- First Quarter 2014 results from continuing operations included:
- Net sales of $166.8 million, up 2.3 percent from Q1 2013
- Operating income of $6.6 million, up from a loss of $4.8
million in Q1 2013
- Net loss of $0.07 per share, up from a loss of $0.31 per share
in Q1 2013
- Adjusted EBITDA of $18.0 million, up 119.5 percent from Q1
2013
- Strong liquidity maintained due to effective working capital
management
- Margin improvements reflect impact of capital investments,
improved cost structure, and operational performance
Accuride Corporation (NYSE:ACW) – a leading supplier of components
to the North American commercial vehicle industry – today reported
financial results for the first quarter ended March 31, 2014.
First Quarter 2014 Results
First quarter 2014 net sales from continuing operations were
$166.8 million, compared with $163.0 million in the same period in
2013, an increase of 2.3 percent, primarily reflecting increased
OEM production across the Wheels and Gunite businesses. The Company
achieved operating income of $6.6 million for the quarter, compared
to an operating loss of $4.8 million in the first quarter of 2013.
The Company reported a net loss from continuing operations of $3.3
million, or $0.07 per share, during the quarter, compared to a net
loss of $14.8 million, or $0.31 per share, in 2013. First quarter
Adjusted EBITDA more than doubled year-over-year to $18.0 million,
or 10.8 percent of net sales, compared to $8.2 million, or 5.0
percent of net sales, in the same quarter of 2013. As of March 31,
2014, Accuride had $21.6 million of cash plus $41.3 million in
availability under its ABL Credit Facility, for total liquidity of
$62.9 million.
Commenting on Accuride's first-quarter results and business
conditions, President and CEO Rick Dauch said, "Accuride continued
to build momentum financially and operationally during the quarter.
Our reduced cost structure and greater operating efficiencies
enabled each of our business units to further expand margins,
despite sales that were only up slightly year-over-year. This
steady improvement is consistent with the growth in profitability
we expect to generate as our end markets continue their recovery.
Particularly notable was the continued resurgence of Gunite, which
achieved an Adjusted EBITDA margin of nearly 10 percent due to its
lowered breakeven point and higher mix of aftermarket business.
This conversion level supports our target for Gunite to become a 10
to 12 percent Adjusted EBITDA business in 2014. In addition,
liquidity remained strong at $62.9 million, despite the quarter's
seasonal weakness and payment of our semi-annual bond obligation."
Industry Conditions
Net orders for the Class 8 and Class 5-7 commercial vehicle
segments that Accuride supplies posted strong gains in the first
quarter, growing 35.3 percent and 20.4 percent, respectively,
year-over-year. Strong fleet profitability and aging
equipment are fueling the replacement trend. Meanwhile,
trailer orders stand at their highest level since August
2006. As a result, first-quarter Class 8 and Class 5-7
production increased 22.1 percent and 12.2 percent, respectively,
over the first quarter of 2013, while trailer production was
essentially flat year-over-year. Based on the continued
strong order rate, we anticipate higher OEM build rates over the
next few quarters, particularly within the Class 8 segment.
Demand in Brillion's core industrial end markets, however, remained
soft in the first quarter and is not expected to recover until
2015-16.
First Quarter Business Segment Results
Accuride Wheels
Accuride Wheels segment net sales were $92.2 million, down $1.0
million, or 1.1 percent, from the same period in 2013, primarily
due to market share changes amongst truck OEMs and reduced OEM
light duty and military demand, partially offset by stronger OEM
truck and trailer demand. Wheels' Adjusted EBITDA was $19.2
million, an increase of $3.2 million, or 20.0 percent, from the
first quarter of 2013. Accuride successfully introduced and
launched its revolutionary new Steel Armor™ coating technology in
January. The new industry benchmark, Steel Armor™ is designed
to combat corrosion and its proprietary formula adds up to two
years to steel wheel life – greatly reducing fleet maintenance
costs.
Gunite
Gunite segment net sales were $44.0 million, up $4.6 million, or
11.7 percent, from the first quarter of 2013, attributable
primarily to stronger aftermarket demand for brake drums.
Gunite's Adjusted EBITDA was $4.3 million, compared to a
negative $0.6 million in the first quarter of 2013. Gunite's
results reflect the operational improvements from capital
investments and consolidation of operations.
Brillion Iron Works
Brillion Iron Works' first quarter net sales were $30.6 million,
up $0.2 million, or 0.6 percent, from the first quarter of
2013. Brillion's Adjusted EBITDA was $2.4 million, an
increase of $0.7 million, from the first quarter of 2013. The
improved operating performance at Brillion reflects the impact of
our efforts to continuously reduce cost through LEAN manufacturing
initiatives and the competitive new collective bargaining
agreements reached with the U.S. Steelworkers and the International
Association of Machinists. While improving, Brillion's results
continue to be impacted by weak demand in its core industrial,
construction, mining, and oil and gas markets.
Liquidity and Debt
As of March 31, 2014, total debt was $340.4 million, consisting
of $305.4 million of our outstanding 9.5% senior secured notes, net
of discount, and a $35.0 million draw on our ABL Credit
Facility. Accuride had $21.6 million of cash plus $41.3
million in availability under its ABL Credit Facility, for total
liquidity of $62.9 million.
Business and Market Outlook
"After more than a year of challenging market conditions, we are
starting to experience a real and significant upturn in the North
American commercial vehicle industry," Rick Dauch
said. "Demand for new equipment was up significantly in the
first quarter, with order trends pushing backlog-to-build ratios to
three- and four-year highs. This should translate into more
robust production schedules at our OEM customers as 2014
progresses. Further, one of the toughest winters in recent
memory is expected to fuel strong aftermarket demand at
Gunite. With our investments to "Fix and Grow" the company
substantially behind us, Accuride is well poised to capitalize on –
and profitably grow in – the strengthening market environment.
Restoring our operational performance and capabilities to world
class levels lowered our cost structure and made us competitive
again. Our business unit margins will further expand in 2014
as we compete for, and win, new business opportunities and convert
them into bottom-line results. Longer term, we are working
closely with select strategic customers to explore opportunities to
support their needs globally."
2014 Financial Guidance
Accuride Chief Financial Officer Greg Risch stated, "Based on
the strengthening market conditions and our improved operating
performance, we expect our results to be at the high end of our
current earnings guidance stated below. If industry conditions
continue to improve, we will revisit our guidance at our next
quarterly earnings call."
Accuride expects 2014 net sales of $650 million to $685 million,
and Adjusted EBITDA of $60 million to $70 million. This 2014
guidance is based on North American Class 8 production levels in
range of 260,000 to 275,000 units, North American Class 5-7
production levels in the range of 200,000 to 215,000 units and
North American Trailer production in the range of 235,000 to
245,000 units. In addition, management expects the net sales
for its Brillion business unit to be flat compared to 2013 as its
end markets are not expected to recover until 2015-16.
Earnings Conference Call Information
Accuride will host a conference call to discuss the financial
and operational results of its First Quarter 2014 on Monday, April
28, 2014, beginning at 9:00 a.m. Central Time. Analysts and
investors may participate on the conference call by dialing (800)
708-4539 in the United States, or (847) 619-6396 internationally,
and using participant code 37084551. A live webcast of the
conference call can be accessed via the Investors section of the
company's website – www.AccurideCorp.com/investors. Digital
playback of the call will be available from April 28, 2014, at
11:30 a.m. CDT until 11:59 p.m. CDT, May 5, 2014, by calling (888)
843-7419 in the United States, or (630) 652-3042 internationally,
using access code 37084551.
About Accuride Corporation
With headquarters in Evansville, Ind., USA, Accuride Corporation
is a leading supplier of components to the North American
commercial vehicle industry. The company's products include
commercial vehicle wheels; wheel-end components and assemblies; and
specialty cast-iron components for a range of agricultural,
construction and mining, and oil and gas equipment
applications. The company's products are marketed under its
brand names, which include Accuride®, Accuride Wheel End
SolutionsTM, Gunite®, and
BrillionTM. Accuride's common stock trades on the
New York Stock Exchange under the ticker symbol ACW. For more
information, visit the Company'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
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, including
statements regarding Accuride's expectations, hopes, beliefs, and
intentions with respect to future results. Such statements are
subject to the impact on Accuride's business and prospects
generally of, among other factors, 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 Accuride's Securities and Exchange Commission
filings, including those described in Item 1A of Accuride's Annual
Report on Form 10-K for the fiscal year ended December 31, 2013.
Any forward-looking statement reflects only Accuride's belief at
the time the statement is made. Although Accuride believes that the
expectations reflected in these forward-looking statements are
reasonable, it cannot guarantee its future results, levels of
activity, performance or achievements. Except as required by law,
Accuride undertakes no obligation to update any forward-looking
statements to reflect events or developments after the date of this
news release.
Three Months Operating
Results |
|
|
Three Months
Ended March 31, |
(Dollars in
thousands) |
2014 |
2013 |
|
|
|
|
|
Net sales: |
|
|
|
|
Wheels |
$92,218 |
55.3% |
$93,162 |
57.1% |
Gunite |
43,973 |
26.4% |
39,396 |
24.2% |
Brillion Iron Works |
30,593 |
18.3% |
30,429 |
18.7% |
Total net sales |
$166,784 |
100.0% |
$162,987 |
100.0% |
|
|
|
|
|
Gross Profit |
$17,023 |
10.2% |
$6,278 |
3.9% |
|
|
|
|
|
Income (loss) from Operations: |
|
|
|
|
Wheels |
$9,742 |
10.6% |
$5,743 |
6.2% |
Gunite |
3,278 |
7.5% |
(1,777) |
(4.5)% |
Brillion Iron Works |
1,275 |
4.2% |
575 |
1.9% |
Corporate / Other |
(7,726) |
— |
(9,338) |
— |
Consolidated Total |
$6,569 |
3.9% |
$(4,797) |
(2.9)% |
|
|
|
|
|
Net Loss |
$(3,573) |
(2.1)% |
$(15,947) |
(9.8)% |
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
Wheels |
$19,196 |
20.8% |
$16,040 |
17.2% |
Gunite |
4,317 |
9.8% |
(564) |
(1.4)% |
Brillion Iron Works |
2,414 |
7.9% |
1,720 |
5.7% |
Corporate / Other |
(7,971) |
— |
(8,969) |
— |
Continuing Operations |
$17,956 |
10.8% |
$8,227 |
5.0% |
|
|
|
|
|
Brillion Farm |
— |
— |
— |
— |
Imperial Group |
— |
— |
(821) |
(2.8)% |
Consolidated Total |
$17,956 |
10.8% |
$7,406 |
3.8% |
|
|
|
ACCURIDE CORPORATION
AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS
OF OPERATIONS AND COMPREHENSIVE LOSS |
|
|
Three Months
Ended March 31, |
(In thousands, except per share
data) |
2014 |
2013 |
|
|
|
NET SALES |
$166,784 |
$162,987 |
COST OF GOODS SOLD |
149,761 |
156,709 |
GROSS PROFIT |
17,023 |
6,278 |
OPERATING EXPENSES: |
|
|
Selling, general and administrative |
10,454 |
11,075 |
INCOME (LOSS) FROM OPERATIONS |
6,569 |
(4,797) |
OTHER INCOME (EXPENSE): |
|
|
Interest expense, net |
(8,420) |
(8,694) |
Other income (loss), net |
(530) |
145 |
LOSS BEFORE INCOME TAXES FROM CONTINUING
OPERATIONS |
(2,381) |
(13,346) |
INCOME TAX PROVISION |
904 |
1,409 |
LOSS FROM CONTINUING OPERATIONS |
(3,285) |
(14,755) |
DISCONTINUED OPERATIONS, NET OF TAX |
(288) |
(1,192) |
NET LOSS |
$(3,573) |
$(15,947) |
Weighted average common shares
outstanding—basic |
47,596 |
47,453 |
Basic loss per share – continuing
operations |
$(0.07) |
$(0.31) |
Basic loss per share – discontinued
operations |
(0.01) |
(0.03) |
Basic loss per share |
$(0.08) |
$(0.34) |
Weighted average common shares
outstanding—diluted |
47,596 |
47,453 |
Diluted loss per share – continuing
operations |
$(0.07) |
$(0.31) |
Diluted loss per share – discontinued
operations |
(0.01) |
(0.03) |
Diluted loss per share |
$(0.08) |
$(0.34) |
OTHER COMPREHENSIVE INCOME: |
|
|
Defined benefit plans |
333 |
331 |
COMPREHENSIVE LOSS |
$(3,240) |
$(15,616) |
|
|
|
ACCURIDE
CORPORATION |
CONSOLIDATED ADJUSTED
EBITDA |
(UNAUDITED) |
|
|
Three
Months Ended March 31, |
(In thousands) |
2014 |
2013 |
|
|
|
Net loss |
$(3,573) |
$(15,947) |
Income tax expense |
904 |
1,409 |
Interest expense, net |
8,420 |
8,694 |
Depreciation and amortization |
10,272 |
11,431 |
Restructuring, severance and other
charges1 |
627 |
411 |
Other items related to our credit
agreement2 |
1,306 |
1,408 |
Adjusted EBITDA |
$17,956 |
$7,406 |
|
Note: |
1) For the three months ended March 31,
2014, Adjusted EBITDA represents net income before net interest
expense, income tax expense, depreciation and amortization, plus
$0.6 million in costs associated with restructuring items. For
the three months ended March 31, 2013, Adjusted EBITDA represents
net income before net interest expense, income tax benefit,
depreciation and amortization, plus $0.4 million in costs
associated with restructuring items. |
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 March 31, 2014, items related to our credit agreement
consisted of foreign currency losses and other income or expenses
of $1.3 million. For the three months ended March 31, 2013,
items related to our credit agreement consisted of foreign currency
income and other income or expenses of $1.4 million. |
|
|
ACCURIDE
CORPORATION |
SEGMENT ADJUSTED EBITDA
RECONCILIATION |
(UNAUDITED) |
|
|
Three Months
Ended March 31, 2014 |
(In thousands) |
Income (loss) from
Operations |
Depreciation and
Amortization |
Other |
Adjusted EBITDA |
Wheels |
$9,742 |
$7,907 |
$1,547 |
$19,196 |
Gunite |
3,278 |
789 |
250 |
4,317 |
Brillion Iron Works |
1,275 |
1,109 |
30 |
2,414 |
Corporate / Other |
(7,726) |
456 |
(701) |
(7,971) |
Continuing Operations |
$6,569 |
$10,261 |
$1,126 |
$17,956 |
|
|
|
|
|
Imperial Group |
(11) |
11 |
— |
— |
Consolidated Total |
$6,558 |
$10,272 |
$1,126 |
$17,956 |
|
|
|
|
|
Three Months
Ended March 31, 2013 |
(In thousands) |
Income (loss) from
Operations |
Depreciation and
Amortization |
Other |
Adjusted EBITDA |
Wheels |
$5,743 |
$8,238 |
$2,059 |
$16,040 |
Gunite |
(1,777) |
963 |
250 |
(564) |
Brillion Iron Works |
575 |
1,115 |
30 |
1,720 |
Corporate / Other |
(9,338) |
744 |
(375) |
(8,969) |
Continuing Operations |
$(4,797) |
$11,060 |
$1,964 |
$8,227 |
|
|
|
|
|
Imperial Group |
(1,192) |
371 |
— |
(821) |
Consolidated Total |
$(5,989) |
$11,431 |
$1,964 |
$7,406 |
We define Adjusted EBITDA as our net income or loss before
income tax expense or benefit, interest expense, net, depreciation
and amortization, restructuring, severance, and other charges,
impairment, and currency losses, net. Adjusted EBITDA has been
included because we believe that it is useful for us and our
investors to measure our ability to provide cash flows to meet debt
service. Adjusted EBITDA should not be considered an
alternative to net income (loss) or other traditional indicators of
operating performance and cash flows determined in accordance with
accounting principles generally accepted in the United States
("GAAP"). We present the table of Adjusted EBITDA because
covenants in the agreements governing our material indebtedness
contain ratios based on this measure on a quarterly
basis. While Adjusted EBITDA is used as a measure of liquidity
and the ability to meet debt service requirements, it is not
necessarily comparable to other similarly titled captions of other
companies due to differences in methods of calculations.
ACCURIDE
CORPORATION |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(UNAUDITED) |
|
|
March 31, |
December 31, |
(In thousands) |
2014 |
2013 |
|
|
|
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$21,640 |
$33,426 |
Customer and other receivables |
83,295 |
59,520 |
Inventories |
45,309 |
39,329 |
Other current assets |
15,805 |
16,993 |
Total current assets |
166,049 |
149,268 |
PROPERTY, PLANT AND EQUIPMENT, net |
218,527 |
219,624 |
OTHER ASSETS: |
|
|
Goodwill and other assets |
242,180 |
242,885 |
TOTAL |
$626,756 |
$611,777 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Accounts payable |
$63,061 |
$47,527 |
Other current liabilities |
36,057 |
42,472 |
Total current liabilities |
99,118 |
89,999 |
LONG-TERM DEBT |
340,446 |
330,183 |
OTHER LIABILITIES |
128,302 |
129,711 |
STOCKHOLDERS' EQUITY: |
|
|
Total stockholders' equity |
58,890 |
61,884 |
TOTAL |
$626,756 |
$611,777 |
CONTACT: Investor Relations: Todd Taylor
Email: ttaylor@accuridecorp.com
Phone: (812) 962-5105
Media Relations: Timothy G. Weir, APR
Email: tweir@accuridecorp.com
Phone: (812) 962-5128
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