.2) (58.8) (54.6)
Other income (expense),
net 1.2 (0.4) 2.8 0.2
-------- --------- -------- --------
Income before
income taxes 39.2 43.6 203.4 183.4
Income taxes 14.3 16.1 74.2 67.8
-------- --------- -------- ---------
Net income $ 24.9 $ 27.5 $ 129.2 $ 115.6
========= ======== ======== ========
Diluted earnings
per share $ 0.51 $ 0.56 $ 2.60 $ 2.34
========= ======== ======== =========
Diluted shares
outstanding 49.2 49.9 49.7 49.5
========= ======== ======== ========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
-----------------------------------------------------------------------
December 31, December 31,
2000 1999
---------- -----------
(In millions)
ASSETS
Current assets:
Cash and equivalents $ 35.2 $ 140.2
Accounts receivable, net 247.3 190.1
Inventories 160.4 133.3
Prepaid expenses and other 57.7 42.0
---------- ----------
Total current assets 500.6 505.6
Property, plant and
equipment, net 1,200.1 929.0
Goodwill and other assets 201.8 238.6
---------- -----------
Total assets $ 1,902.5 $ 1,673.2
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 510.3 $ 442.8
Long-term debt 817.1 774.9
Postretirement benefits
and other long-term
liabilities 203.1 191.8
--------- ----------
Total liabilities 1,530.5 1,409.5
Stockholders' equity 372.0 263.7
--------- ----------
Total liabilities and
stockholders' equity $ 1,902.5 $ 1,673.2
========= ==========
AMERICAN AXLE & MANUFACTURING HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
------------------------------------------------------------------------
Three months ended Year ended
December 31, December 31,
--------------------- --------------------
2000 1999 2000 1999
--------- --------- ------- --------
(In millions)
Operating activities
Net income $ 24.9 $ 27.5 $ 129.2 $ 115.6
Depreciation and
amortization 30.9 23.7 107.9 89.5
Other 75.5 45.6 15.1 105.2
-------- ------- -------- --------
Net cash provided by
operating activities 131.3 96.8 252.2 310.3
Capital expenditures (134.6) (95.6) (381.0) (301.7)
-------- -------- --------- ---------
Net cash flow
from operations (3.3) 1.2 (128.8) 8.6
Acquisitions, net
of cash acquired - (13.5) - (239.4)
Proceeds from
sale-leasebacks - - - 187.0
Purchase of treasury
stock, net (20.2) - (20.2) -
Other financing
activities, net 0.5 (20.4) 44.3 179.5
Effect of exchange
rate changes on cash (0.3) - (0.3) -
-------- ------- -------- --------
Net (decrease)
increase in cash
and equivalents (23.3) (32.7) (105.0) 135.7
Cash and equivalents at
beginning of period 58.5 172.9 140.2 4.5
-------- -------- -------- --------
Cash and equivalents at
end of period $35.2 $140.2 $ 35.2 $ 140.2
======== ======== ======== ========
======================================================================
EBITDA (a) $ 86.6 $ 83.3 $ 377.0 $ 334.6
========= ======== ======== =========
(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.
For more information:
Media relations contact: Investor relations contact:
Carrie L. P. Gray Robert A. Krause
Director, Marketing & Corporate Relations Vice President & Treasurer
(313) 974-2598 (313) 974-3074
GrayC@aam.com krauser@aam.com
Or visit the AAM website at http://www.aam.com