Accuride Corporation (NYSE: ACW), a leading manufacturer and
supplier of commercial vehicle components, today announced its
second quarter fiscal year 2008 results. Sales were $244.9 million
compared with $245.1 million in the prior year period. Improved
sales of aluminum and military wheels and industrial components
offset the decline in steel wheel sales. Operating income totaled
$8.6 million, or 3.5 percent of sales, compared with $14.2 million,
or 5.8 percent of sales, last year. Net income was $3.4 million, or
$0.10 per diluted share, compared with $4.9 million, or $0.14 per
diluted share, in the prior year. �Our strong market position
enabled us to participate in the Class 8 market growth in the
second quarter of 2008, however, other areas of the commercial
vehicle industry continue to impact our results,� said John Murphy,
Accuride�s President and CEO. �We are making progress on our
announced initiatives, including organic revenue growth in the
aftermarket and military, continued operational improvements in the
Components segment and the recovery of raw material costs. We are
assessing all of our operating assets and cost structures and
expect further reductions in costs while maximizing our
capabilities to meet the demand requirements of our customers.�
Second Quarter Operating Results � � Three Months Ended June 30, �
� 2008 � � � 2007 � � � � � � � Net sales: � Wheels $ 105,154 43.0
% $ 113,357 46.2 % Components 127,359 52.0 % 120,666 49.2 % Other �
12,406 � � � 5.0 % � � � � 11,110 � � � 4.6 % Total net sales $
244,919 100.0 % $ 245,133 100.0 % Gross profit: Wheels 17,072 16.2
% 23,523 20.8 % Components 2,873 2.3 % 3,397 2.8 % Other 3,378 27.2
% 2,541 22.9 % Corporate (1,973 ) � � � % � � (1,007 ) � � � %
Total gross profit 21,350 8.7 % 28,454 11.6 % � Income from
operations 8,589 3.5 % 14,231 5.8 % � Net income $ 3,375 1.4 % $
4,893 2.0 % Diluted income per share $ 0.10 $ 0.14 Sales of $244.9
million in the second quarter of 2008 were flat compared to sales
in the prior year although second quarter 2007 results included
$12.5 million in additional light wheel sales to Ford and GM and
$2.0 million in sales related to a resolution of a commercial
dispute with a customer. The 6 percent increase in Components sales
was offset by a 7 percent decline in Wheels sales. The growth in
the Components segment was largely driven by increases in
industrial component sales and surcharge recovery. The decline in
the Wheels segment reflects reduced demand for Class 5-7 vehicles
and trailers, as well as greatly reduced sales to light steel wheel
customers as we reset our focus on more profitable segments and
customers, which was partially offset by higher sales of aluminum
and military wheels. Gross profit declined to $21.4 million, or 8.7
percent of sales, from $28.5 million, or 11.6 percent of sales, in
last year�s second quarter. Gross profit in the Wheels segment
declined compared to the prior year as lower steel wheel volume and
inventory reduction offset increased aluminum and military wheels
volume and cost savings from the restructuring of our steel wheel
business. Gross profit in 2007 benefited from a $1.1 million
curtailment gain and $2.0 million from a commercial dispute with a
customer. Gross profit in the Components segment compared
unfavorably with the prior year period due primarily to higher
economic costs and $1.2 million of severance related costs recorded
in the second quarter of 2008. Operating income declined to $8.6
million, or 3.5 percent of sales, from $14.2 million, or 5.8
percent of sales, in the prior year period despite a reduction in
operating expenses totaling $1.5 million in the second quarter of
2008 related to ongoing expense and salary reduction initiatives.
Net income was $3.4 million, or $0.10 per diluted share, compared
with $4.9 million, or $0.14 per diluted share, in the prior year.
Net interest expense declined to $8.5 million from $11.3 million in
the second quarter of last year due to $3.4 million in non-cash
unrealized gains related to the mark-to-market of interest rate
swaps. The $2.3 million income tax benefit in the second quarter of
2008 was due to a favorable settlement of an IRS audit and a
favorable change in our valuation allowance. Six Month Operating
Results � Six Months Ended June 30, � � 2008 � � � � 2007 � � � � �
� � Net sales: � � � Wheels $ 209,164 43.3 % $ 272,686 47.8 %
Components 248,118 51.3 % 273,415 47.9 % Other � � 25,847 � � � 5.4
� % � � � � � 24,462 � � � 4.3 % Total net sales $ 483,129 100.0 %
$ 570,563 100.0 % Gross profit: Wheels 37,243 17.8 % 36,320 13.3 %
Components (7,942 ) (3.2 ) % 12,720 4.7 % Other 7,188 27.8 % 5,471
22.4 % Corporate (2,870 ) � � � � % � � (1,941 ) � � � % Total
gross profit 33,619 7.0 % 52,570 9.2 % � Income from operations
7,204 1.5 % 23,296 4.1 % � Net income (loss) $ (8,366 ) (1.7 ) % $
3,009 0.5 % Diluted income (loss) per share $ (0.24 ) $ 0.09 For
the six month period ended June 30, 2008, sales were $483.1 million
compared with $570.6 million in the prior year period which
included $29.3 million in additional light steel wheel sales to
Ford and GM and $10.0 million of revenue related to a resolution of
a commercial dispute with a customer. The additional decline in
sales was in line with reduced demand in the commercial vehicle
industry. Gross profit for the six months declined to $33.6
million, or 7.0 percent of sales, from $52.6 million, or 9.2
percent of sales, in the prior year. Gross profit in the Wheels and
Components segment was reduced primarily due to the net reduction
in sales driven primarily by industry weakness. During the first
six months of 2007, the Wheels segment recognized $17.5 million of
severance and other benefit charges related to a reduction in their
work force in Canada and $11.1 million of additional depreciation
expense as a result of the reduction of useful lives of certain
assets, which was partially offset by $10 million related to the
aforementioned resolution of a commercial dispute with a customer.
Gross profit in the Components segment for the first six months of
2008 was impacted by $7.7 million of one-time charges related to a
labor disruption at our Rockford, Illinois facility and $1.8
million of severance related charges. Operating income for the six
months declined to $7.2 million from $23.3 million in the prior
year period despite a reduction in operating expenses totaling $2.9
million in the first half of 2008 related to ongoing expense and
salary reduction initiatives. The Company had a net loss of $8.4
million, or ($0.24) per diluted share, for the first six months of
2008 compared with net income of $3.0 million, or $0.09 per diluted
share, in the prior year. Net interest expense increased to $24.2
million from $23.3 million in the prior year principally due to
higher debt costs and $1.2 million in non-cash unrealized losses
related to the mark-to-market of interest rate swaps in current
year compared to $0.8 million in non-cash unrealized gains in prior
year�s results. Liquidity and Debt Adjusted EBITDA was $19.7
million, or 8.0 percent of sales, for the second quarter of 2008,
compared to Adjusted EBITDA of $28.3 million, or 11.6 percent of
sales, for the same quarter of 2007. Adjusted EBITDA was $38.2
million, or 7.9 percent of sales, for the first six months of 2008,
compared to Adjusted EBITDA of $77.5 million, 13.6 percent of
sales, for the same period in 2007. The purpose and reconciliation
of Adjusted EBITDA for the Company to the most directly comparable
GAAP measure is set forth in the accompanying schedules. As of June
30, 2008, the Company had net debt of $539.5 million. For the
second quarter of 2008, cash from operating activities was a
negative $4.1 million and capital expenditures totaled $9.4
million, resulting in negative free cash flow of $13.5 million,
compared to positive free cash flow of $6.8 million in the second
quarter of 2007. For the remainder of the year, the Company expects
to be free cash flow positive. The Company ended the second quarter
with $33.2 million of cash and revolver availability of $125.0
million, resulting in total liquidity of $158.2 million. As of June
30, 2008, the leverage ratio as defined by the Company�s credit
agreement was 7.12 times. All debt amortization payments have been
prepaid through 2011 and the Company expects to remain in
compliance with its debt covenants throughout the remainder of
2008. Industry Overview The Company continues to be negatively
impacted by continued weakness within the commercial vehicle market
related to the weak U.S. economy and freight environment. The three
major segments the Company supplies (North America Class 5-8
vehicles, U.S. Trailers and the related aftermarket channels) have
all suffered losses compared to a year ago due mainly to a soft
economy and a recessionary freight environment. At the close of the
second quarter the industry saw improvement from a year ago within
the North America Class 8 segment, however, North America Class
5-7, U.S. trailer and aftermarket segments remained weak. Looking
at the remainder of 2008, order boards within the Class 5-8 markets
as well as the trailer market are struggling to gain meaningful
traction as the freight environment remains weak and trucker
profits continue to erode in the midst of escalating fuel prices.
Order boards within these markets saw month-over-month decreases in
the second quarter. With weak order backlogs, some OEMs continue to
reduce their build plans for the remainder of 2008. While current
OEM reported build rates translate into a North America Class 8
build of approximately 215,000 units for 2008, the Company believes
there is downside risk to this forecast unless a meaningful
recovery is seen in the U.S. economy and freight environment.
Company Outlook �We are redoubling our efforts to offset the margin
impact of weak industry demand and higher raw material costs with
new sales development programs in the aftermarket and military,
continued operating improvements in the Components segment and
price increases and surcharges,� said Murphy. �However, given our
limited visibility on the timing of the recovery of commercial
vehicle demand, including lower expectations in trailer production,
we feel it prudent to reduce the range of our fiscal 2008 guidance
to $85 - $100 million of Adjusted EBITDA based on estimated North
American Class 8 production of 190,000 to 215,000 units and Class
5-7 production of 170,000 to 190,000 units. However, we expect to
breakeven in free cash flow for the year due to our continued focus
on working capital management and the reduction of capital
expenditures.� Murphy concluded, �While the immediate focus is on
free cash flow to meet our debt service requirements, the
longer-term opportunity for Accuride�s new management team lies in
building more diverse revenue streams, adding more profitable
engineered solutions and achieving greater asset utilization across
the entire enterprise. Our Company is a unique blend of
intellectual capital and specialized manufacturing capabilities.
Our job is to unlock greater value from these assets in a way that
creates more sustainable growth and higher returns on capital,
while reducing our financial and operating risks. Meanwhile, the
current industry malaise is causing us to reevaluate our position
in certain areas. We are determined to invest only in those
businesses in which we find ourselves competitively advantaged.
Therefore, we have initiated a strategic review of all operating
assets and cost structures in an effort to reduce fixed costs and
redeploy capital more effectively. We expect the review to be
completed in the third quarter.� Other Financial Matters During the
last two weeks of the quarter ended June 30, 2008, we experienced a
significant decline in our stock price resulting from overall
economic and industry conditions. We determined this is an
indicator of impairment and an impairment analysis is required
under generally accepted accounting principles in the U.S. We are
in the process of finalizing the initial analysis to determine the
fair value of each of our seven operating segments. Since the
initial analysis is not yet complete, we are unable to disclose
which, if any, of our operating segments have failed the initial
impairment analysis. In the event that one or some of our operating
segments fail the initial analysis, we will perform additional
calculations to determine the amount of impairment, which will be
recorded in the quarter ending September 30, 2008. Such a charge
would be non-cash and would not affect our liquidity, tangible
equity, or debt covenant ratios. The Company will conduct a
conference call to review its second quarter results on Tuesday,
August 5, 2008, at 10:00 a.m. Central Time. The phone number to
access the conference call is (866) 825-3209 in the United States,
or (617) 213-8061 internationally, access code 71776401. The
conference call will be accompanied by a slide presentation, which
can be accessed through the investor relations section of the
Company�s web site. A replay will be available beginning August 5,
2008, at 12:00 p.m. Central Time, continuing to August 12, 2008, by
calling (888) 286-8010 in the United States, or (617) 801-6888
internationally, access code 42574748. The financial results for
the three-month and six-month period ended June 30, 2008, will also
be 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 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, 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
CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) � �
Three Months EndedJune 30, � � � Six Months EndedJune 30, � (in
thousands except per share data) 2008 � � � 2007 � 2008 � � � 2007
� � NET SALES $ 244,919 $ 245,133 $ 483,129 $ 570,563 COST OF GOODS
SOLD 223,569 � 216,679 � 449,510 � 517,993 � GROSS PROFIT 21,350
28,454 33,619 52,570 OPERATING EXPENSES: Selling, general and
administrative 12,761 � 14,223 � 26,415 � 29,274 � INCOME FROM
OPERATIONS 8,589 14,231 7,204 23,296 OTHER INCOME (EXPENSE):
Interest income 193 393 725 937 Interest expense (8,677 ) (11,665 )
(24,923 ) (24,228 ) Other income (expense), net 933 � 3,222 � (121
) 3,296 � INCOME (LOSS) BEFORE INCOME TAXES 1,038 6,181 (17,115 )
3,301 INCOME TAX PROVISION (BENEFIT) (2,337 ) 1,288 � (8,749 ) 292
� NET INCOME (LOSS) $ 3,375 � $ 4,893 � $ (8,366 ) $ 3,009 �
Weighted average common shares outstanding�basic 35,430 35,127
35,421 35,011 Basic income (loss) per share $ 0.10 $ 0.14 $ (0.24 )
$ 0.09 Weighted average common shares outstanding�diluted 35,518
35,408 35,465 35,151 Diluted income (loss) per share $ 0. 10 $ 0.14
$ (0.24 ) $ 0.09 ACCURIDE CORPORATION CONSOLIDATED ADJUSTED EBITDA
(UNAUDITED) � � Historical Results Three Months EndedJune 30, � � �
Six Months EndedJune 30, � (in thousands) 2008 � � 2007 � 2008 � �
2007 � � NET INCOME (LOSS) $ 3,375 $ 4,893 $ (8,366 ) $ 3,009 Net
interest expense 8,484 11,272 24,198 23,291 Income tax expense
(benefit) (2,337 ) 1,288 (8,749 ) 292 Depreciation and amortization
11,480 � 14,005 � 23,168 � 35,747 � EBITDA 21,002 31,458 30,251
62,339 Restructuring, severance and other charges1 (436 ) (7 )
7,653 18,261 Items related to our credit agreement2 (848 ) (3,103 )
304 � (3,076 ) ADJUSTED EBITDA $ 19,718 � $ 28,348 � $ 38,208 � $
77,524 � Note: 1) � For the three months ended June 30, 2008,
Adjusted EBITDA represents net income before net interest expense,
income tax expense, depreciation and amortization, plus (i) ($0.4)
million in costs associated with a labor disruption at our facility
in Rockford, Illinois, which affected gross profit. For the three
months ended June 30, 2007, Adjusted EBITDA represents net income
before net interest expense, income tax expense, depreciation and
amortization, plus (i) ($2.1) million in costs associated with a
reduction in the employee workforce in our steel wheel operations,
(ii) $0.5 million in other non-operating costs at our facility in
Erie, Pennsylvania, (iii) $1.3 million in other non-operating costs
at our facility in London, Ontario, and (iv) $0.3 million in fees
related to the secondary stock offerings completed in May 2007.
Items (i), (ii), and (iii) affected gross profit. Item (iv)
affected SG&A. For the six months ended June 30, 2008, Adjusted
EBITDA represents net income before net interest expense, income
tax expense, depreciation and amortization, plus (i) $7.7 million
in costs associated with a labor disruption at our facility in
Rockford, Illinois, which affected gross profit. For the six months
ended June 30, 2007, Adjusted EBITDA represents net income before
net interest expense, income tax expense, depreciation and
amortization, plus (i) $16.1 million in costs associated with a
reduction in the employee workforce in our steel wheel operations,
(ii) $0.5 million in other non-operating costs at our facility in
Erie, Pennsylvania, (iii) $1.3 million in other non-operating costs
at our facility in London, Ontario, and (iv) $0.3 million in fees
related to the secondary stock offerings completed in May 2007.
Items (i), (ii), and (iii) affected gross profit. Item (iv)
affected SG&A. 2) 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 June
30, 2008, items related to our credit agreement consist of foreign
currency income and other net income of $0.8 million. For the three
months ended June 30, 2007, items related to our credit agreement
consist of foreign currency income and other income of $3.1
million. For the six months ended June 30, 2008, items related to
our credit agreement consist of foreign currency losses and other
income or losses of $0.3 million. For the six months ended June 30,
2007, items related to our credit agreement consist of foreign
currency income and other income of $3.1 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 (UNAUDITED) � (In thousands) June
30,2008 December 31,2007 � ASSETS CURRENT ASSETS: Cash and cash
equivalents $ 33,227 $ 90,935 Customer and other receivables
113,845 87,195 Inventories, net 98,786 92,570 Supplies, net 20,506
20,540 Other current assets 28,001 22,125 Total current assets
294,365 313,365 PROPERTY, PLANT AND EQUIPMENT, net 272,156 279,240
OTHER ASSETS: Goodwill and other assets 526,106 521,029 TOTAL $
1,092,627 $ 1,113,634 LIABILITIES AND STOCKHOLDERS� EQUITY CURRENT
LIABILITIES: Accounts payable $ 77,092 $ 80,070 Other current
liabilities 68,336 69,884 Total current liabilities 145,428 149,954
LONG-TERM DEBT 572,725 572,725 OTHER LIABILITIES 106,714 117,155
STOCKHOLDERS� EQUITY: Total stockholders� equity 267,760 273,800
TOTAL $ 1,092,627 $ 1,113,634 ACCURIDE CORPORATION CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) � � � Six Months
Ended June 30, � (In thousands) 2008 � � � 2007 � CASH FLOWS FROM
OPERATING ACTIVITIES: Net income (loss) $ (8,366 ) $ 3,009
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and impairment 20,373 32,910
Amortization � deferred financing costs 616 617 Amortization �
other intangible assets 2,795 2,837 Loss on disposal of assets 62
29 Provision for deferred income taxes (10,230 ) 204 Non-cash
stock-based compensation 1,710 1,280 Changes in certain assets and
liabilities: Receivables (26,650 ) 23,700 Inventories and supplies
(6,180 ) (27,027 ) Prepaid expenses and other assets (8,320 )
(12,688 ) Accounts payable 3,521 (12,519 ) Accrued and other
liabilities (1,744 ) 2,703 � Net cash provided by (used in)
operating activities (32,413 ) 15,055 � CASH FLOWS FROM INVESTING
ACTIVITIES: Purchases of property, plant and equipment (19,852 )
(15,919 ) Purchase of marketable securities (5,000 ) � Other (642 )
(30 ) Net cash used in investing activities (25,494 ) (15,949 )
CASH FLOWS FROM FINANCING ACTIVITIES: Payments on long-term debt �
(60,000 ) Increase in revolving credit advance � 5,000 Decrease in
revolving credit advance � (5,000 ) Other 199 � 3,412 � Net cash
provided by (used in) financing activities 199 � (56,588 ) DECREASE
IN CASH AND CASH EQUIVALENTS (57,708 ) (57,482 ) CASH AND CASH
EQUIVALENTS�Beginning of period 90,935 � 110,204 � CASH AND CASH
EQUIVALENTS�End of period $ 33,227 � $ 52,722 � � Supplemental cash
flow information: Cash paid for interest $ 22,166 $ 22,328 Cash
paid for income taxes $ 3,956 $ 5,600 Purchases of property, plant,
and equipment in accounts payable $ 1,722 $ 5,449
Accuride (NYSE:ACW)
Historical Stock Chart
From May 2024 to Jun 2024
Accuride (NYSE:ACW)
Historical Stock Chart
From Jun 2023 to Jun 2024